As Filed with the Securities and Exchange Commission on March 21, 2000
Registration No. _________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUST
REGISTERED ON FORM N-8B-2
GE Capital Life Separate Account III
(Exact name of trust)
GE Capital Life Assurance Company
(Name of depositor)
125 Park Avenue, 6th Floor
New York, NY 10017-5529
(Complete address of depositor's principal executive offices)
Name and complete address of agent for service:
Barry J. Grosman
President
GE Capital Life Assurance Company of New York
125 Park Avenue, 6th Floor
New York, NY 10017-5529
Copy to:
Stephen E. Roth, Esquire
Sutherland, Asbill & Brennan
1275 Pennsylvania Ave., NW
Washington, D.C. 20004-2415
Approximate date of proposed public offering: As soon as practicable after the
effective date of this Registration Statement
Securities Being Offered: Flexible Premium Variable Life Insurance Policies
The Registrant hereby amends this Registration Statement on such dates as may be
necessary to delay its effective date until the Registrant shall file a further
amendment which specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933 or until the Registration Statement shall become effective on such
date as the Commission, acting pursuant to said Section 8(a), may determine.
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GE Capital Life Separate Account III
Prospectus For The
Flexible Premium Joint and Last Survivor Variable Life Insurance Policy
Policy Form NY 1253 12/99
issued by:
GE Capital Life Assurance Company of New York
125 Park Avenue, 6th Floor
New York, New York 10017-5529
Telephone: (212) 672-4400
Variable Life Servicing Center:
6610 West Broad Street
Richmond, VA 23230
Telephone: (800) 313-5282
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This prospectus describes a flexible premium variable joint and last survivor
life insurance policy offered by GE Capital Life Assurance Company of New York
("we," "us," "our," the "Company", or "GE Capital Life"). It is underwritten on
an individual basis. The Policy provides life insurance protection, premium
flexibility, and the ability to change Death Benefits.
The Policy provides insurance on the lives of two Insureds. We will pay Death
Proceeds only on the death of the Last Insured. The amount of the Death Proceeds
will depend in part on the Death Benefit Option the Owner ("you" or "your")
selects. You can elect one of two Death Benefit Options under the Policy. Under
Option A, the Death Benefit will equal the greater of (1) the Specified Amount
plus the Policy's Account Value, or (2) the Account Value multiplied by the
applicable corridor percentage. Under Option B, the Death Benefit will equal the
greater of (1) the Specified Amount, or (2) the Account Value multiplied by the
applicable corridor percentage. We guarantee that your Death Benefit will at
least equal the Specified Amount so long as your Policy is in force.
You direct your premiums to the Investment Subdivisions of Separate Account III.
Each Investment Subdivision invests in shares of the Funds. We list the Funds,
and their currently available portfolios, below.
THE ALGER AMERICAN FUND:
Alger American Growth Portfolio, Alger American Small Capitalization
Portfolio
FIDELITY VARIABLE INSURANCE PRODUCTS FUND (VIP):
VIP Equity-Income Portfolio, VIP Growth Portfolio, VIP Overseas Portfolio,
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II (VIP II):
VIP II Asset Manager Portfolio, VIP II Contrafund Portfolio
FIDELITY VARIABLE INSURANCE PRODUCTS FUND III (VIP III):
VIP III Growth & Income Portfolio, VIP III Growth Opportunities Portfolio
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FEDERATED INSURANCE SERIES:
Federated American Leaders Fund II, Federated High Income Bond Fund II,
Federated Utility Fund II,
GE INVESTMENTS FUNDS, INC.:
Income Fund, International Equity Fund, Money Market Fund, Premier Growth
Equity Fund, Real Estate Securities Fund, S&P 500 Index Fund, Total Return
Fund, U.S. Equity Fund, Value Equity Fund
GOLDMAN SACHS VARIABLE INSURANCE TRUST (VIT):
Goldman Sachs Growth and Income Fund, Goldman Sachs Mid Cap Equity Fund
JANUS ASPEN SERIES:
Aggressive Growth Portfolio, Balanced Portfolio, Capital Appreciation
Portfolio, Flexible Income Portfolio, Global Life Sciences Portfolio,
Global Technology Portfolio, Growth Portfolio, International Growth
Portfolio, Worldwide Growth Portfolio,
OPPENHEIMER VARIABLE ACCOUNT FUNDS:
Oppenheimer Bond Fund/VA, Oppenheimer Aggressive Growth Fund/VA,
Oppenheimer Capital Appreciation Fund/VA, Oppenheimer High Income Fund/VA,
Oppenheimer Multiple Strategies Fund/VA
SALOMON BROTHERS VARIABLE SERIES FUND INC.:
Salomon Investors Fund, Salomon Total Return Fund, Salomon Strategic Bond
Fund
Your Policy provides for a Surrender Value. The amount of your Surrender Value
will depend upon the investment performance of the portfolio(s) you select. You
bear the investment risk of investing in Separate Account III.
You may cancel your Policy during the free-look period. Please note that
replacing your existing insurance coverage with the Policy might not be to your
advantage.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
NEITHER THE U.S. GOVERNMENT NOR ANY GOVERNMENTAL AGENCY INSURES OR GUARANTEES
YOUR INVESTMENT IN THE POLICY.
This Prospectus contains information about Separate Account III that you should
know before investing. Please read this Prospectus carefully before investing
and keep it for future reference.
The date of this Prospectus is _______________ ______, 2000.
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TABLE OF CONTENTS
Page
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DEFINITIONS.................................................................................................................1
POLICY SUMMARY..............................................................................................................4
PORTFOLIO ANNUAL EXPENSE TABLE..............................................................................................8
Other Policies..........................................................................................................10
RISK SUMMARY...............................................................................................................11
GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK..............................................................................13
SEPARATE ACCOUNT III.......................................................................................................13
Changes to Separate Account III.........................................................................................14
THE PORTFOLIOS.............................................................................................................14
Investment Subdivision..................................................................................................15
Portfolio Shares........................................................................................................24
CHARGES AND DEDUCTIONS.....................................................................................................24
Premium Charge..........................................................................................................25
Mortality and Expense Risk Charge.......................................................................................25
Monthly Deduction.......................................................................................................25
Cost of Insurance.......................................................................................................26
Surrender Charge........................................................................................................27
Partial Surrender Processing Fee........................................................................................29
Transfer Charge.........................................................................................................29
Other Charges...........................................................................................................29
Reduction Of Charges For Group Sales....................................................................................29
THE POLICY.................................................................................................................30
Applying for a Policy...................................................................................................30
Owner...................................................................................................................30
Beneficiary.............................................................................................................30
Changing the Owner or Beneficiary.......................................................................................31
Canceling a Policy......................................................................................................31
PREMIUMS...................................................................................................................31
General.................................................................................................................31
Tax Free Exchanges (1035 Exchanges).....................................................................................32
Certain Internal Exchanges..............................................................................................32
Periodic Premium Plan...................................................................................................32
Minimum Premium Payment.................................................................................................32
Allocating Premiums.....................................................................................................32
</TABLE>
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HOW YOUR ACCOUNT VALUE VARIES...............................................33
Account Value............................................................33
Surrender Value..........................................................33
Investment Subdivision Values............................................33
Unit Values..............................................................33
Net Investment Factor....................................................34
TRANSFERS...................................................................34
General..................................................................34
Dollar-Cost Averaging....................................................35
Asset Allocation.........................................................36
Portfolio Rebalancing....................................................36
Transfers By Third Parties...............................................36
DEATH BENEFITS..............................................................37
Amount Of Death Proceeds.................................................37
Death Benefit Options....................................................37
Changing the Death Benefit Option........................................38
Changing the Specified Amount............................................39
SURRENDERS AND PARTIAL SURRENDERS...........................................40
Surrenders...............................................................40
Partial Surrenders.......................................................40
Effect Of Partial Surrenders On Account Value And Death Proceeds.........40
LOANS.......................................................................41
General..................................................................41
Preferred Policy Debt....................................................41
Interest Rate Charged....................................................42
Repayment Of Policy Debt.................................................42
Effect Of Policy Loans...................................................42
TERMINATION.................................................................43
Premium To Prevent Termination...........................................43
Your Policy Will Remain In Effect During The Grace Period................43
Reinstatement............................................................43
PAYMENTS AND TELEPHONE TRANSACTIONS.........................................43
Requesting Payments......................................................43
Telephone Transactions...................................................44
TAX CONSIDERATIONS..........................................................44
Federal Tax Matters......................................................44
Introduction.............................................................44
Tax Status Of The Policy.................................................45
Tax Treatment of Policies -- General.....................................46
Special Rules for Modified Endowment Contracts (MECs)....................47
Income Tax Withholding...................................................48
Tax Status of the Company................................................48
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Changes in the Law and Other Considerations............................49
OTHER POLICY INFORMATION..................................................49
Optional Payment Plans.................................................49
Dividends..............................................................50
Incontestability.......................................................50
Suicide Exclusion......................................................50
Misstatement of Age or Gender..........................................51
Written Notice.........................................................51
Trustee................................................................51
Other Changes..........................................................51
Reports................................................................51
Change Of Owner........................................................52
Supplemental Benefits..................................................52
Using the Policy as Collateral.........................................53
Exchanges..............................................................53
Reinsurance............................................................53
Legal Proceedings......................................................53
ADDITIONAL INFORMATION....................................................53
Sale Of The Policies...................................................53
Legal Matters..........................................................54
Actuarial Matters......................................................54
Financial Statements...................................................54
Executive Officers and Directors.......................................54
Other Information......................................................56
HYPOTHETICAL ILLUSTRATIONS................................................56
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE.
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DEFINITIONS
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We have tried to make this Prospectus as understandable as possible.
However, in explaining how the Policy works, we have had to use certain terms
that have special meanings. We define these terms below.
ACCOUNT VALUE -- The total amount under the Policy. Account Value equals the
amount in Separate Account III and in the General Account.
AGE -- The age of each Insured at his or her birthday nearest the Policy Date or
a Policy Anniversary.
ATTAINED AGE -- For each Insured, an Insured's Age on the Policy Date plus the
number of full years since the Policy Date.
BENEFICIARY -- The person or entity you designate to receive the Death Proceeds
payable at the death of the Last Insured.
CONTINUATION AMOUNT -- A cumulative amount set forth on the Policy data pages
for each month of the Continuation Period representing the minimum Net Total
Premium required to keep the Policy in force during the Continuation Period.
CONTINUATION PERIOD -- The five Policy Years from the Policy Date during which
the Policy will not lapse if the Net Total Premium is at least equal to the
Continuation Amount for the number of Policy Months that the Policy has been in
force.
DEATH BENEFIT -- The amount determined under the Death Benefit Option in effect
as of the date of death of the Last Insured.
DEATH PROCEEDS -- The total amount payable to the Beneficiary upon the death of
the Last Insured.
FUND -- Any open-end management investment company or unit investment trust in
which Separate Account III invests.
GENERAL ACCOUNT -- The assets of GE Capital Life other than those allocated to
Separate Account III or any of our other separate accounts.
HOME OFFICE -- Our offices at 125 Park Avenue, 6th Floor, New York, New York
10017-5529, (212) 672-4400.
INSURED(S) -- The person(s) whose lives are insured under the Policy.
INVESTMENT SUBDIVISION -- A subdivision of Separate Account III, the assets of
which invest exclusively in a corresponding portfolio of a Fund. Not all
Investment Subdivisions may be available in all states or markets.
LAST INSURED -- The last Insured to die.
1
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MATURITY DATE -- The date your Policy terminates and we pay any Account Value
less outstanding Policy Debt if any insured is living. This date is shown in
your Policy and is the policy anniversary nearest the younger Insured's 100th
birthday.
MONTHLY ANNIVERSARY DAY -- The same day in each month as your Policy Date.
NET PREMIUM -- The portion of each premium you allocate to one or more
Investment Subdivisions. It is equal to the premium paid times the Net Premium
Factor.
NET PREMIUM FACTOR -- The factor we use in determining the Net Premium which
reflects a deduction from each premium paid.
NET TOTAL PREMIUM -- On any date, Net Total Premium equals the total of all
premiums paid to that date less (a) divided by (b), where:
(a) is any outstanding Policy Debt, plus the sum of any partial
surrenders to date; and
(b) is the Net Premium Factor.
OPTIONAL PAYMENT PLAN -- A plan under which any part of Death Proceeds,
Surrender Value proceeds, or benefits at maturity can be used to provide a
series of periodic payments to you or a Beneficiary.
OWNER -- The person (or persons) who owns (or own) the Policy. "You" or "your"
refers to the Owner or Joint Owners. You may also name Contingent Owners.
PLANNED PERIODIC PREMIUM -- A level premium amount scheduled for payment at
fixed intervals over a specified period of time.
POLICY -- The Policy with any attached application(s), any riders, and
endorsements.
POLICY DATE -- The date as of which we issue the Policy and the date as of which
the Policy becomes effective. We measure Policy Years and Anniversaries from the
Policy Date. The Policy Date is shown on the Policy data pages. If the Policy
Date would otherwise fall on the 29th, 30th, or 31st day of a month, the Policy
Date will be the 28th.
POLICY DEBT -- The amount of outstanding loans plus accrued interest. We deduct
Policy Debt from proceeds payable at the death of the Last Insured, or maturity,
or at the time of surrender.
POLICY MONTH -- A one-month period beginning on a Monthly Anniversary Day and
ending on the day immediately preceding the next Monthly Anniversary Day.
SEPARATE ACCOUNT III -- GE Capital Life Separate Account III, the segregated
asset account of GE Capital Life Annuity to which you allocate Net Premiums.
SPECIFIED AMOUNT -- An amount we use in determining the insurance coverage.
2
<PAGE>
SURRENDER VALUE -- The amount we pay you when you surrender the Policy. It is
equal to Account Value minus any Policy Debt and minus any applicable surrender
charge.
UNIT VALUE -- A unit of measure we use to calculate the Account Value for each
Investment Subdivision.
VALUATION DAY -- For each Investment Subdivision, each day on which the New York
Stock Exchange is open for regular trading except for days that the Investment
Subdivision's corresponding portfolio does not value its shares.
VALUATION PERIOD -- The period that starts at the close of regular trading on
the New York Stock Exchange on any Valuation Day and continues to the end of the
next Valuation Day.
3
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POLICY SUMMARY
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PREMIUMS
o You select a premium payment plan. You are not required to pay premiums
according to the plan, but may vary frequency and amount, within limits, and
can skip planned premiums. SEE Periodic Premium Plan.
o Premium amounts depend on each Insured's Age, gender, rating class, the
Specified Amount selected, and any supplemental benefit riders. SEE
Premiums.
o You may make unscheduled premium payments, within limits. SEE Premiums.
o Under certain circumstances, you may have to pay extra premiums to prevent
termination. SEE Premium to Prevent Termination.
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DEDUCTIONS FROM PREMIUMS
o If the initial Specified Amount is $500,000 or more, we currently deduct a 3
1/2 % premium charge (5% maximum) from each premium before we place it in an
Investment Subdivision. If the initial Specified Amount is at least $250,000
but less than $500,000, we currently deduct a 6 1/2% premium charge (8%
maximum). We currently do not deduct the maximum premium charge but reserve
the right to do so. We refer to the premium minus the premium charge as a
Net Premium. We do not assess a premium charge against the policy loan
portion of a premium received from the rollover of a life insurance policy.
SEE Premium Charge.
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ALLOCATION OF NET PREMIUMS
o You allocate your Net Premiums among up to seven of the Investment
Subdivisions of Separate Account III at any given time. Until (1) the date
we approve the application, (2) the date we receive all necessary forms
(including any subsequent amendments to your application), and (3) the date
we receive the entire initial premium, we will place any premiums you pay in
a non-interest bearing account. After we issue your Policy, we will allocate
your Net Premiums to the Investment Subdivisions you designate.
SEE Allocating Premiums.
o The Investment Subdivisions invest in corresponding portfolios of the
following Funds:
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4
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<TABLE>
<CAPTION>
- ----------------------------------------------- ---------------------------------------------------
<S> <C>
THE ALGER AMERICAN FUND GOLDMAN SACHS VARIABLE INSURANCE TRUST
Alger American Growth Portfolio Growth and Income Fund
Alger American Small Capitalization Mid Cap Value Fund
FEDERATED INSURANCE SERIES JANUS ASPEN SERIES
Federated American Leaders Fund II Aggressive Growth Portfolio
Federated High Income Bond Fund II Balanced Portfolio
Federated Utility Fund II Capital Appreciation Portfolio
FIDELITY VARIABLE INSURANCE PRODUCTS FUND Flexible Income Portfolio
VIP Equity-Income Portfolio Global Life Sciences Portfolio
VIP Growth Portfolio Global Technology Portfolio
VIP Overseas Portfolio Growth Portfolio
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II International Growth Portfolio
VIP II Asset Manager Portfolio Worldwide Growth Portfolio
VIP II Contrafund Portfolio OPPENHEIMER VARIABLE ACCOUNT FUNDS
FIDELITY VARIABLE INSURANCE PRODUCTS FUND III Oppenheimer Aggressive Growth Fund/VA
VIP III Growth & Income Portfolio Oppenheimer Bond Fund/VA
VIP III Growth Opportunities Portfolio Oppenheimer Capital Appreciation Fund/VA
GE INVESTMENTS FUNDS, INC. Oppenheimer High Income Fund/VA
Income Fund Oppenheimer Multiple Strategies Fund/VA
International Equity Fund SALOMON BROTHERS VARIABLE SERIES FUNDS INC.
Money Market Fund Investors Fund
Premier Growth Equity Fund Strategic Bond Fund
S&P Index Total Return Fund
Real Estate Securities Fund
Total Return
U.S. Equity Fund SEE Investment Subdivisions.
Value Equity Fund
- --------------------------------------------- ------------------------------------------------------
</TABLE>
Not all of these portfolios may be available in all states or in all markets.
5
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DEDUCTIONS FROM ASSETS
o Each Fund deducts management fees and other expenses from its assets. For
the year ended December 31, 1999, the minimum total annual expenses (as a
percentage of average net assets) was ____% and the minimum total annual
expenses (as a percentage of average net assets) was ______%. See Portfolio
Annual Expenses.
o We deduct a daily mortality and expense risk charge at a current effective
annual rate of 0.70% (maximum effective annual rate of 0.70%) from assets in
the Investment Subdivisions.
o We make a monthly deduction from your Account Value for (1) the cost of
insurance, (2) a policy charge of $5, (3) for the first 10 Policy Years, an
initial expense charge based on each Insured's issue Age of up to $.20 per
$1,000 of initial Specified Amount, (4) for 10 Policy Years after the
increase, an additional expense charge based on each Insured's issue Age of
up to $.20 per $1,000 of any increase in Specified Amount, and (5)
supplemental benefit charges. See Monthly Deduction.
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ACCOUNT VALUE
o Account Value equals the total amount in Separate Account III and the
General Account.
o Account Value serves as the starting point for calculating certain values
under a Policy, such as the Surrender Value and the Death Proceeds. Account
Value varies from day to day to reflect investment experience of the
Investment Subdivisions, charges deducted and other Policy transactions
(such as Policy loans, transfers and partial surrenders). SEE How Your
Account Value Varies.
o You can transfer Account Value among the Investment Subdivisions (subject to
certain restrictions). A $10 transfer charge applies to each transfer made
after the first transfer in a calendar month. SEE Transfers for rules and
limits. Policy loans reduce the amount available for allocations and
transfers.
o There is no minimum guaranteed Account Value. During the Continuation
Period, the Policy will lapse if the Surrender Value is too low to cover the
monthly deduction and the Net Total Premium is less than the Continuation
Amount. After the Continuation Period, the Policy will lapse if the
Surrender Value is too low to cover the monthly deduction. SEE Premium to
Prevent Termination.
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<TABLE>
<CAPTION>
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CASH BENEFITS DEATH BENEFITS
<S> <C>
o You may take a Policy loan for up to 90% of the o The minimum Specified Amount available is
difference between Account Value and any surrender $250,000.
charges, minus any Policy Debt. SEE Loans.
o We will pay Death Proceeds only upon the death
o You may partially surrender your Policy up to a of the Last Insured.
maximum amount. The minimum partial surrender
amount is $500, and a processing fee equal to the o You may choose from two Death Benefit Options:
lesser of $25 or 2% of the amount of the partial Option A (greater of Specified Amount plus
surrender will apply to each partial surrender. If Account Value, or the applicable corridor
you select Death Benefit Option B, you may only make percentage multiplied by Account Value); or
partial surrenders after the first Policy Year. SEE Option B (greater of Specified Amount, or the
Partial Surrenders. applicable corridor percentage multiplied by
Account Value). We determine the Specified
o You can surrender your Policy at any time before the Amount and Account Value for this purpose as of
death of the Last Insured for its Surrender Value the date of death of the Last Insured. SEE
(Account Value minus Policy Debt and minus any Death Benefits.
applicable surrender charge). A surrender charge
will apply during the first 11 Policy Years, and for o Death Proceeds are payable as a lump sum or
11 Policy Years after an increase in the Specified under a variety of options.
Amount (except for increases in the Specified Amount
that result from a change in Death Benefit Option). o You may change the Specified Amount and the
The surrender charge will not exceed $50 per $1,000 Death Benefit Option. SEE Changing the
of Specified Amount. SEE Surrenders and Surrender Specified Amount and Changing the Death Benefit
Charge. Option for rules and limits.
o You may choose from a variety of payment options. o During the Continuation Period, the Policy will
SEE Requesting Payments. remain in force regardless of the sufficiency
of Surrender Value so long as the Net Total
Premium is at least equal to the Continuation
Amount. SEE Premium to Prevent Termination.
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</TABLE>
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PORTFOLIO ANNUAL EXPENSE TABLE
- --------------------------------------------------------------------------------
This table describes the portfolio fees and expenses. These fees and expenses
are shown as a percentage of net assets for the year ended December 31, 1999.
The prospectus for each Fund contains more detail concerning a portfolio's fees
and expenses.
PORTFOLIO ANNUAL EXPENSES
Annual expenses of the portfolios of the Funds for the year ended
December 31, 1999 (as a percentage of each portfolio's average net assets):
<TABLE>
<CAPTION>
MANAGEMENT FEES OTHER EXPENSES
(AFTER FEE WAIVER (AFTER REIMBURSEMENT TOTAL ANNUAL
PORTFOLIO AS APPLICABLE) AS APPLICABLE) EXPENSES
--------- -------------- -------------- --------
<S> <C> <C> <C>
THE ALGER AMERICAN FUND
Alger Small Cap 0.85% 0.05% 0.90%
Alger Growth 0.75 0.04 0.79
FEDERATED INSURANCE SERIES
American Leaders II 0.75 0.13 0.88
High Income Bond II 0.60 0.19 0.79
Utility II 0.75 0.19 0.94
FIDELITY VARIABLE INSURANCE PRODUCTS FUND*(1)
Equity-Income Portfolio VIP 0.48 0.09 0.57
Growth Portfolio VIP 0.58 0.08 0.66
Overseas Portfolio VIP 0.73 0.18 0.91
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II*(2)
Asset Manager Portfolio VIP II 0.53 0.10 0.63
Contrafund Portfolio VIP II 0.58 0.09 0.67
FIDELITY VARIABLE INSURANCE PRODUCTS FUND III*(3)
Growth & Income Portfolio VIP III 0.48 0.12 0.60
Growth Opportunities Portfolio VIP III 0.58 0.11 0.69
GE INVESTMENTS FUNDS(4)
Income Fund 0.50 0.07 0.57
International Equity Fund 1.00 0.08 1.08
Money Market Fund 0.24 0.06 0.30
Premier Growth Fund 0.65 0.03 0.68
Real Estate Fund 0.85 0.09 0.94
S&P 500 Index Fund 0.35 0.04 0.39
Total Return Fund 0.50 0.06 0.56
US Equity Fund 0.55 0.06 0.61
Value Equity Fund 0.65 0.06 0.71
GOLDMAN SACHS VARIABLE INSURANCE TRUST(5)
Growth & Income 0.75 0.25 1.00
Mid Cap Value 0.80 0.25 1.05
JANUS ASPEN SERIES(6)
Aggressive Growth Portfolio 0.65 0.02 0.67
Capital Appreciation Portfolio 0.65 0.04 0.69
Equity Income Portfolio 0.62 0.63 1.25
</TABLE>
8
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<TABLE>
<CAPTION>
MANAGEMENT FEES OTHER EXPENSES
(AFTER FEE WAIVER (AFTER REIMBURSEMENT TOTAL ANNUAL
PORTFOLIO AS APPLICABLE) AS APPLICABLE) EXPENSES
--------- -------------- -------------- --------
<S> <C> <C> <C>
Flexible Income Portfolio 0.65 0.07 0.72
Global Life Sciences Portfolio 0.65 0.19 0.84
Global Technology Portfolio 0.65 0.13 0.78
Growth Portfolio 0.65 0.02 0.67
High-Yield Portfolio 0.00 1.00 1.00
International Growth Portfolio 0.65 0.11 0.76
Worldwide Growth Portfolio 0.65 0.05 0.70
OPPENHEIMER VARIABLE ACCOUNT FUNDS
Aggressive Growth Fund/VA 0.66 0.01 0.67
Bond Fund/VA 0.72 0.01 0.73
Capital Appreciation Fund/VA 0.68 0.02 0.70
High Income Fund/VA 0.74 0.01 0.75
Multiple Strategies Fund/VA 0.72 0.01 0.73
SALOMON BROTHERS VARIABLE TRUST SERIES FUND(7)
Investors Fund 0.70 0.28 0.98
Strategic Bond Fund 0.80 0.20 1.00
Total Return Fund 0.75 0.25 1.00
</TABLE>
* The fees and expenses reported for the Variable Insurance Products Fund
(VIP), Variable Insurance Products Fund II (VIP II) and Variable Insurance
Products Fund III (VIP III) are prior to any fee waiver and/or
reimbursement as applicable.
(1) A portion of the brokerage commissions that certain funds pay was used
to reduce fund expenses. In addition, certain funds, or FMR on behalf
of certain funds, have entered into arrangements with their custodian
whereby credits realized as a result of uninvested cash balances were
used to reduce custodian expenses. Absent these reductions and credits,
the total annual expenses of the portfolios of the Variable Insurance
Products Fund during 1999 would have been .56% for VIP Equity-Income
Portfolio, .87% for VIP Overseas Portfolio and .65% for VIP Growth
Portfolio.
(2) A portion of the brokerage commissions that certain funds pay was used
to reduce fund expenses. In addition, certain funds, or FMR on behalf
of certain funds, have entered into arrangements with their custodian
whereby credits realized as a result of uninvested cash balances were
used to reduce custodian expenses. Absent these reductions and credits,
the total annual expenses of the portfolios of the Variable Insurance
Products Fund II during 1999 would have been .62% for VIP II Asset
Manager Portfolio and .65% for VIP II Contrafund Portfolio.
(3) A portion of the brokerage commissions that certain funds pay was used
to reduce fund expenses. In addition, certain funds, or FMR on behalf
of certain funds, have entered into arrangements with their custodian
whereby credits realized as a result of uninvested cash balances were
used to reduce custodian expenses. Absent these reductions and
credits, the total annual expenses of the portfolios of the Variable
Insurance Products Fund III during 1999 would have been .59% for VIP
III Growth & Income Portfolio and .68% for VIP III Growth
Opportunities Portfolio.
9
<PAGE>
(4) GE Investment Management Incorporated currently serves as investment
adviser to GE Investments Funds, Inc. (formerly Life of Virginia Series
Fund, Inc.) and has voluntarily agreed to waive a portion of the fee
payable by the Fund. Absent this fee waiver, the total annual expenses
of the GE Money Market Fund would have been .50%, GE Real Estate would
have been .94%, GE Premier Growth would have been .72%.
(5) Goldman Sachs Asset Management has voluntarily agreed to reduce or
limit certain other expenses (excluding management fees, taxes,
interest, brokerage fees, litigation, indemnification and other
extraordinary expenses) to the extent such expenses exceed 0.15% of
each Fund's respective average daily net assets. The investment
adviser may modify or discontinue any of the limitations set forth
above in the future at its discretion. Absent reimbursements, the
total annual expenses during 1999 would have been 1.22% for Growth and
Income Fund and 1.22% for Mid Cap Value Fund.
(6) Absent reimbursements, the total annual expenses of the portfolios of
the Janus Aspen Series during 1999 would have been 4.92% for Janus
Aspen High-Yield Portfolio and 1.28% for Janus Aspen Equity Income
Portfolio.
(7) Absent certain fee waivers or reimbursements, the total annual expenses
of the portfolios of Salomon Brothers Variable Series Fund during 1999
would have been 1.15% for Investors Fund, 1.65% for Total Return Fund
and 1.48% for Strategic Bond Fund.
The expense information regarding the Funds was provided by those Funds. We have
not independently verified this information. We cannot guarantee that the
reimbursements and fee waivers provided by certain of the Funds will continue.
OTHER POLICIES
We may offer other variable life insurance policies which also invest
in the same portfolios of the Funds. These policies may have different charges
that could affect the value of the Investment Subdivisions and may offer
different benefits more suitable to your needs. To obtain more information about
these policies, contact your agent, or call (800) 313-5282.
10
<PAGE>
RISK SUMMARY
================================================================================
- ------------------------------
INVESTMENT Your Account Value is subject to the risk that
RISK investment performance will be unfavorable and
that your Account Value will decrease. Because we
continue to deduct charges from Account Value, if
investment results are sufficiently unfavorable
and/or you stop making premium payments at or
above the minimum requirements, the Surrender
Value of your Policy may fall to zero. In that
case, the Policy will terminate without value and
insurance coverage will no longer be in effect,
unless you make an additional payment sufficient
to prevent a termination during the 61-day grace
period. However, your Policy will not lapse
during the Continuation Period, even if your
Surrender Value is too low to cover the monthly
deductions so long as the Net Total Premium is at
least equal to the Continuation Amount. On the
other hand, if investment experience is
sufficiently favorable and you have kept the
Policy in force for a substantial time, you may
be able to draw upon Account Value, through
partial surrenders and Policy loans.
- ------------------------------
- ------------------------------
RISK OF If the Surrender Value of your Policy is too low
TERMINATION to pay the Monthly Deduction when due (and,
during the Continuation Period, the Net Total
Premium is less than the Continuation Amount),
the Policy will be in default and a grace period
will begin. There is a risk that if withdrawals,
loans, and monthly deductions reduce your
Surrender Value to too low an amount and/or if
the investment experience of your selected
Investment Subdivisions is unfavorable, then your
Policy could lapse. In that case, you will have a
61-day grace period to make a sufficient payment.
If you do not make a sufficient payment before
the grace period ends, your Policy will terminate
without value, insurance coverage will no longer
be in effect, and you will receive no benefits.
After termination, you may reinstate your Policy
within three years subject to certain conditions.
- ------------------------------
- ------------------------------
TAX RISK We intend for the Policy to satisfy the
definition of a "life insurance contract" under
section 7702 of the Internal Revenue Code of
1986, as amended (the "Code"). In general,
earnings under the Policy will not be taxed until
a distribution is made from the Policy. In
addition, death benefits generally will be
excludable from income. In the case of a Policy
that is considered a "modified endowment
contract," special rules apply and a 10% penalty
tax may be imposed on distributions, including
loans. SEE Special Rules for Modified Endowment
Contracts. You should consult a qualified tax
advisor in all tax matters involving your Policy.
- ------------------------------
11
<PAGE>
- ------------------------------
LIMITS ON PARTIAL The Policy permits you to take partial
SURRENDERS surrenders. However, if you selected Option B,
you may only make partial surrenders after the
first Policy Year.
The minimum partial surrender amount is $500, and
we will assess a processing fee on the surrender.
There is a limit on the maximum amount you may
partially surrender.
Partial surrenders will reduce your Account
Value, Death Proceeds, and Specified Amount (if
you elected Death Benefit Option B). Federal
income taxes and a penalty tax may apply to
partial surrenders.
- ------------------------------
- ------------------------------
EFFECTS OF POLICY A Policy loan, whether or not repaid, will affect
LOANS Account Value over time because we subtract the
amount of the loan from the Investment
Subdivisions as collateral. We then credit a
fixed interest rate to the loan collateral. As a
result, the loan collateral does not participate
in the investment results of the Investment
Subdivisions. The longer the loan is outstanding,
the greater the effect is likely to be. Depending
on the investment results of the Investment
Subdivisions, the effect could be favorable or
unfavorable.
A Policy loan also reduces the Death Proceeds. A
Policy loan could make it more likely that a
Policy would terminate. There is a risk if the
loan reduces your Surrender Value to too low an
amount and investment experience is unfavorable,
that the Policy will lapse, resulting in adverse
tax consequences. You must submit a sufficient
payment during the grace period to avoid the
Policy's termination without value and the end of
insurance coverage.
- ------------------------------
- ------------------------------
COMPARISON WITH The Policy is similar in many ways to universal
OTHER INSURANCE life insurance. As with universal life insurance:
POLICIES
-> the Owner pays premiums for insurance coverage
on the Insureds;
-> the Policy provides for the accumulation of
Surrender Value that is payable if the Owner
surrenders the Policy during the Insureds'
lifetimes;
-> and the Surrender Value may be substantially
lower than the premiums paid.
However, the Policy differs from universal life
insurance in that it permits you to place your
premium in the Investment Subdivisions. The
amount and duration of life insurance protection
and of the Policy's Account Value will vary with
the investment performance of the Investment
Subdivisions you select.
The Surrender Value of your Policy may decrease
if the investment performance of the Investment
Subdivisions to which you allocate Account Value
is sufficiently adverse. If the Surrender Value
becomes insufficient to cover charges when due
and the Continuation Period is not in effect, the
Policy will terminate without value after a grace
period.
- ------------------------------
12
<PAGE>
- --------------------------------------------------------------------------------
GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK
- --------------------------------------------------------------------------------
We are a stock life insurance that was incorporated in New York on February 23,
1988. We are ultimately a indirect subsidiary of General Electric Capital
Corporation ("GE Capital"), a New York corporation that is a diversified
financial services company whose subsidiaries consist of specialty insurance,
equipment management, and commercial and consumer financing businesses. General
Electric Capital Corporation is owned by General Electric Capital Services, Inc.
which in turn is owned by General Electric Company. GE Capital's ultimate
parent, General Electric Company, founded more than one hundred years ago by
Thomas Edison, is the world's largest manufacturer of jet engines, engineering
plastics, medical diagnostic equipment, and large electric power generation
equipment.
We are licensed in New York and Delaware and specialize in writing individual
fixed-rate deferred annuities, fixed payout immediate annuities, and variable
deferred annuities.
We are subject to regulation by the Superintendent of Insurance of the State of
New York. We submit annual statements on our operation and finances to the New
York Insurance Department.
We are a member of the Insurance Marketplace Standards Association ("IMSA"). We
may use the IMSA membership logo and language in our advertisements, as outlined
in IMSA's Marketing and Graphics Guidelines. Companies that belong to IMSA
subscribe to a set of ethical standards covering various aspects of sales and
service for individually sold life insurance and annuities.
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT III
- --------------------------------------------------------------------------------
We established GE Capital Life Separate Account III as a separate investment
account on March 20, 2000. Separate Account III currently has forty
Investment Subdivisions available under the Policy. Each Investment Subdivision
invests exclusively in shares representing an interest in a separate
corresponding portfolio of one of the ten Funds described below.
The assets of Separate Account III belong to us. Nonetheless, we do not charge
the assets in Separate Account III attributable to the Policies with liabilities
arising out of any other business, which we may conduct. The assets of Separate
Account III shall, however, be available to cover the liabilities of our General
Account to the extent that the assets of the Separate Account exceed its
liabilities arising under the Policies supported by it. Income, gains and
losses, whether or not realized from the assets of Separate Account III shall
credited to or charged against Separate Account III without regard to the
income, gains, or losses arising out of any other business we may conduct.
We registered Separate Account III with the SEC as a unit investment trust under
the Investment Company Act of 1940 ("1940 Act"). Separate Account III meets the
definition of a separate account under the federal securities laws. Registration
with the SEC does not involve supervision of the management or investment
practices or policies of Separate Account III by the SEC. You assume the full
investment risk for all amounts you allocate to Separate Account III.
13
<PAGE>
CHANGES TO SEPARATE ACCOUNT III
Separate Account III may include other Investment Subdivisions that are not
available under the Policy. We may substitute another investment subdivision or
insurance company separate account under the Policy if, in our judgment,
investment in an Investment Subdivision should no longer be possible or becomes
inappropriate to the purposes of the Policies, or if investment in another
investment subdivision or insurance company separate account is in the best
interest of Owners. The new Investment Subdivisions may be limited to certain
classes of Policies, and the new portfolios may have higher fees and charges
than the portfolios they replaced. No substitution may take place without notice
to Owners and prior approval of the SEC and insurance regulatory authorities, to
the extent required by the 1940 Act and applicable law.
We may also, where permitted by law:
o create new separate accounts;
o transfer assets of Separate Account III, which we determine to be
associated with the class of Policies to which this Policy belongs,
to another separate account;
o add new Investment Subdivisions to or remove Investment Subdivisions
from Separate Account III, or combine Investment Subdivisions;
o remove existing Funds;
o substitute new Funds for any existing Fund which we determine is no
longer appropriate in light of the purposes of the Separate Account;
o deregister Separate Account III under the 1940 Act; and
o operate Separate Account III under the direction of a committee or in
another form.
CHANGES IN INVESTMENT POLICY AND EXCHANGE RIGHTS. If you object to a
material change in the investment policy of Separate Account III or any
Investment Subdivision, you have the right to exchange this Policy for a fixed
benefit policy. No evidence of insurability will be required. We will notify you
of the options available and the procedures to follow if you decide to make an
exchange. You must make an exchange within 60 days after the change in
investment policy becomes effective or 60 days after the receipt of the notice
of the options available, whichever is later. There will always be one policy
available for exchange.
- --------------------------------------------------------------------------------
THE PORTFOLIOS
- --------------------------------------------------------------------------------
You decide the Investment Subdivisions to which you direct Net Premiums. You may
change your premium allocation without penalty or charges. There is a separate
Investment Subdivision, which corresponds to each portfolio of a Fund offered in
this Policy.
Each Fund is registered with the Securities and Exchange Commission as an
open-end management investment company under the 1940 Act. The assets of each
portfolio are separate from other portfolios
14
<PAGE>
of a Fund and each portfolio has separate investment objectives and policies. As
a result, each portfolio operates as a separate portfolio and the investment
performance of one portfolio has no effect on the investment performance of any
other portfolio.
Before choosing an Investment Subdivision to allocate your Net Premiums and
Account Value, carefully read the prospectus for each Fund, along with this
Prospectus. We summarize the investment objectives of each portfolio below.
There is no assurance that any of the portfolios will meet these objectives.
The investment objectives and policies of certain portfolios are similar to the
investment objectives and policies of other portfolios that may be managed by
the same investment adviser or manager. The investment results of the
portfolios, however, may be higher or lower than the results of such other
portfolios. There can be no assurance, and no representation is made, that the
investment results of any of the portfolios will be comparable to the investment
results of any other portfolio, even if the other portfolio has the same
investment adviser or manager, or if the other portfolio has a similar name.
INVESTMENT SUBDIVISION
We offer you a choice from among 40 Investment Subdivisions, each of which
invests in an underlying portfolio of one of the Funds. You may invest in up to
seven Investment Subdivisions at any one time.
<TABLE>
<CAPTION>
<S> <C> <C>
- -------------------------------------- ------------------------------------------------------------------ --------------------------
ADVISER
INVESTMENT OBJECTIVE (AND SUB-ADVISER, AS
INVESTMENT SUBDIVISION APPLICABLE)
- -------------------------------------- ------------------------------------------------------------------ --------------------------
THE ALGER AMERICAN FUND
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Seeks long-term capital appreciation by focusing on Fred Alger
growing companies that generally have broad product lines, Management, Inc.
Alger American Growth markets, financial resources and depth of management.
Portfolio Under normal circumstances, the portfolio invests primarily
in the equity securities of large companies. The portfolio
considers a large company to have a market capitalization of
$1 billion or greater.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Seeks long-term capital appreciation by focusing on small, Fred Alger
fast-growing companies that offer innovative products, Management, Inc.
Alger American Small services or technologies to a rapidly expanding marketplace.
Capitalization Portfolio Under normal circumstances, the portfolio invests primarily
in the equity securities of small capitalization companies. A
small capitalization company is one that has a market
capitalization within the range of the Russell 2000 Growth
Index or the S&P(R) Small Cap 600 Index.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
FEDERATED INSURANCE SERIES
- -------------------------------------- ------------------------------------------------------------------ --------------------------
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Seeks long-term growth of capital with a secondary Federated Investment
objective of providing income. Seeks to achieve its Management Company
Federated American Leaders objective by investing, under normal circumstances, at
Fund II least 65% of its total assets in common stock of "blue
chip" companies.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Seeks high current income by investing primarily in a Federated Investment
diversified portfolio of professionally managed Management Company
Federated High Income Bond fixed-income securities. The fixed income securities in
Fund II which the Fund intends to invest are lower-rated
corporate debt obligations, commonly referred to as
"junk bonds". The risks of these securities and their
high yield potential are described in the prospectus for
the Federated Insurance Series, which should be read
carefully before investing.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Seeks high current income and moderate capital Federated Investment
Federated Utility Fund II appreciation by investing primarily in equity and debt Management Company
securities of utility companies.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Seeks reasonable income and will consider the potential Fidelity Management &
for capital appreciation. The fund also seeks a yield, Research Company
VIP Equity-Income Portfolio which exceeds the composite yield on the securities
comprising the S&P 500 by investing primarily in
income-producing equity securities and by investing in
domestic and foreign issuers.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Seeks capital appreciation by investing primarily in Fidelity Management &
common stocks of companies believed to have Research Company
VIP Growth Portfolio above-average growth potential
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
- -------------------------------------- ------------------------------------------------------------------ -------------------------
Seeks long-term growth of capital by investing at least Fidelity Management
VIP Overseas Portfolio 65% of total assets in foreign securities, primarily in & Research Company
common stocks. (subadvised by
Fidelity Management
& Research (U.K.)
Inc., Fidelity
Management &
Research Far East
Inc., Fidelity
International
Investment Advisors
and Fidelity
International
Investment Advisors
(U.K.) Limited)
- -------------------------------------- ------------------------------------------------------------------ -------------------------
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
- -------------------------------------- ------------------------------------------------------------------ -------------------------
VIP II Asset Manager Portfolio Seeks high total return with reduced risk over the Fidelity Management
long-term by allocating assets among stocks, bonds and & Research Company
short-term and money market instruments. (subadvised by
Fidelity Management
& Research (U.K.)
Inc. and Fidelity
Management &
Research Far East
Inc.)
- -------------------------------------- ------------------------------------------------------------------ -------------------------
- -------------------------------------- ------------------------------------------------------------------ -------------------------
Seeks long-term capital appreciation by investing mainly in Fidelity Management
common stocks and in securities of companies whose value is & Research Company
VIP II Contrafund Portfolio believed to have not been fully recognized by the public. This (subadvised by
fund invests in domestic and foreign issuers. This fund also Fidelity Management
invests in "growth" stocks or "value" stocks or both. & Research (U.K.)
Inc. and Fidelity
Management &
Research Far East
Inc.)
- -------------------------------------- ------------------------------------------------------------------ -------------------------
FIDELITY VARIABLE INSURANCE PRODUCTS FUND III
- -------------------------------------- ------------------------------------------------------------------ -------------------------
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
- -------------------------------------- ------------------------------------------------------------------ -------------------------
Seeks high total return through a combination of current Fidelity Management
VIP III Growth & Income income and capital appreciation by investing a majority & Research Company
Portfolio of assets in common stocks with a focus on those that (subadvised by
pay current dividends and show potential for capital Fidelity Management
appreciation. & Research (U.K.)
Inc. and Fidelity
Management &
Research Far East
Inc.)
- -------------------------------------- ------------------------------------------------------------------ -------------------------
VIP III Growth Opportunities Seeks to provide capital growth by investing primarily Fidelity Management
Portfolio in common stock and other types of securities, including & Research Company
bonds, which may be lower-quality debt securities. (subadvised by
Fidelity Management
& Research (U.K.)
Inc. and Fidelity
Management &
Research Far East
Inc.)
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
- -------------------------------------- ------------------------------------------------------------------ -------------------------
GE INVESTMENTS FUNDS, INC.
- -------------------------------------- ------------------------------------------------------------------ -------------------------
Objective of providing maximum income consistent with GE Asset
prudent investment management and preservation of Management
Income Fund capital by investing primarily in income-bearing debt Incorporated
securities and other income bearing instruments.
- -------------------------------------- ------------------------------------------------------------------ -------------------------
Objective of providing long-term growth of capital by GE Asset
investing primarily in foreign equity and equity-related Management
International Equity Fund securities which the Adviser believes have long-term Incorporated
potential for capital growth.
- -------------------------------------- ------------------------------------------------------------------ -------------------------
Objective of providing highest level of current income GE Asset
as is consistent with high liquidity and safety of Management
Money Market Fund principal by investing in various types of good quality Incorporated
money market securities.
- -------------------------------------- ------------------------------------------------------------------ -------------------------
Objective of providing long-term growth of capital as GE Asset
Premier Growth Equity Fund well as future (rather than current) income by investing Management
primarily in growth-oriented equity securities. Incorporated
- -------------------------------------- ------------------------------------------------------------------ -------------------------
Objective of providing maximum total return through GE Asset
current income and capital appreciation by investing Management
primarily in securities of U.S. issuers that are Incorporated
Real Estate Securities Fund principally engaged in or related to the real estate (Subadvised by
industry including those that own significant real Seneca Capital
estate assets. The portfolio will not invest directly in Management, L.L.C.)
real estate.
- -------------------------------------- ------------------------------------------------------------------ -------------------------
Objective of providing capital appreciation and GE Asset
S&P 500 Index Fund(1) accumulation of income that corresponds to the Management
investment return of the Standard & Poor's 500 Composite Incorporated
Stock Price Index through investment in common stocks (Subadvised by State
comprising the Index. Street Global
Advisors)
- -------------------------------------- ------------------------------------------------------------------ -------------------------
</TABLE>
- --------
(1) "Standard & Poor's," "S&P," and "S&P 500" are trademarks of The Mc-Graw Hill
Companies, Inc. and have been licensed for use by GE Investment Management
Incorporated. The S&P 500 Index Fund is not sponsored, endorsed, sold or
promoted by Standard & Poor's, and Standard & Poor's makes no representation or
warranty, express or implied, regarding the advisability of investing in this
Fund or the Policy.
19
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
- -------------------------------------- ------------------------------------------------------------------ -------------------------
Objective of providing the highest total return, GE Asset
composed of current income and capital appreciation, as Management
Total Return Fund is consistent with prudent investment risk by investing Incorporated
in common stock, bonds and money market instruments, the
proportion of each being continuously determined by the
investment adviser.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Objective of providing long-term growth of capital GE Asset Management
through investments primarily in equity securities of Incorporated
U.S. Equity Fund U.S. companies.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Objective of providing long term growth of capital by GE Asset Management
investing primarily in common stock and other equity Incorporated
securities of companies that the investment adviser (Subadvised by NWQ
believes are undervalued by the marketplace at the time Investment Management
of purchase and that offer the potential for Company)
Value Equity Fund above-average growth of capital. Although the current
portfolio reflects investments primarily within the mid
cap range, the Fund is not restricted to investments
within any particular capitalization and may in the
future invest a majority of its assets in another
capitalization range.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
GOLDMAN SACHS VARIABLE INSURANCE TRUST (VIT)
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Seeks long-term capital growth and growth of income, Goldman Sachs
primarily through equity securities that are considered Asset Management
Growth and Income Fund to have favorable prospects for capital appreciation
and/or dividend-paying ability.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Seeks long-term capital appreciation, primarily through Goldman Sachs
equity securities of companies with public stock market Asset Management
capitalizations within the range of the market
capitalization of companies constituting the Russell
Mid Cap Value Fund Midcap Index at the time of investment (currently
between $400 million and $16 billion).
- -------------------------------------- ------------------------------------------------------------------ --------------------------
JANUS ASPEN SERIES
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Non-diversified portfolio pursuing long-term growth of Janus Capital
capital. Pursues this objective by normally investing at Corporation
Aggressive Growth Portfolio least 50% of its assets in equity securities issued by
medium-sized companies.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Seeks long term growth of capital. Pursues this Janus Capital
objective consistent with the preservation of capital Corporation
Balanced Portfolio and balanced by current income. Normally invests 40-60%
of its assets in securities selected primarily for their
growth potential and 40-60% of its assets in securities
selected primarily for their income potential.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Capital Appreciation Portfolio Seeks long-term growth of capital. Pursues this Janus Capital
objective by investing primarily in common stocks of Corporation
companies of any size.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Seeks maximum total return consistent with preservation Janus Capital
of capital. Total return is expected to result from a Corporation
Flexible Income Portfolio combination of income and capital appreciation. The
portfolio pursues its objective primarily by investing
in any type of income-producing securities. This
portfolio may have substantial holdings of lower-rated
debt securities or "junk" bonds. The risks of investing
in junk bonds are described in the prospectus for Janus
Aspen Series, which should be read carefully before
investing.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Seeks long-term growth of capital. The portfolio pursues Janus Capital
this objective by investing primarily in equity Corporation
securities of U.S. and foreign companies that the
Global Life Sciences Portfolio portfolio manager believes have a life science
orientation. The portfolio normally invests at least 25%
of its total assets, in the aggregate, in the following
industry groups: health care; pharmaceuticals;
agriculture; cosmetics/personal care; and biotechnology
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Seeks long-term growth of capital. The portfolio pursues Janus Capital
this objective by investing primarily in equity Corporation
securities of U.S. and Foreign companies that the
portfolio manager believes will benefit significantly
Global Technology Portfolio from advances or improvements in technology.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Seeks long-term capital growth consistent with the Janus Capital
preservation of capital and pursues its objective by Corporation
Growth Portfolio investing in common stocks of companies of any size.
Emphasizes larger, more established issuers.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Seeks long-term growth of capital. Pursues this Janus Capital
objective Janus Capital primarily through investments in Corporation
common stocks of issuers located outside the United
States. The portfolio normally invests at least 65% of
International Growth Portfolio its total assets in securities of issuers from at least
five different countries, excluding the United States.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Seeks long-term capital growth in a manner consistent Janus Capital
Janus Capital with the preservation of capital. Pursues Corporation
Worldwide Growth Portfolio this objective by Corporation investing in a diversified
portfolio of common stocks of foreign and domestic
issuers of all sizes. Normally investsin at least five
different countries including the United States.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
OPPENHEIMER VARIABLE ACCOUNT FUNDS
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Aggressive Growth Fund/VA Seeks to achieve capital appreciation by investing in OppenheimerFunds, Inc.
"growth-type" companies.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Seeks high level of current income and capital, and OppenheimerFunds, Inc.
growth when consistent with its primary objective. Under
Bond Fund/VA normal conditions this fund will invest at least 65% of
its total assets in investment grade debt securities.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Seeks capital appreciation from investments in OppenheimerFunds, Inc.
securities of well-known and established companies. Such
Capital Appreciation Fund/VA securities generally have a history of earnings and
dividends and are issued by seasoned companies (having
an operating history of at least five years, including
predecessors). Current income is a secondary
consideration in the selection of the Capital
Appreciation Fund's portfolio securities.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Multiple Strategies Fund/VA Seeks total investment return (which includes current OppenheimerFunds, Inc.
income and capital appreciation in the values of its
shares) from investments in common stocks and other
equity securities, bonds and other debt securities, and
"money market" securities.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
SALOMON BROTHERS VARIABLE SERIES FUNDS
- -------------------------------------- ------------------------------------------------------------------ --------------------------
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Seeks long-term growth of capital with current income as Salomon Brothers Asset
a secondary objective, primarily through investments in Management Inc
Investors Fund common stocks of well-known companies.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Seeks high level of current income with capital Salomon Brothers Asset
appreciation as a secondary objective, through a Management Inc
globally diverse portfolio of fixed-income investments,
Strategic Bond Fund including lower-rated fixed income securities commonly
known as junk bonds.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
Total Return Fund Seeks to obtain above-average income by primarily Salomon Brothers Asset
investing in a broad variety of securities, including Management, Inc,
stocks, fixed-income securities and short-term
obligations.
- -------------------------------------- ------------------------------------------------------------------ --------------------------
</TABLE>
Not all these portfolios may be available in all states or markets.
We will purchase shares of the portfolios at net asset value and direct them to
the appropriate Investment Subdivisions of Separate Account III. We will redeem
sufficient shares of the appropriate portfolios at net asset value to pay
surrender/partial surrender proceeds or for other purposes described in the
Policy. We automatically reinvest all dividends and capital gain distributions
of the portfolios in shares of the distributing portfolios at their net asset
value on the date of distribution. In other words, we do not pay portfolio
dividends or portfolio distributions out to Owners as additional units, but
instead reflect them in Unit Values.
Shares of the portfolios of the Funds are not sold directly to the general
public. They are sold to us, and they may also be sold to other insurance
companies that issue variable annuity and variable life insurance policies. In
addition, they may be sold to retirement plans.
When a Fund sells shares in any of its portfolios both to variable annuity and
to variable life insurance separate accounts, it engages in mixed funding. When
a Fund sells shares in any of its portfolios to separate accounts of
unaffiliated life insurance companies, it engages in shared funding.
Each Fund may engage in mixed and shared funding. Therefore, due to differences
in redemption rates or tax treatment, or other considerations, the interests of
various shareholders participating in a Fund could conflict. A Fund's Board of
Directors will monitor for the existence of any material conflicts, and
determine what action, if any, should be taken. SEE the Prospectuses for the
Funds.
We have entered into agreements with either the investment adviser or
distributor of each of the Funds under which the adviser or distributor pays us
a fee ordinarily based upon an annual average percentage of the average
aggregate net amount we have invested on behalf of Separate Account III and
other
23
<PAGE>
separate accounts. These percentages differ, and some investment advisers or
distributors pay us a greater percentage than other advisors or distributors.
These agreements reflect administrative services we provide.
YOUR RIGHT TO VOTE PORTFOLIO SHARES
As required by law, we will vote the portfolio shares held in Separate Account
III at meetings of the shareholders of the Funds. The voting will be done
according to the instructions of Owners who have interests in any Investment
Subdivisions, which invest in the portfolios of the Funds. If the 1940 Act or
any regulation under it should be amended, and if as a result we determine that
we are permitted to vote the portfolios' shares in our own right, we may elect
to do so.
We will determine the number of votes which you have the right to cast by
applying your percentage interest in an Investment Subdivision to the total
number of votes attributable to the Investment Subdivision. In determining the
number of votes, we will recognize fractional shares.
We will vote portfolio shares of a class held in an Investment Subdivision for
which we received no timely instructions in proportion to the voting
instructions which we received for all Policies participating in that Investment
Subdivision. We will apply voting instructions to abstain on any item to be
voted on a pro-rata basis to reduce the number of votes eligible to be cast.
Whenever a Fund calls a shareholders meeting, each person having a voting
interest in an Investment Subdivision will receive proxy material, reports and
other materials relating to the portfolio. Since each portfolio may engage in
shared funding, other persons or entities besides the Company may vote portfolio
shares. SEE Investment Subdivisions.
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CHARGES AND DEDUCTIONS
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This section describes the charges and deductions we make under the Policy to
compensate us for the services and benefits we provide, costs and expenses we
incur, and risks we assume. The services and benefits we provide include:
o the partial surrender, surrender, Policy loan and death benefits under the
Policy;
o investment options, including Net Premium allocations, dollar-cost averaging
and portfolio rebalancing programs;
o administration of various elective options under the Policy; and
o the distribution of various reports to Owners.
The costs and expenses we incur include:
o those associated with underwriting applications, increases in Specified
Amount, and riders;
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o various overhead and other expenses associated with providing the services
and benefits provided by the Policy;
o sales and marketing expenses; and
o other costs of doing business, such as federal, state and local premium and
other taxes and fees.
The risks we assume include:
o that the Insureds may live for a shorter period of time than estimated,
resulting in the payment of greater death benefits than expected; and
o that the costs of providing the services and benefits under the Policies
will exceed the charges deducted.
We may profit from any charges deducted, such as the mortality and expense risk
charge. We may use any such profits for any purpose, including payment of
distribution expenses.
PREMIUM CHARGE
If the initial Specified Amount is $500,000 or more, we currently deduct a 3
1/2% charge (5% maximum) from each Charge (per $1,000 of Specified Amount)
premium before placing the resulting Net Premium in the Investment Subdivisions.
If the initial Specified Amount is at least $250,000 but less than $500,000, we
currently deduct a 6 1/2% premium charge (8% maximum). We currently do not
deduct the maximum premium charge but reserve the right to do so. We will not
assess the premium charge against the policy loan portion of a premium received
from the rollover of a life insurance policy.
MORTALITY AND EXPENSE RISK CHARGE
We currently deduct a daily charge from assets in the Investment Subdivisions
attributable to the Policies at an effective annual rate of 0.70% of net assets.
We will not increase this charge for the duration of your Policy. This charge is
factored into the net investment factor.
The mortality risk we assume is the risk that the Insureds may live for a
shorter period of time than estimated and, therefore, a greater amount of Death
Benefit proceeds than expected will be payable. The expense risk we assume is
that expenses incurred in issuing and administering the Policies will be greater
than estimated and, therefore, will exceed the expense charge limits set by the
Policy.
MONTHLY DEDUCTION
We make a monthly deduction on the Policy Date and each Monthly Anniversary Day
from Account Value. The monthly deduction for each Policy consists of:
o the cost of insurance charge (discussed below);
o a policy charge of $5;
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o an initial expense charge deducted for the first 10 Policy Years based on
the Insureds issue Ages according to the chart below:
Charge (per $1,000 of
Issue Age Specified Amount)
--------- -----------------
20 to 44 $.08
45 to 59 $.13
60 to 85 $.20
For joint Insureds, we will: (i) calculate the charge for each insured,
(2) take an average of the two expense charges, and (3) deduct the
average charge.
o an additional expense charge deducted for 10 years following an
increase in the Specified Amount based on the Insured's Issue Age
according to the chart below:
Charge (per $1,000 of
Issue Age Specified Amount)
--------- -----------------
20 to 44 $.08
45 to 59 $.13
60 to 85 $.20
For joint Insureds, we will: (i) calculate the charge for each insured,
(2) take an average of the two expense charges, and (3) deduct the
average charge.
The additional expense charge will become effective on the Monthly
Anniversary Date following the increase in Specified Amount.
o and any charges for additional benefits added by riders to the Policy (SEE
Supplemental Benefits).
We will allocate the monthly deduction for a Policy Month among the Investment
Subdivisions of Separate Account III in the same proportion that your Policy's
Account Value in each Subdivision bears to the total Account Value in all
Investment Subdivisions at the beginning of the Policy Month.
COST OF INSURANCE
The cost of insurance is a significant charge under your Policy because it is
the primary charge for the Death Benefit we provide you. We determine the cost
of insurance in a manner that reflects the anticipated mortality of both
Insureds and the fact that the Death Benefit is not payable until the death of
the Last Insured. Because the cost of insurance depends on a number of factors
(Age, gender, Policy duration, and rating class), the cost will vary from Policy
to Policy and from Monthly Anniversary Day to Monthly Anniversary Day. The cost
of insurance rates generally increase as the Insureds' Attained Age increases.
We calculate the cost of insurance on each Monthly Anniversary Day based on the
net amount risk. We determine the net amount at risk by the following formula:
Death Benefit
-------------
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1.0032737 = Account Value
To determine the cost of insurance for a particular Policy Month, we divide the
net amount at risk by 1000 and multiply that result by the applicable cost of
insurance rate. If Option B is in effect, and the Specified Amount has
increased, we first consider the Account Value part of the initial Specified
Amount. If the Account Value is more than the initial Specified Amount, we will
consider it part of the increased Specified Amounts resulting from increases in
the order of the increases. Account Value, as used in this paragraph, means the
Account Value at the beginning of the month before the Monthly Anniversary Day.
The cost of insurance rates for the Policy are based on each Insured's issue
Age, gender, Policy duration, and applicable rating class. We currently place
Insureds in the following rating classes when we issue the Policy, based on our
underwriting: a male or female; and a nicotine use or no nicotine use rating
class. In addition, some Insureds may qualify for a preferred rating. The
original rating classes apply to the initial Specified Amount. If you apply for
an increase in Specified Amount, you will have to submit evidence satisfactory
to us that each Insured is insurable at the same rating class used at the time
we issued the Policy. The death of the first Insured to die will not affect the
cost of insurance scale for the second Insured.
We may change the cost of insurance rates from time to time at our sole
discretion, but we guarantee that the rates we charge will never exceed the
maximum rates shown in your Policy. These rates are based on the Commissioners'
1980 Standard Ordinary Mortality Tables. Modifications to cost of insurance
rates are made for rating classes other than standard. The rates we currently
charge are, at most ages, lower than the maximum permitted under the Policies
and depend on our expectation of future experience with respect to mortality,
interest, expenses, persistency, and taxes. A change in rates will apply to all
persons of the same age, gender, and rating class and whose Policies have been
in effect for the same length of time. We will review our rates no more
frequently than once per year or less frequently than every five years.
SURRENDER CHARGE
If you fully surrender your Policy during the surrender charge period, we will
deduct a surrender charge. We calculate the schedule of surrender charges that
applies to a Policy by multiplying surrender charge factors times the Specified
Amount, divided by $1,000. We determine the factors per $1,000 of Specified
Amount and vary them by issue Age, gender, and rating class of each Insured and
by the number of months since the Policy Date. The surrender charge decreases
uniformly each Policy Month to zero in the last month of Policy Year 11. We will
deduct the surrender charge before we pay the Surrender Value. The surrender
charge will not exceed $50 per $1,000 of Specified Amount.
The chart below illustrates the surrender charge factor for the first Policy
Year per $1,000 of Specified Amount for Policies which are issued on a male no
nicotine use and female no nicotine use standard rating class basis. These
calculations assume both Insureds are the same issue Age.
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Factor per $1,000
Issue Age of Specified Amount
--------- -------------------
25/25 $12
35/35 $14
45/45 $18
55/55 $24
65/65 $35
75/75 $41
85/85 $34
If you increase the Specified Amount (other than as a result of a change from
Death Benefit Option A to Death Benefit Option B), you will be subject to an
additional surrender charge for another 11 Policy Years following the increase.
We will base the amount of the additional surrender charge on the initial scale
of per $1,000 surrender charge factors calculated at the time of issue.
If you decrease the Specified Amount during the period that surrender charges
apply (other than as a result of partial surrenders or a change from Death
Benefit Option B to Death Benefit Option A), you will be assessed a portion of
the surrender charges to which the Policy is subject. We will deduct the amount
of the surrender charge from your Account Value, and will allocate the charge
among each Investment Subdivision in the same proportion that the Policy's
Account Value in each Investment Subdivision bears to the Account Value in all
Investment Subdivisions. We will base the amount of surrender charge:
(1) first on any surrender charge in effect on the most recent increase and
the amount of reduction to this increase caused by the decrease;
(2) then on any surrender charge in effect on the next most recent
increases successively and the amount of any reduction to each of these
increases caused by the decrease; and
(3) finally on the surrender charge in effect on coverage provided under
the original application and any reduction to this amount caused by the
decrease.
Whenever we deduct a portion of the surrender charges because you decreased the
Specified Amount, we reduce the Policy's remaining surrender charges to reflect
the assessments made.
The total surrender charge for any given Policy Month is the sum of:
o the surrender charge that applies to the initial Specified Amount, adjusted
for any decrease in Specified Amount; plus
o the surrender charges that apply to any increases in Specified Amount,
adjusted for any decrease in Specified Amount.
We disclose the surrender charges on the data pages to your Policy.
We do not assess a surrender charge for partial surrenders, but do assess a
processing fee.
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PARTIAL SURRENDER PROCESSING FEE
We deduct a partial surrender processing fee on partial surrenders you make. The
fee equals the lesser of $25 or 2% of the amount surrendered.
TRANSFER CHARGE
We assess a $10 transfer charge for each transfer after the first transfer you
make in any calendar month. This charge is at cost with no profit to us. We take
this charge from the amount you transfer. For purposes of assessing this charge,
we consider each transfer request one transfer, regardless of the number of
Investment Subdivisions affected by the transfer. Multiple transfers within the
same Valuation Period are also considered one transfer for this purpose.
OTHER CHARGES
If you request a projection of illustrative future life insurance under the
Policy and Policy values, we reserve the right to charge a maximum fee of $25
for the cost of preparing the projection. There are deductions from and expenses
paid out of the assets of each portfolio that are more fully described in each
Fund's prospectus.
REDUCTION OF CHARGES FOR GROUP SALES
We may reduce charges and/or deductions for sales of the Policies to a trustee,
employer or similar entity representing a group or to members of the group where
such sales result in savings of sales or administrative expenses. We will base
these discounts on the following:
1. THE SIZE OF THE GROUP. Generally, the sales expenses for each
individual owner for a larger group are less than for a smaller group
because more Policies can be implemented with fewer sales contacts and
less administrative cost.
2. THE TOTAL AMOUNT OF PREMIUM PAYMENTS TO BE RECEIVED FROM A GROUP. Per
Policy sales and other expenses are generally proportionately less on
larger premium payments than on smaller ones.
3. THE PURPOSE FOR WHICH THE POLICIES ARE PURCHASED. Certain types of
plans are more likely to be stable than others. Such stability reduces
the number of sales contacts and administrative and other services
required, reduces sales administration and results in fewer Policy
terminations. As a result, our sales and other expenses are reduced.
4. THE NATURE OF THE GROUP FOR WHICH THE POLICIES ARE PURCHASED. Certain
types of employee and professional groups are more likely to continue
Policy participation for longer periods than are other groups with more
mobile membership. If fewer Policies are terminated in a given group,
our sales and other expenses are reduced.
5. OTHER CIRCUMSTANCES. There may be other circumstances of which we are
not presently aware, which could result in reduced sales expenses.
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<PAGE>
If, after we consider the factors listed above, we determine that a group
purchase would result in reduced sales expenses, we may reduce the charges
and/or deductions for each group. Reductions in these charges and/or deductions
will not be unfairly discriminatory against any person, including the affected
Owners and all other owners of policies funded by Separate Account III.
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THE POLICY
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APPLYING FOR A POLICY
To purchase a Policy, you and your registered representative must complete an
application and submit it to us at our Variable Life Servicing Center. You also
must pay an initial premium of a sufficient amount. SEE Premiums, below. You can
submit your initial premium with your application or at a later date. (If you
submit your initial premium with your application, please remember that we will
place your premium in a non-interest bearing account for a certain amount of
time. SEE Allocating Premiums.) Coverage generally becomes effective as of the
Policy Date.
Generally, we will issue a Policy covering Insureds from Age 20 up to Age 85 if
evidence of insurability satisfies our underwriting rules. Required evidence of
insurability may include, among other things, medical examinations of the
Insureds. We may reject an application for any lawful reason.
If you do not pay the full first premium with your application, the insurance
will become effective on the effective date. This date is the date that you pay
your premium and that we deliver your Policy. All persons proposed for insurance
must be insurable on the Policy Date.
If you pay the full first premium with your application, we may give you a
conditional receipt. This means that, subject to our underwriting requirements
and subject to a maximum limitation, your insurance will become effective on the
effective date we specified in the conditional receipt, provided the Insureds
are found to be, on the effective date, insurable at standard premium rates for
the plan and amount of insurance requested in the application. This effective
date will be the latest of (i) the date of completion of the application, (ii)
the date of completion of all medical exams and tests we require, and (iii) the
policy date you requested when that date is later than the date you completed
your application.
OWNER
You have rights in the Policy during the Insureds' lifetimes. If you die before
the Insureds and there is no contingent Owner, ownership will pass to your
estate.
We will treat Joint Owners as having equal undivided interests in the Policy.
All Owners must together exercise any ownership rights in the Policy.
BENEFICIARY
You designate the primary Beneficiaries and contingent Beneficiaries when you
apply for the Policy. You may name one or more primary Beneficiaries or
contingent Beneficiaries. We will pay the proceeds in equal shares to the
survivors in the appropriate Beneficiary class, unless you request otherwise.
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<PAGE>
Unless an optional payment plan is chosen, we will pay the Death Proceeds in a
lump sum to the primary Beneficiary(ies). If the primary Beneficiary(ies) dies
before the Insureds, we will pay the proceeds to the contingent
Beneficiary(ies). If there is no surviving Beneficiary(ies) we will pay the
proceeds to you or your estate.
CHANGING THE OWNER OR BENEFICIARY
During either Insured's life, you may change the Owner. If you reserved the
right, you also may change the Beneficiary during either Insured's life. An
irrevocable Beneficiary may only be changed with the consent of that irrevocable
Beneficiary. To change the Owner or Beneficiary, please write our Variable Life
Servicing Center. The request and the change must be in a form satisfactory to
us and we must actually receive the request. The change will take effect as of
the date you signed the request.
CANCELING A POLICY
You may cancel a Policy during the "free-look period" by returning it to us at
our Variable Life Servicing Center or to the agent who sold it. The free-look
period expires 10 days after you receive the Policy. The free-look period is
longer if required by state law. If you decide to cancel the Policy during the
free-look period, we will treat the Policy as if it had never been issued.
Within seven calendar days after we receive the returned Policy, we will refund
you the greater of:
o the total amount of monthly deductions made against Account Value and any
charges deducted from premiums paid (excluding portfolio fees and charges)
plus the Net Premiums allocated to Separate Account III adjusted by
investment gains or losses; or
o the total of all premiums paid.
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PREMIUMS
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GENERAL
The premium amounts sufficient to fund a Policy depend on a number of factors,
such as the Age, gender, and rating class of the proposed Insureds, the desired
Specified Amount, any supplemental benefits, and investment performance of the
Investment Subdivisions. We will usually credit your initial premium payment to
the Policy on the later of the date we approve your application and the date we
receive your payment. We will credit any subsequent premium payment to the
Policy on the Valuation Day we receive it at our Variable Life Servicing Center.
After you pay the initial premium, you may make unscheduled premium payments in
any amount and at any time subject to certain restrictions.
The total premiums you pay may not exceed guideline premium limitations for life
insurance set forth in the Code and shown in your Policy. We may reject any
premium, or any portion of a premium, that would result in the Policy being
disqualified as life insurance under the Code. We will refund any rejected
premium along with any interest it accrued. For your convenience, we will
monitor Policies and will attempt to notify you on a timely basis if your Policy
is in jeopardy of becoming a Modified Endowment Contract ("MEC") under the Code.
SEE Tax Considerations.
We reserve the right to limit the number and amount of any unscheduled premium
payment.
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TAX FREE EXCHANGES (1035 EXCHANGES)
We will accept as part of your initial premium money from one contract that
qualified for a tax free exchange under Section 1035 of the Code. If you
contemplate such an exchange, you should consult a competent tax advisor to
learn the potential tax effects of such a transaction. Replacing your existing
coverage with this Policy may not be to your advantage. We will accept 1035
exchanges even if there is an outstanding loan on the other policy, so long as
the outstanding loan is no more than 40% of the rollover premium.
PERIODIC PREMIUM PLAN
When you apply for a Policy, you may select a periodic premium payment plan.
Under this plan, you may choose to receive a premium notice either annually,
semi-annually, or quarterly. You can also arrange for annual, semi-annual,
quarterly or monthly premium payments paid via automatic deduction from your
bank account or any other similar account we accept. You are not required to pay
premiums in accordance with this premium plan; you can pay more or less than
planned or skip a planned premium payment entirely. You can change the amount of
planned premiums and payment arrangements, or switch between frequencies,
whenever you want by providing satisfactory instructions to our Variable Life
Servicing Center. This change will be effective upon our receipt of the
instructions. Depending on the Account Value at the time of an increase in the
Specified Amount and the amount of the increase requested, a change in your
periodic premium payments may be advisable. SEE Changing the Specified Amount.
MINIMUM PREMIUM PAYMENT
Generally the minimum premium payment we will accept is $25 (please keep in mind
that you may have to pay a higher amount to keep the Policy in force). Even if
you pay the minimum premium amount, your Policy may lapse. SEE Premium to
Prevent Termination. For purposes of the minimum premium payment requirements,
we deem any payment to be a planned periodic premium if we receive it within 30
days (before or after) of the scheduled date for a planned periodic premium
payment and the percentage difference between the planned amount and the actual
payment amount is not more than 10%. We will deem all other premium payments to
be unscheduled premium payments. Unless you direct us otherwise, we apply
unscheduled premium payments first to repay any Policy Debt.
ALLOCATING PREMIUMS
When you apply for a Policy, you specify the percentage of your Net Premium we
allocate to each Investment Subdivision. You may only direct your Net Premiums
and Account Value to seven Investment Subdivisions at any given time. You can
change the allocation percentages at any time by writing or calling our Variable
Life Servicing Center. The change will apply to all premiums we receive with or
after we receive your instructions. Net Premium allocations must be in
percentages totaling 100%, and each allocation percentage must be a whole
number.
Until we approve your application, receive all necessary forms including any
subsequent amendments to the application, and receive the entire initial
premium, we will place any premiums you pay into a non-interest bearing account.
After we issue your Policy, we will allocate your Net Premium directly
to the Investment Subdivisions you chose.
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HOW YOUR ACCOUNT VALUE VARIES
- --------------------------------------------------------------------------------
ACCOUNT VALUE
The Account Value is the entire amount we hold under your Policy for you. The
Account Value serves as a starting point for calculating certain values under a
Policy. It is the sum of the total amount under the Policy in each Investment
Subdivision and the amount held in the General Account to secure Policy Debt.
SEE Loan Benefits. We determine Account Value first on your Policy Date (or on
the date we receive your initial premium, if later) and after that on each
Valuation Day. Your Account Value will vary to reflect the performance of the
Investment Subdivisions to which you have allocated amounts and also will vary
to reflect Policy Debt, charges for monthly deduction, mortality and expense
risk charges, transfers, partial surrenders, Policy loan interest, and Policy
loan repayments. Your Account Value may be more or less than the premiums you
paid.
SURRENDER VALUE
The Surrender Value on a Valuation Day is the Account Value reduced by both any
surrender charge that we would deduct if you surrendered the Policy that day and
any Policy Debt.
INVESTMENT SUBDIVISION VALUES
On any Valuation Day, the value of an Investment Subdivision equals the number
of Investment Subdivision units we credit to the Policy multiplied by the Unit
Value for that day. When you make allocations to an Investment Subdivision,
either by Net Premium allocation, transfer of Account Value, transfer of loan
interest from the General Account, or repayment of a Policy loan, we credit your
Policy with units in that Investment Subdivision. We determine the number of
units by dividing the amount allocated, transferred or repaid to the Investment
Subdivision by the Investment Subdivision's Unit Value for the Valuation Day
when we effect the allocation, transfer or repayment.
The number of units we credit to a Policy will decrease whenever we take the
allocated portion of the monthly deduction, you take a Policy loan or a partial
surrender from the Investment Subdivision, you transfer an amount from the
Investment Subdivision, you take a partial surrender from the Investment
Subdivision, or you surrender the Policy.
UNIT VALUES
We arbitrarily set the Unit Value for each Investment Subdivision at $10 when we
established the Investment Subdivision. After that, an Investment Subdivision's
Unit Value varies to reflect the investment experience of the underlying
portfolio, and may increase or decrease from one Valuation Day
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<PAGE>
to the next. We determine Unit Value, after an Investment Subdivision's
operations begin, by multiplying the net investment factor for that Valuation
Period by the Unit Value for the immediately preceding period.
NET INVESTMENT FACTOR
The net investment factor for a Valuation Period is (a) divided by (b), minus
(c), where:
(a) is the result of:
1. the value of the assets at the end of the preceding Valuation
Period; PLUS
2. the investment income and capital gains, realized or
unrealized, credited to those assets at the end of the
Valuation Period for which the net investment factor is being
determined; MINUS
3. the capital losses, realized or unrealized, charged against
those assets during the Valuation Period; MINUS
4. any amount charged against Separate Account III for taxes, or
any amount we set aside during the Valuation Period as a
provision for taxes attributable to the operation or
maintenance of Separate Account III; and
(b) is the value of the assets in the Investment Subdivision at the end
of the preceding Valuation Period; and
(c) is a charge no greater than .0019246% for each day in the Valuation
Period. This corresponds to .70% per year.
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TRANSFERS
- --------------------------------------------------------------------------------
GENERAL
Transfer requests may be made in writing or in any other form acceptable to us.
A transfer will take effect as of the end of the Valuation Period during which
we receive your request at our Variable Life Servicing Center.
We may defer transfers under the same conditions that we may delay paying
proceeds. SEE Requesting Payments. Currently, there is no limit on the number of
transfers among the Investment Subdivisions, but we reserve the right to limit
the number of transfers to twelve each calendar year. We reserve the right to
modify, restrict, suspend or eliminate the transfer privileges, including
telephone transfer privileges, at any time, for any reason. There is a charge
after the first transfer made in a calendar month. SEE Transfer Charge.
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Sometimes, we may not honor your transfer request. We may not honor your
transfer request:
(i) if any Investment Subdivision that would be affected by the
transfer is unable to purchase or redeem shares of the Fund in
which the Investment Subdivision invests;
(ii) if the transfer is a result of more than one trade involving the
same Investment Subdivision within a 30 day period;
(iii) if the transfer would adversely affect unit values; or
(iv) if the transfer would adversely affect any portfolio affected by
the transfer.
We also may not honor transfers made by third parties. (SEE Transfers by Third
Parties.)
When thinking about a transfer of Account Value, you should consider the
inherent risk involved. Frequent transfers based on short-term expectations may
increase the risk that you will make a transfer at an inopportune time.
DOLLAR-COST AVERAGING
The dollar-cost averaging program permits you to systematically transfer on a
monthly or quarterly basis a set dollar amount from the Investment Subdivision
investing in the Money Market portfolio of the GE Investments Funds (the "Money
Market Investment Subdivision") to any combination of other Investment
Subdivisions (as long as the total number of Investment Subdivisions used does
not exceed the maximum number allowed under the Policy). The dollar-cost
averaging method of investment is designed to reduce the risk of making
purchases only when the price of units is high, but you should carefully
consider your financial ability to continue the program over a long enough
period of time to purchase units when their value is low as well as when it is
high. Dollar-cost averaging does not assure a profit or protect against a loss.
You may participate in the dollar-cost averaging program by completing a
dollar-cost averaging agreement or calling our Variable Life Servicing Center.
To use the dollar-cost averaging program, you must transfer at least $100 from
the Money Market Investment Subdivision to any other Investment Subdivision. If
any transfer would leave less than $100 in the Money Market Investment
Subdivision, we will transfer the entire amount. Once elected, dollar-cost
averaging remains in effect from the date we receive your request until the
value of the Investment Subdivision from which transfers are being made is
depleted, or until you cancel the program by written request or by telephone if
we have your telephone authorization on file. If you elect the program at time
of application, the dollar-cost averaging program will begin on the 5th day of
the month immediately following the allocation of your Net Premium to the
Investment Subdivisions (SEE "Allocating Premiums" for a description of when
this occurs).
There is no additional charge for dollar-cost averaging, and we do not consider
a transfer under this program a transfer for purposes of assessing a transfer
charge, nor for calculating any limit on the maximum number of transfers we may
impose for a calendar year. We reserve the right to discontinue or modify the
dollar-cost averaging program at any time and for any reason.
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ASSET ALLOCATION
You may select from certain asset allocation model portfolios, or you may use a
model portfolio as a guide to help you develop your own asset allocation
program.
If you elect to participate in the asset allocation program, we will
automatically allocate all premium payments among the Investment Subdivisions
indicated by the model and the portfolios within the model you select. Although
you may use only one model at a time, you may elect to change your selection as
your tolerance for risk, needs, and/or objectives change. You may use a
questionnaire that we offer to determine the model that best meets your risk
tolerance and time horizons. Asset allocation does not guarantee a profit or
protect against a loss.
Because each Investment Subdivision performs differently over time, your
portfolio mix may vary from its initial allocations. You may elect to have the
portfolios automatically rebalanced under our portfolio rebalancing program,
described below.
From time to time, we will review the models and may find that allocation
percentages among the Investment Subdivisions or even some of the Investment
Subdivisions within a particular model need to be changed. We will send you
notice that such a change has been made. Unless you elect to participate in the
new allocation model you will remain in your current designated allocation
model. This change will not be made automatically.
There is no additional charge for the asset allocation program. We reserve the
right to discontinue offering this program at any time and for any reason.
PORTFOLIO REBALANCING
Once you allocate your money among the Investment Subdivisions, the performance
of each Investment Subdivision may cause your allocation to shift. You may
instruct us to automatically rebalance (on a quarterly, semi-annual or annual
basis) your Account Value to return to the percentages specified in your
allocation instructions. You may elect to participate in the portfolio
rebalancing program at any time by completing the portfolio rebalancing
agreement. Your percentage allocations must be in whole percentages. Subsequent
changes to your percentage allocations may be made at any time by writing or
calling our Variable Life Servicing Center. Once elected, portfolio rebalancing
remains in effect from the date we receive your request until you instruct us to
discontinue portfolio rebalancing. There is no additional charge for using
portfolio rebalancing, and we do not consider a portfolio rebalancing transfer a
transfer for purposes of assessing a transfer charge, nor for calculating any
limit on the maximum number of transfers we may impose for a calendar year. We
reserve the right to discontinue or modify the portfolio rebalancing program at
any time and for any reason. Portfolio rebalancing does not guarantee a profit
or protect against a loss.
TRANSFERS BY THIRD PARTIES
As a general rule and as a convenience to you, we allow you to give a third
party the right to effect transfers on your behalf. However, when the same third
party makes transfers for many Owners, the result can be simultaneous transfers
involving large amounts of Account Value. Such transfers can disrupt the orderly
management of the portfolios underlying the Policy, can result in higher costs
to
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Owners, and are generally not compatible with the long-range goals of Owners. We
believe that such simultaneous transfers effected by such third parties are not
in the best interests of all shareholders of the portfolios underlying the
Policies, and the managements of those portfolios share this position.
Therefore, to the extent necessary to reduce the adverse effects of simultaneous
transfers made by third parties who make transfers on behalf of multiple Owners,
we may not honor such transfers. Also, we will institute procedures to assure
that the transfer requests that we receive have, in fact, been made by the
Owners in whose names they are submitted. These procedures will not, however,
prevent Owners from making their own transfer requests.
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DEATH BENEFITS
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As long as the Policy remains in force, we will process a claim for Death
Proceeds upon receipt at our Variable Life Servicing Center of: (i) the Policy;
(ii) satisfactory proof that both Insureds died while the Policy was in effect;
and (iii) proof of interest of the claimant. SEE Requesting Payments. We will
pay the Death Proceeds to the Beneficiary. No Death Proceeds are available at
the death of the first Insured to die.
AMOUNT OF DEATH PROCEEDS
The amount of Death Proceeds will depend on:
o the Death Benefit determined under the Death Benefit Option in effect
on the date of death of the Last Insured;
o the use of the Account Value;
o any partial surrenders;
o any Policy Debt;
o any additional insurance provided by rider;
o any increase or decrease in existing coverage;
o either Insured's suicide during the first two Policy Years or during
the first two Policy Years following an increase in existing coverage;
and
o a misstatement of either Insured's Age or gender.
DEATH BENEFIT OPTIONS
There are two Death Benefit Options available under the Policy. Under Option A,
the Death Benefit equals the greater of:
o the Specified Amount plus the Account Value; or
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o the applicable corridor percentage of the Account Value as determined
using the table of percentages shown below.
Under Option B, the Death Benefit equals the greater of:
o the Specified Amount; or
o the applicable corridor percentage of the Account Value as determined
using the table percentages shown below.
Under both options, we determine the Specified Amount and Account Value on the
date of death of the Last Insured. The corridor percentage is 250% until the
younger Insured attains Age 40 and declines after that as the younger Insured's
Attained Age increases. If the younger Insured was the first to die, the
corridor percentage will depend on the Attained Age that he or she would have
been if still living. If the table of percentages currently in effect becomes
inconsistent with any federal income tax laws and/or regulations, we reserve the
right to change the table.
<TABLE>
<CAPTION>
Table of Percentages of Account Value
<S> <C> <C> <C> <C> <C>
Younger Younger Younger
Insured's Corridor Insured's Corridor Insured's Corridor
Attained Age Percentage Attained Age Percentage Attained Age Percentage
------------ ---------- ------------ ---------- ------------ ----------
0-40 250% 54 157% 68 117%
41 243% 55 150% 69 116%
42 236% 56 146% 70 115%
43 229% 57 142% 71 113%
44 222% 58 138% 72 111%
45 215% 59 134% 73 109%
46 209% 60 130% 74 107%
47 203% 61 128% 75-90 105%
48 197% 62 126% 91 104%
49 191% 63 124% 92 103%
50 185% 64 122% 93 102%
51 178% 65 120% 94+ 101%
52 171% 66 119%
53 164% 67 118%
</TABLE>
Under Option A, the Death Benefit will vary directly with the investment
performance of the Account Value. Under Option B, the Death Benefit ordinarily
will not change until the applicable percentage amount of the Account Value
exceeds the Specified Amount or you change the Specified Amount.
CHANGING THE DEATH BENEFIT OPTION
You select the Death Benefit Option when you apply for the Policy. However, you
may change the Option on your Policy at any time by writing to our Variable Life
Servicing Center. The effective date of the change will be the Monthly
Anniversary Day after we receive the request for the change. We will send you
revised Policy data pages reflecting the new Option and the effective date of
the change. If you request a change from Option A to Option B, we will increase
the Specified Amount by the Account
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<PAGE>
Value on the effective date of the increase. If you request a change from Option
B to Option A, we will decrease the Specified Amount after the change by the
Account Value on the effective date of the change. A change in the Death Benefit
Option will affect the cost of insurance charges.
CHANGING THE SPECIFIED AMOUNT
After a Policy has been in effect for one year, you may increase or decrease the
Specified Amount. However, we permit changes in the Specific Amount that are a
result of a Death Benefit Option Change from any time. To make a change, you
must send a written request and the Policy to our Variable Life Servicing
Center. Any change in the Specified Amount may affect the cost of insurance rate
and the net amount at risk, both of which may change your cost of insurance. SEE
Monthly Deduction and Cost of Insurance. Depending on the Account Value at the
time of an increase in the Specified Amount and the amount of the increase
requested, it may be advisable to change your periodic payments upon an increase
in the Specified Amount.
Any change in the Specified Amount will affect the maximum premium limitation.
If a decrease in the Specified Amount causes the premiums to exceed new lower
limitations required by federal tax law, we will withdraw the excess from
Account Value and refund it to you so that the Policy will continue to meet
these requirements. We will withdraw the Account Value that we refund from each
Investment Subdivision in the same proportion that the Account Value in that
Investment Subdivision bears to the total Account Value in all Investment
Subdivisions under the Policy at the time of the withdrawal (i.e., on a pro-rata
basis).
Any decrease in the Specified Amount will become effective on the Monthly
Anniversary Day after the date we receive the request. The decrease will first
apply to coverage provided by the most recent increase, then to the next most
recent increases successively, then to the coverage under the original
application. During the Continuation Period, we will not allow a decrease unless
the Account Value less any Policy Debt is greater than the surrender charge. The
Specified Amount following a decrease can never be less than the minimum
Specified Amount for the Policy when we issued it. A decrease may cause us to
assess a surrender charge.
While both Insureds are living, you may apply for an increase in Specified
Amount by completing a supplemental application. You will have to submit
evidence satisfactory to us that each Insured is insurable at the same or better
rating class used when the Policy was issued. An increase in Specified Amount
(other than as a result of a change from Death Benefit Option A to Death Benefit
Option B) will subject you to additional surrender charges. SEE Surrender
Charge. Any approved increase will become effective on the date shown in the
supplemental Policy data page. Please note that an increase will not become
effective if the Policy's Surrender Value is too low to cover the monthly
deduction for the Policy Month following the increase.
If there is an increase in the Specified Amount, you will incur a monthly
expense charge of up to $.20 per $1,000 of increase depending on your age at
issue. We currently vary this charge based on the issue Age of each Insured, and
we currently deduct this charge only during the first ten Policy Years following
the increase. This charge will be included in the monthly deduction. SEE Monthly
Deduction and Surrender Charge.
An increase in the Specified Amount will increase the Continuation Amounts.
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<PAGE>
A change in your Specified Amount may have federal tax consequences. SEE Tax
Considerations.
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SURRENDERS AND PARTIAL SURRENDERS
- --------------------------------------------------------------------------------
SURRENDERS
You may cancel and surrender your Policy at any time before the death of the
Last Insured and before the Maturity Date. The Policy will terminate on the
Valuation Day we receive your request at our Variable Life Servicing Center, and
you will not he able to reinstate it.
We will pay you the Surrender Value in a lump sum unless you make other
arrangements. You will incur a surrender charge if you surrender your Policy
during the first 11 Policy Years, or during 11 Policy Years after an increase
Specified Amount (except an increase in Specified Amount due to a change in the
Death Benefit) but in any event, not beyond the younger Insured's attained age
99 if earlier. A surrender may have adverse tax consequences. SEE Tax
Considerations.
PARTIAL SURRENDERS
You may make partial surrenders under your Policy at any time before the death
of the Last Insured and before the Maturity Date if you elected Option A. If you
elected Option B, you only may make partial surrenders after the first Policy
Year and before the earlier of (i) the death of the Last Insured and (ii) the
Maturity Date. The minimum partial surrender amount is $500. The maximum partial
surrender amount is the lesser of:
o the Surrender Value less $500; and
o the available loan amount (which is equal to 90% of the difference
between Account Value and any surrender charges, minus any Policy
Debt).
We will assess a processing fee for each partial surrender. SEE Partial
Surrender Processing Fee. The amount of the partial surrender will equal the
amount you requested to surrender plus the processing fee.
When you request a partial surrender, you can direct how we deduct the surrender
from your Account Value. If you provide no directions, we will deduct the
partial surrender proportionately from the Investment Subdivisions in which you
are invested.
EFFECT OF PARTIAL SURRENDERS ON ACCOUNT VALUE AND DEATH PROCEEDS
A partial surrender will reduce both the Account Value and the Death Proceeds by
the amount of the partial surrender. Under Death Benefit Option B, the Specified
Amount will also decrease by the amount of the partial surrender.
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<PAGE>
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LOANS
- --------------------------------------------------------------------------------
GENERAL
You may borrow up to the following amount:
o 90% of the difference between your Account Value at the end of the
Valuation Period during which we received your loan request and any
surrender charges on the date of the loan;
o less any outstanding Policy Debt.
You may request Policy loans by writing our Variable Life Servicing Center.
When we make a loan, we transfer an amount equal to the loan proceeds from your
Account Value in Separate Account III to our General Account and hold it as
"collateral" for the loan. If you do not direct an allocation for this transfer,
we will make it on a pro-rata basis from each Investment Subdivision in which
you have invested. We will credit interest at an annual rate of at least 4% to
the collateral.
You may repay a loan in part or in full at any time during either Insured's life
while your Policy is in effect. When you repay a loan, we transfer an amount
equal to the repayment from our General Account to Separate Account III and
allocate it as you directed when you repaid the loan. If you provide no
directions, we will allocate the amount according to your standing instructions
for Net Premium allocations.
PREFERRED POLICY DEBT
We will designate a portion of Policy loans taken or existing on or after the
Preferred Loan Availability Date (as shown on the Policy data pages) as
Preferred Policy Debt. In Policy Years 11 and later, Preferred Policy Debt will
be at least as large as:
o the Account Value less any surrender charge that applies;
o minus the total premiums paid.
We redetermine the amount of Preferred Policy Debt each Policy Month. We reserve
the right to change this practice in our sole discretion.
We currently credit interest at an annual rate of 4% to that portion of Account
Value transferred to the General Account which equals Preferred Policy Debt.
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<PAGE>
INTEREST RATE CHARGED
We will charge interest daily on any outstanding non-preferred Policy loan at an
effective annual rate of 6%, and for an outstanding preferred Policy loan, we
charge interest daily at an effective annual rate of 4%. Interest is due and
payable at the end of each Policy Year while a Policy loan is outstanding. If,
on any Policy Anniversary, you have not paid interest accrued since the last
Policy Anniversary, we add the amount of the interest to the loan and this
becomes part of your outstanding Policy Debt. We transfer the interest due from
each Investment Subdivision on a pro-rata basis.
REPAYMENT OF POLICY DEBT
You may repay all or part of your Policy Debt at any time while either Insured
is living and the Policy is in force. We will treat any payments by you other
than planned periodic premiums first as the repayment of any outstanding Policy
Debt. We will treat the portion of the payment in excess of any outstanding
Policy Debt as an unscheduled premium payment. We will first apply any repayment
to reduce the portion of Policy Debt that is not Preferred Policy Debt.
You must send loan repayments to our Variable Life Servicing Center. We will
credit the repayments as of the date we receive them. We do not treat a Policy
loan repayment as a premium payment, and a loan repayment is not subject to the
premium charge.
EFFECT OF POLICY LOANS
A Policy loan affects the Policy, because we reduce the Death Proceeds and
Surrender Value under the Policy by the amount of any outstanding loan plus
interest you owe on the loan. Repaying the loan causes the Death Proceeds and
Surrender Value to increase by the amount of the repayment. As long as a loan is
outstanding, we hold an amount equal to the loan as collateral. This amount is
not affected by Separate Account III's investment performance. Amounts
transferred from Separate Account III as collateral will affect the Account
Value because we credit such amounts with an interest rate we declare rather
than a rate of return reflecting the investment performance of Separate Account
III.
There are risks involved in taking a Policy loan, a few of which include the
potential for a Policy to lapse if projected earnings, taking into account
outstanding loans, are not achieved. A Policy loan may also have possible
adverse tax consequences that could occur if a Policy lapses with loans
outstanding. SEE Tax Considerations.
We will notify you if the sum of your loans plus any interest you owe on the
loans is more than the Account Value less applicable surrender charges, or if
during the Continuation Period, the sum of your loans plus any interest you owe
on the loans is more than the Account Value less any applicable surrender
charges, and the Net Total Premium is less than the Continuation Amount. If you
do not submit a sufficient payment within 61 days from the date of the notice,
your Policy may terminate.
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<PAGE>
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TERMINATION
- --------------------------------------------------------------------------------
PREMIUM TO PREVENT TERMINATION
Generally, if on a Monthly Anniversary Day, the Surrender Value of your Policy
is too low to cover the monthly deduction, a Policy will be in default and a
grace period will begin. In that case, we will mail you notice of the additional
premium necessary to prevent your Policy from terminating. You will have a
61-day grace period from the date we mail the notice to make the required
premium payment.
However, your Policy will not lapse during the Continuation Period, even if your
Surrender Value is too low to cover the monthly deduction, so long as the Net
Total Premium is at least equal to the Continuation Amount. At the end of the
Continuation Period, you may, however, have to make an additional premium
payment to keep the Policy in force. In any event, your Policy will terminate on
the Maturity Date.
YOUR POLICY WILL REMAIN IN EFFECT DURING THE GRACE PERIOD
If the death of the Last Insured occurs during the grace period before you pay
the required premium, the Death Proceeds will still be payable to the
Beneficiary, although we will reduce the amount of the Death Proceeds by the
amount of premium that would have been required to keep the Policy in force. If
you have not paid the required premium before the grace period ends, your Policy
will terminate. It will have no value and no benefits will be payable. However,
you may reinstate your Policy under certain circumstances.
REINSTATEMENT
If you have not surrendered your Policy, you may reinstate your Policy within
three years after termination, subject to compliance with certain conditions,
including the payment of a necessary premium. You must also submit evidence of
insurability satisfactory to us that each Insured is insurable at the same
rating class used at Policy issue to determine the guaranteed maximum cost of
insurance rate scale. SEE your Policy for further information.
Any termination and subsequent reinstatement of the Policy will reduce the
Continuation Amounts.
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PAYMENTS AND TELEPHONE TRANSACTIONS
- --------------------------------------------------------------------------------
REQUESTING PAYMENTS
You may send your written requests for payment to our Variable Life Servicing
Center or give them to one of our authorized agents. We will ordinarily pay any
Death Proceeds, loan proceeds or surrender or partial surrender proceeds in a
lump sum within seven days after receipt at our Variable Life Servicing Center
of the documents required for such a payment. Other than the Death Proceeds,
which we determine as of the date of death of the Last Insured, the amount we
pay is as of the end of the Valuation Period during which our Variable Life
Servicing Center receives all required documents. We may pay your Death Proceeds
in a lump sum or under an optional payment plan. SEE Optional Payment Plans.
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<PAGE>
Any Death Proceeds that we pay in one lump sum will include interest from the
date of death of the Last Insured to the date of payment. We will pay interest
at a rate we set, or a rate set by law if greater. The minimum interest rate
which we may pay is 3.0%. We will not pay interest beyond one year or any longer
time set by law. We will reduce Death Proceeds by any outstanding Policy Debt
and any due and unpaid charges and will increase Death Proceeds by any benefits
added by rider.
We may delay making a payment or processing a transfer request if:
o the disposal or valuation of Separate Account III's assets is not
reasonably practicable because the New York Stock Exchange is closed
for other than a regular holiday or weekend, trading is restricted by
the SEC, or the SEC declares that an emergency exists; or
o the SEC by order permits postponement of payment to protect our Policy
Owners.
We also may defer making payments attributable to a check that has not cleared
the bank on which it is drawn.
TELEPHONE TRANSACTIONS
You may make certain requests under the Policy by telephone provided you sent
written authorization to us at our Variable Life Servicing Center. These include
requests for transfers, changes in premium allocation designations, dollar-cost
averaging changes and changes in the portfolio rebalancing program. Our Variable
Life Servicing Center will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. Such procedures may include,
among others, requiring some form of personal identification prior to acting
upon instructions received by telephone, providing written confirmation of such
transactions, and/or tape recording of telephone instructions. Your request for
telephone transactions authorizes us to record telephone calls. If we do not
follow reasonable procedures we may be liable for any losses due to unauthorized
or fraudulent instructions. However, if we follow reasonable procedures, we will
not be liable for any losses due to unauthorized or fraudulent instructions.
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TAX CONSIDERATIONS
- --------------------------------------------------------------------------------
FEDERAL TAX MATTERS
INTRODUCTION
This part of the Prospectus discusses the Federal income tax treatment of the
Policy. The Federal income tax treatment of the Policy is complex and sometimes
uncertain. The Federal income tax rules may vary with your particular
circumstances.
THIS DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. It does not
address all of the Federal income tax rules that may affect you and your Policy.
This discussion also does not address Federal estate or gift tax consequences,
or state or local tax consequences, associated with a Policy. As a result, you
should always consult a tax advisor about the application of tax rules to your
individual situation.
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<PAGE>
TAX STATUS OF THE POLICY
Federal income tax law generally grants favorable treatment to life insurance:
the proceeds paid on the death of the Last Insured are excluded from the gross
income of the Beneficiary, and the Owner is not taxed on increases in the
Account Value unless amounts are distributed while the Insureds are alive. For
this treatment to apply to your Policy, the premiums paid for your Policy must
not exceed a limit established by the tax law. An increase or decrease in the
Policy's Specified Amount may change this premium limit. Also, due to the
coverage of more than one Insured under the Policy, there is some uncertainty
about how this limit should be calculated. As a result, we may need to return a
portion of your premiums (with earnings) and impose higher cost of insurance
charges in the future.
We will monitor the premiums paid for your Policy to keep them within the tax
law's limit. However, for your Policy to receive favorable tax treatment as life
insurance, two other requirements must be met:
o The investments of Separate Account III must be "adequately
diversified" in accordance with Internal Revenue Service ("IRS")
regulations; and
o your right to choose particular investments for a Policy must be
limited.
INVESTMENTS IN SEPARATE ACCOUNT III MUST BE DIVERSIFIED: The IRS has issued
regulations that prescribe standards for determining whether the investments of
Separate Account III, including the assets of the Funds in which Separate
Account III invests, are "adequately diversified." If Separate Account III fails
to comply with these diversification standards, you could be required to pay tax
currently on the excess of the Account Value over the premiums paid for the
Policy.
Although we do not control the investments of all of the Funds (the Company only
indirectly controls those of GE Investments Funds, Inc., through an affiliated
company), we expect that the Funds will comply with the IRS regulations so that
Separate Account III will be considered "adequately diversified."
RESTRICTIONS ON THE EXTENT TO WHICH YOU CAN DIRECT THE INVESTMENT OF ACCOUNT
VALUES: Federal income tax law limits your right to choose particular
investments for the Policy. The U.S. Treasury Department stated in 1986 that it
expected to issue guidance clarifying those limits, but it has not yet done so.
Thus, the nature of the limits is currently uncertain. As a result, your right
to allocate Account Values among the Funds may exceed those limits. If so, you
would be treated as the owner of a portion of the assets of Separate Account III
and thus subject to current taxation on the income and gains from those assets.
The Company does not know what limits may be set forth in any guidance that the
Treasury Department may issue, or whether any such limits will apply to existing
Policies. The Company therefore reserves the right to modify the Policy without
your consent to attempt to prevent the tax law from considering you to own a
portion of the assets of Separate Account III.
NO GUARANTEES REGARDING TAX TREATMENT: The Company makes no guarantees regarding
the tax treatment of any Policy or of any transaction involving a Policy.
However, the remainder of this discussion assumes that your Policy will be
treated as a life insurance contract for Federal income tax purposes and that
the tax law will not impose tax on any increase in your Account Value until
there is a distribution from your Policy.
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TAX TREATMENT OF POLICIES -- GENERAL
DEATH PROCEEDS AND ACCOUNT VALUE INCREASES: A Policy's treatment as life
insurance for Federal income tax purposes generally has the following results:
o Death Proceeds are excludable from the gross income of the Beneficiary.
o You are not taxed on increases in the Account Value unless amounts are
distributed from the Policy while the Insureds are alive.
o The taxation of amounts distributed while the Insureds are alive
depends upon whether your Policy is a "modified endowment contract."
The term "modified endowment contract," or "MEC," is defined below.
PARTIAL AND FULL SURRENDERS AND MATURITY PROCEEDS: A partial surrender occurs
when you receive less than the total amount of the Policy's Surrender Value;
receipt of the entire Surrender Value is a full surrender. If your Policy is not
a MEC, you will generally pay tax on the amount of a partial or full surrender
only to the extent it exceeds your "investment in the contract." In a few
states, a maturity value will be paid. Maturity proceeds will be taxable to the
extent the amount received plus Policy Debt exceeds the investment in the
contract. You will be taxed on this amount at ordinary income tax rates, not at
lower capital gains tax rates. Your "investment in the contract" generally
equals the total of the premiums paid for your Policy plus the amount of any
loan that was includible in your income, reduced by any amounts you previously
received from the Policy that you did not include in your income.
SPECIAL RULE FOR CERTAIN CASH DISTRIBUTIONS IN THE FIRST 15 POLICY YEARS: During
the first 15 years after your Policy is issued, if we distribute cash to you and
reduce the Death Benefit (e.g., by decreasing the Policy's Specified Amount) at
the same time, you may be required to pay tax on all or part of the cash
payment, even if it is less than your investment in the contract. This also may
occur if we distribute cash to you up to two years before the proceeds are
reduced, or if the cash payment is made in anticipation of the reduction.
However, you will not be required to pay tax on more than the amount by which
your Account Value exceeds your investment in the contract.
CONSIDERATIONS WHERE INSUREDS LIVE PAST AGE 100: If the Insureds survive beyond
the end of the mortality table used to measure charges under the Policy, which
ends at age 100, the IRS may seek to deny the tax-free treatment of the Death
Proceeds and instead to tax you on the amount by which your Account Value
exceeds your investment in the contract. Because in most states, the Policy
continues to have insurance risk beyond age 100, for which we assess a cost of
insurance charge, we believe that the proceeds will continue to be protected
from taxation. Therefore, we have no current plans to withhold or report taxes
in this situation.
LOANS: If your Policy is not a MEC, a loan received under a Policy (i.e., Policy
Debt) normally will be treated as your indebtedness. Hence, so long as the
Policy remains in force, you will generally not be taxed on any part of a Policy
loan. However, it is possible that you could have additional income for tax
purposes if any of your Policy loan consists of Preferred Policy Debt. If your
Policy terminates (by a full surrender or by a lapse) while the Insureds are
alive, you will be taxed on the amount (if any) by which the Policy Debt plus
any amount received in cash exceeds your investment in the contract.
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<PAGE>
Generally, interest paid on Policy Debt or other indebtedness related to the
Policy will not be tax deductible, except in the case of certain indebtedness
under a Policy covering a "key person." A tax advisor should be consulted before
taking any Policy loan.
LOSS OF INTEREST DEDUCTION WHERE POLICIES ARE HELD BY OR FOR THE BENEFIT OF
CORPORATIONS, TRUSTS, ETC.: If an entity (such as a corporation or a trust, not
an individual) purchases a Policy or is the beneficiary of a Policy, a portion
of the interest on indebtedness unrelated to the Policy may not be deductible by
the entity. However, this rule does not apply to a Policy owned by an entity
engaged in a trade or business which covers the life of only one individual who
is:
o a 20% owner of the entity, or
o an officer, director, or employee of the trade or business,
at the time first covered by the Policy. This rule also does not apply to a
Policy owned by an entity engaged in a trade or business which covers the joint
lives of the 20% owner of the entity and the owner's spouse at the time first
covered by the Policy. Entities that are considering purchasing the Policy, or
that will be Beneficiaries under a Policy, should consult a tax advisor.
OPTIONAL PAYMENT PLANS: If Death Proceeds under the Policy are paid under one of
the optional payment plans, the Beneficiary will be taxed on a portion of each
payment (at ordinary income tax rates). The Company will notify the Beneficiary
annually of the taxable amount of each payment. However, if the Death Proceeds
are held by the Company under Optional Payment Plan 4 (interest income), the
Beneficiary will be taxed on the interest income as it is credited.
CHANGES AND EXCHANGES: The right to change Owners (see "Change of Owner") and
changes reducing future amounts of Death Proceeds may have tax consequences
depending upon the circumstances of each change. The exchange of one life
insurance contract for another life insurance contract generally is not taxed
(unless cash is distributed or a loan is reduced or forgiven). However, in the
case of the Policy, the other life insurance contract involved in the exchange
must also cover the same two Insureds. The exercise of a Policy Split Option
Rider may result in the taxation of the Policy as if there were a full
surrender.
SPECIAL RULES FOR MODIFIED ENDOWMENT CONTRACTS (MECS)
DEFINITION OF A "MODIFIED ENDOWMENT CONTRACT:" Special rules apply to a Policy
classified as a MEC. A Policy will be classified as a MEC if either of the
following is true:
o If premiums are paid more rapidly than allowed by a "7-pay test" under
the tax law. At your request, we will let you know the amount of
premium that may be paid for your Policy in any year that will avoid
MEC treatment under the 7-pay test.
o If the Policy is received in exchange for another policy that is a MEC.
Due to the coverage of more than one Insured under the Policy, there are special
considerations in applying the 7-pay test. For example, a reduction in the Death
Benefit at any time, such as may occur
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<PAGE>
upon a partial surrender, may cause the Policy to be a MEC, resulting in the tax
treatment described below applying. Also and more generally, the manner of
applying the 7-pay is somewhat uncertain in the case of contracts covering more
than one Insured.
TAX TREATMENT OF MECS: If a Policy is classified as a MEC, the following
special rules apply:
o A partial surrender will be taxable to you to the extent that the
Account Value exceeds your investment in the contract.
o A loan from the Policy (together with any unpaid interest included in
Policy Debt), and the amount of any assignment or pledge of the Policy,
will be taxed in the same manner as a partial surrender.
o A penalty tax of 10% will be imposed on the amount of any full or
partial surrender, loan and unpaid loan interest included in Policy
Debt, assignment, or pledge on which you must pay tax. However, the
penalty tax does not apply to a distribution made:
(1) after you attain age 59 1/2,
(2) because you have become disabled, within the meaning of the
tax law, or
(3) in substantially equal periodic payments over your life or
life expectancy (or over the joint lives or life expectancies
of you and your beneficiary, within the meaning of the tax
law).
SPECIAL RULES IF YOU OWN MORE THAN ONE MEC: All MECs that we (or any of our
affiliates) issue to you within the same calendar year will be combined to
determine the amount of any distribution from the Policy that will be taxable to
you.
INTERPRETATIVE ISSUES: The tax law's rules relating to MECs are complex and open
to considerable variation in interpretation. You should consult your tax advisor
before making any decisions regarding changes in coverage under or distributions
from your Policy.
INCOME TAX WITHHOLDING
We may be required to withhold and pay to the IRS a part of the taxable portion
of each distribution made under a Policy. However, in many cases, the recipient
may elect not to have any amounts withheld. You are responsible for payment of
all taxes and early distribution penalties, regardless of whether you request
that no taxes be withheld or if we do not withhold a sufficient amount of taxes.
At the time you request a distribution from the Policy, we will send you forms
that explain the withholding requirements.
TAX STATUS OF THE COMPANY
Under existing Federal income tax law, we do not expect to incur any Federal
income tax liability on the income or gains in Separate Account III. Based upon
this expectation, we do not impose a charge for
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Federal income taxes. If Federal income tax law changes and we are required to
pay taxes on some or all of the income and gains earned by Separate Account III,
we may impose a charge for those taxes.
We may also incur state and local taxes, in addition to premium taxes for which
a deduction from premiums is currently made. At present, these taxes are not
significant. If there is a material change in state or local tax laws, we may
impose a charge for any taxes attributable to Separate Account III.
CHANGES IN THE LAW AND OTHER CONSIDERATIONS
This discussion is based on our understanding of the Federal income tax law
existing on the date of this Prospectus. Congress, the IRS, and the courts may
modify these laws at any time, and may do so retroactively. Any person concerned
about the tax implications of ownership of a Policy should consult a competent
tax advisor.
- --------------------------------------------------------------------------------
OTHER POLICY INFORMATION
- --------------------------------------------------------------------------------
OPTIONAL PAYMENT PLANS
The Policy currently offers the following five optional payment plans as
alternatives to the payment of Death Proceeds, Surrender Value, or your Account
Value on the Maturity Date in a lump sum:
PLAN 1 -- INCOME FOR A FIXED PERIOD. We will make equal periodic payments for a
fixed period not longer than 30 years. Payments can be annual, semi-annual,
quarterly, or monthly. If the payee dies before the end of the fixed period, we
will discount the amount of the remaining guaranteed payments to the date of the
payee's death at a yearly rate of 3%. We will pay the discounted amount in one
sum to the payee's estate unless otherwise provided.
PLAN 2 -- LIFE INCOME. We will make equal monthly payments for a guaranteed
minimum period. If the payee lives longer than the minimum period, payments will
continue for his or her life. The minimum period can be 10, 15, or 20 years. If
the payee dies before the end of the guaranteed period, we will discount the
amount of remaining payments for the minimum period at the same interest rate
used to calculate the monthly income. We will pay the discounted amount in one
sum to the payee's estate unless otherwise provided.
PLAN 3 -- INCOME OF A DEFINITE AMOUNT. We will make equal periodic payments of a
definite amount. Payments can be annual, semi-annual, quarterly, or monthly. The
amount paid each year must be at least $120 for each $1,000 of proceeds.
Payments will continue until the proceeds are exhausted. The last payment will
equal the amount of any unpaid proceeds. If the payee dies, we will pay the
amount of the remaining proceeds with earned interest in one sum to the payee's
estate unless otherwise provided.
PLAN 4 -- INTEREST INCOME. We will make periodic payments of interest earned
from the proceeds left with us. Payments can be annual, semi-annual, quarterly
or monthly and will begin at the end of the first period chosen. If the payee
dies, we will pay the amount of remaining proceeds and any earned but unpaid
interest in one sum to the payee's estate unless otherwise provided.
PLAN 5 -- JOINT LIFE AND SURVIVOR INCOME. We will make equal monthly payments to
two payees for a guaranteed minimum of 10 years. Each payee must be at least 35
years old when payments begin.
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<PAGE>
Payments will continue as long as either payee is living. If both payees die
before the end of the minimum period, we will discount the amount of the
remaining payments for the 10 year period at the same interest rate used to
calculate the monthly income. We will pay the discounted amount in one sum to
the survivor's estate unless otherwise provided.
You may select an optional payment plan during either Insured's life in your
application or by writing our Variable Life Servicing Center. We will transfer
any amount left with us for payment under an optional payment plan to our
General Account. Payments under an optional payment plan will not vary with the
investment performance of Separate Account III because they are forms of
fixed-benefit annuities. SEE Tax Treatment of Policies. Amounts allocated to an
optional payment plan will earn interest at 3% compounded annually. Certain
conditions and restrictions apply to payments received under an optional payment
plan. For further information, please review your Policy or contact one of our
authorized agents.
DIVIDENDS
The Policy is non-participating. We will not pay dividends on the Policy.
INCONTESTABILITY
The Policy limits our right to contest the Policy as issued, as increased, or as
reinstated, except for material misstatements contained in the application, a
supplemental application, or a reinstatement application, after it has been in
force during the lifetimes of at least one of the Insureds for a minimum period,
generally for two years from the Policy Date, effective date of the increase, or
the date of reinstatement. We can only contest the Policy, an increase in
Specified Amount, and/or a reinstatement of the Policy if a copy of the
application was attached to the Policy when issued or delivered, or was made a
part of the Policy when a change in coverage or Policy reinstatement went into
effect. This provision does not apply to riders that provide disability
benefits.
SUICIDE EXCLUSION
If either Insured commits suicide within two years of the Policy Date, we will
limit the amount of proceeds we pay under the Policy to all premiums paid, less
outstanding Policy Debt and less amounts paid upon partial surrender of the
Policy. We also will provide a single life policy to the surviving Insured. The
single life policy will have the same Policy Date as this Policy. The rating
class of the single life policy will be the rating class of the surviving
Insured under this Policy. We may require increase premiums under the single
life policy. The policy or policies we offer will be one offered by us or by an
affiliate.
If the first Insured to die commits suicide more than two years after the Policy
Date but within two years after the effective date of an increase in the
Specified Amount, we will reduce the Specified Amount to the amount in effect
before the increase. We will refund any monthly deductions made with respect to
the increase in a lump sum to the Owner.
If the Last Insured commits suicide more than two years after the Policy Date
and within two years after an increase in the Specified Amount became effective,
we will reduce the Specified Amount to the amount in effect before the increase.
The amount payable with respect to the increase will equal the
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<PAGE>
monthly deductions that were made for that increase. The amount payable will be
treated as Death Proceeds and paid to the Beneficiary under the same conditions
as the initial Specified Amount.
MISSTATEMENT OF AGE OR GENDER
We will adjust the Death Benefit if you misstated either Insured's Age or gender
in your application.
WRITTEN NOTICE
You should send any written notice to us at our Variable Life Servicing Center.
The notice should include the Policy number and each Insured's full name. We
will send any notice to the address shown in the application unless an
appropriate address change form has been filed with us.
TRUSTEE
If you name a trustee as the Owner or Beneficiary of the Policy and the trustee
subsequently exercises ownership rights or claims benefits thereunder, we will
have no obligation to verify that a trust is in effect or that the trustee is
acting within the scope of his or her authority. Payment of Policy benefits to
the trustee will release us from all obligations under the Policy to the extent
of the payment. When we make a payment to the trustee, we will have no
obligation to ensure that such payment is applied according to the terms of the
trust agreement.
OTHER CHANGES
At any time, we may make such changes in the Policy as are necessary to assure
compliance at all times with the definition of life insurance prescribed by the
Code.
Also, we may make changes:
o to make the Policy, our operations, or the operation of Separate
Account III conform with any law or regulation issued by any government
agency to which they are subject; or
o to reflect a change in the operation of Separate Account III, if
allowed by the Policy.
Only an authorized officer of GE Capital Life has the right to change the
Policy. No agent has the authority to change the Policy or waive any of its
terms. The President or a Vice President of GE Capital Life must sign
all endorsements, amendments, or riders to be valid.
REPORTS
We maintain records and accounts of all transactions involving the Policy,
Separate Account III and Policy Debt. Within 30 days after each Policy
Anniversary, we will send you a report showing information about your Policy.
The report will show:
o the Specified Amount;
o the Account Value in each Investment Subdivision;
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<PAGE>
o the Surrender Value;
o the Policy Debt; and
o the premiums paid and charges made during the Policy Year.
We also will send you an annual and a semi-annual report for each Fund
underlying an Investment Subdivision to which you have allocated Account Value,
as required by the 1940 Act. In addition, when you pay premiums (other than by
pre-authorized checking account deduction), or if you take out a Policy loan
make transfers or make partial surrenders, you will receive a written
confirmation of these transactions.
CHANGE OF OWNER
You may change the Owner of the Policy by sending a written request on a form
satisfactory to us to our Variable Life Servicing Center while either Insured is
alive and the Policy is in force. The change will take effect the date you sign
the written request, but the change will not affect any action we have taken
before we receive the written request. A change of Owner does not change the
Beneficiary designation.
SUPPLEMENTAL BENEFITS
We offer two additional benefit riders. We add the Policy Split Option Rider
automatically to your Policy. This rider allows you to surrender this Policy in
exchange for an individual policy the life on one Insured or separate individual
policies on the lives of each Insured. The maximum, amount of insurance
available at the time the rider is exercised on either Insured is equal to
one-half the base Policy Specified Amount. There is no additional charge for
this rider, but we will require evidence of insurability when you exercise this
option. SEE Tax Considerations. For further information about this rider,
including information on the terms to which the exchange is subject, please see
your Policy.
You may elect the Four Year Term Rider. This rider protects your estate from the
IRS's "contemplation of death" rules. To avoid inclusion of Policy Death
Proceeds, the Insureds cannot possess any incidence of ownership in the Policy
(i.e., the Policy must be owned by a trust or other third party.) However,
certain situations may call for the Insureds to initially own the Policy when
estate planning documents are drawn. After ownership of the Policy has been
relinquished, the Insureds must live three years for the Death Proceeds to avoid
estate tax inclusion. The Four Year Term Rider provides an extra amount of
insurance for the first four Policy Years to cover the additional estate tax
triggered if the second death occurs within the first three years. We will pay
the amount payable under the rider at the death of the Last Insured. You may
only elect the Four Year Term Rider at the time we issue the Policy. There is an
extra charge for this rider that will be included in your monthly deduction. SEE
Tax Considerations. Please see your Policy for additional information.
Additional rules and limits apply to these supplemental benefits. Please ask
your authorized GE Capital Life agent for further information or contact our
Variable Life Servicing Center.
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USING THE POLICY AS COLLATERAL
You can assign the Policy as collateral security. You must notify us in writing
if you assign the Policy. Any payments we made before the assignment will not be
affected. We are not responsible for the validity of an assignment. An
assignment may affect your rights and the rights of the Beneficiary.
EXCHANGES
During the first 24 Policy Months, you have the right to exchange this Policy
for any other flexible adjustable joint and last survivor life Policy we or one
of our affiliates offer. We will not require evidence of insurability. If you
decide to make an exchange, we will notify you of the policies available for
exchange and the procedures to follow. You may elect to have the amount of the
new policy be either (a) or (b) where:
(a) is the Death Benefit on the date of the exchange, and
(b) is the Death Benefit minus Account Value on the date of exchange.
The new policy will have the same policy date, genders, issue ages and
equivalent rating classes as this Policy. The new policy will include such
riders and endorsements as were included in this Policy, if such riders and
endorsements are available with the new policy.
The exchange is subject to an equitable adjustment in payments and Account
Values to reflect variances, if any, in the payments and Account Values under
the existing Policy and the new policy.
REINSURANCE
We intend to reinsure a portion of the risks assumed under the Policies.
LEGAL PROCEEDINGS
GE Capital Life, like all other companies, is involved in lawsuits, including
class action lawsuits. In some class action and other lawsuits involving
insurance companies, substantial damages have been sought and/or material
settlement payments have been made. Although the outcome of any litigation
cannot be predicted with certainty, GE Capital Life believes that at the present
time there are no pending or threatened lawsuits that are reasonably likely to
have a material adverse impact on it or Separate Account III.
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ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
SALE OF THE POLICIES
Our licensed life insurance agents sell the Policies. These agents are also
registered representatives of Capital Brokerage Corporation, the principal
underwriter of the Policies, or of broker-dealers who have entered into written
sales agreements with the principal underwriter. One of these affiliated
broker-dealers is Terra Securities Corporation. (Capital Brokerage Corporation
does business in Indiana, Minnesota, New Mexico, and Texas as GE Capital
Brokerage Corporation.)
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Capital Brokerage Corporation, a Washington corporation, located at 6630 W.
Broad Street, Richmond, Virginia 23230, is registered with the SEC under the
Securities Exchange Act of 1934 as a broker-dealer and is a member of the
National Association of Securities Dealers, Inc. Capital Brokerage Corporation
also serves as principal underwriter for other variable life insurance and
variable annuity policies we issue. However, Capital Brokerage Corporation has
not retained any amounts for acting as principal underwriter of these other
policies.
Our writing agents receive commissions based on a commission schedule and rules.
First-year commissions depend on each Insured's Age, rating class, gender and
the size of the Policy. In the first Policy Year, the agent will receive a
commission of up to 85% of the maximum commissionable premium plus up to 4% of
premiums paid in excess of the maximum commissionable premium. In renewal years,
the agent receives up to 4% of the premiums paid.
We may pay a trail commission equal to an annual rate of .20% of Account Value
after the fifth Policy Year.
Agents may also be eligible to receive certain bonuses and allowances, as well
as retirement plan credits, based on commissions earned. Field management of the
Company receives compensation which we may base in part on the level of agent
commissions in their management units. Broker-dealers and their registered
agents will receive first-year and subsequent year commissions equivalent to the
total commissions and benefits received by the field management and writing
agents of the Company. We do not deduct these commissions from premium payments
or Account Value; we pay these commissions.
LEGAL MATTERS
The legal matters in connection with the Policy described in this Prospectus
have been passed on by Patricia L. Dysart, Assistant Vice President of GE
Capital Life. Sutherland Asbill & Brennan LLP of Washington, D.C. has provided
advice on matters relating to the federal securities laws.
ACTUARIAL MATTERS
Actuarial matters included in this Prospectus have been examined by Paul Haley,
Vice President and Actuary of GE Capital Life, whose opinion we filed as an
exhibit to the registration statement.
FINANCIAL STATEMENTS
We did not include financial statements for Separate Account III in this
prospectus because of the date of this prospectus, Separate Account III had not
begun operation.
EXECUTIVE OFFICERS AND DIRECTORS
We are managed by a board of directors. The following table sets forth the name,
address and principal occupations during the past five years of each of our
executive officers and directors.
Item 25. Directors and Executive Officers of GE Capital Life
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<TABLE>
<CAPTION>
<S> <C> <C>
Name Address Positions and Offices with Depositor
- ---- ------- ------------------------------------
Pamela S. Schutz GE Financial Assurance Chairperson
6610 W. Broad Street
Richmond, VA 23230
Barry J. Grosman GE Capital Life Assurance Company President, Chief Executive Officer &
of New York Director
125 Park Avenue, 6th Floor
New York, NY 10017
Marshall S. Belkin 345 Kear Street Director
Yorktown Heights, NY 10598
Richard I. Byer Clark & Pope, Inc. Director
317 Madison Avenue
New York, NY 10017
Thomas W. Casey GE Financial Assurance Vice President and Chief Financial
6604 W. Broad St. Officer
Richmond, VA 23230
Stephen N. DeVos GE Financial Assurance Vice President and Investment
6604 W. Broad St. Officer
Richmond, VA 23230
Bernard M. Eiber 55 Northern Blvd. Director
Room 302
Great Neck, NY 11021
Jerry S. Handler Handro Properties Director
151 West 40th St.
New York, NY 10018
Gerald A. Kaufman 33 Walt Whitman Rd., Suite 233 Director
Huntrington Station, NY 11746
Donita King GE Financial Assurance Senior Vice President, General
6610 W. Broad Street Counsel & Secretary
Richmond, VA 23230
Leon E. Roday GE Financial Assurance Senior Vice President
6604 West Broad St.
Richmond, VA 23230
A. Louis Parker GEFA Benefit Services Director
4850 Street Road
Trevose, PA 19049
</TABLE>
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Isidore Sapir Granit Apartments at the Granit Director
Apt. 756, P.O. Box 657
Kernonkson, NY 12446
Thomas A. Skiff GE Financial Assurance Director
1650 Los Gamos Dr.
San Rafael, CA 94903
Steven A. Smith First Colony Life Director
700 Main Street
Lynchburg, VA 24505
Geoffrey S. Stiff GE Financial Assurance Director
6610 W. Broad St.
Richmond, VA 23230
OTHER INFORMATION
We have filed a Registration Statement with the SEC, under the Securities Act of
1933 as amended, for the Policies being offered here. This Prospectus does not
contain all the information in the Registration Statement, its amendments and
exhibits. Please refer to the Registration Statement for further information
about Separate Account III, the Company, and the Policies offered. Statements in
this Prospectus about the content of Policies and other legal instruments are
summaries. For the complete text of those Policies and instruments, please refer
to those documents as filed with the SEC and available on the SEC's website at
http://www.sec.gov.
- --------------------------------------------------------------------------------
HYPOTHETICAL ILLUSTRATIONS
- --------------------------------------------------------------------------------
To show you how the Policy works, we have included some hypothetical
illustrations for a Policy issued to a male Insured, age 55, and a female
Insured, age 55. These illustrations show how Account Values, Surrender Values,
and death benefits under the two Death Benefit options available under a Policy
vary over time assuming the following:
o The initial and planned premium of each illustration are allocated
completely to Separate Account III and remain there over the entire
period:
o The Insureds both qualify for the Preferred No Nicotine Use
classification;
o There are no withdrawals and no supplemental benefits;
o There is no Policy Debt; and
o The portfolios earn gross (that is, before deductions for investment
management fees and other operating expenses of the portfolios) annual
rates of return of 0%, 6%, and 12%.
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<PAGE>
It is important to understand that the illustrations assume a level rate of
return for all years. The values of your Policy would be different from those
shown if the hypothetical returns averaged 0%, 6%, or 12% but fluctuated over
and under those averages for the years shown.
The illustrations reflect an average annual charge of 0.78% of the average daily
net assets of the portfolios for investment management fees and other operating
expenses. We calculated these fees based on an average of the expense ratios of
each of the portfolios (in some cases, we estimated those fees) for the latest
year of operations. The average daily charge for the portfolio expenses reflects
voluntary expense agreements between certain of the portfolios and their
investment managers. These expense agreements could terminate at any time. SEE
"Portfolio Annual Expense Table." If these agreements terminate, the values
shown on the following pages would be less.
The illustrations reflect a premium charge, the .70% mortality and expense risk
charge to Separate Account III, and the monthly deduction. The monthly deduction
is taken from the Policy Account Value each month. The monthly deduction
illustrated consists of the cost of insurance charge, the policy charge of $5,
and an expense charge of up to $0.20 per $1,000 of initial Specified Amount. Our
current charges and the maximum charges we have a contractual right to charge
are reflected in separate illustrations on the following pages. SEE "Charges and
Deductions." After deduction of estimated portfolio expenses and the mortality
and expense risk charge, the illustrated gross annual investment rates of return
of 0%, 6% and 12% correspond to approximate net annual rates of return for the
Investment Subdivisions of -1.48%, 4.52% and 10.52%, respectively.
All of the illustrations reflect the fact that no charges for Federal or state
income taxes are currently made against Separate Account III. To produce after
tax returns of 0%, 6%, or 12% if we were to make such charges in the future,
Separate Account III would have to earn a sufficient amount in excess of 0%, 6%,
or 12% to cover any tax charges. The Surrender Values shown in the illustrations
reflect the fact that we deduct a Surrender Charge for the first 11 Policy Years
(and for 11 Policy Years after you increase the Specified Amount). SEE "Charges
and Deductions."
Each illustration also has a column labeled "Premiums Accumulated at 5% Interest
Per Year." This column shows the amount that would accumulate if the premium
payments were invested to earn interest, after taxes, of 5% per year, compounded
annually.
Upon request, we will furnish you a personalized illustration based upon the
proposed Insureds' circumstances. Such illustrations will reflect the current
cost of insurance charges and the guaranteed maximum cost of insurance charges,
and may assume different hypothetical rates of return than those shown in the
following illustrations.
The investment rates of return we have chosen to use in the illustrations are
hypothetical only, and you should understand that they do not represent actual
past or future rates of return. The actual rates of return under a Policy may be
more or less than the hypothetical rates of return in the illustrations.
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<TABLE>
<CAPTION>
FLEXIBLE PREMIUM JOINT AND LAST SURVIVOR VARIABLE LIFE INSURANCE
Male Issue Age 55 Preferred No Nicotine Use Initial Specified Amount $250,000
Female Issue Age 55 Preferred No Nicotine Use Initial Premium and Planned
Death Benefit Option A Premium (Payable Annually) (1)
$5,100
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0% ASSUMED HYPOTHETICAL 6% ASSUMED HYPOTHETICAL 12% ASSUMED HYPOTHETICAL
GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
PREMIUMS RETURN WITH MAXIMUM RETURN WITH MAXIMUM RETURN WITH MAXIMUM
END ACCUMULATED CHARGES (2)(3) CHARGES (2)(3) CHARGES (2)(3)
OF AT 5% -------------------------------- ------------------------------- ---------------------------------
POLICY INTEREST SURRENDER ACCOUNT DEATH SURRENDER ACCOUNT DEATH SURRENDER ACCOUNT DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------- ----- ----- ------- ----- ----- ------- ----- ----- -------
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
</TABLE>
* Premium in addition to the planned premium is required to keep the Policy in
effect.
(1) The values illustrated assume that the planned premium of $______ is paid at
the beginning of each Policy Year. Values will be different if premiums are paid
with a different frequency or in different amounts.
(2) The values and benefits are as of the end of the year shown. They assume
that no Policy loans or withdrawals have been made. Excessive loans or
withdrawals may cause this Policy to lapse because of insufficient Account
Value.
(3) The values and benefits are shown using the maximum expense charges and cost
of insurance rates allowable under the Policy. Accordingly, if the assumed
hypothetical gross annual investment return were earned, the values and benefits
of an actual Policy with the listed specifications could never be less than
those shown, and in some cases may be greater than those shown.
We emphasize that the assumed gross annual investment rates of return shown
above and elsewhere in this prospectus are illustrative only and should not be
viewed as a representation of past or future investment rates of return.
Actual gross annual rates of return may be more or less than those shown and
will depend on a number of factors, including investment allocations made to the
Investment Subdivisions. The gross hypothetical investment rates of return of
0%, 6%, and 12% shown above correspond to net annual rates of -1.48%, 4.52% and
10.52%. The Surrender Values, Account Values, and Death Benefit for a Policy
would be different from those shown if the actual gross annual rates of return
averaged 0%, 6%, and 12% over a period of years, but varied above or below that
average for individual Policy Years during the period. They would also be
different if you take a loan or withdrawal during the period of time
illustrated. No representation can be made that those assumed gross annual rates
of return can be achieved for any one year or sustained over any period of time.
58
<PAGE>
<TABLE>
<CAPTION>
FLEXIBLE PREMIUM JOINT AND LAST SURVIVOR VARIABLE LIFE INSURANCE
Male Issue Age 55 Preferred No Nicotine Use Initial Specified Amount $250,000
Female Issue Age 55 Preferred No Nicotine Use Initial Premium and Planned
Death Benefit Option A Premium (Payable Annually) (1)
$5,100
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0% ASSUMED HYPOTHETICAL 6% ASSUMED HYPOTHETICAL 12% ASSUMED HYPOTHETICAL
GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
PREMIUMS RETURN WITH MAXIMUM RETURN WITH MAXIMUM RETURN WITH MAXIMUM
END ACCUMULATED CHARGES (2)(3) CHARGES (2)(3) CHARGES (2)(3)
OF AT 5% -------------------------------- ------------------------------- ---------------------------------
POLICY INTEREST SURRENDER ACCOUNT DEATH SURRENDER ACCOUNT DEATH SURRENDER ACCOUNT DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------- ----- ----- ------- ----- ----- ------- ----- ----- -------
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
</TABLE>
(1) The values illustrated assume that the planned premium of $_____ is paid at
the beginning of each Policy Year. Values will be different if premiums are paid
with a different frequency or in different amounts.
(2) The values and benefits are as of the end of the year shown. They assume
that no Policy loans or withdrawals have been made. Excessive loans or
withdrawals may cause this Policy to lapse because of insufficient Account
Value.
(3) The values and benefits are shown using the expense charges and cost of
insurance rates currently in effect. Although GE Capital Life anticipates
deducting these charges for the foreseeable future, these charges are not
guaranteed and could be raised at the discretion of GE Life & Annuity.
Accordingly, even if the assumed hypothetical gross annual investment return
were earned, the values and benefits under an actual Policy with the listed
specifications may be less than those shown if the cost of insurance charges
were increased.
We emphasize that the assumed gross annual investment rates of return
shown above and elsewhere in this prospectus are illustrative only and should
not be viewed as a representation of past or future investment rates of return.
Actual gross annual rates of return may be more or less than those shown
and will depend on a number of factors, including investment allocations made to
the investment subdivisions. The gross hypothetical investment rates of return
of 0%, 6%, and 12% shown above correspond to net annual rates of -1.48%, 4.52%
and 10.52%The Surrender Values, Account Values, and Death Benefit for a Policy
would be different from those shown if the actual gross annual rates of return
averaged 0%, 6%, and 12% over a period of years, but varied above or below that
average for individual Policy Years during the period. They would also be
different if you take a loan or withdrawal during the period of time
illustrated. No representation can be made that those assumed gross annual rates
of return can be achieved for any one year or sustained over any period of time.
59
<PAGE>
<TABLE>
<CAPTION>
FLEXIBLE PREMIUM JOINT AND LAST SURVIVOR VARIABLE LIFE INSURANCE
Male Issue Age 55 Preferred No Nicotine Use Initial Specified Amount $250,000
Female Issue Age 55 Preferred No Nicotine Use Initial Premium and Planned
Death Benefit Option B Premium (Payable Annually) (1) $3,800
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0% ASSUMED HYPOTHETICAL 6% ASSUMED HYPOTHETICAL 12% ASSUMED HYPOTHETICAL
GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
PREMIUMS RETURN WITH MAXIMUM RETURN WITH MAXIMUM RETURN WITH MAXIMUM
END ACCUMULATED CHARGES (2)(3) CHARGES (2)(3) CHARGES (2)(3)
OF AT 5% -------------------------------- ------------------------------- ---------------------------------
POLICY INTEREST SURRENDER ACCOUNT DEATH SURRENDER ACCOUNT DEATH SURRENDER ACCOUNT DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------- ----- ----- ------- ----- ----- ------- ----- ----- -------
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
</TABLE>
* Premium in addition to the planned premium is required to keep the Policy in
effect.
(l) The values illustrated assume that the planned premium of $_____ is paid at
the beginning of each Policy Year. Values will be different if premiums are paid
with a different frequency or in different amounts.
(2) The values and benefits are as of the end of the year shown. They assume
that no Policy loans or withdrawals have been made. Excessive loans or
withdrawals may cause this Policy to lapse because of insufficient Account
Value.
(3) The values and benefits are shown using the maximum expense charges and cost
of insurance rates allowable under the Policy. Accordingly, if the assumed
hypothetical gross annual investment return were earned, the values and benefits
of an actual Policy with the listed specifications could never be less than
those shown, and in some cases may be greater than those shown.
We emphasize that the assumed gross annual investment rates of return shown
above and elsewhere in this prospectus are illustrative only and should not be
viewed as a representation of past or future investment rates of return.
Actual gross annual rates of return may be more or less than those shown and
will depend on a number of factors, including investment allocations made to the
investment subdivisions. The gross hypothetical investment rates of return of
0%, 6%, and 12% shown above correspond to net annual rates of -1.48%, 4.52% and
10.52%. The Surrender Values, Account Values, and Death Benefit for a Policy
would be different from those shown if the actual gross annual rates of return
averaged 0%, 6%, and 12% over a period of years, but varied above or below that
average for individual Policy Years during the period. They would also be
different if you take a loan or withdrawal during the period of time
illustrated. No representation can be made that those assumed gross annual rates
of return can be achieved for any one year or sustained over any period of time.
60
<PAGE>
<TABLE>
<CAPTION>
FLEXIBLE PREMIUM JOINT AND LAST SURVIVOR VARIABLE LIFE INSURANCE
Male Issue Age 55 Preferred No Nicotine Use Initial Specified Amount $250,000
Female Issue Age 55 Preferred No Nicotine Use Initial Premium and Planned
Death Benefit Option B Premium (Payable Annually) (1) $3,800
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0% ASSUMED HYPOTHETICAL 6% ASSUMED HYPOTHETICAL 12% ASSUMED HYPOTHETICAL
GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
PREMIUMS RETURN WITH MAXIMUM RETURN WITH MAXIMUM RETURN WITH MAXIMUM
END ACCUMULATED CHARGES (2)(3) CHARGES (2)(3) CHARGES (2)(3)
OF AT 5% -------------------------------- ------------------------------- ---------------------------------
POLICY INTEREST SURRENDER ACCOUNT DEATH SURRENDER ACCOUNT DEATH SURRENDER ACCOUNT DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------- ----- ----- ------- ----- ----- ------- ----- ----- -------
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
</TABLE>
(1) The values illustrated assume that the planned premium of $___________ is
paid at the beginning of each Policy Year. Values will be different if premiums
are paid with a different frequency or in different amounts.
(2) The values and benefits are as of the end of the year shown. They assume
that no Policy loans or withdrawals have been made. Excessive loans or
withdrawals may cause this Policy to lapse because of insufficient Account
Value.
(3) The values and benefits are shown using the expense charges and cost of
insurance rates currently in effect. Although GE Capital Life anticipates
deducting these charges for the foreseeable future, these charges are not
guaranteed and could be raised at the discretion of GE Capital Life.
Accordingly, even if the assumed hypothetical gross annual investment return
were earned, the values and benefits under an actual Policy with the listed
specifications may be less than those shown if the cost of insurance charges
were increased.
We emphasize that the assumed gross annual investment rates of return shown
above and elsewhere in this prospectus are illustrative only and should not be
viewed as a representation of past or future investment rates of return.
Actual gross annual rates of return may be more or less than those shown and
will depend on a number of factors, including investment allocations made to the
Investment Subdivisions. The gross hypothetical investment rates of return of
0%, 6%, and 12% shown above correspond to net annual rates of -1.48%, 4.52% and
10.52%. The Surrender Values, Account Values, and Death Benefit for a Policy
would be different from those shown if the actual gross annual rates of return
averaged 0%, 6%, and 12% over a period of years, but varied above or below that
average for individual Policy Years during the period. They would also be
different if you take a loan or withdrawal during the period of time
illustrated. No representation can be made that those assumed gross annual rates
of return can be achieved for any one year or sustained over any period of time.
61
<PAGE>
<TABLE>
<CAPTION>
FLEXIBLE PREMIUM JOINT AND LAST SURVIVOR VARIABLE LIFE INSURANCE
Male Issue Age 55 Preferred No Nicotine Use Initial Specified Amount $1,000,000
Female Issue Age 55 Preferred No Nicotine Use Initial Premium and Planned
Death Benefit Option A Premium (Payable Annually) (1) $19,400
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0% ASSUMED HYPOTHETICAL 6% ASSUMED HYPOTHETICAL 12% ASSUMED HYPOTHETICAL
GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
PREMIUMS RETURN WITH MAXIMUM RETURN WITH MAXIMUM RETURN WITH MAXIMUM
END ACCUMULATED CHARGES (2)(3) CHARGES (2)(3) CHARGES (2)(3)
OF AT 5% -------------------------------- ------------------------------- ---------------------------------
POLICY INTEREST SURRENDER ACCOUNT DEATH SURRENDER ACCOUNT DEATH SURRENDER ACCOUNT DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------- ----- ----- ------- ----- ----- ------- ----- ----- -------
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
</TABLE>
* Premium in addition to the planned premium is required to keep the Policy in
effect.
(1) The values illustrated assume that the planned premium of $_____ is paid at
the beginning of each Policy Year. Values will be different if premiums are paid
with a different frequency or in different amounts.
(2) The values and benefits are as of the end of the year shown. They assume
that no Policy loans or withdrawals have been made. Excessive loans or
withdrawals may cause this Policy to lapse because of insufficient Account
Value.
(3) The values and benefits are shown using the maximum expense charges and cost
of insurance rates allowable under the Policy. Accordingly, if the assumed
hypothetical gross annual investment return were earned, the values and benefits
of an actual Policy with the listed specifications could never be less than
those shown, and in some cases may be greater than these shown.
We emphasize that the assumed gross annual investment rates of return shown
above and elsewhere in this prospectus are illustrative only and should not be
viewed as a representation of past or future investment rates of return.
Actual gross annual rates of return may be more or less than those shown and
will depend on a number of factors, including investment allocations made to the
Investment Subdivisions. The gross hypothetical investment rates of return of
0%, 6%, and 12% shown above correspond to net annual rates of -1.48%, 4.52% and
10.52%. The Surrender Values, Account Values, and Death Benefit for a Policy
would be different from those shown if the actual gross annual rates of return
averaged 0%, 6%, and 12% over a period of years, but varied above or below that
average for individual Policy Years during the period. They would also be
different if you take a loan or withdrawal during the period of time
illustrated. No representation can be made that those assumed gross annual rates
of return can be achieved for any one year or sustained over any period of time.
62
<PAGE>
<TABLE>
<CAPTION>
FLEXIBLE PREMIUM JOINT AND LAST SURVIVOR VARIABLE LIFE INSURANCE
Male Issue Age 55 Preferred No Nicotine Use Initial Specified Amount $1,000,000
Female Issue Age 55 Preferred No Nicotine Use Initial Premium and Planned
Death Benefit Option B Premium (Payable Annually) (1) $19,400
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0% ASSUMED HYPOTHETICAL 6% ASSUMED HYPOTHETICAL 12% ASSUMED HYPOTHETICAL
GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
PREMIUMS RETURN WITH MAXIMUM RETURN WITH MAXIMUM RETURN WITH MAXIMUM
END ACCUMULATED CHARGES (2)(3) CHARGES (2)(3) CHARGES (2)(3)
OF AT 5% -------------------------------- ------------------------------- ---------------------------------
POLICY INTEREST SURRENDER ACCOUNT DEATH SURRENDER ACCOUNT DEATH SURRENDER ACCOUNT DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------- ----- ----- ------- ----- ----- ------- ----- ----- -------
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
</TABLE>
(1) The values illustrated assume that the planned premium of $____________ is
paid at the beginning of each Policy Year. Values will be different if premiums
are paid with a different frequency or in different amounts.
(2) The values and benefits are as of the end of the year shown. They assume
that no Policy loans or withdrawals have been made. Excessive loans or
withdrawals may cause this Policy to lapse because of insufficient Account
Value.
(3) The values and benefits are shown using the expense charges and cost of
insurance rates currently in effect. Although GE Capital Life anticipates
deducting these charges for the foreseeable future, these charges are not
guaranteed and could be raised at the discretion of GE Capital Life.
Accordingly, even if the assumed hypothetical gross annual investment return
were earned, the values and benefits under an actual Policy with the listed
specifications may be less than those shown if the cost of insurance charges
were increased.
We emphasize that the assumed gross annual investment rates of return shown
above and elsewhere in this prospectus are illustrative only and should not be
viewed as a representation past or future investment rates of return.
Actual gross annual rates of return may be more or less than those shown and
will depend on a number of factors, including investment allocations made to the
Investment Subdivisions. The gross hypothetical investment rates of return of
0%, 6%, and 12% shown above correspond to net annual rates of -1.48%, 4.52% and
10.52%. The Surrender Values, Account Values, and Death Benefit for a Policy
would be different from those shown if the actual gross annual rates of return
averaged 0%, 6%, and 12% over a period of years, but varied above or below that
average for individual Policy Years during the period. They would also be
different if you take a loan or withdrawal during the period of time
illustrated. No representation can be made that those assumed gross annual rates
of return can be achieved for any one year or sustained over any period of time.
63
<PAGE>
<TABLE>
<CAPTION>
FLEXIBLE PREMIUM JOINT AND LAST SURVIVOR VARIABLE LIFE INSURANCE
Male Issue Age 55 Preferred No Nicotine Use Initial Specified Amount $1,000,000
Female Issue Age 55 Preferred No Nicotine Use Initial Premium and Planned
Death Benefit Option B Premium (Payable Annually) (1) $14,600
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0% ASSUMED HYPOTHETICAL 6% ASSUMED HYPOTHETICAL 12% ASSUMED HYPOTHETICAL
GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
PREMIUMS RETURN WITH MAXIMUM RETURN WITH MAXIMUM RETURN WITH MAXIMUM
END ACCUMULATED CHARGES (2)(3) CHARGES (2)(3) CHARGES (2)(3)
OF AT 5% -------------------------------- ------------------------------- ---------------------------------
POLICY INTEREST SURRENDER ACCOUNT DEATH SURRENDER ACCOUNT DEATH SURRENDER ACCOUNT DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------- ----- ----- ------- ----- ----- ------- ----- ----- -------
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
</TABLE>
* Premium in addition to the planned premium is required to keep the Policy in
effect.
(1) The values illustrated assume that the planned premium of $_____ is paid at
the beginning of each Policy Year. Values will be different if premiums are paid
with a different frequency or in different amounts.
(2) The values and benefits are as of the end of the year shown. They assume
that no Policy loans or withdrawals have been made. Excessive loans or
withdrawals may cause this Policy to lapse because of insufficient Account
Value.
(3) The values and benefits are shown using the maximum expense charges and cost
of insurance rates allowable under the Policy. Accordingly, if the assumed
hypothetical gross annual investment return were earned, the values and benefits
of an actual Policy with the listed specifications could never be less than
those shown, and in some cases may be greater than those shown.
We emphasize that the assumed gross annual investment rates of return shown
above and elsewhere in this prospectus are illustrative only and should not be
viewed as a representation of past or future investment rates of return.
Actual gross annual rates of return may be more or less than those shown and
will depend on a number of factors, including investment allocations made to the
Investment Subdivisions. The gross hypothetical investment rates of return of
0%, 6%, and 12% shown above correspond to net annual rates of -1.48%, 4.52% and
10.52%%. The Surrender Values, Account Values, and Death Benefit for a Policy
would be different from those shown if the actual gross annual rates of return
averaged 0%, 6%, and 12% over a period of years, but varied above or below that
average for individual Policy Years during the period. They would also be
different if you take a loan or withdrawal during the period of time
illustrated. No representation can be made that those assumed gross annual rates
of return can be achieved for any one year or sustained over any period of time.
64
<PAGE>
<TABLE>
<CAPTION>
FLEXIBLE PREMIUM JOINT AND LAST SURVIVOR VARIABLE LIFE INSURANCE
Male Issue Age 55 Preferred No Nicotine Use Initial Specified Amount $1,000,000
Female Issue Age 55 Preferred No Nicotine Use Initial Premium and Planned
Death Benefit Option B Premium (Payable Annually) (1) $14,600
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0% ASSUMED HYPOTHETICAL 6% ASSUMED HYPOTHETICAL 12% ASSUMED HYPOTHETICAL
GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
PREMIUMS RETURN WITH MAXIMUM RETURN WITH MAXIMUM RETURN WITH MAXIMUM
END ACCUMULATED CHARGES (2)(3) CHARGES (2)(3) CHARGES (2)(3)
OF AT 5% -------------------------------- ------------------------------- ---------------------------------
POLICY INTEREST SURRENDER ACCOUNT DEATH SURRENDER ACCOUNT DEATH SURRENDER ACCOUNT DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------- ----- ----- ------- ----- ----- ------- ----- ----- -------
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
</TABLE>
(l) The values illustrated assume that the planned premium of $__________ is
paid at the beginning of each Policy Year. Values will be different if premiums
are paid with a different frequency or in different amounts.
(2) The values and benefits are as of the end of the year shown. They assume
that no Policy loans or withdrawals have been made. Excessive loans or
withdrawals may cause this Policy to lapse because of insufficient Account
Value.
(3) The values and benefits are shown using the expense charges and cost of
insurance rates currently in effect. Although GE Capital Life anticipates
deducting these charges for the foreseeable future, these charges are not
guaranteed and could be raised at the discretion of GE Capital Life.
Accordingly, even if the assumed hypothetical Gross annual investment return
were earned, the values and benefits under an actual Policy with the listed
specifications may be less than those shown if the cost of insurance charges
were increased.
We emphasize that the assumed gross annual investment rates of return shown
above and elsewhere in this prospectus are illustrative only and should not be
viewed as a representation past or future investment rates of return.
Actual gross annual rates of return may be more or less than those shown and
will depend on a number of factors, including investment allocations made to the
Investment Subdivisions. The gross hypothetical investment rates of return of
0%, 6%, and 12% shown above correspond to net annual rates of -1.48%, 4.52% and
10.52%. The Surrender Values, Account Values, and Death Benefit for a Policy
would be different from those shown if the actual gross annual rates of return
averaged 0%, 6%, and 12% over a period of years, but varied above or below that
average for individual Policy Years during the period. They would also be
different if you take a loan or withdrawal during the period of time
illustrated. No representation can be made that those assumed gross annual rates
of return can be achieved for any one year or sustained over any period of time.
65
<PAGE>
Financials will be added by Pre-Effective Amendment.
<PAGE>
- --------------------------------------------------------------------------------
PART II
- --------------------------------------------------------------------------------
OTHER INFORMATION
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.
RULE 484 UNDERTAKING
Section 722 of the Code of New York, in brief, allow a corporation to indemnify
any person made party to a proceeding because such person is or was a director,
officer, employee, or agent of the corporation, against liability incurred in
the proceeding if: (1) he conducted himself in good faith; and (2) he believed
that (a) in the case of conduct in his official capacity with the corporation,
his conduct was in its best interests; and (b) in all other cases, his conduct
was at least not opposed to the corporation's best interests and (3) in the case
of any criminal proceeding, he had no reasonable cause to believe his conduct
was unlawful. The termination of a proceeding by judgment, order, settlement or
conviction is not, of itself, determinative that the director, officer,
employee, or agent of the corporation did not meet the standard of conduct
described. A corporation may not indemnify a director, officer, employee, or
agent of the corporation in connection with a proceeding by or in the right of
the corporation, in which such person was adjudged liable to the corporation, or
in connection with any other proceeding charging improper personal benefit to
such person, whether or not involving action in his official capacity, in which
such person was adjudged liable on the basis that personal benefit was
improperly received by him. Indemnification permitted under these sections of
the Code of New York in connection with a proceeding by or in the right of the
corporation is limited to reasonable expenses incurred in connection with the
proceeding.
Article VIII, Section 1 of the By-Laws of GE Capital Life Assurance Company of
New York further provides that:
(a) The Corporation may indemnify any person, made, or threatened to be made, a
party to an action or proceeding other than one by or in the right of the
Corporation to procure a judgment in its favor, whether civil or criminal,
including an action by or in the right of any other Corporation of any type or
kind, domestic or foreign, or any partnership, joint venture, trust, employee
benefit plan or other enterprise, which any director or officer of the
Corporation served in any capacity at the request of the Corporation, by reason
of the fact that he, his testator or intestate, was a director or officer of the
Corporation, or served such other Corporation, partnership, joint venture,
trust, employee benefit plan, or other enterprise in any capacity, against
judgments, fines, amounts paid in settlement and reasonable expenses, including
fines, amounts paid in settlement and reasonable expenses, including attorney's
fees actually and necessarily incurred as a result of such action or proceeding,
or any appeal therein, if such director or officer acted, in good faith, for a
purpose which he reasonable believed to be in, or, in the case of service for
any other
66
<PAGE>
Corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise, not opposed to, the best interests of the Corporation and, in
criminal actions or proceedings, in addition, had no reasonable cause to believe
that his conduct was unlawful.
(b) The termination of any such civil or criminal action or proceeding by
judgment, settlement, conviction or upon a plea of nolo contendere, or its
equivalent, shall not in itself create a presumption that any such director or
officer did not act, in good faith, for a purpose which he reasonably believed
to be in, or, in the case of service for any other Corporation or any
partnership, joint venture, trust, employee benefit plan or other enterprise,
not opposed to, the best interests of the Corporation or that he had reasonable
cause to believe that his conduct was unlawful.
(c) A Corporation may indemnify any person made, or threatened to be made, a
party to an action by or in the right of the Corporation to procure a judgment
in its favor by reason of the fact that he, his testator or intestate, is or was
a director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director or officer of any other Corporation of any type or
kind, domestic or foreign, of any partnership, joint venture, trust, employee
benefit plan or other enterprise, against amounts paid in settlement and
reasonable expenses, including attorneys' fees, actually and necessarily
incurred by him in connection with the defense or settlement and reasonable
expenses, including attorneys' fees, actually and necessarily incurred by him in
connection with the defense or settlement of such action, or in connection with
an appeal therein, if such director or officer acted, in good faith, for a
purpose which he reasonably believed to be in or in the case of service for
other Corporation or any partnership, joint venture, trust, employee benefit
plan or other enterprise, not opposed to the best interests of the Corporation,
except that no indemnification under this paragraph shall be made in respect of
(1) a threatened action or a pending action which is settled or otherwise
disposed of or (2) any claim, issue or matter as to which such person shall have
been adjudged to be liable to the Corporation, unless and only to the extent
that the court in which the action was brought, or, if no action was brought,
any court of competent jurisdiction, determines upon application that, in view
of all the circumstances of the case, the person is fairly and reasonably
entitled to indemnity for such portion of the settlement and expenses as the
court deems proper.
(d) For the purpose of this section, the Corporation shall be deemed to have
requested a person to serve an employee benefit plan where the performance by
such person of his duties to the Corporation also imposes duties on, or
otherwise involves services by, such person to the plan or participants or
beneficiaries of the plan; excise taxes assessed on a person with respect to an
employee benefit plan pursuant to applicable law shall be considered fines; and
action taken or omitted by a person with respect to an employee benefit plan in
the performance of such person's duties for a purpose reasonably believed by
such person to be in the interest of the participants and beneficiaries of the
plan shall be deemed to be for a purpose which is not opposed to the best
interests of the Corporation.
Insofar as indemnification for liability arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provision, or otherwise under
circumstances where the burden of proof set forth in Section 11(b) of the Act
has not been sustained, 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
67
<PAGE>
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.
REPRESENTATION PURSUANT TO SECTION 26(e)(2)(A)
GE Capital Life hereby represents that the fees and charges deducted
under the Policy, in the aggregate, are reasonable in relation to the services
rendered, the expenses expected to be incurred, and the risks assumed by GE
Capital Life.
68
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following Papers and Documents:
The facing sheet.
The prospectus consisting of ___ pages.
The undertaking to file reports.
The Rule 484 undertaking.
Representation pursuant to Section 26(e)(2)(A).
The signatures.
Written consents of the following persons:
(a) Patricia L. Dysart, Esq.
(b) Sutherland Asbill & Brennan LLP
(c) Paul A. Haley, F.S.A.
(d) KPMG LLP.
The following exhibits, corresponding to those required by paragraph A
of the instructions as to exhibits in Form N-8B-2:
(b) Exhibits
1 A. (1)(a) Resolution of Board of Directors of GE Capital Life Assurance
Company of New York ("GE Capital Life") authorizing the
establishment of the GE Capital Life Separate Account III (the
"Separate Account"). 5/
1 A. (1)(b) Resolution of Board of Directors of GE Capital Life Assurance
Company of New York ("GE Capital Life") authorizing the
establishment of investment subdivisions of the Separate
Account investing in shares of 43 investment
subdivisions/subaccounts. 5/
1 A. (2) Not Applicable.
1 A. (3) Underwriting Agreement between GE Capital Life and Capital
Brokerage Corporation. 2/
1 A. (3)(a) Dealer Sales Agreement. 2/
1 A. (4) None.
1 A. (5)(a) Form of Policy, PNY1255. 5/
1 A. (5)(b) Endorsements/Riders to Policy Form
1 A. (5)(b)(i) Policy Split Option Rider, NY4473 12/99 5/
1 A. (5)(b)(ii) Joint Life Level Term Insurance Rider, NY4474 12/99 5/
69
<PAGE>
1 A. (6)(a) Certificate of Incorporation of GE Capital Life. 1/
1 A. (6)(b) By-Laws of GE Capital Life. 1/
1 A. (7) Not Applicable.
1 A. (8)(a) Form of Participation Agreement regarding Alger American Fund.
2/
1 A. (8)(b) Form of Participation Agreement regarding Federated Insurance
Series. 2/
1 A. (8)(c) Form of Participation Agreement regarding GE Investments
Funds, Inc. 2/
1 A. (8)(d) Form of Participation Agreement regarding Janus Aspen Series.
2/
1 A. (8)(e)(i) Amendment to Participation Agreement regarding Janus Aspen
Series. 6/
1 A. (8)(f) Form of Participation Agreement regarding Oppenheimer Variable
Account Funds. 2/
1 A. (8)(g) Form of Participation Agreement regarding PBHG Insurance
Series Fund. 2/
1 A. (8)(h) Form of Participation Agreement regarding Variable Insurance
Products Fund. 2/
1 A. (8)(i) Form of Participation Agreement regarding Variable Insurance
Products Fund II. 2/
1 A. (8)(j) Form of Participation Agreement regarding Variable Insurance
Products Fund III. 2/
1 A. (8)(k) Form of Participation Agreement regarding Goldman Sachs
Variable Insurance Trust. 2/
1 A. (8)(l) Form of Participation Agreement regarding Salomon Brothers
Variable Series Fund. 4/
1 A. (9) Opinion and Consent of Counsel. 6/
1 A. (10) Form of Individual Policy Application. 6/
2. Opinion and Consent of Patricia L. Dysart, Esq. 6/
3.(a) Consent of Sutherland, Asbill & Brennan LLP. 6/
3.(b) Consent of Independent Auditors. 6/
4. Not Applicable.
5. Not Applicable.
6. Opinion and Consent of Paul A. Haley, F.S.A. 6/
7. Consolidated memorandum describing certain procedures
filed pursuant to Rule 6e-2(b)(12)(ii) and Rule
6e-3(T)(b)(12)(iii). 6/
70
<PAGE>
8.(a) Power of Attorney, April 1997. 1/
8.(b) Power of Attorney, April 1999. 5/
1/ Incorporated herein by reference to initial filing of the registration
statement on Form N-4, File No. 333-39955, filed with the Securities
and Exchange Commission on September 10, 1997.
2/ Incorporated herein by reference to pre-effective 1 of the registration
statement on Form N-4, File No. 333-39955, filed with the Securities
and Exchange Commission on May 13, 1998.
3/ Incorporated herein by reference to post-effective 1 filing of the
registration statement on Form N-4, File No. 333-39955, filed with the
Securities and Exchange Commission on March 1, 1999.
4/ Incorporated herein by reference to post-effective 2 filing of the
registration statement on Form N-4, File No. 333-39955, filed with the
Securities and Exchange Commission on April 30 1999.
5/ Incorporated herein.
6/ To be filed by pre-effective amendment.
- -------------------
71
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant, GE Capital Life Separate Account III 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 of New York in the State of New York, on the 21st day of March, 2000.
GE Capital Life Separate Account III
------------------------------------
(Registrant)
By: GE Capital Life Assurance Company of New York
(Depositor)
By: /s/ Patricia L. Dysart
---------------------------
Title: Assistant Vice President
-------------------------
Attest:
/s/ Laura C. Deusebio
- --------------------------
Name
By: GE Capital Life Assurance Company of New York
(Depositor)
By: /s/ Patricia L. Dysart
---------------------------
Title: Assistant Vice President
Attest: -------------------------
/s/ Laura C. Deusebio
- --------------------------
Name
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the date(s) indicated.
<TABLE>
<CAPTION>
Directors and Officers of GE Capital Life
<S> <C> <C>
Signature Title Date
- --------- ----- ----
/s/ Pamela S. Schutz Chairperson 3/21/00
- ---------------------
Pamela S. Schutz
/s/ Barry J. Grosman President, Chief Executive Officer 3/21/00
- ---------------------- & Director
Barry J. Grosman
/s/ Marshall S. Belkin Director 3/21/00
- -----------------------
Marshall S. Belkin
/s/ Richard I. Byer Director 3/21/00
- --------------------
Richard I. Byer
/s/ Thomas W. Casey Vice President and Chief Financial Officer 3/21/00
- --------------------
Thomas W. Casey
/s/ Stephen N. DeVos Vice President and Investment Officer 3/21/00
- ---------------------
Stephen N. DeVos
/s/ Bernard M. Eiber Director 3/21/00
- ---------------------
Bernard M. Eiber
/s/ Jerry S. Handler Director 3/21/00
- ---------------------
Jerry S. Handler
/s/ Gerald A. Kaufman Director 3/21/00
- ----------------------
Gerald A. Kaufman
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
/s/ Donita King Senior Vice President, General Counsel & Secretary 3/21/00
- ---------------- & Secretary
Donita King
/s/ Leon E. Roday Senior Vice President 3/21/00
- ------------------
Leon E. Roday
/s/ A. Louis Parker Director 3/21/00
- --------------------
A. Louis Parker
/s/ Isidore Sapir Director 3/21/00
- --------------------
Isidore Sapir
/s/ Thomas A. Skiff Director 3/21/00
- --------------------
Thomas A. Skiff
/s/ Steven A. Smith Director 3/21/00
- --------------------
Steven A. Smith
/s/ Geoffrey S. Stiff Director 3/21/00
- ----------------------
Geoffrey S. Stiff
</TABLE>
By /s/ Patricia L. Dysart, pursuant to Power of Attorney executed on April 25,
1999.
<PAGE>
Exhibit List
------------
1 A (1)(a) Resolution of Board of Directors of GE Capital Life
Assurance Company of New York ("GE Capital Life")
authorizing the establishment of the GE Capital Life
Separate Account III (the "Separate Account").
1 A (1)(c) Resolution of Board of Directors of GE Capital Life
Assurance Company of New York ("GE Capital Life")
authorizing the establishment of investment subdivisions of
the Separate Account investing in shares of 43 investment
subdivisions/subaccounts.
1 A (5)(a) Form of Policy
1 A (5)(b)(i) Policy Split Option Rider
1 A (5)(b)(ii) Joint Life Level Term Insurance Rider
8 (b) Power of Attorney, April 1999
EXHIBIT 1 A (1)(a)
Unanimous Written Consent
in Lieu of a Meeting
of the
Executive Committee
of the
Board of Directors
of
GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK
The Undersigned, being all of the members of the Board of Directors of GE
Capital Life Assurance Company of New York (the "Company"), a New York
corporation, do hereby unanimously adopt the following resolutions as the
Resolutions of the Board of Directors of the Company:
RESOLVED, that the Board of Directors of the Company, hereby establishes a
separate account, pursuant to the provisions of N.Y. Ins. Law ss.4240,
designated GE Capital Life Separate Account III (hereinafter the "Separate
Account"), for the following use and purposes, and subject to such conditions as
hereinafter set forth; and
FURTHER RESOLVED, that the Separate Account is established for the purpose of
providing for the issuance by the Company of certain variable life insurance
policies (the "Policies"), and shall constitute a funding medium to support
reserves under such Policies issued by the Company; and
FURTHER RESOLVED, that the income, gains and losses, whether or not realized,
from assets allocated to the Separate Account shall, in accordance with the
applicable agreement or agreements be credited to or charged against the
Separate Account, without regard to other income, gains or losses of the
Company; and
FURTHER RESOLVED, that the portion of the assets of the Separate Account not
exceeding the reserves and other contract liabilities with respect to the
Separate Account shall not be charged with liabilities arising out of any other
business of the Company; and
FURTHER RESOLVED, that the Separate Account shall be divided into investment
subdivisions, each of which shall invest in the shares of an open-end management
investment company portfolio or units of a unit investment trust, and net
premium payments under the Policies shall be allocated in accordance with
instructions received from owners of the Policies; and
FURTHER RESOLVED, that the President, Chief Executive Officer and Chief
Financial Officer (hereafter, the "empowered officers") and each of them, with
full power to act without the others, be, and they hereby are, severally
authorized to add or remove any investment subdivision of the Separate Account,
any open-end management investment company or portfolio thereof, or any unit
investment trust or series thereof, as may hereafter be deemed necessary or
appropriate; and
FURTHER RESOLVED, that the income, gains and losses, whether or not realized,
from assets allocated to each investment subdivision of the Separate Account
shall, in accordance with the applicable agreement or agreements, be credited to
or charged against such investment subdivision of the Separate Account, without
regard to other income, gains or losses of any other investment subdivision of
the Separate Account; and
<PAGE>
FURTHER RESOLVED, that the empowered officers and each of them, with full power
to act without the others, be, and they hereby are, severally authorized to
invest such amount or amounts of the Company's cash in the Separate Account or
in any investment subdivision thereof, or in any open end investment company
portfolio or unit investment trust, as may be deemed necessary or appropriate to
facilitate the commencement of the Separate Account's and/or the portfolio's or
unit investment trust's operations and/or to meet any minimum capital
requirements under the Investment Company Act of 1940, as amended (the "1940
Act"); and
FURTHER RESOLVED, that the empowered officers and each of them, with full power
to act without the others, be, and they hereby are, severally authorized to
transfer cash from time to time from the Company's general account to the
Separate Account, or from the Separate Account to the general account, as deemed
necessary or appropriate and consistent with the terms of the Policies and,
subject to any approvals required by the New York Superintendent of Insurance;
and
FURTHER RESOLVED, that the Board of Directors of the Company reserves the right
to change the designation of the Separate Account hereafter to such other
designation as it may deem necessary or appropriate; and
FURTHER RESOLVED, that the empowered officers and each of them, with full power
to act without the others, with such assistance from the Company's independent
certified public accountants, legal counsel and independent consultants or
others as they may require, be, and they hereby are, severally authorized and
directed to take all action necessary to: (a) register the Separate Account as a
unit investment trust under the 1940 Act; (b) register the Policies under the
Securities Act of 1933 (the "1933 Act"); and (c) take all other actions that are
necessary in connection with the offering of the Policies for sale and the
operation of the Separate Account in order to comply with the 1940 Act, the 1933
Act, the Securities Exchange Act of 1934 and other applicable federal laws,
including the filing of any registration statements, any undertakings, no-action
requests, consents, applications for exemptions from the 1940 Act or other
applicable federal laws, and any amendments to the foregoing as the empowered
officers of the Company shall deem necessary or appropriate; and
FURTHER RESOLVED, that the empowered officers and each of them, with full power
to act without the others, are severally authorized and empowered to prepare,
execute and cause to be filed with the Securities and Exchange Commission on
behalf of the Separate Account, and by the Company as sponsor and depositor, a
Notification of Registration on Form N-8A, a registration statement on Form
N-8B-2, and a registration statement on Form S-6 or its successor registering
the Separate Account as an investment company under the 1940 Act and registering
the Policies under the 1933 Act, and any and all amendments to the foregoing on
behalf of the Separate Account and the Company and on behalf of and as
attorneys-in-fact for the empowered officers and/or any other officer of the
Company; and
FURTHER RESOLVED, that Barry J. Grosman, President (and any successor to such
position), is duly appointed as agent for service under any such registration
statement, duly authorized to receive communications and notices from the
Securities and Exchange Commission with respect thereto; and
FURTHER RESOLVED, that the empowered officers and each of them, with full power
to act without the others, are severally authorized on behalf of the Separate
Account and on behalf of the Company to take any and all action that each of
them may deem necessary or advisable in order to offer and sell the Policies,
including any registrations, filings and qualifications both of the Company, its
officers, agents and employees, and of the Policies, under the insurance and
securities laws of New York, and in connection
<PAGE>
therewith to prepare, execute, deliver and file all such applications, requests,
undertakings, reports, covenants, resolutions, applications for exemptions,
consents to service of process and other papers and instruments as may be
required under such laws, and to take any and all further action which such
officers or legal counsel of the Company may deem necessary or desirable
(including entering into whatever agreements and contracts may be necessary) in
order to maintain such registrations or qualifications for as long as the
officers or legal counsel deem it to be in the best interests of the Separate
Account and the Company; and
FURTHER RESOLVED, that the empowered officers and each of them, with full power
to act without the others, be, and they hereby are, severally authorized in the
names and on behalf of the Separate Account and the Company to prepare and file
with the Superintendent of Insurance of New York a Plan of Operations for the
Separate Account in compliance with the insurance laws and regulations of New
York; and
FURTHER RESOLVED, that the empowered officers and each of them, with full power
to act without the others, be, and hereby are, severally authorized to establish
procedures under which the Company will provide voting rights for owners of the
Policies with respect to securities owned by the Separate Account; and
FURTHER RESOLVED, that the empowered officers and each of them, with full power
to act without the others, are hereby severally authorized to execute such
agreement or agreements as deemed necessary and appropriate (i) with a qualified
entity under which such entity will be appointed principal underwriter and
distributor for the Policies, (ii) with one or more qualified entities to
provide administrative services in connection with the establishment and
maintenance of the Separate Account and the administration of the Policies, and
(iii) with the designated mutual fund portfolios and/or the principal
underwriter and distributor of such mutual fund portfolios for the purchase and
redemption of portfolio shares; and
FURTHER RESOLVED, that the empowered officers and each of them, with full power
to act without the others, are hereby severally authorized to execute and
deliver such agreements and other documents and do such acts and things as each
of them may deem necessary or desirable to carry out the foregoing resolutions
and the intent and purposes thereof.
FURTHER RESOLVED, that the Company hereby adopts and establishes the following
Standards of Suitability for its officers, employees, and agents with respect to
the suitability of the Policies for applicants:
1. No recommendation shall be made to an applicant to
purchase a Policy, and no Policy shall be issued, in
the absence of reasonable grounds to believe that the
purchase of the Policy is suitable for the applicant
on the basis of information furnished after
reasonable inquiry of the 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;
2. A good faith, reasonable inquiry shall be made as to
the facts and circumstances concerning a prospective
Policy owner's insurance and financial needs and no
recommendation shall be made that the prospective
Policy owner purchase a Policy when such a purchase
is not reasonably consistent with the information
that is known or reasonably should be known to the
Company or its agents. In making such
<PAGE>
recommendation, factors which may be considered are:
age, earnings, marital status, number and age of
dependents, the value of savings or other assets, and
current life insurance program.
Additionally, the Company's agents, as registered representatives, will be
subject to supervision by a registered broker-dealer with respect to suitability
and other sales practices under the NASD Conduct Rules of NASD Regulation, Inc.;
and
FURTHER RESOLVED, that the Company hereby adopts and establishes the following
Standards of Conduct for itself and its officers, directors, and employees
(each, an "Employee") with respect to the purchase or sale of investments of the
Separate Account:
No Employee shall:
1. Employ any device, scheme or artifice to defraud the
Separate Account or the owners of the Policies;
2. Make any untrue statement of a material fact with
respect to the investments of the Separate Account or
omit to state a material fact necessary to make the
statements made, in light of the circumstances in
which they were made, not misleading;
3. Engage in any act, practice or course of business
that operates or would operate as a fraud or deceit
upon the Separate Account or the owners of the
Policies;
4. Engage in any manipulative practice with respect to
the Separate Account or the owners of the Policies;
5. Sell to, or purchase from, the Separate Account any
securities or other property, except as permitted
under applicable laws, rules, regulations, order, or
other interpretation of any government, agency, or
self-regulatory organization.
6. Purchase or allow to be purchased for the Separate
Account any securities of which the Company or an
affiliated company is the issuer, except as permitted
under applicable laws, rules, regulations, order, or
other interpretation of any government, agency, or
self-regulatory organization.
7. Accept any compensation other than a regular salary
or wages from the Company or an affiliated company
for the sale or purchase of investment securities to
or from the Separate Account except as permitted
under applicable laws, rules, regulations, orders, or
other interpretations of any government, agency or
self-regulatory organization;
8. Engage in any joint transaction, participation or
common undertaking whereby the Company or an
affiliated company participates with the Separate
Account in any transaction in which the Company or an
affiliated company obtains an advantage in the price
or quality of the item purchased, the service
received or in the cost of such service, and the
Separate Account or the owners of the Policies are
disadvantaged in any of these respects by the same
transaction; or
<PAGE>
9. Borrow money or securities from the Separate Account
other than under a Policy loan provision.
FURTHER RESOLVED, that the Company shall require any third party providing
administrative services to the Separate Account to adopt Standards of Conduct
encompassing the standards set forth above.
<PAGE>
IN WITNESS WHEREOF, the undersigned have signed this consent as of the 20th day
of March, 2000.
/s/ Barry J. Grosman /s/ Richard I. Byer /s/ Jerry S. Handler
- ---------------------- --------------------- ---------------------
Barry J. Grosman Richard I. Byer Jerry S. Handler
/s/ Marshall S. Belkin /s/ Bernard M. Eiber /s/ Gerald A. Kaufman
- ---------------------- --------------------- ---------------------
Marshall S. Belkin Bernard M. Eiber Gerald A. Kaufman
EXHIBIT 1 A (1)(b)
Unanimous Written Consent
in Lieu of a Meeting
of the
Executive Committee
of the
Board of Directors
of
GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK
The undersigned, being the duly appointed Directors of GE Capital Life
Assurance Company of New York (the "Company"), hereby take the following
action by unanimous written consent in lieu of a meeting pursuant to Section
708 of the New York Business Corporation Law:
WHEREAS, The Board of Directors of the Company, pursuant to the Provisions of
Section 4240 of the New York Insurance Law, adopted a resolution establishing
GE Capital Life Separate Account III (the "Separate Account") on March 20,
2000, and
WHEREAS, The Company wishes to establish forty-three investment
subdivisions/subaccounts of Separate Account II which will invest in shares
of Alger American Growth Portfolio and Alger American Small Capitalization
Portfolio of the Alger American Fund; VIP Equity-Income Portfolio, VIP Growth
Portfolio and VIP Overseas Portfolio of Fidelity Variable Insurance Products
Fund; VIP II Asset Manager Portfolio and VIP II Contrafund Portfolio of
Fidelity Variable Insurance Products Fund II; VIP III Growth & Income
Portfolio and VIP III Growth Opportunities Portfolio of Fidelity Variable
Insurance Products Fund III; Federated American Leaders Fund II, Federated
High Income Fund II and Federated Utility Fund II of Federated Insurance
Series; Aggressive Growth Portfolio, Balanced Portfolio, Capital Appreciation
Portfolio, Flexible Income Portfolio, Global Life Sciences Portfolio, Global
Technology Portfolio, Growth Portfolio, International Growth Portfolio, and
Worldwide Growth Portfolio of Janus Aspen Series; Global Income Fund, Income
Fund, International Equity Fund, Money Market Fund, Premier Growth Equity
Fund, Real Estate Securities Fund, S&P 500 Index Fund, Total Return Fund,
U.S. Equity Fund, and Value Equity Fund of GE Investments Funds, Inc.;
Oppenheimer Aggressive Growth Fund/VA, Oppenheimer Bond Fund/VA, Oppenheimer
Growth Fund/VA, Oppenheimer High Income Fund/VA, and Oppenheimer Multiple
Strategies Fund/VA of Oppenheimer Variable Account Funds; PBHG Growth II
Portfolio and PBHG Large Cap Growth Portfolio of PBHG Insurance Series Fund,
Inc.; Goldman Sachs Growth and Income Fund and Goldman Sachs Mid Cap Value
Fund of Goldman Sachs Asset Management, Inc.; Salomon Brothers Investors
Fund, Salomon Brothers Strategic Bond Fund, and Salomon Brothers Total Return
Fund of Salomon Brothers Variable Series Fund, Inc.
NOW, THEREFORE, BE IT RESOLVED, That the Board of Directors of the Company
does hereby establish and create thirty-seven investment
subdivisions/subaccounts of the aforementioned separate account. Each
investment subdivision/subaccount shall invest in shares of a single mutual
fund portfolio as set forth below:
<PAGE>
INVESTMENT SUBDIVISIONS: TO BE INVESTED IN:
THE ALGER AMERICAN FUND
AAF Growth Alger American Growth Portfolio
AAF Small Capitalization Alger American Small Capitalization Portfolio
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
FID Equity-Income Equity-Income Portfolio
FID Growth Growth Portfolio
FID Overseas Overseas Portfolio
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
FID Asset Manager Asset Manager Portfolio
FID Contrafund Contrafund Portfolio
FIDELITY VARIABLE INSURANCE PRODUCTS FUND III
FID Growth & Income Growth & Income Portfolio
FID Growth Opportunities Growth Opportunities Portfolio
Federated Insurance Series
FED American Leaders II Federated American Leaders Fund II
FED High Income Bond II Federated High Income Bond Fund II
FED Utility II Federated Utility Fund II
JANUS ASPEN SERIES
JAN Aggressive Growth Aggressive Growth Portfolio
JAN Balanced Balanced Portfolio
JAN Capital Appreciation Capital Appreciation Portfolio
JAN Flexible Income Flexible Income Portfolio
JAN Global Life Sciences Global Life Sciences Portfolio
JAN Global Technology Global Technology Portfolio
JAN Growth Growth Portfolio
JAN International Growth International Growth Portfolio
JAN Worldwide Growth Worldwide Growth Portfolio
GE INVESTMENTS FUNDS INC.
GEI Global Income Global Income Fund
GEI Income Income Fund
GEI International Equity International Equity Fund
GEI Money Market Money Market Fund
GEI Premier Growth Equity Premier Growth Equity Fund
GEI Real Estate Securities Real Estate Securities Fund
GEI S&P 500 Index S&P 500 Index Fund
GEI Total Return Total Return Fund
GEI U.S. Equity U.S. Equity Fund
GEI Value Equity Value Equity Fund
OPPENHEIMER VARIABLE ACCOUNT FUNDS
OPP Aggressive Growth/VA Oppenheimer Aggressive Growth Fund/VA
OPP Bond/VA Oppenheimer Bond Fund/VA
OPP Growth/VA Oppenheimer Growth Fund/VA
OPP High Income/VA Oppenheimer High Income Fund/VA
OPP Multiple Strategies/VA Oppenheimer Mulitiple Strategies Fund/VA
PBHG INSURANCE SERIES FUND, INC.
PIL Growth II Growth II Portfolio
PIL Large Cap Growth Large Cap Growth Portfolio
GOLDMAN SACHS VARIABLE INSURANCE TRUST
GSF Growth and Income Growth and Income Fund
GSF Mid-Cap Value Mid-Cap Value Fund
-83-
<PAGE>
SALOMON BROTHERS VARIABLE SERIES FUND, INC.
SAL Investors Salomon Brothers Investors Fund
SAL Strategic Bond Salomon Brothers Strategic Bond Fund
SAL Total Return Salomon Brothers Total Return Fund
FURTHER RESOLVED, That the President, or any Senior Vice President, and each of
them, with full power to act without the others, are hereby severally authorized
to execute whatever agreement or agreements may be necessary or appropriate to
enable such investments to be made, and the Board of Directors hereby ratifies
the action of any such officer in executing any such agreement prior to the date
of these resolutions; and
FURTHER RESOLVED, That the President or any Senior Vice President, and each of
them, with full power to act without the others, are hereby severally authorized
to execute and deliver such other documents and do such acts and things as each
or any of them may deem necessary or desirable to carry out the foregoing
resolutions and the intent and purposes thereof.
FURTHER RESOLVED, That these resolutions shall take effect as of March 20, 2000.
IN WITNESS WHEREOF, the undersigned have signed this consent as of the 20th day
of March, 2000.
/s/ Barry J. Grosman /s/ Richard I. Byer /s/ Jerry S. Handler
- ---------------------- --------------------- ---------------------
Barry J. Grosman Richard I. Byer Jerry S. Handler
/s/ Marshall S. Belkin /s/ Bernard M. Eiber /s/ Gerald A. Kaufman
- ---------------------- --------------------- ---------------------
Marshall S. Belkin Bernard M. Eiber Gerald A. Kaufman
-84-
EXHIBIT 1 A (5)(a)
FLEXIBLE PREMIUM VARIABLE
JOINT AND LAST SURVIVOR
LIFE INSURANCE POLICY
- --------------------------------------------------------------------------------
TO THE OWNER:
PLEASE READ YOUR POLICY CAREFULLY. This Policy is a legal contract between you
and the Company. You, the Owner, have benefits and rights described in this
Policy. We will pay any Account Value less outstanding Policy Debt to you on the
Maturity Date if one Insured is living on that date, subject to policy
provisions. The Insureds are named in the Policy. The Beneficiary is as named in
the attached application, unless later changed. We will pay the Death Proceeds
of this Policy to the Beneficiary, subject to policy provisions. This is a
Flexible Premium Variable Joint and Last Survivor Life Insurance Policy. You may
increase or decrease the Specified Amount. We will allocate Net Premiums to the
Separate Account named on the policy data pages.
THIS POLICY'S ACCOUNT VALUE IN THE SEPARATE ACCOUNT IS BASED ON THE INVESTMENT
EXPERIENCE OF THAT ACCOUNT, AND MAY INCREASE OR DECREASE DAILY. IT IS NOT
GUARANTEED AS TO DOLLAR AMOUNT. SEE ACCOUNT VALUE BENEFITS SECTION. THE AMOUNT
OF THE DEATH BENEFIT OR THE DURATION OF THE DEATH BENEFIT MAY VARY OR BE FIXED
UNDER SPECIFIED CONDITIONS AND MAY INCREASE OR DECREASE. SEE DEATH PROCEEDS
SECTION. THE MAXIMUM LOAN AMOUNT IS NINETY PERCENT OF THE DIFFERENCE BETWEEN THE
ACCOUNT VALUE AND ANY SURRENDER CHARGE ON THE DATE OF THE LOAN.
REFUND PRIVILEGE. You may return this Policy to our Home Office or to your agent
within 10 days after its delivery for a refund. The amount of the refund will
equal the total of all premiums paid.
For GE Capital Life Assurance Company of New York
PRESIDENT SECRETARY
- --------------------------------------------------------------------------------
o Flexible Premium Variable Joint and Last Survivor Life Insurance Policy
o Death Proceeds payable at death of last joint Insured to die prior to Maturity
Date
o No benefit payable at the death of the first Insured to die
o Adjustable Death Benefit
o Flexible premiums payable until death of last joint Insured to die or until
maturity
o Some benefits reflect investment results
o Non-participating
- --------------------------------------------------------------------------------
GE CAPITAL LIFE ASSURANCE
COMPANY OF NEW YORK
125 Park Avenue, Sixth Floor, New York, New York 10017-5529
A Stock Company
<PAGE>
POLICY DATA
SCHEDULE OF BENEFITS SCHEDULE OF PREMIUMS
AMOUNT PAYABLE
LIFE INSURANCE
PLANNED PERIODIC PREMIUM [$3,841.98 ANNUALLY]
MINIMUM NET PREMIUM FACTOR: [0.95 (THE MINIMUM NET PREMIUM FACTOR REFLECTS
THE MAXIMUM DEDUCTION OF 5% OF EACH PREMIUM RECEIVED)]
MAXIMUM MONTHLY POLICY CHARGE: [$ 5.00]
MAXIMUM INITIAL MONTHLY EXPENSE CHARGE PER $1,000: [$ 0.XX]
MAXIMUM INCREASE MONTHLY EXPENSE CHARGE PER $1,000: [$ 0.XX]
TRANSFER CHARGE: [$10.00]
MAXIMUM MORTALITY AND EXPENSE RISK CHARGE:[ 0.70% ANNUALLY (.0019246% DAILY)]
PARTIAL SURRENDER CHARGE: [LESSER OF $25.00 AND 2.00% OF AMOUNT OF PARTIAL
SURRENDER]
POLICY LOAN INTEREST RATES:
NON-PREFERRED LOANS: [6.00% PER ANNUM PAYABLE IN ARREARS]
PREFERRED LOANS: [4.00% PER ANNUM PAYABLE IN ARREARS]
MINIMUM POLICY LOAN CREDITING RATE: [4.00% ON ACCOUNT VALUE THAT IS LOANED]
PREFERRED LOAN AVAILABILITY DATE: [May 1, 2010]
MINIMUM SPECIFIED AMOUNT [$250,000]
CONTINUATION PERIOD [5 YEARS]
NOTE: IT IS POSSIBLE THAT COVERAGE WILL EXPIRE PRIOR TO THE MATURITY DATE SHOWN
IF SUFFICIENT PREMIUMS ARE NOT PAID. SEE THE GRACE PERIOD PROVISION. WE HAVE THE
RIGHT TO CHARGE UP TO THE GUARANTEED MAXIMUM COST OF INSURANCE RATES AND OTHER
MAXIMUM EXPENSE CHARGES. THIS MAY RESULT IN YOU HAVING TO PAY MORE PREMIUM THAN
WAS ILLUSTRATED OR THE ACCOUNT VALUE MAY BE LESS THAN THOSE ILLUSTRATED.
OWNER [THE INSUREDS]
INSUREDS [JOHN DOE] [MALE 35] AGE NEAREST BIRTHDAY
[NO NICOTINE USE STANDARD RATING CLASS]
[JANE DOE] [FEMALE 35] AGE NEAREST BIRTHDAY
[NO NICOTINE USE STANDARD RATING CLASS]
POLICY NUMBER [N00000000]
POLICY DATE [MAY 1, 2000] [MAY 1, 2065] MATURITY DATE
MONTHLY ANNIVERSARY DAY [1]
PLAN FLEXIBLE PREMIUM VARIABLE JOINT AND LAST SURVIVOR LIFE INSURANCE
[$1,000,000] SPECIFIED AMOUNT - DEATH BENEFIT OPTION [B]
<PAGE>
POLICY NUMBER: [N00000000]
ADDITIONAL RATING CLASS INFORMATION
[JOHN DOE] [PREFERRED NO NICOTINE USE]
[JANE DOE] [PREFERRED NO NICOTINE USE]
<PAGE>
<TABLE>
<CAPTION>
SEPARATE ACCOUNT III
<S> <C>
INVESTMENT SUBDIVISIONS ARE INVESTED IN
[THE ALGER AMERICAN FUND
AAF SMALL CAPITALIZATION - A ALGER AMERICAN SMALL CAPITALIZATION
PORTFOLIO
AAF GROWTH - A ALGER AMERICAN GROWTH PORTFOLIO
FlDELITY VARIABLE INSURANCE PRODUCTS FUND
FID EQUITY-INCOME - A EQUITY-INCOME PORTFOLIO
FID GROWTH - A GROWTH PORTFOLIO
FlD OVERSEAS - A OVERSEAS PORTFOLIO
FlDELITY VARIABLE INSURANCE PRODUCTS FUND II
FID ASSET MANAGER - A ASSET MANAGER PORTFOLIO
FID CONTRAFUND - A CONTRAFUND PORTFOLIO
FIDELITY VARIABLE INSURANCE PRODUCTS FUND III
FID GROWTH AND INCOME - A GROWTH & INCOME PORTFOLIO
FlD GROWTH OPPORTUNITIES - A GROWTH OPPORTUNITIES PORTFOLIO
FEDERATED INSURANCE SERIES
FED UTILITY II - A FEDERATED UTILITY FUND II
FED HIGH INCOME BOND II - A FEDERATED HIGH INCOME BOND FUND II
FED AMERICAN LEADERS II - A FEDERATED AMERICAN LEADERS FUND II
JANUS ASPEN SERIES
JAN BALANCED - A BALANCED PORTFOLIO
JAN FLEXIBLE INCOME - A FLEXIBLE INCOME PORTFOLIO
JAN GROWTH - A GROWTH PORTFOLIO
JAN AGGRESSIVE GROWTH - A AGGRESSIVE GROWTH PORTFOLIO
JAN WORLDWIDE GROWTH - A WORLDWIDE GROWTH PORTFOLIO
JAN INTERNATIONAL GROWTH - A INTERNATIONAL GROWTH PORTFOLIO
JAN CAPITAL APPRECIATION - A CAPITAL APPRECIATION PORTFOLIO
GE INVESTMENTS FUNDS, INC.
GEI MONEY MARKET - A MONEY MARKET FUND
GEI INCOME - A INCOME FUND
GEI S&P 500 INDEX - A * S&P 500 INDEX FUND
GEI TOTAL RETURN - A TOTAL RETURN FUND
GEI INTERNATIONAL EQUITY - A INTERNATIONAL EQUITY FUND
GEI REAL ESTATE SECURITIES - A REAL ESTATE SECURITIES FUND
GEI VALUE EQUITY - A VALUE EQUITY FUND
GEI U.S.EQUITY - A U.S. EQUITY FUND
GEI PREMIER GROWTH EQUITY - A PREMIER GROWTH EQUITY FUND
OPPENHEIMER VARIABLE ACCOUNT FUNDS
OPP HIGH INCOME/VA - A OPPENHEIMER HIGH INCOME FUND/VA
OPP BOND/VA - A OPPENHEIMER BOND FUND/VA
OPP AGGRESSIVE GROWTH/VA - A OPPENHEIMER AGGRESSIVE GROWTH FUND/VA
OPP CAPITAL APPRECIATION/VA - A OPPENHEIMER CAPITAL APPRECIATION FUND/VA
OPP MULTI STRATEGIES/VA - A OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
</TABLE>
EFFECTIVE [12/01/99]
CONTINUED
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT SUBDIVISIONS ARE INVESTED IN
GOLDMAN SACHS ASSET MANAGEMENT FUND, INC.
GSF GROWTH AND INCOME - A GOLDMAN SACHS GROWTH AND INCOME FUND
GSF MID CAP VALUE - A GOLDMAN SACHS MID CAP VALUE FUND
SALOMON BROTHERS VARIABLE SERIES FUNDS INC.
SAL INVESTORS - A SALOMON BROTHERS VARIABLE INVESTORS FUND
SAL TOTAL RETURN - A SALOMON BROTHERS VARIABLE TOTAL RETURN FUND
SAL STRATEGIC BOND - A SALOMON BROTHERS VARIABLE STRATEGIC BOND FUND]
</TABLE>
YOU MAY ALLOCATE YOUR NET PREMIUMS AND ACCOUNT VALUE TO AS MANY AS [SEVEN]
INVESTMENT SUBDIVISIONS. YOUR ALLOCATIONS MUST BE IN PERCENTAGES TOTALING 100%.
EACH ALLOCATION PERCENTAGE MUST BE A WHOLE NUMBER AND AT LEAST 1%.
CONSULT YOUR PROSPECTUS FOR INVESTMENT DETAILS.
* "STANDARD & POOR'S," "S&P," "S&P 500," "STANDARD & POOR'S 500," AND "500" ARE
TRADEMARKS OF THE MCGRAW-HILL COMPANIES, INC. AND HAVE BEEN LICENSED FOR USE BY
GE INVESTMENT MANAGEMENT INCORPORATED. THE S&P 500 INDEX FUND IS NOT SPONSORED,
ENDORSED, SOLD OR PROMOTED BY STANDARD & POOR'S AND STANDARD & POOR'S MAKES NO
REPRESENTATION REGARDING THE ADVISABILITY OF INVESTING IN THE FUND.
<PAGE>
POLICY NUMBER: [N00000000]
TABLE OF MAXIMUM PREMIUMS
POLICY MAXIMUM POLICY MAXIMUM
YEAR PREMIUM YEAR PREMIUM
[1 75,881.17 36 276,622.56
2 75,881.17 37 284,306.52
3 75,881.17 38 291,990.48
4 75,881.17 39 299,674.44
5 75,881.17 40 307,358.40
6 75,881.17 41 315,042.36
7 75,881.17 42 322,726.32
8 75,881.17 43 330,410.28
9 75,881.17 44 338,094.24
10 76,839.60 45 345,778.20
11 84,523.56 46 353,462.16
12 92,207.52 47 361,146.12
13 99,891.48 48 368,830.08
14 107,575.44 49 376,514.04
15 115,259.40 50 384,198.00
16 122,943.36 51 391,881.96
17 130,627.32 52 399,565.92
18 138,311.28 53 407,249.88
19 145,995.24 54 414,933.84
20 153,679.20 55 422,617.80
21 161,363.16 56 430,301.76
22 169,047.12 57 437,985.72
23 176,731.08 58 445,669.68
24 184,415.04 59 453,353.64
25 192,099.00 60 461,037.60
26 199,782.96 61 468,721.56
27 207,466.92 62 476,405.52
28 215,150.88 63 484,089.48
29 222,834.84 64 491,773.44
30 230,518.80 65 499,457.40]
31 238,202.76
32 245,886.72
33 253,570.68
34 261,254.64
35 268,938.60
ACCORDING TO OUR UNDERSTANDING OF CURRENT FEDERAL TAX LAW, YOU MAY NOT PAY MORE
THAN THESE AMOUNTS CUMULATIVELY AND MAINTAIN THE TAX STATUS OF THIS POLICY AS
LIFE INSURANCE. THIS TABLE IS SUBJECT TO CHANGE. THIS TABLE DOES NOT RELATE TO
MODIFIED ENDOWMENT CONTRACT STATUS UNDER FEDERAL TAX LAW.
<PAGE>
POLICY NUMBER: [N00000000]
TABLE OF CONTINUATION AMOUNTS
POLICY CONTINUATION POLICY CONTINUATION POLICY CONTINUATION
MONTH AMOUNT MONTH AMOUNT MONTH AMOUNT
[1 99.33 41 4,072.53 81 8,045.73
2 198.66 42 4,171.86 82 8,145.06
3 297.99 43 4,271.19 83 8,244.39
4 397.32 44 4,370.52 84 8,343.72
5 496.65 45 4,469.85 85 8,443.05
6 595.98 46 4,569.18 86 8,542.38
7 695.31 47 4,668.51 87 8,641.71
8 794.64 48 4,767.84 88 8,741.04
9 893.97 49 4,867.17 89 8,840.37
10 993.30 50 4,966.50 90 8,939.70
11 1,092.63 51 5,065.83 91 9,039.03
12 1,191.96 52 5,165.16 92 9,138.36
13 1,291.29 53 5,264.49 93 9,237.69
14 1,390.62 54 5,363.82 94 9,337.02
15 1,489.95 55 5,463.15 95 9,436.35
16 1,589.28 56 5,562.48 96 9,535.68
17 1,688.61 57 5,661.81 97 9,635.01
18 1,787.94 58 5,761.14 98 9,734.34
19 1,887.27 59 5,860.47 99 9,833.67
20 1,986.60 60 5,959.80 100 9,933.00
21 2,085.93 61 6,059.13 101 10,032.33
22 2,185.26 62 6,158.46 102 10,131.66
23 2,284.59 63 6,257.79 103 10,230.99
24 2,383.92 64 6,357.12 104 10,330.32
25 2,483.25 65 6,456.45 105 10,429.65
26 2,582.58 66 6,555.78 106 10,528.98
27 2,681.91 67 6,655.11 107 10,628.31
28 2,781.24 68 6,754.44 108 10,727.64
29 2,880.57 69 6,853.77 109 10,826.97
30 2,979.90 70 6,953.10 110 10,926.30
31 3,079.23 71 7,052.43 111 11,025.63
32 3,178.56 72 7,151.76 112 11,124.96
33 3,277.89 73 7,251.09 113 11,224.29
34 3,377.22 74 7,350.42 114 11,323.62
35 3,476.55 75 7,449.75 115 11,422.95
36 3,575.88 76 7,549.08 116 11,522.28
37 3,675.21 77 7,648.41 117 11,621.61
38 3,774.54 78 7,747.74 118 11,720.94
39 3,873.87 79 7,847.07 119 11,820.27
40 3,973.20 80 7,946.40 120 11,919.60
CONTINUED
<PAGE>
POLICY NUMBER: [N00000000]
TABLE OF CONTINUATION AMOUNTS
POLICY CONTINUATION POLICY CONTINUATION POLICY CONTINUATION
MONTH AMOUNT MONTH AMOUNT MONTH AMOUNT
121 12,018.93 161 15,992.13 201 19,965.33
122 12,118.26 162 16,091.46 202 20,064.66
123 12,217.59 163 16,190.79 203 20,163.99
124 12,316.92 164 16,290.12 204 20,263.32
125 12,416.25 165 16,389.45 205 20,362.65
126 12,515.58 166 16,488.78 206 20,461.98
127 12,614.91 167 16,588.11 207 20,561.31
128 12,714.24 168 16,687.44 208 20,660.64
129 12,813.57 169 16,786.77 209 20,759.97
130 12,912.90 170 16,886.10 210 20,859.30
131 13,012.23 171 16,985.43 211 20,958.63
132 13,111.56 172 17,084.76 212 21,057.96
133 13,210.89 173 17,184.09 213 21,157.29
134 13,310.22 174 17,283.42 214 21,256.62
135 13,409.55 175 17,382.75 215 21,355.95
136 13,508.88 176 17,482.08 216 21,455.28
137 13,608.21 177 17,581.41 217 21,554.61
138 13,707.54 178 17,680.74 218 21,653.94
139 13,806.87 179 17,780.07 219 21,753.27
140 13,906.20 180 17,879.40 220 21,852.60
141 14,005.53 181 17,978.73 221 21,951.93
142 14,104.86 182 18,078.06 222 22,051.26
143 14,204.19 183 18,177.39 223 22,150.59
144 14,303.52 184 18,276.72 224 22,249.92
145 14,402.85 185 18,376.05 225 22,349.25
146 14,502.18 186 18,475.38 226 22,448.58
147 14,601.51 187 18,574.71 227 22,547.91
148 14,700.84 188 18,674.04 228 22,647.24
149 14,800.17 189 18,773.37 229 22,746.57
150 14,899.50 190 18,872.70 230 22,845.90
151 14,998.83 191 18,972.03 231 22,945.23
152 15,098.16 192 19,071.36 232 23,044.56
153 15,197.49 193 19,170.69 233 23,143.89
154 15,296.82 194 19,270.02 234 23,243.22
155 15,396.15 195 19,369.35 235 23,342.55
156 15,495.48 196 19,468.68 236 23,441.88
157 15,594.81 197 19,568.01 237 23,541.21
158 15,694.14 198 19,667.34 238 23,640.54
159 15,793.47 199 19,766.67 239 23,739.87
160 15,892.80 200 19,866.00 240 23,839.20]
CONTINUATION AMOUNTS ARE DESCRIBED IN THE CONTINUATION AMOUNT AND
CONTINUATION PERIOD PROVISION
<PAGE>
POLICY NUMBER: [N00000000]
TABLE OF SURRENDER CHARGES
POLICY SURRENDER POLICY SURRENDER POLICY SURRENDER
MONTH CHARGE MONTH CHARGE MONTH CHARGE
[1 14,000.00 37 14,000.00 73 13,880.00
2 14,000.00 38 14,000.00 74 13,760.00
3 14,000.00 39 14,000.00 75 13,650.00
4 14,000.00 40 14,000.00 76 13,530.00
5 14,000.00 41 14,000.00 77 13,410.00
6 14,000.00 42 14,000.00 78 13,330.00
7 14,000.00 43 14,000.00 79 13,180.00
8 14,000.00 44 14,000.00 80 13,060.00
9 14,000.00 45 14,000.00 81 12,950.00
10 14,000.00 46 14,000.00 82 12,830.00
11 14,000.00 47 14,000.00 83 12,710.00
12 14,000.00 48 14,000.00 84 12,600.00
13 14,000.00 49 14,000.00 85 12,480.00
14 14,000.00 50 14,000.00 86 12,360.00
15 14,000.00 51 14,000.00 87 12,250.00
16 14,000.00 52 14,000.00 88 12,130.00
17 14,000.00 53 14,000.00 89 12,010.00
18 14,000.00 54 14,000.00 90 11,900.00
19 14,000.00 55 14,000.00 91 11,780.00
20 14,000.00 56 14,000.00 92 11,660.00
21 14,000.00 57 14,000.00 93 11,550.00
22 14,000.00 58 14,000.00 94 11,430.00
23 14,000.00 58 14,000.00 95 11,310.00
24 14,000.00 60 14,000.00 96 11,200.00
25 14,000.00 61 14,000.00 97 11,080.00
26 14,000.00 62 14,000.00 98 10,960.00
27 14,000.00 63 14,000.00 99 10,850.00
28 14,000.00 64 14,000.00 100 10,730.00
29 14,000.00 65 14,000.00 101 10,610.00
30 14,000.00 66 14,000.00 102 10,500.00
31 14,000.00 67 14,000.00 103 10,380.00
32 14,000.00 68 14,000.00 104 10,260.00
33 14,000.00 69 14,000.00 105 10,150.00
34 14,000.00 70 14,000.00 106 10,030.00
35 14,000.00 71 14,000.00 107 9,910.00
36 14,000.00 72 14,000.00 108 9,800.00
CONTINUED
<PAGE>
POLICY NUMBER: [N00000000]
TABLE OF SURRENDER CHARGES
POLICY SURRENDER POLICY SURRENDER POLICY SURRENDER
MONTH CHARGE MONTH CHARGE MONTH CHARGE
109 9,680.00 145 5,480.00 181 1,280.00
110 9,560.00 146 5,360.00 182 1,160.00
111 9,450.00 147 5,250.00 183 1,050.00
112 9,330.00 148 5,130.00 184 930.00
113 9,210.00 149 5,010.00 185 810.00
114 9,100.00 150 4,900.00 186 700.00
115 8,980.00 151 4,780.00 187 580.00
116 8,886.00 152 4,660.00 188 460.00
117 8,750.00 153 4,550.00 189 350.00
118 8,630.00 154 4,430.00 190 230.00
119 8,510.00 155 4,310.00 191 110.00
120 8,400.00 156 4,200.00 192 0.00]
121 8,280.00 157 4,080.00
122 8,160.00 158 3,960.00
123 8,050.00 159 3,850.00
124 7,930.00 160 3,730.00
125 7,810.00 161 3,610.00
126 7,770.00 162 3,500.00
127 7,580.00 163 3,380.00
128 7,460.00 164 3,260.00
129 7,350.00 165 3,150.00
130 7,230.00 166 3,030.00
131 7,110.00 167 2,910.00
132 7,000.00 168 2,800.00
133 6,880.00 169 2,680.00
134 6,760.00 170 2,560.00
135 6,650.00 171 2,450.00
136 6,530.00 172 2,330.00
137 6,410.00 173 2,210.00
138 6,300.00 174 2,100.00
139 6,180.00 175 1,980.00
140 6,060.00 176 1,860.00
141 5,950.00 177 1,750.00
142 5,830.00 178 1,630.00
143 5,710.00 179 1,510.00
144 5,600.00 180 1,400.00
<PAGE>
POLICY NUMBER: [N0000000]
TABLE OF GUARANTEED MAXIMUM INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK
AGE LIFE
MONTHLY
RATE
[35 0.00020
36 0.00066
37 0.00121
38 0.00186
39 0.00265
40 0.00359
41 0.00476
42 0.00613
43 0.00775
44 0.00961
45 0.01183
46 0.01443
47 0.01748
48 0.02104
49 0.02522
50 0.03014
51 0.03602
52 0.04311
53 0.05168
54 0.06186
55 0.07389
56 0.08795
57 0.10404
58 0.12230
59 0.14364
60 0.16895
61 0.19907
62 0.23596
63 0.28155
64 0.33722
65 0.40307
66 0.47989
67 0.56783
68 0.66735
69 0.78169
CONTINUED
<PAGE>
POLICY NUMBER: [N00000000]
TABLE OF GUARANTEED MAXIMUM INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK
AGE LIFE
MONTHLY
RATE
70 0.91701
71 1.08841
72 1.27876
73 1.52262
74 1.81657
75 2.16057
76 2.55596
77 3.00219
78 3.49949
79 4.05866
80 4.69923
81 5.44086
82 6.30715
83 7.31754
84 8.46287
85 9.73940
86 11.12947
87 12.12947
88 14.23436
89 15.95026
90 17.78896
91 19.78598
92 22.00632
93 24.56619
94 27.80324
95 32.43367
96 40.11854
97 55.18811
98 83.33333
99 83.33333]
CONTINUED
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Policy Data ........................................................ 3
Definitions ........................................................ 4
Introduction ....................................................... 6
The Owner and the Beneficiary ...................................... 7
Premium Payments ................................................... 8
Death Proceeds ..................................................... 10
The Separate Account ............................................... 12
Account Value Benefits ............................................. 15
Loan Benefits ...................................................... 18
General Information ................................................ 20
Optional Payment Plans ............................................. 22
A copy of the application and any riders and endorsements follow page 24.
DEFINITIONS
ACCOUNT VALUE - The total amount under the Policy in each Investment Subdivision
and our General Account.
AGE - An Insured's age on his or her birthday nearest the Policy Date or a
policy anniversary.
ATTAINED AGE - An Insured's age on the Policy Date plus the number of full years
since the Policy Date.
BENEFICIARY - The person or entity designated by the Owner to receive the Death
Proceeds payable at the death of the second Insured to die.
CONTINUATION AMOUNT - A cumulative amount set forth on the policy data pages for
each month of the Continuation Period.
CONTINUATION PERIOD - The period, shown on the policy data pages, during which
the Policy will remain in effect if the Net Total Premium is at least equal to
the Continuation Amount for the number of Policy Months that the Policy has been
in effect.
THE COMPANY - GE Capital Life Assurance Company of New York. "We", "us" or
"our" refers to the Company.
DEATH BENEFIT - The amount determined under the death benefit option in effect
as of the date of death of the second Insured to die.
DEATH PROCEEDS - The total amount payable to the Beneficiary upon the death of
the second Insured to die.
FUND - Any open-end management investment company or unit investment trust in
which an Investment Subdivision invests.
<PAGE>
5
GENERAL ACCOUNT - Assets of the Company other than those allocated to the
Separate Account or any other separate account of the Company.
HOME OFFICE - The Company's offices at 125 Park Avenue, Sixth Floor, New York,
New York 10017-5529.
INSURED(S) - The persons whose lives are insured under this Policy.
INVESTMENT SUBDIVISION - Subdivision of the Separate Account, the assets of
which are invested exclusively in a corresponding portfolio of a Fund.
MATURITY DATE - The date the Policy matures. This date will be the policy
anniversary nearest the younger Insured's 100th birthday. The date is shown on
the policy data pages.
MONTHLY ANNIVERSARY DAY - The same day in each month as the Policy Date. This
day is shown on the policy data pages.
NET PREMIUM - The portion of each premium paid which is used in determining the
Account Value. It is equal to the premium paid times the Net Premium Factor.
NET PREMIUM FACTOR - The factor used in determining the Net Premium which
reflects a deduction from each premium paid.
NET TOTAL PREMIUM - On any date, Net Total Premium means the total of all
premiums paid to that date less (a) divided by (b), where:
(a) is any outstanding Policy Debt, plus the sum of any partial surrenders
to date; and
(b) is the Net Premium Factor.
OPTIONAL PAYMENT PLAN - A plan whereby any part of Death Proceeds, Surrender
Value proceeds, or benefits at maturity can be left with us to provide a series
of periodic payments to an Owner or Beneficiary.
OWNER - The Owner of the Policy as named in this Policy. "You" or "your" refers
to the Owner. Contingent owners may also be named.
PLANNED PERIODIC PREMIUM - A level premium amount scheduled for payment at fixed
intervals over a specified period of time.
POLICY - This Policy with any attached application(s), and any riders and
endorsements.
POLICY DATE - Date as of which the Company issues the Policy and as of which the
Policy becomes effective. Policy years and anniversaries are measured from the
Policy Date. The Policy Date is shown on the policy data pages.
POLICY DEBT - The amount of outstanding loans plus accrued interest. Policy Debt
is deducted from proceeds payable at the death of the second Insured to die, on
maturity, or at the time of surrender.
POLICY MONTH - A one-month period beginning on a Monthly Anniversary Day and
ending on the day immediately preceding the next Monthly Anniversary Day.
SEPARATE ACCOUNT - The segregated asset account of the Company shown on the
policy data pages.
<PAGE>
SPECIFIED AMOUNT - An amount used in determining the insurance coverage. The
original Specified Amount is shown on the policy data pages.
SURRENDER VALUE - The amount payable to the Owner upon surrender of the Policy.
UNIT VALUE - Unit of measure used to calculate the Account Value for each
Investment Subdivision.
VALUATION DAY - For each Investment Subdivision, each day on which the New York
Stock Exchange is open for regular trading except for days that the Investment
Subdivision's corresponding portfolio does not value its shares.
VALUATION PERIOD - Period that starts at the close of regular trading on the New
York Stock Exchange on any Valuation Day and ends at the close of regular
trading on the next succeeding Valuation Day.
INTRODUCTION
This is a flexible premium variable joint and last survivor life insurance
policy. The first premium payment is due on the Policy Date. Subsequent premiums
may be paid at any time while this Policy is in effect and before the Maturity
Date, subject to conditions specified in the Premium Payments section. In return
for these premiums and the insurance application, we provide certain benefits.
The Policy provides Death Proceeds. Proceeds can be paid in a lump sum or under
an Optional Payment Plan. No Death Proceeds are payable until the death of the
second Insured to die. (See Death Proceeds section.) At the death of the first
Insured to die, the premiums and benefits provided by the Policy will not
change.
The Policy has an Account Value. The Account Value reflects the investment
experience of the Separate Account. (See THE SEPARATE ACCOUNT section.) This
Account Value is the basis for certain benefits you can use before the death of
the second Insured to die or at maturity.
READ YOUR POLICY CAREFULLY.
PROJECTION OF VALUES
We will provide a projection of illustrative future life insurance and Account
Value proceeds. To receive the illustration, send a written request to our Home
Office. You must pay any service fee in effect at that time. The fee will not be
more than $25 per illustration.
The illustration will assume:
o amounts of insurance;
o coverage options;
o future premium payments you specify; and
o other assumptions specified by you or by us.
WHEN THIS POLICY WILL TERMINATE
All coverage under this Policy will terminate when:
o you request that coverage terminate and you return this Policy;
o at the second death of the two Insureds;
o this Policy matures; or
o the grace period ends without sufficient premium being paid.
This Policy will also terminate as stated in the Suicide provision.
<PAGE>
7
THE OWNER AND THE BENEFICIARY
THE OWNER
You have rights in the Policy during either Insured's life. The Policy names the
Insureds. If you are not an Insured, you should name a contingent owner who will
become the Owner if you die before either Insured. If you die before either
Insured and there is no contingent owner, ownership passes to your estate. If
there are multiple Owners, they own the Policy jointly with rights of
survivorship. If the last surviving joint Owner dies before both Insureds,
ownership passes to the estate of that joint Owner.
THE BENEFICIARY
You may name primary and contingent Beneficiaries. Your original Beneficiary
choice is shown in the attached application. Unless an Optional Payment Plan is
chosen, Death Proceeds will be paid in a lump sum to the primary Beneficiary. If
the primary Beneficiary dies before the second Insured to die, Death Proceeds
will be paid to the contingent Beneficiary. If no Beneficiary survives both
Insureds, Death Proceeds will be paid to you or your estate.
You may name more than one primary or contingent Beneficiary. If you do, the
proceeds will be paid in equal shares to the survivors in the appropriate
Beneficiary class who survive both Insureds, unless you have requested
otherwise.
CHANGING THE OWNER OR BENEFICIARY
During either Insured's life, you may change the Owner. You may also change the
Beneficiary during either Insured's life if you reserved this right. An
irrevocable Beneficiary may only be changed with the consent of that irrevocable
Beneficiary.
HOW TO CHANGE THE OWNER OR BENEFICIARY. To make a change, send a written request
to our Home Office. The request must be received by us in a form satisfactory to
us. The change will take effect as of the date you sign the request. The change
will be subject to any payment we make before we record the change.
USING THE POLICY AS COLLATERAL FOR A LOAN
This Policy may be assigned as collateral security. We must be notified in
writing if you assign the Policy. Any payment we make before we record the
assignment at our Home Office will not be affected. We are not responsible for
the validity of an assignment. Your rights and the rights of any revocable
Beneficiary may be affected by an assignment.
TRUSTEE
If a trustee is named as the Owner or Beneficiary of this Policy and exercises
ownership rights or claims benefits, we will have no obligation to verify that a
trust is in effect. We are not obligated to verify that the trustee is acting
within the scope of his/her authority. Payment of policy benefits to the trustee
will release us from all obligations under the Policy to the extent of the
payment. We will have no obligation to ensure that a payment to the trustee is
applied according to the terms of the trust agreement.
<PAGE>
PREMIUM PAYMENTS
This Policy's first premium is due on the Policy Date.
PREMIUMS AFTER THE FIRST PREMIUM
Any premium payments after the first premium may be made under a periodic plan
or at any time while this Policy is in effect.
PERIODIC PREMIUM PLAN. You may request that we send reminders of your Planned
Periodic Premium. You may choose to send premiums directly to us either
annually, semi-annually, or quarterly. We can also arrange for pre-authorized
payments from your bank account or similar facility either annually,
semi-annually, quarterly or monthly. Planned Periodic Premiums will be subject
to our rules on minimun amount.
You can change the frequency or amount of your Planned Periodic Premium. We
reserve the right to limit the amount of any increase in Planned Periodic
Premiums.
UNSCHEDULED PAYMENTS. You can make an unscheduled premium payment at any time
while this Policy is in effect. Unscheduled payments are applied first to repay
any Policy Debt, unless you direct us otherwise. We reserve the right to limit
the number and amount of any unscheduled premium payments.
MAXIMUM PREMIUMS. We will limit the total of all premiums paid to date for this
Policy to the amounts shown in the table of maximum premiums in the policy data
pages. We may reject any premium, or any portion of a premium, that would result
in the Policy being disqualified as life insurance under the Internal Revenue
Code. We will refund any rejected premium along with any interest it accrued. We
reserve the right to change the table of maximum premiums when necessary as a
result of changes in coverage or to maintain compliance with the Internal
Revenue Code. If we do, we will send you a new table of maximum premiums
reflecting the adjusted amounts.
WHEN AND WHERE TO PAY PREMIUMS
Each premium is payable in advance. Send each premium to our Home Office. Make
the check payable to GE Capital Life Assurance Company of New York.
ALLOCATION OF NET PREMIUMS
You may allocate the Net Premium to one or more Investment Subdivisions of the
Separate Account. You may not allocate Net Premium to more than the maximum
number of allocations shown in the policy data pages. The minimum percentage of
each Net Premium which may be allocated to any particular Investment Subdivision
is shown on the policy data pages. Net Premiums will initially be allocated in
accordance with the allocations requested by you. You may change the allocation
of Net Premiums at any time without charge. To change your allocations send us a
notice at our Home Office. The notice must be in writing or in any form
acceptable to us. The changed allocation will apply to premiums received after
we record the change.
CONTINUATION AMOUNT AND CONTINUATION PERIOD
On any Monthly Anniversary Day during the Continuation Period, if the Surrender
Value of this Policy is not sufficient to cover the monthly deduction, this
Policy will remain in effect if the Net Total Premium is at least equal to the
Continuation Amount.
At the end of the Continuation Period, you may have to pay an additional premium
to keep the Policy in effect. (See Insufficient Surrender Value provision.)
<PAGE>
9
An increase in Specified Amount will increase the Continuation Amounts. A
decrease in Specified Amount will reduce the Continuation Amounts. Any
termination and subsequent reinstatement of the Policy will reduce the
Continuation Amounts. We will send you a supplemental policy data page
reflecting the adjusted amounts. The Continuation Period will be as though the
Policy had been in effect continuously from its original Policy Date.
GRACE PERIOD
On any Monthly Anniversary Day during the Continuation Period, if (1) the
Surrender Value is not sufficient to cover the monthly deduction, and (2) the
Net Total Premium is less than the Continuation Amount, you must pay a premium
sufficient to keep the Policy in effect or coverage will terminate. The amount
of the sufficient premium will equal the lesser of (a) and (b), where:
(a) equals the monthly deduction due minus the Surrender Value, and that result
divided by the Net Premium Factor; and
(b) equals the Continuation Amount minus the Net Total Premium.
All amounts in (a) and (b) above are as of the Monthly Anniversary Day at the
beginning of the grace period. The monthly deduction is described in the ACCOUNT
VALUE BENEFITS section.
On any Monthly Anniversary Day after the Continuation Period, if the Surrender
Value is not sufficient to cover the monthly deduction, you must pay a premium
sufficient to keep the Policy in effect or coverage will terminate. In this
case, the amount of the sufficient premium will equal the monthly deduction due
minus the Surrender Value, and that result divided by the Net Premium Factor. As
used in this paragraph, the monthly deduction due and the Surrender Value are
both as of the Monthly Anniversary Day at the beginning of the grace period.
In either case, we will mail you written notice of the sufficient premium. This
notice will be sent to your last known address. You have a 61-day grace period
from the date we mail the notice to pay the sufficient premium.
Coverage continues during the 61-day grace period. If the death of the second
Insured to die occurs during the grace period, proceeds will be reduced by the
amount of the sufficient premium (as described in this provision) that would
have been required to keep the Policy in effect.
If the sufficient premium is not paid by the end of the grace period, this
Policy will terminate without value.
HOW THIS POLICY CAN BE REINSTATED
You may reinstate this Policy within three years of the end of the grace period
if:
(1) you submit an application for reinstatement;
(2) you provide required evidence of insurability satisfactory to us that each
Insured is insurable at the same rating class used at policy issue to
determine the guaranteed maximum cost of insurance rate scale. This is the
requirement if both Insureds were alive on the date of termination. If only
one Insured was alive on the date of termination, we only require evidence
of insurability for that Insured;
(3) the Policy has not been surrendered for cash; and
(4) you pay the premium as described in this section.
The Policy will be reinstated effective on the date we approve the
reinstatement. The surrender charge and the Continuation Period will be as
though the Policy had been in effect continuously from its original Policy Date.
<PAGE>
On the date of reinstatement, the Account Value will be allocated to the
Investment Subdivisions of the Separate Account. Unless you tell us otherwise,
these allocations will be made in the same manner that Net Premiums are
allocated.
IF THIS POLICY TERMINATES AND IS REINSTATED BEFORE THE END OF THE CONTINUATION
PERIOD, you will have to pay a premium equal to (1) minus (2) minus (3) plus
(4), where:
(1) is the Continuation Amount as of the date of reinstatement;
(2) is the sum of the monthly deductions that would have been made during the
period between termination and reinstatement, divided by the Net Premium
Factor;
(3) is the Net Total Premium on the date of termination; and
(4) is an amount sufficient to keep the Policy in effect for two Policy Months
after the date of reinstatement.
On the date of reinstatement, the Account Value will equal (a) plus (b) minus
(c), where:
(a) is the Account Value on the first day of the grace period;
(b) is the premium paid to reinstate multiplied by the Net Premium Factor; and
(c) is the monthly deduction for the month following the date of reinstatement.
IF THIS POLICY TERMINATES BEFORE THE END OF THE CONTINUATION PERIOD, AND IS
REINSTATED AFTER THE END OF THE CONTINUATION PERIOD, you will have to pay a
premium which, after multiplying it by the Net Premium Factor, equals (1) plus
(2) minus (3), where:
(1) is the surrender charge on the date of termination;
(2) is an amount equal to the monthly deductions for two months after the date
of reinstatement; and
(3) is the Account Value on the date of termination.
On the date of reinstatement, the Account Value will equal (a) plus (b) plus
(c), where:
(a) is the surrender charge in effect on the date of reinstatement;
(b) is an amount equal to the monthly deductions for the two months after the
date of reinstatement, minus the monthly deduction for the month following
the date of reinstatement; and
(c) is any premium paid in excess of the required reinstatement premium,
multiplied by the Net Premium Factor.
IF THIS POLICY TERMINATES AFTER THE END OF THE CONTINUATION PERIOD AND IS
REINSTATED, you will have to pay a premium to keep the Policy in effect for at
least two months.
On the date of reinstatement, the Account Value will equal (a) plus (b) minus
(c), where:
(a) is the surrender charge in effect on the date of reinstatement;
(b) is the premium paid to reinstate multiplied by the Net Premium Factor; and
(c) is the monthly deduction for the month following the date of reinstatement.
DEATH PROCEEDS
Death Proceeds are payable at the death of the second Insured to die. No
benefits are payable at the death of the first Insured to die. We will process a
claim for Death Proceeds on this Policy when we receive:
o this Policy;
o due proof that both Insureds died while this Policy was in effect; and
o proof of the interest of the claimant.
Proceeds can be paid in a lump sum or under an Optional Payment Plan. Interest
will be paid on the proceeds from the date of death to the date of payment at
the annual rate of 3%.
<PAGE>
11
HOW WE DETERMINE DEATH PROCEEDS
In the application for original coverage, the Owner elected one of two death
benefit options.
Under Option A, the Death Benefit is the greater of (1) and (2), where:
(1) is the Specified Amount plus the Account Value; and
(2) is the Account Value multiplied by the corridor percentage.
Under Option B, the Death Benefit is the greater of (1) and (2), where:
(1) is the Specified Amount; and
(2) is the Account Value multiplied by the corridor percentage.
For both Option A and Option B, references to Specified Amount and Account Value
in items (1) and (2), are amounts in effect on the date of death of the second
Insured to die.
In no event will the Death Benefit be less than the amount required to keep the
Policy qualified as life insurance.
The corridor percentage will depend on the Attained Age of the younger Insured
on the date of death of the second Insured to die. If the younger Insured was
the first to die, the corridor percentage will depend on the Attained Age that
he/she would have been if still living. (See the corridor percentage chart in
this section.)
The actual amount of Death Proceeds will depend on:
o the Death Benefit as determined in this section;
o the use of the Account Value;
o any partial surrenders;
o any Policy Debt;
o any additional insurance provided by rider;
o any increase or decrease in existing coverage;
o either Insured's suicide during the first two policy years or during the
first two policy years following an increase in existing coverage; and
o a misstatement of either Insured's Age or gender.
<TABLE>
<CAPTION>
Younger Younger Younger Younger
Insured's Insured's Insured's Insured's
Attained Corridor Attained Corridor Attained Corridor Attained Corridor
Age Percentage Age Percentage Age Percentage Age Percentage
--- ---------- --- ---------- --- ---------- --- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
40 or 50 185% 61 128% 72 111%
younger 250% 51 178 62 126 73 109
41 243 52 171 63 124 74 107
42 236 53 164 64 122 75 105
43 229 54 157 65 120 through
44 222 55 150 66 119 90
45 215 56 146 67 118 91 104
46 209 57 142 68 117 92 103
47 203 58 138 69 116 93 102
48 197 59 134 70 115 94 or older 101
49 191 60 130 71 113
</TABLE>
<PAGE>
COMPLIANCE AS LIFE INSURANCE
We reserve the right to amend this Policy as necessary to maintain compliance
with the Internal Revenue Code. We will send any such amendments to you. You
have the right to refuse such amendments and accept full responsibility for any
consequences as a result of such refusal.
CHANGE IN EXISTING COVERAGE
After the Policy has been in effect for one year, you can increase or decrease
the Specified Amount. To make a change, send a written request along with the
Policy to our Home Office. The one year limitation will not apply to an increase
or decrease in Specified Amount caused by a change in death benefit options.
DECREASE IN SPECIFIED AMOUNT. Any decrease will become effective on the Monthly
Anniversary Day after the date we receive the request. The decrease will first
apply to coverage provided by the most recent increase. Then the decrease will
apply to the next most recent increases successively. Next the decrease will
apply to the coverage provided under the original application.
During the Continuation Period, we will not allow a decrease unless the Account
Value less any Policy Debt is greater than the surrender charge. A decrease may
not cause the Specified Amount to be less than the minimum Specified Amount
shown on the policy data pages. A decrease may cause a surrender charge to be
assessed and may require us to make a payment to you to keep the Policy
qualified as life insurance. If this event occurs, we will send you revised
policy data pages. (SEE SURRENDER CHARGE ON DECREASE IN SPECIFIED AMOUNT in the
Surrender provision.)
INCREASE IN SPECIFIED AMOUNT. While both Insureds are living, you may apply for
an increase in Specified Amount using a supplemental application. You will have
to submit evidence satisfactory to us that each Insured is insurable at the same
rating class used at policy issue. An increase in Specified Amount will incur
additional surrender charges except for increases in Specified Amount resulting
from a change from death benefit Option A to death benefit Option B. Any
approved increase will become effective on the date shown in the supplemental
policy data page. The approved increase will not become effective if the
Policy's Surrender Value is too low to cover the monthly deduction for the
Policy Month following the increase.
CHANGE IN DEATH BENEFIT OPTIONS
If you elected death benefit Option A, you can request a change to death benefit
Option B. The Specified Amount after the change will equal the sum of (1) plus
(2), where:
(1) is the Specified Amount on the date your request becomes effective; and
(2) is the Account Value on the date your request becomes effective.
If you elected death benefit Option B, you can request a change to death benefit
Option A. This will decrease the Specified Amount by the amount of Account
Value. The decrease will not cause a surrender charge to be assessed.
Any change in death benefit options will become effective on the first Monthly
Anniversary Day after the date we receive the request in our Home Office.
THE SEPARATE ACCOUNT
The Separate Account supports the operation of this Policy and certain other
variable life insurance policies we may offer. We will not allocate assets to
the Separate Account to support the operation of any contracts or policies that
are not variable life insurance.
We own the assets in the Separate Account. These assets are held separately from
our other assets. They are not part of our General Account.
<PAGE>
13
The Separate Account is registered with the Securities and Exchange Commission
as a unit investment trust under the Investment Company Act of 1940. The
Separate Account is also subject to laws of the state of New York which regulate
the operations of insurance companies incorporated in New York. The investment
policy of the Separate Account will not be changed without the approval of the
New York Insurance Commissioner. The approval process is on file with the New
York Insurance Commissioner.
INSULATION OF ASSETS
The portion of the assets of the Separate Account which equals the reserves and
other policy liabilities which are supported by the Separate Account will not be
charged with liabilities arising from any other business we conduct. We have the
right to transfer to our General Account any assets of the Separate Account
which are in excess of such reserves and other policy liabilities.
INVESTMENT SUBDIVISIONS
The Separate Account is divided into Investment Subdivisions. The income, gains
and losses, whether or not realized, from the assets allocated to an Investment
Subdivision are credited to or charged against such Investment Subdivision
without regard to other income, gains or losses of the Company.
The Investment Subdivisions available under this Policy are shown in the policy
data pages. Each Investment Subdivision in the Separate Account invests
exclusively in a portfolio. Any amounts of income, dividends and gains
distributed from the shares of a Fund are reinvested in additional shares of
that Fund.
CHANGES TO THE SEPARATE ACCOUNT AND INVESTMENT SUBDIVISIONS
Where permitted by applicable law, the Company may:
o create new separate accounts;
o combine separate accounts, including the Separate Account;
o transfer assets of the Separate Account, which we determine to be
associated with the class of policies to which this Policy belongs, to
another separate account;
o add new Investment Subdivisions to or remove existing Investment
Subdivisions from the Separate Account or combine Investment
Subdivisions;
o make Investment Subdivisions (including new Investment Subdivisions)
available to such classes of policies as we may determine;
o add new Funds or remove existing Funds;
o substitute new Funds for any existing Fund whose shares are no longer
available for investment;
o substitute new Funds for any existing Fund which we determine is no
longer appropriate in light of the purposes of the Separate Account;
o deregister the Separate Account under the Investment Company Act of 1940;
and
o operate the Separate Account under the direction of a committee or in any
other form permitted by law.
In the event of any substitution or change, we may, by appropriate endorsement,
make such changes in this and other policies as may be necessary or appropriate
to reflect the substitution or change.
VALUATION OF SEPARATE ACCOUNT ASSETS
We will value the assets of the Separate Account each Valuation Day at their
fair market value. The valuation will be done in accordance with accepted
accounting practices and applicable laws and regulations.
<PAGE>
POLICY EXCHANGE
If you object to a material change in the investment policy of the Separate
Account or any Investment Subdivision, you have the right to exchange this
Policy for a fixed benefit policy. No evidence of insurability will be required.
We will notify you of the options available, and the procedures to follow if you
decide to make an exchange. You must make an exchange within sixty days after
the change in investment policy becomes effective or sixty days after the
receipt of the notice of the options available, whichever is later. There will
always be one policy available for exchange.
UNIT VALUE
Each Investment Subdivision has a Unit Value. When Net Premiums or other amounts
are transferred into an Investment Subdivision, a number of units are purchased
based on that Investment Subdivision's Unit Value as of the end of the Valuation
Period during which the transfer is made. Likewise, when amounts are transferred
out of an Investment Subdivision, units are redeemed in a similar manner.
The Unit Value of each Investment Subdivision was arbitrarily set when the
Investment Subdivision began operations. The Unit Value for each subsequent
Valuation Period is the net investment factor for that period, multiplied by the
Unit Value for the immediately preceding period. The Unit Value for a Valuation
Period applies to each day in the period.
Each Investment Subdivision has its own net investment factor. In the following
definition, "assets" refers to the assets in each Investment Subdivision. "Any
amount charged against the Separate Account" refers to those amounts that are
allocated to each Investment Subdivision.
The net investment factor for a Valuation Period is (a) divided by (b), minus
(c), where:
(a) is the result of:
1. the value of the assets at the end of the preceding Valuation Period;
plus
2. the investment income and capital gains, realized or unrealized,
credited to those assets at the end of the Valuation Period for which
the net investment factor is being determined; minus
3. the capital losses, realized or unrealized, charged against those assets
during the Valuation Period; minus
4. any amount charged against the Separate Account for taxes, or any amount
we set aside during the Valuation Period as a provision for taxes
attributable to the operation or maintenance of the Separate Account;
and
(b) is the value of the assets in the Investment Subdivision at the end of the
preceding Valuation Period; and
(c) is a charge no greater than the maximum mortality and expense risk charge,
as shown on the policy data pages, made for each day in the Valuation
sPeriod.
TRANSFERS
You may transfer Account Value among the Investment Subdivisions of the Separate
Account. The transfer will be effective as of the end of the Valuation Period
during which we receive your request at our Home Office. You must request a
transfer in writing or in any other form acceptable to us. The first transfer in
each calendar month will be made without a transfer charge. A transfer charge
will be imposed for each subsequent transfer in the same calendar month. This
transfer charge is shown on the policy data pages. When we make transfers, the
Account Value on the date of the transfer will not be affected by the transfer
except to the extent of the transfer charge. The transfer charge will be taken
from the amount transferred.
<PAGE>
15
We reserve the right to limit, upon written notice, the number of transfers
each calendar year to twelve. Also, we reserve the right to refuse to execute
any transfer:
(1) if any of the Investment Subdivisions that would be affected by the
transfer is unable to purchase or redeem shares of the relevant
portfolio in which the Investment Subdivision invests; or
(2) if the transfer is a result of more than one trade involving the same
Investment Subdivision within a 30 day period; or
(3) if the transfer would adversely affect accumulation unit values (which
may occur if the transfer would affect one percent or more of the
relevant Fund's total assets); or
(4) if the transfer would adversely affect any Fund affected by the
transfer.
Where permitted by law, we may accept your authorization of third party
transfers on your behalf. We may restrict the Investment Subdivisions that will
be available to you for transfers of Account Value and we may restrict the
number of such transfers during any period in which you authorize such third
party to act on your behalf. We will give you prior notice of any such
restrictions. However, we will not enforce such restrictions if you provide us
with satisfactory evidence that (1) such third party has been appointed by a
court of competent jurisdiction to act on your behalf, or (2) such third party
has been appointed by you to act on your behalf for all your financial affairs.
ACCOUNT VALUE BENEFITS
HOW WE DETERMINE ACCOUNT VALUE
At the end of the Valuation Period during which the first premium is applied,
the Account Value in each Investment Subdivision is equal to (a) minus (b),
where:
(a) is the portion of the Net Premium which has been paid and allocated to
that Investment Subdivision; and
(b) is the portion of any due and unpaid monthly deductions allocated to
the Account Value in that Investment Subdivision.
At the end of each Valuation Period after such date, the Account Value allocated
to each Investment Subdivision of the Separate Account is (1) plus (2) plus (3)
minus (4) minus (5) minus (6), where:
(1) is the Account Value allocated to the Investment Subdivision at the end
of the preceding Valuation Period, multiplied by the Investment
Subdivision's net investment factor for the current Valuation Period;
(2) is Net Premiums received during the current Valuation Period and which
are allocated to the Investment Subdivision;
(3) is any other amount transferred into the Investment Subdivision during
the current Valuation Period;
(4) is any partial surrender made from the Investment Subdivision during
the current Valuation Period;
(5) is any Account Value transferred out of the Investment Subdivision
during the current Valuation Period;
(6) any monthly deduction allocated to the Investment Subdivision during
the current Valuation Period.
<PAGE>
HOW WE DETERMINE NET PREMIUM
To calculate the Net Premium, we multiply the premium paid times the Net Premium
Factor.
The minimum Net Premium Factor is shown on the policy data pages. We may use a
Net Premium Factor greater than the minimum Net Premium Factor at our sole
discretion.
MONTHLY DEDUCTION
The monthly deduction is a charge made on the Policy Date and each Monthly
Anniversary Day thereafter against the Account Value. It is determined by adding
the cost of insurance, the cost of additional benefits provided by rider, the
initial monthly expense charge, any increase monthly expense charge, and the
monthly policy charge.
MONTHLY POLICY CHARGE. The actual monthly policy charge will never be greater
than the maximum monthly policy charge shown on the policy data pages.
INITIAL MONTHLY EXPENSE CHARGE. The initial monthly expense charge will be
included in the monthly deduction. This charge will be deducted during the first
ten policy years. The maximum amount of the charge per $1,000 of initial
Specified Amount is shown on the policy data pages.
INCREASE MONTHLY EXPENSE CHARGE. The increase monthly expense charge due to an
increase in Specified Amount will be included in the monthly deduction. This
charge will be deducted during the ten year period following the increase. The
maximum amount of the charge per S1,000 of increase is shown on the policy data
pages.
The monthly deduction for a Policy Month will be allocated among the Investment
Subdivisions of the Separate Account in the same proportion that the Policy's
Account Value in each Investment Subdivision bears to the total Account Value in
all Investment Subdivisions at the beginning of the Policy Month.
COST OF INSURANCE
The cost of insurance is calculated on each Monthly Anniversary Day and is based
on the net amount at risk. The net amount at risk is calculated by dividing the
Death Benefit by 1.0032737, and then subtracting the Account Value. To determine
the cost of insurance for a particular Policy Month, we divide the net amount at
risk by 1000 and multiply that result by the applicable cost of insurance rate.
If Option B is in effect, and the Specified Amount has increased, the Account
Value is first considered part of the initial Specified Amount. If the Account
Value is more than the initial Specified Amount, any excess Account Value will
be considered part of the increased Specified Amounts resulting from increases
in the order of the increases. Account Value, as used in this paragraph, means
the Account Value at the beginning of the month, prior to the monthly deduction
for the cost of insurance.
COST OF INSURANCE RATE. The monthly rate is based on each Insured's gender,
issue age, rating class and policy duration. The rates are determined by us
according to our expectations of future experience for mortality, lapse, taxes,
interest, and expenses. We will review our experiences in these categories not
more frequently than once per year or less frequently than every five years. We
can change the rates from time to time. They will never be more than the maximum
rates shown in the table of guaranteed maximum insurance rates. A change in
rates will apply to all persons of the same age, gender and rating class and
whose policies have been in effect for the same length of time. Any change in
the cost of insurance rate will be determined in accordance with the standards
and procedures on file with the New York Insurance Department.
INSUFFICIENT SURRENDER VALUE
On a Monthly Anniversary Day, if the Surrender Value is not enough to cover the
monthly deduction for that Monthly Anniversary Day, the Grace Period provision
will apply.
<PAGE>
CONTINUATION OF COVERAGE
This Policy and any riders will remain in effect:
o as long as the Surrender Value covers the monthly deduction; or
o as provided for in the Continuation Amount and Continuation Period
provision under PREMIUM PAYMENTS.
But in any case, the Policy will not continue beyond the Maturity Date. Also, a
rider attached to this Policy will not continue beyond its termination date
under any circumstances.
SURRENDER
You can make a full or partial surrender of this Policy by sending a written
request and the Policy to our Home Office. Unless an Optional Payment Plan is
chosen, any proceeds payable will be paid to you in a lump sum. A surrender must
take place prior to the death of the second Insured to die and before the
Maturity Date.
AMOUNT PAYABLE ON SURRENDER. The Surrender Value of this Policy is the Account
Value on the date we receive your request for surrender in our Home Office less
any Policy Debt and less any surrender charge that applies.
SURRENDER CHARGE. We will charge a surrender charge during any surrender charge
period. Surrender charge amounts are shown in the policy data pages. The
surrender charge period is the period of Policy Months for which a surrender
charge is shown in the policy data pages. The total surrender charge for any
given Policy Month is the sum of:
o the surrender charge that applies to the original Specified Amount,
adjusted for any decrease in Specified Amount; plus,
o the surrender charges that apply to any increases in Specified Amount,
adjusted for any decrease in Specified Amount.
SURRENDER CHARGE ON DECREASE IN SPECIFIED AMOUNT. If the Specified Amount is
decreased during the surrender charge period other than for a partial surrender,
we will charge a surrender charge. The amount of surrender charge will be
deducted from your Account Value. The charge will be allocated among each
Investment Subdivision in the same proportion that the Policy's Account Value in
each Investment Subdivision bears to the Account Value in all Investment
Subdivisions.
The amount of surrender charge will be based:
(1) first on any surrender charge in effect on the most recent increase and
the amount of reduction to this increase caused by the decrease;
(2) then on any surrender charge in effect on the next most recent
increases successively and the amount of any reduction to each of these
increases caused by the decrease; and
(3) finally on the surrender charge in effect on coverage provided under
the original application and any reduction to this amount caused by the
decrease.
Surrender charges in effect before the decrease are adjusted to reflect any
assessments made.
PARTIAL SURRENDER. You can make a partial surrender of this Policy. A partial
surrender cannot be less than $500. A partial surrender cannot exceed the lesser
of:
o the Surrender Value, less $500; or
o the available loan amount.
We will reduce the Account Value and the Death Proceeds by the amount of any
partial surrender. A partial surrender will not be permitted during the first
policy year if death benefit Option B is in effect.
<PAGE>
You may tell us how to allocate the partial surrender among the Investment
Subdivisions of the Separate Account. If you do not, the partial surrender will
be allocated among each Investment Subdivision in the same proportion that the
Policy's Account Value in each Investment Subdivision bears to the total Account
Value in all Investment Subdivisions on the date we receive the request in our
Home Office.
We will deduct a charge from the amount of each partial surrender. The charge is
shown on the policy data pages.
RECEIVING THE SURRENDER VALUE
The Surrender Value is payable in one lump sum unless you choose to receive
periodic payments under an Optional Payment Plan.
POSTPONEMENT OF PAYMENTS
We will usually pay any amounts payable as a result of surrender, partial
surrender, or policy loan within seven days after we receive written request in
our Home Office, in a form satisfactory to us. Except to pay premiums, we
reserve the right to defer payment of policy loans for six months. If payment of
a policy loan or surrender is not made within 10 days of receipt of
documentation necessary to complete the transaction, we will pay interest at an
annual rate of 3% on the policy loan or surrender. We will usually pay any Death
Proceeds within seven days after we receive due proof of death.
Payment of any amount for surrender, partial surrender, policy loan or Death
Proceeds may be postponed whenever:
o the New York Stock Exchange is closed other than customary week-end and
holiday closings, or trading on the New York Stock Exchange is restricted
as determined by the Securities and Exchange Commission; or
o the Securities and Exchange Commission by order permits postponement for
the protection of policyowners; or
o an emergency exists, as determined by the Securities and Exchange
Commission, as a result of which disposal of securities is not reasonably
practicable or it is not reasonably practicable to determine the value of
the net assets of the Separate Account.
We have the right to defer payment which is derived from any amount recently
paid to us by check or draft, until we are satisfied the check or draft has been
paid by the bank on which it was drawn.
LOAN BENEFITS
The Policy has loan benefits that are described below.
MAKING A POLICY LOAN
You may obtain a policy loan from us. This Policy is the only security required.
We recommend that you consult a tax advisor before requesting a loan. The
MAXIMUM loan amount is 90% of the difference between (a) the Account Value and
(b) any surrender charge on the date of the loan. The AVAILABLE loan amount is
the maximum loan amount less any outstanding Policy Debt.
When a policy loan is made, an amount of Account Value sufficient to secure the
loan is transferred out of the Separate Account and into our General Account.
You may tell us how to allocate that Account Value among the Investment
Subdivisions of the Separate Account. If you do not, that Account Value will be
allocated among each Investment Subdivision in the same proportion that the
Policy's Account Value in each Investment Subdivision bears to the total Account
Value in all investment Subdivisions on the date we make the loan.
<PAGE>
19
Account Value in the General Account will earn interest daily at a minimum
annual rate of 4%. On each policy anniversary day, the interest earned since the
preceding policy anniversary day will be transferred into the Separate Account.
This interest will be allocated to the Investment Subdivisions in the same
manner as Net Premiums.
Account Value in the General Account will earn interest daily at a minimum
annual rate of 4%. On each policy anniversary day, the interest earned since the
preceding policy anniversary day will be transferred into the Separate Account.
This interest will be allocated to the Investment Subdivisions in the same
manner as Net Premiums.
Any loan transaction will permanently affect the values of the Policy.
POLICY LOAN INTEREST
The interest rates charged for non-preferred policy loans and for preferred
policy loans are shown on the policy data pages. Interest accrues daily, and is
due and payable on each policy anniversary. If interest is not paid when due, an
amount equal to the amount owed will be transferred out of the Separate Account
and into our General Account to become part of the Policy Debt and interest will
be charged on that amount. Interest transferred out of the Separate Account will
be transferred from each Investment Subdivision in the same proportion that the
Account Value in that Investment Subdivision bears to the total Account Value in
all Investment Subdivisions at the time of interest transfer.
PREFERRED POLICY DEBT
A portion of policy loans taken and/or existing after the preferred loan
availability date (shown on the policy data pages) will be designated as
preferred policy debt. The amount of preferred policy debt is redetermined each
policy month.
Preferred policy debt will be at least as large as:
(a) the Account Value less any surrender charge that applies, minus
(b) the total premiums paid.
REPAYING POLICY DEBT
You can repay Policy Debt in part or in full any time during either Insured's
life while this Policy is in effect. Loan payments will first be applied to
reduce the portion of Policy Debt that does not correspond to preferred policy
debt.
When a loan repayment is made, Account Value in the General Account related to
that payment will be transferred into the Separate Account. You may tell us how
to allocate this Account Value among each Investment Subdivision of the Separate
Account. If you do not, we will allocate that amount among the Investment
Subdivisions in the same proportion that Net Premiums are being allocated.
If you do not repay Policy Debt, it will be deducted from any proceeds or
benefit payable at the death of the second Insured to die, on maturity, or on
surrender. Any Policy Debt which exists at the end of the 61-day grace period
will be deducted from the Account Value and considered repaid as of the date of
termination.
MINIMUM LOAN PAYMENT
During the Continuation Period, if Policy Debt on any Monthly Anniversary Day
exceeds the Account Value less any surrender charge that applies, and the Net
Total Premium is less than the Continuation Amount, your Policy will enter a
61-day grace period. You will have the 61-day grace period to pay a minimum
loan payment equal to the lesser of (a) and (b), where:
(a) equals the amount by which Policy Debt exceeds the Account Value less
any surrender charge and
(b) equals the Net Premium Factor times the difference between the
Continuation Amount and the Net Total Premium.
<PAGE>
All amounts in (a) and (b) above are as of the Monthly Anniversary Day when
excess Policy Debt first occur.
After the Continuation Period, if Policy Debt on any Monthly Anniversary Day
exceeds the Account Value less any surrender charge that applies, your Policy
will enter a 61-day grace period. In this case, you will have the 61-day grace
period to pay a minimum loan payment equal to the amount by which Policy Debt
exceeds the Account Value less any surrender charge. As used in this paragraph,
Policy Debt, Account Value and surrender charge are all as of the Monthly
Anniversary Day when excess Policy Debt first occurs.
We will send written notice of the minimum loan payment to you and any assignee
of record at our Home Office at least 30 days prior to the date of termination.
If you do not pay the minimum loan payment by the end of the grace period, your
Policy will terminate without value.
GENERAL INFORMATION
ANNUAL STATEMENT
On each policy anniversary, we will send you an annual statement that will
describe the current status of your Policy and any other information required by
the New York Insurance Department. The statement will show the Specified Amount,
the Account Value, the Surrender Value and Policy Debt as of the policy
anniversary. The statement will also show premiums paid and charges made during
the policy year.
CALCULATION OF VALUES
Our calculations of guaranteed maximum cost of insurance rates are based on the
Commissioners' 1980 Standard Ordinary Smoker or Nonsmoker Mortality Tables (age
nearest birthday).
The values provided for in this Policy are always at least what is required by
New York law. A detailed statement of how we calculate the values in this Policy
has been filed with the New York Insurance Department.
EXCHANGE PROVISION
During the first 24 policy months, you have the right to exchange this Policy
for a flexible premium adjustable joint and last survivor life policy. We will
not require evidence of insurability. If you decide to make an exchange, we will
notify you of the policies available for exchange and the procedures to follow.
The policy or policies we offer for exchange will be one offered by us or by an
affiliate. You may elect to have the amount of the new policy be either (a) or
(b) where:
(a) is the Death Benefit on the date of exchange, and
(b) is the Death Benefit minus the Account Value on the date of exchange.
The new policy will have the same policy date, genders, issue ages and
equivalent rating classes as this Policy. The new policy will include such
riders and endorsements as were included in this Policy, if such riders and
endorsements are available with the new policy.
The exchange is subject to an equitable adjustment in payments and Account
Values to reflect variances, if any, in the payments and Account Values under
the existing Policy and the new policy.
LIMITS ON CONTESTING THIS POLICY
In deciding to issue this Policy, we relied on statements in the application for
the Policy. If we increase the Specified Amount or reinstate the Policy after it
lapses, we rely on statements in a supplemental application or a reinstatement
application. The statements in all such applications are considered
representations and not warranties.
<PAGE>
21
We can contest this Policy, an increase in Specified Amount and/or a
reinstatement of this Policy, if:
o any material misrepresentation of fact was made in the application, a
supplemental application or a reinstatement application; and
o a copy of that application was attached to the Policy when issued or
delivered, or was made a part of the Policy when a change in coverage
or Policy reinstatement went into effect.
With respect to the original Specified Amount, we will not contest this Policy
after it has been in effect during the lifetime of at least one of the Insured's
for two years from its Policy Date. We will not contest an increase in Specified
Amount after that increase has been in effect during the lifetime of at least
one of the Insured's for two years from the effective date of the increase. We
will not contest a reinstatement of this Policy after the reinstated Policy has
been in effect during the lifetime of at least one of the Insured's for two
years from the date of reinstatement.
This provision does not apply to riders that provide disability benefits.
MATURITY DATE
On the Maturity Date, your Policy terminates. We will pay you the Account Value,
less any outstanding Policy Debt, in a lump sum or under an Optional Payment
Plan.
MISSTATEMENT OF AGE OR GENDER
If either Insured's Age or gender was misstated in an application, the Death
Benefit will be adjusted. The Death Benefit after adjustment will be the sum of
(a) and (b), where:
(a) is the Account Value at the time of the death of the second Insured to
die; and
(b) is the unadjusted Death Benefit, reduced by the Account Value at the
time of the death of the second Insured to die, and multiplied by the
ratio of (1) the most recent monthly deduction based on each Age and
gender shown in the application, to (2) the most recent monthly
deduction based on each true Age or gender.
All amounts are those in effect, with respect to each Insured, in the Policy
Month of the death of the second Insured to die.
In no event will the Death Benefit be less than the amount required to keep the
Policy qualified as life insurance.
NONPARTICIPATING
This is not a participating policy. No dividends are payable.
THE POLICY AND ITS PARTS
The Policy with any attached application(s), and any riders and endorsements is
a legal contract. It is the entire contract between you and us. An agent cannot
change this contract. Any change to it must be in writing and approved by us.
Only an authorized officer of the Company can give our approval.
We will not use any statement in the original application to deny a claim unless
a copy of that application was attached to this Policy when issued or delivered.
We will not use any statement in a supplemental application to deny a claim
unless a copy of that application was sent to you when the change in coverage
went into effect. We will not use any statement in a reinstatement application
to deny a claim unless a copy of the reinstatement application was sent to you
when the Policy was reinstated.
<PAGE>
SUICIDE
If either Insured commits suicide within two years of the Policy Date, all
coverage under the Policy will end, and we will pay a limited amount of
proceeds. The limited amount of proceeds will equal all premiums paid on the
Policy, less Policy Debt and partial surrenders. We will also provide a single
life policy to the surviving Insured. The single life policy will have the same
Policy Date as this Policy. The rating class of the single life policy will be
the rating class of the surviving Insured under this Policy. We may require
increased premiums under the single life policy. The policy or policies we offer
will be one offered by us or by an affiliate.
If the first Insured to die commits suicide more than two years after the Policy
Date and within two years after an increase in the Specified Amount became
effective, the Specified Amount will be reduced to the amount in effect prior to
the increase. Monthly deductions that were made with respect to the increase
will be refunded in a lump sum to the Owner.
If the second Insured to die commits suicide more than two years after the
Policy Date and within two years after an increase in the Specified Amount
became effective, the Specified Amount will be reduced to the amount in effect
prior to the increase. The amount payable with respect to the increase will
equal the monthly deductions that were made for that increase. The amount
payable will be treated as Death Proceeds and paid to the Beneficiary under the
same conditions as the original Specified Amount.
Any limited amount payable will be treated as Death Proceeds and paid to the
Beneficiary under the same conditions as the original Specified Amount.
WRITTEN NOTICE
Any written notice to us should be sent to our Home Office at 125 Park Avenue,
Sixth Floor, New York, New York 10017-5529. Please include the policy number and
each Insured's full name.
Any notice we send to you will be sent to your address shown in the application.
Notify us of any change of address.
OPTIONAL PAYMENT PLANS
Death Proceeds, Surrender Value proceeds or benefits at maturity will be paid in
one lump sum, unless requested otherwise. Any part of the proceeds can be left
with us and paid under a payment plan. During either Insured's life, you can
choose a plan. A Beneficiary can choose a plan if you have not chosen one at the
death of the second Insured to die.
There are several important payment plan rules:
o The payee under a plan cannot be a corporation, association or fiduciary.
o If you change a Beneficiary, your plan selection will no longer be in
effect unless you request that it continue.
o Any choice or change of a plan must be sent in writing to our Home
Office.
o The amount of each payment under a plan must be at least $50.
o Payments will begin either on the date of death of the second Insured to
die, on surrender, or on the Maturity Date, except for payments under
Plan 4 which begin at the end of the first interest period.
o Payments are backed by assets in our General Account.
o The guaranteed amount payable under Plan 2 and Plan 5 is calculated using
the 1983 Table 'a' with improvement scale G (age nearest birthday), and
will earn interest at 3% compounded yearly.
<PAGE>
23
PLAN 1. INCOME FOR A FIXED PERIOD. We will make equal periodic payments for a
fixed period, not longer than 30 years. Payments can be annual, semi-annual,
quarterly or monthly. Payments will be made according to the table in this
section. Guaranteed amounts payable under this plan will earn interest at 3%
compounded yearly. We may increase the interest and the amount of any payment.
If the payee dies, the amount of the remaining guaranteed payments will be
DISCOUNTED to the date of the payee's death at a yearly rate of 3%. DISCOUNTED
means we will deduct the amount of interest each remaining payment would have
included had it not been paid out early. The discounted amount will be paid in
one sum to the payee's estate unless otherwise provided.
PLAN 2. LIFE INCOME. We will make equal monthly payments for a guaranteed
minimum period. If the payee lives longer than the minimum period, payments will
continue for his or her life. The minimum period can be 10, 15 or 20 years.
Payments will be according to the table in this section. Guaranteed amounts
payable under this plan will earn interest at 3% compounded yearly. We may
increase the interest rate and the amount of any payment. If the payee dies
before the end of the guaranteed period, the amount of remaining payments for
the minimum period will be discounted at the same interest rate used to
calculate the monthly income. The discounted amounts will be paid in one sum to
the payee's estate unless otherwise provided.
PLAN 3. INCOME OF A DEFINITE AMOUNT. We will make equal periodic payments of a
definite amount. Payments can be annual, semi-annual, quarterly or monthly. The
amount paid each year must be at least $120 for each $1,000 of proceeds.
Payments will continue until the proceeds are exhausted. The last payment will
equal the amount of any unpaid proceeds. Unpaid proceeds will earn interest at
3% compounded yearly. We may increase the interest rate. If we do, the payment
period will be extended. If the payee dies, the amount of the remaining proceeds
with earned interest will be paid in one sum to his or her estate unless
otherwise provided.
PLAN 4. INTEREST INCOME. We will make periodic payments of interest earned from
the proceeds left with us. Payments can be annual, semi-annual, quarterly or
monthly, and will begin at the end of the first period chosen. Proceeds left
under this plan will earn interest at 3% compounded yearly. We may increase the
interest rate and the amount of any payment. If the payee dies, the amount of
remaining proceeds and any earned but unpaid interest will be paid in one sum to
his or her estate unless otherwise provided.
PLAN 5. JOINT LIFE AND SURVIVOR INCOME. We will make equal monthly payments to
two payees for a guaranteed minimum of 10 years. Each payee must be at least 35
years old when payments begin. The guaranteed amount payable under this plan
will earn interest at 3% compounded yearly. We may increase the interest rate
and the amount of any payment. Payments will continue as long as either payee is
living. If both payees die before the end of the minimum period, the amount of
the remaining payments for the 10 year period will be discounted at the same
interest rate used to calculate the monthly income. The discounted amount will
be paid in one sum to the survivor's estate unless otherwise provided.
<PAGE>
<TABLE>
<CAPTION>
PLAN 1 TABLE: Monthly payment rates for each $1,000 of proceeds under Plan 1.
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Years
Payable 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
- ------------------------------------------------------------------------------------------------------------------------------------
Monthly
Payment $84.47 $42.86 $28.99 $22.06 $17.91 $15.14 $13.16 $11.68 $10.53 $9.61 $8.86 $8.24 $7.71 $7.26 $6.87
====================================================================================================================================
Years
Payable 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
- ------------------------------------------------------------------------------------------------------------------------------------
Monthly
Payment $6.53 $6.23 $5.96 $5.73 $5.51 $5.32 $5.15 $4.99 $4.84 $4.71 $4.59 $4.47 $4.37 $4.27 $4.18
- ------------------------------------------------------------------------------------------------------------------------------------
Annual, semi-annual or quarterly payments are determined by multiplyinq the
monthly payment by 11.838, 5.963 or 2.992, respectively.
<CAPTION>
PLAN 2 TABLE: Monthly payment rates for each $1,000 of proceeds under Plan 2.
Settlement Settlement
Age Male Payee Female Payee Age Male Payee Female Payee
-------------------- ------------------- --------------------- ----------------------
lO Years 15 Years 20 Years 10 Years 15 Years 20 Years 10 Years 15 Years 20 Years 10 Years 15 Years 20 Years
Certain Certain Certain Certain Certain Certain Certain Certain Certain Certain Certain Certain
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
20 $2.90 $2.89 $2.89 $2.80 $2.80 $2.80 65 $5.44 $5.17 $4.83 $4.85 $4.72 $4.54
25 2.99 2.98 2.98 2.88 2.87 2.87 66 5.58 5.28 4.89 4.97 4.83 4.62
30 3.10 3.10 3.09 2.96 2.96 2.96 67 5.74 5.38 4.96 5.10 4.93 4.69
35 3.24 3.24 3.23 3.08 3.07 3.07 68 5.89 5.49 5.02 5.24 5.04 4.77
40 3.43 3.41 3.39 3.22 3.21 3.20 69 6.05 5.60 5.08 5.39 5.16 4.84
45 3.66 3.64 3.60 3.40 3.39 3.37 70 6.22 5.70 5.13 5.55 5 28 4.92
50 3.95 3.91 3.85 3.63 3.61 3.59 71 6.39 5.81 5.18 5.71 5 39 4.99
51 4 02 3.97 3.91 3.68 3.66 3.63 72 6.57 5.91 5.23 5.88 5.51 5.05
52 4.09 4.04 3.96 3.74 3.72 3.68 73 6.75 6.01 5.27 6.06 5.63 5.12
53 4.16 4.11 4.02 3.80 3.77 3.74 74 6.93 6.10 5.31 6.25 5.75 5.17
54 4.24 4.18 4.08 3.86 3.83 3.79 75 7.12 6.19 5.35 6.44 5.87 5.22
55 4.32 4.25 4.15 3.93 3.90 3.85 76 7.30 6.28 5.38 6.64 5.98 5.27
56 4.41 4.33 4.21 4.00 3.96 3.91 77 7.49 6.35 5.40 6.85 6.09 5.31
57 4.50 4.41 4.28 4.07 4.03 3.97 78 7.67 6.43 5.42 7.06 6.19 5.35
58 4.60 4.49 4.34 4.15 4.10 4.03 79 7.85 6.49 5.44 7.27 6.28 5.38
59 4.70 4.58 4.41 4.23 4.18 4.10 80 8.02 6.55 5.46 7.48 6.37 5.41
60 4.81 4.67 4.48 4.32 4.26 4.17 81 8.18 6.61 5.47 7.68 6.45 5.43
61 4.92 4.77 4.55 4.42 4.35 4.24 82 8.34 6.65 5.48 7.88 6.52 5.45
62 5.04 4.86 4.62 4.52 4.43 4.31 83 8.49 6.69 5.49 8.08 6.58 5.47
63 5.17 4.96 4.69 4.62 4.53 4.39 84 8.63 6.73 5.50 8.26 6.63 5.48
64 5.30 5.06 4.76 4.73 4.62 4.46 85 8.76 6.76 5.50 8.43 6.68 5.49
& over
- ------------------------------------------------------------------------------------------------------------------------------------
Values for ages not shown wi11 be furnished upon request.
<CAPTION>
PLAN 5 TABLE: Monthly payment rates for each $1000 of proceeds under Plan 5.
Male Settlement Female Settlement Age
---------------------------------------------------------------------------------------------
Age 35 40 45 50 55 60 65 70 75 80 85&over
- --------------------------------------------------------------------------------------------------------------
35 $2.95 $3.00 $3.06 $3.11 $3.15 $3.18 $3.20 $3.22 $3.23 $3.24 $3.24
40 2.98 3.06 3.13 3.20 3.26 3.31 3.35 3.38 3.40 3.41 3.42
45 3.01 3.10 3.20 3.30 3.39 3.46 3.53 3.58 3.61 3.64 3.65
50 3.03 3.14 3.25 3.38 3.51 3.63 3.73 3.81 3.87 3.91 3.93
55 3.04 3.16 3.30 3.45 3.62 3.79 3.94 4.08 4.18 4.25 4.29
60 3.05 3.18 3.33 3.51 3.72 3.94 4.16 4.37 4.55 4.67 4.75
65 3.06 3.19 3.36 3.56 3.79 4.07 4.37 4.68 4.96 5.18 5.32
70 3.07 3.20 3.37 3.59 3.85 4.17 4.55 4.97 5.39 5.75 6.00
75 3.07 3.21 3.38 3.61 3.89 4.24 4.68 5.20 5.78 6.32 6.73
80 3.07 3.21 3.39 3.62 3.91 4.28 4.76 5.37 6.08 6.81 7.40
85&over 3.07 3.22 3.39 3.62 3.92 4.31 4.81 5.47 6.28 7.15 7.91
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Figures for intermediate ages, for two males or two females will be furnished
upon request.
SETTLEMENT AGE: The settlement age is the payee's age nearest birthday on the
date payments begin, minus an age adjustment from the table below. The age
adjustment cannot exceed the age of the payee.
----------------------------------------------------
Year Payments Begin Age
After Prior To Adjustment
----------------------------------------------------
---- 2001 0
2000 2026 3
2025 2051 7
2050 ---- 10
----------------------------------------------------
<PAGE>
FLEXIBLE PREMIUM VARIABLE
JOINT AND LAST SURVIVOR
LIFE INSURANCE POLICY
- --------------------------------------------------------------------------------
o Death Proceeds payable at death of last joint Insured to die prior to
Maturity Date
o No benefit payable at the death of the first Insured to die
o Adjustable Death Benefit
o Flexible premiums payable until death of last joint Insured to die or
until maturity
o Some benefits reflect investment results
o Non-participating
- --------------------------------------------------------------------------------
GE CAPITAL LIFE ASSURANCE
COMPANY OF NEW YORK
<PAGE>
GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK
POLICY SPLIT OPTION RIDER
- --------------------------------------------------------------------------------
This rider is attached to and made a part of the Policy. It goes into effect on
the Policy Date, unless another effective date is shown in the policy data
pages.
BENEFIT
This rider gives the Owner the right to surrender this Policy in exchange for
separate individual policies on the lives of each Insured.
Prior to making an exchange, we will require evidence of insurability
satisfactory to us that the persons to be insured are insurable under the new
policies.
We will waive all or part of the surrender charge of this Policy. The portion
that we will waive is calculated on a pro rata basis, never to exceed the full
surrender charge amount. To determine the amount of surrender charge to be
waived, divide (a) by (b), and multiply times (c), where:
(a) is the new policies' amount of insurance;
(b) is this Policy's Specified Amount at the time of exchange; and
(c) is this Policy's total surrender charge before any adjustments have
been made.
The waived portions of the surrender charge will be credited to the new policies
30 days after we issue the new policies.
EXCHANGE PROVISION
The exchange is subject to the following terms:
1. The amount of insurance on each new policy will be 50% of the Specified
Amount on this Policy. "Specified Amount" does not include any
additional insurance provided by riders attached to this Policy.
2. Any Account Value on each new policy will be 50% of the Account Value
on this Policy.
3. Any outstanding Policy Debt on this Policy will apply to each new
policy on a 50% basis.
4. You must send us a written request and this Policy.
5. The full first premium on each new policy must be paid before it will
become effective.
6. Coverage under this Policy will terminate and coverage under each new
policy will begin on the exchange date.
7. The new policies can be on the plan of insurance you select from the
plans available for exchange at the time of the request. There will
always be at least one plan available for exchange.
8. The policy date of the new policies will be the exchange date. The
premiums for the new policies will be at the rates in effect for each
Insured's gender, age and rating class on the exchange date. The new
policies will be subject to our rules on frequency of premium payment,
minimum premium and plan availability at the time of exchange.
9. Nonforfeiture values in each new policy will be computed using the
issue age and policy anniversaries of the new policy.
10. Supplementary benefit riders can be included in the new policies only
with our written consent.
11. The Policy Date of this Policy will be treated as the policy date of
the new policies for purposes of the Suicide Provisions.
12. Before exercising the option provided by this rider, you should consult
your personal tax advisor.
<PAGE>
WHEN THIS OPTION WILL TERMINATE
The option provided by this rider will terminate on the earliest of:
o the date the Policy ends for any reason;
o the date of death of the first Insured to die; and
o the date of exchange if the option under this rider is executed.
For GE Capital Life Assurance Company of New York,
President
<PAGE>
GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK
JOINT LIFE LEVEL TERM INSURANCE RIDER
- --------------------------------------------------------------------------------
This rider provides level term life insurance on the life of the second Insured
to die. We will pay the amount of insurance to the Beneficiary under the same
terms and conditions set forth in the Policy with regard to payment of Death
Proceeds.
You means the Policy Owner.
AMOUNT OF INSURANCE
The amount of insurance payable under this rider at the death of the second
Insured to die is shown in the policy data pages. We will not allow any increase
or decrease to the rider's amount of insurance.
WHEN THIS RIDER IS EFFECTIVE
This rider goes into effect on the Policy Date, unless another effective date is
shown in the policy data pages.
This rider will end on the earliest of:
o the date the rider expires;
o the date we receive a written request from you to end the rider; and
o the date the policy ends for any reason.
The date the rider expires is shown in the policy data pages.
LIMITS ON CONTESTING THIS RIDER
We will not contest the amount of insurance originally provided by this rider
after it has been in effect during the lifetime of at least one Insured for two
years from the effective date of this rider. We will not contest a reinstatement
of this rider after the reinstatement has been in effect during the lifetime of
at least one Insured for two years from the date of reinstatement.
MISSTATEMENT OF AGE OR GENDER
If the age or gender of either Insured was misstated in the application for this
rider, life insurance proceeds will be adjusted. The life insurance proceeds
after adjustment will be the product of (a) and (b), where:
(a) is the unadjusted life insurance proceeds; and
(b) is the ratio of (1) the most recent monthly cost of insurance deducted
for this rider, to (2) the most recent monthly cost of insurance that
should have been deducted for this rider at the true age or gender.
SUICIDE
If either insured person commits suicide within two years of the effective date
of this rider, all coverage under this rider will end, and we will pay a limited
amount to the owner. The limited amount will equal the total cost of insurance
for this rider for the months it was in effect. We will also provide a single
life policy to the surviving Insured. The single life policy will have the same
Policy Date as this rider. The rating class of the single life policy will be
the rating class of the surviving Insured under this rider. We may require
increased premiums under the single life policy. The policy or policies we offer
will be one offered by us or by an affiliate.
LIMITS ON EFFECT OF OTHER RIDERS
No benefit rider, other than a Disability Benefit Rider, will affect this rider.
This rider will not increase the benefits paid under any other rider.
<PAGE>
REINSTATEMENT
You may reinstate this rider at the same time and under the same
conditions as the Policy.
COST OF THIS RIDER
This rider is issued in consideration of the application and the inclusion of
the rider's monthly cost of insurance in the Policy's monthly deduction.
The monthly cost of insurance for this rider is (1) multiplied by (2) where:
(1) is the Cost of Insurance Rate for this rider; and
(2) is the rider's Amount of Insurance divided by 1000.
COST OF INSURANCE RATE
The monthly rate is based on each Insured's gender, age, rating class, and
policy duration. The rates are determined by us according to expectations of
future mortality, lapse, interest and expenses. We can change our schedule of
declared rates from time to time, but they will never be more than the maximum
rates shown in the Table of Guaranteed Maximum Insurance Rates. A change in
declared rates will apply to all persons of the same age, gender and rating
class and whose policies have been in effect for the same length of time.
This rider has no account value but the addition of the rider may affect your
ssPolicy's Account Value.
This rider is subject to the provisions of the Policy.
For GE Capital Life Assurance Company of New York,
President
EXHIBIT 8(b)
GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK
POWER OF ATTORNEY
GE Capital Life Assurance Company of New York, a New York Corporation, (the
"Company") and each of its undersigned officers and directors, hereby nominate
and appoint Barry J. Grosman, Thomas W. Casey and Patricia L. Dysart, (with full
power to each of them to act alone) as his/her true and lawful attorney-in-fact
and agent, for him/her and in his/her name and place in any and all capacities,
to execute and sign all Registration Statements of the Company filed with the
Securities and Exchange Commission on form N-4 under the Securities Act of 1933
and the Investment Company Act of 1940 and on form S-6 under the Securities Act
of 1933 (including any and all pre- and post-effective amendments and any
supplements thereto), and to file with the Securities and Exchange Commission
all such Registration Statements, amendments and any supplements thereto, as
well as any and all exhibits and other documents necessary or desirable to such
Registration Statement, amendment or supplement, or the GE Capital Life Separate
Account II, or the GE Capital Life Separate Account III granting to such
attorneys and each of them, full power and authority to do and perform each and
every act necessary and/or appropriate as fully and with all intents and
purposes as the Company itself and the undersigned officers and directors
themselves might or could do.
IN WITNESS WHEREOF, GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK has caused
this power of attorney to be executed in its full name and by its President and
attested by its Secretary, and the undersigned officers and directors have each
executed such power of attorney, on this 25th day of April, 1999.
GE CAPITAL LIFE ASSURANCE
COMPANY OF NEW YORK
By: /s/ Barry J. Grosman
---------------------------------
Barry J. Grosman
President, Chief Executive
Officer and Director
ATTEST:
- -------------
