<PAGE>
As Filed with the Securities and
Exchange Commission on April 29, 1996
Registration Statement No. 2-29516
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
Post-Effective Amendment No. 42 X
-- -----
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No.__ _____
(Check appropriate box or boxes)
CG VARIABLE ANNUITY ACCOUNT I
Group Tax Deferred Variable Annuities
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(Exact Name of Registrant)
Connecticut General Life Insurance Company
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(Name of Depositor)
900 Cottage Grove Road, Bloomfield, Connecticut 06002
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(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code: 860-726-5832
David C. Kopp, Assistant General Counsel
Connecticut General Life Insurance Company
900 Cottage Grove Road, Bloomfield, CT 06002
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(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: Continuous
--------------------
It is proposed that this filing will become effective (check appropriate space)
___immediate upon filing pursuant to paragraph (b) of Rule 486
x on April 30, 1996 pursuant to paragraph (b) of Rule 486
---
___60 days after filing pursuant to paragraph (a) of Rule 486
___on (date) pursuant to paragraph (a) of Rule 486
The Registrant has registered an indefinite number or amount of securities under
the Securities Act of 1933 pursuant to Rule 24f-2. The Rule 24f-2 Notice for
the most recent fiscal year was filed on February 29, 1996.
<PAGE>
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CG Variable Annuity Account I ("VAA-I")
- --------------------------------------------------------------------------------
Group Tax Deferred Variable Annuities
Offered by:
Connecticut General Life Insurance Company ("CG Life")
Hartford, Connecticut 06152
(860) 726-6000
This prospectus contains information about the Group Tax Deferred Variable
Annuities ("the Contract") offered by CG Life. The Contract may be issued in
connection with annuity purchase plans adopted by public school systems and
certain tax-exempt organizations pursuant to Section 403(b) of the Internal
Revenue Code of 1986, (the "Code").
This prospectus sets forth concisely the information about the Contract that
a prospective investor ought to know before investing. Additional information
about the Contract and VAA-I, contained in a Statement of Additional
Information, has been filed with the Securities and Exchange Commission. A
copy of the Statement of Additional Information is available upon request and
without charge by writing to Connecticut General Life Insurance Company, LDS-
M92, P.O. Box 2975, Hartford, CT 06104 or by calling (860) 725-2175. The
Statement of Additional Information has the same date as the date of this
prospectus, and is incorporated by reference into this prospectus. A table of
contents for the Statement of Additional Information appears on page 21 of
this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUS OF
CIGNA VARIABLE PRODUCTS S&P 500 INDEX FUND. THIS PROSPECTUS AND THE PROSPECTUS
OF CIGNA VARIABLE PRODUCTS S&P 500 INDEX FUND SHOULD BE RETAINED FOR FUTURE
REFERENCE.
"Standard & Poor's(R)," "S&P(R)," "S&P 500(R)," "Standard & Poor's 500," and
"500" are trademarks of the Standard & Poor's Corporation (S&P) and have been
licensed for use by CG Life. The S&P 500 Index Fund is not sponsored, endorsed,
sold or promoted by S&P, and S&P makes no representation regarding the
advisability of investing in the Fund.
PROSPECTUS APRIL 30, 1996
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEMS PAGE
<S> <C>
Definitions ............................................................... 3
Synopsis .................................................................. 4
Financial Information ..................................................... 6
Description of the Insurance Company, CG Variable
Annuity Account I and CIGNA Variable Products
S&P 500 Index Fund ...................................................... 7
Deductions and Expenses ................................................... 8
General Description of The Group Variable Annuity Contract ................ 11
The Annuity Period ........................................................ 13
Death Benefits ............................................................ 14
Purchases and Contract Values ............................................. 15
Redemptions ............................................................... 16
Federal Tax Status ........................................................ 18
Legal Proceedings ......................................................... 20
Table of Contents of the Statement of
Additional Information .................................................. 21
</TABLE>
The Contract is not available in all states.
NO PERSON IS AUTHORIZED BY CG LIFE TO GIVE INFORMATION OR TO MAKE ANY
REPRESENTATION, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION
WITH THE OFFERS CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OF, OR SOLICITATION OF AN OFFER TO ACQUIRE, ANY INTEREST OR
PARTICIPATION IN THE VARIABLE ANNUITY CONTRACTS OFFERED BY THIS PROSPECTUS TO
ANYONE IN ANY STATE OR JURISDICTION IN WHICH SUCH SOLICITATION OR OFFER MAY NOT
BE MADE LAWFULLY.
2
<PAGE>
DEFINITIONS
Accumulation Account: An account established under a Contract to which Net
Annual Payments are credited on behalf of a Participant.
Accumulation Unit: A unit of measurement used to determine the value of a
Participant's Accumulation Account before Annuity Payments begin.
Annuitant: Any natural person designated under a Contract as the measuring life
for annuity payout options involving life contingencies and normally the
recipient of Annuity Payments.
Annuity Payment: Periodic payments made to an Annuitant pursuant to a Contract.
Annuity Payment Date: The date Annuity Payments begin under a Contract and the
same day of each month thereafter.
Annuity Unit: A unit of measurement used to determine the amount of the Annuity
Payments.
Contract: The Group Tax Deferred Variable Annuities Contract.
Contractholder: The entity (or person) to which a Contract will be issued,
normally an employer of participants or an organization representing employers
or Participants.
Fund: CIGNA Variable Products S&P 500 Index Fund, a series of shares of CIGNA
Variable Products Group, a Massachusetts business trust, registered under the
Investment Company Act of 1940 as a diversified, open-end management company, or
shares of another registered open-end investment company substituted
therefor.
Fund Shares: Shares of the Fund.
Net Annual Payment: The amount of payments made annually on behalf of a
Participant less the sales charge and maximum annual administration charge.
Participant: An employee for whom payments have been or are being made under the
Contract pursuant to the Plan and for any individual for whom an annuity has not
yet been effected under the Contract.
Plan: A retirement plan under which benefits are to be provided pursuant to a
Contract described herein.
Purchase Payment: The dollar amount paid to CG Life by or on behalf of a
Contractholder. "The net Purchase Payment" is the Purchase Payment reduced by a
sales charge and any applicable state premium taxes.
Separate Account: The separate account [CG Variable Annuity Account I ("VAA-I")]
established by CG Life under Connecticut law to receive payments under the
Contract offered by this Prospectus.
Valuation Date: Each day as of which the Accumulation Unit value and Annuity
Unit value are determined.
Valuation Period: Each business day the New York Stock Exchange is open for
trading or any other day on which there is a sufficient degree of trading in the
portfolio securities of the Separate Account to materially affect the
Accumulation Unit value and the Annuity Unit value.
Variable Annuity: A series of periodic payments, the amount of which will
increase or decrease to reflect the investment experience of VAA-I.
NOTE: All masculine references in this Prospectus are intended to include the
feminine gender. The singular context also includes the plural and vice versa
where appropriate.
3
<PAGE>
SYNOPSIS
EXPENSE TABLE
The following Expense Table lists the transaction expenses and the approximate
annual expenses related to investment in the separate account and CIGNA Variable
Products S&P 500 Index Fund. Below the Expense Table are Examples which show the
accumulated amount of these expenses on a one time $1,000 investment, assuming a
5% rate of return, over the stated investment periods.
CONTRACT-OWNER TRANSACTION EXPENSES
Sales Load Imposed on Purchases (maximum)
(as a percentage of purchase payments) 9%
Deferred Sales Load (as a percentage of
purchase payments or amount surrendered) 0%
Maximum Surrender Fees $20.00
Maximum Exchange Fee 0%
MAXIMUM ANNUAL ADMINISTRATIVE EXPENSE $20.00
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)
Mortality Risk Fees .40%
Expense Fees .20%
Total Separate Account Annual Expenses .60%
FUND ANNUAL EXPENSES*
(as a percentage of fund average net assets)
Management Fees (maximum) .35%
Other Expenses (maximum) .19%
Total Fund Annual Expenses (maximum) .54%
EXAMPLES 1 Year 3 Years 5 Years 10 Years
You would pay the following
expenses on a $1,000
investment, assuming a 5%
annual return on assets, and
you surrender your contract
at the end of the applicable
time period: $120.43 $141.92 $164.32 $224.80
You would pay the following
expenses on a $1,000
investment, assuming a 5%
annual return on assets, if
you annuitize at the end of
the applicable time period: $250.43 $271.92 $294.32 $354.80
You would pay the following
expenses on a $1,000
investment, assuming a 5%
annual return on assets, if
you do not surrender your
contract at the end of the
applicable time period: $100.43 $121.92 $144.32 $204.80
The purpose of the Expense Table is to assist the contractholder in
understanding the costs and expenses that a contractholder will bear directly or
indirectly. See the section entitled "Deductions and Expenses" for further
specific information regarding expenses. For the purposes of the Examples,
assume reinvestment of all dividends and distributions. The Expenses should not
be considered a representation of past or future expenses. Actual expenses may
be greater or less than shown.
*The Fund annual expenses do not flow through directly to the contractholder;
amounts credited are net of these expenses.
4
<PAGE>
The Group Tax Deferred Variable Annuities described in this prospectus are
primarily designed for annuity purchase plans adopted by public school systems
and certain tax-exempt organizations pursuant to Section 403(b) of the Internal
Revenue Code of 1986, (the "Code"). The minimum annual payment for each
Participant is $200 and the maximum annual payment is provided in the annuity
purchase plan adopted pursuant to Section 403(b) of the Code (see "Payment
Limits").
The following is a synopsis of certain features of the Contract, together with a
cross-reference to the page in this Prospectus where the purchaser may find a
more complete description:
. Expense Table, page 4.
. The objective of the Contract, which may or may not be realized, is to
accumulate Accumulation Units sufficient to provide the Annuitant with a
Variable Annuity which will furnish relatively level Annuity Payments during
periods when the economy is relatively stable and to provide increased
Annuity Payments during inflationary and growth periods. See "General
Description of The Group Variable Annuity Contract," page 11.
. The Contract provides that, in the event of death of the Annuitant before
Annuity Payments begin, CG Life will pay death proceeds to a named
beneficiary. See "Death Benefits," page 14.
. The Contract provides that a Participant may surrender (redeem) his value in
the Contract in whole or in part for cash before age 59 1/2 only upon his
separation from service, death, disability, or in case of financial
hardship. The redemption is subject to a sales charge which will in no event
exceed 9%. See "Redemptions", page 16 and "Sales Charge," page 9.
. An additional income tax may be assessed under the Code in the event of
certain early withdrawals. See "Federal Tax Status," page 18.
. The Contract provides that the annuity rates and Contract charges generally
may not be changed adversely to a Contractholder for the duration of the
Contract. See "Changes in the Contract," page 12.
. The Contract provides for transfer of Contract values among other group
annuity contracts issued by Connecticut General. See "Redemptions" page 16.
The objective of the Contract, which may or may not be realized, is to
accumulate Accumulation Units sufficient to provide the Annuitant with a
Variable Annuity which will furnish relatively level Annuity Payments during
periods when the economy is relatively stable and to provide increased Annuity
Payments during inflationary and growth periods. CG Life seeks to accomplish
this objective by investing Net Annual Payments made under the Contract in
shares of the Fund. There is no assurance that this objective will be attained.
Historically, the value of a diversified portfolio of common stocks held for an
extended period of time has tended to rise during periods of inflation. There
has, however, been no exact correlation, and for some periods the values of
securities have declined while the cost-of-living was rising. The values under
the Contract, both before and after the commencement of Annuity Payments, will
increase or decrease to reflect the current value of such equity securities.
Thus the investment risk under a Contract is borne by the Contractholder and
Participant.
All net payments received on behalf of a Participant under a Contract are
credited to VAA-I, a Separate Account established by CG Life under the laws of
the State of Connecticut and registered on June 3, 1968 as a unit investment
trust under the Investment Company Act of 1940, as amended ("1940 Act"). Such
registration does not involve supervision of the investments or investment
policies of VAA-I. Amounts credited to VAA-I are used to purchase shares of the
Fund at the net asset value of such shares. The Fund is treated as a
diversified, open-end investment company under the 1940 Act. The principal
objective of the Fund is long-term growth of capital and it is intended that the
assets of the Fund will consist principally of a portfolio of common stocks. The
Fund will seek to fulfill this objective by attempting to replicate the
composition and total return, reduced by Fund expenses, of the Standard & Poor's
500 Composite Stock Price Index. The value of the investments held in the Fund
will fluctuate daily and is subject to market risk - i.e., the possibility that
common stock prices will decline over short or even extended periods. The U.S.
stock market tends to be cyclical, with periods when stock prices generally rise
and periods when prices generally decline. Additional information concerning the
Fund, including information as to expenses paid by the Fund, is given in the
Fund prospectus which accompanies and should be read with this prospectus.
THIS PROSPECTUS AND THE PROSPECTUS OF THE FUND SHOULD BE RETAINED FOR FUTURE
REFERENCE.
5
<PAGE>
FINANCIAL INFORMATION
1. Accumulation Unit Values (for an Accumulation Unit outstanding throughout
each period):
The following information should be read in conjunction with the financial
statements of VAA-I, which is included in the Statement of Additional
Information. This historical data for Accumulation Unit Values is not
indicative Of future performance.
<TABLE>
<CAPTION>
CG VARIABLE ANNUITY ACCOUNT I
DECEMBER 31,
-----------------------------------------------------------------------------------------------------
Group Contracts: 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 participants or more
Net asset value:
Beginning of year $ 89.219 $ 88.848 $ 86.503 $ 83.718 $ 61.058 $ 63.737 $ 49.506 $ 44.983 $ 43.404 $ 38.417
End of year 121.763 89.219 88.848 86.503 $ 83.718 61.058 63.737 49.506 44.983 43.404
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net increase (decrease)
in net asset value
resulting from operations $ 32.544 $ 0.371 $ 2.345 $ 2.785 $ 22.660 $ (2.679) $ 14.231 $ 4.523 $ 1.579 $ 4.987
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
Accumulation units
outstanding:
End of year 261,172 308,233 353,129 403,359 459,344 500,897 542,091 641,258 796,457 901,968
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
Less than 50 participants
Net asset value:
Beginning of year $ 83.580 $ 83.449 $ 81.459 $ 79.044 $ 57.799 $ 60.491 $ 47.102 $ 42.907 $ 41.505 $ 36.828
End of year 113.772 83.580 83.449 81.459 79.044 57.799 60.491 47.102 42.907 41.505
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net increase (decrease)
in net asset value
resulting from operations $ 30.192 $ 0.131 $ 1.990 $ 2.415 $ 21.245 $ (2.692) $ 13.389 $ 4.195 $ 1.402 $ 4.677
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
Accumulation units
outstanding:
End of year 45,992 50,443 52,486 63,109 65,565 78,757 87,512 100,880 115,656 144,320
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
Tax deferred annuity
contracts issued after
May 1, 1976
Net asset value:
Beginning of year $ 73.775 $ 73.725 $ 72.031 $ 69.957 $ 51.201 $ 53.632 $ 41.797 $ 38.106 $ 36.892 $ 32.763
End of year 100.335 73.775 73.725 72.031 69.957 51.201 53.632 41.797 38.106 36.892
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net increase (decrease)
in net asset value
resulting from operations $ 26.560 $ 0.050 $ 1.694 $ 2.074 $ 18.756 $ (2.431) $ 11.835 $ 3.691 $ 1.214 $ 4.129
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
Accumulation units
outstanding:
End of year 115,290 121,840 124,827 128,504 136,843 155,719 179,187 205,031 251,086 250,886
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
Individual contracts:
Variable annuity contracts:
Net asset value:
Beginning of year $ 78.306 $ 78,370 $ 76,684 $ 74,589 $ 54.672 $ 57.360 $ 44,778 $ 40.894 $ 39.658 $ 35.280
End of year 106.339 78.306 78.370 76.684 74.589 54.672 57.360 44.778 40.894 39.658
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net increase (decrease) in
net asset value resulting
from operations $ 28.033 ($0.064) $ 1.686 $ 2.095 $ 19.917 $ (2.688) $ 12.582 $ 3.884 $ 1.236 $ 4.378
======== ======= ======== ======== ======== ======== ======== ======== ======== ========
Accumulation units
outstanding:
End of year 19,685 23,011 30,646 44,003 47,745 55,038 56,470 65,593 72,116 81,510
======== ======= ======== ======== ======== ======== ======== ======== ======== ========
Flexible annuity contracts:
Net asset value:
Beginning of year $ 74.835 $ 75.158 $ 73.800 $ 72.035 $ 52.985 $ 55.783 $ 43.693 $ 40.037 $ 38.958 $ 34.773
End of year 101.272 74.835 75.158 73.800 72.035 52.985 55.783 43.693 40.037 38.958
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net increase (decrease) in
net asset value resulting
from operations $ 26.437 $ (0.323) $ 1.358 $ 1.765 $ 19.050 $ (2.798) $ 12.09 $ 3.656 $ 1.079 $ 4.185
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
Accumulation units
outstanding:
End of year 17,502 19,687 22,970 25,148 29,545 36,639 38,692 47,749 63,175 72,331
======== ======== ========= ======== ======== ======== ======== ======== ======== ========
</TABLE>
2. Financial Statements: The financial statements of VAA-l and CG Life are
included in the Statement of Additional Information.
6
<PAGE>
DESCRIPTION OF THE INSURANCE COMPANY,
CG VARIABLE ANNUITY ACCOUNT I
AND
CIGNA VARIABLE PRODUCTS S&P 500 INDEX FUND
------------------------------------------
THE INSURANCE COMPANY
CG Life is a stock life insurance company specially chartered by the State of
Connecticut on June 22, 1865. It is licensed to write life insurance, annuities,
and accident and health insurance in all fifty states, the District of Columbia,
Puerto Rico, Taiwan and certain Canadian provinces. Its Home Office is located
at 900 Cottage Grove Road, Bloomfield, Connecticut and its mailing address is
Hartford. Connecticut 06152. Effective May 13, 1991, administrative processing
of retirement plan accounts invested in CG Variable Annuity Account I is
conducted by ClGNA's Annuity Service Center, P.O. Box 13146, Kansas City, MO
64199-3146.
CG Life is a wholly owned subsidiary of Connecticut General Corporation
("CGC"); CGC is a wholly owned subsidiary of CIGNA Holdings, Inc. which in
turn is a wholly owned subsidiary of CIGNA Corporation, an insurance and
financial services holding company organized to effect the combination of CGC
and INA Corporation, which became effective March 30, 1982.
CG VARIABLE ANNUITY ACCOUNT I ("VAA-I")
VAA-I, was established on March 12, 1968 pursuant to resolutions of the Board of
Directors of CG Life. Under Connecticut insurance law the income, gains or
losses of VAA-l are credited to or charged against the assets of VAA-I without
regard to the other income, gains or losses of CG Life. These assets are held
with relation to the Contract and such other contracts as may be issued by CG
Life and designated by it as participating in VAA-I. Although the assets
maintained in VAA-l will not be charged with any liabilities arising out of any
other business conducted by CG Life, all obligations arising under the Contract,
including the promise to make Annuity Payments, are general corporate
obligations of CG Life. Accordingly, all of CG Life's assets are available to
meet its obligations and expenses under the Contract participating in VAA-I.
Any and all distributions made by the Fund with respect to shares held by VAA-I
will be reinvested in additional shares, at net asset value. Deductions and
redemptions from VAA-I will, in effect, be made by redeeming Fund Shares at
their then net asset value. The Fund Shares held in VAA-I are in the custody of
State Street Bank and Trust Company, Boston, Massachusetts, which is acting as
custodian pursuant to an Agreement of Custodianship (see "The Custodian").
THE FUND
The Fund is a separate series of shares of CIGNA Variable Products Group (the
"Trust"), a Massachusetts business trust established by a Master Trust Agreement
dated February 4, 1988 and registered under the Investment Company Act of 1940,
as amended, as a diversified open-end management investment company. The Fund
operates as a diversified, open-end management investment company and is treated
as a regulated investment management company for Federal income tax purposes.
Its sole purpose is to serve as the funding vehicle for the investment of monies
paid by holders of variable annuities issued by CG Life. CIGNA Corporation is
the sponsor of the Trust.
Shares are offered only to Eligible Purchasers (see "Eligible Purchasers" CIGNA
Variable Products S&P 500 Index Fund Prospectus). Shares of the Fund are sold
to VAA-I at net asset value without the imposition of a sales load, sales charge
or selling commission.
The prospectus of the Fund, which accompanies this Prospectus, contains a more
complete description of its investment objectives. In considering the purchase
of the Contract offered in this prospectus, you should read the Fund's
prospectus carefully. Additional copies of the prospectus of the Fund may be
obtained by writing to CIGNA Investments, Inc., Hartford, CT 06152.
7
<PAGE>
VOTING RIGHTS
The Custodian of VAA-I shall vote Fund Shares held in VAA-I at regular and
special meetings of shareholders of the Fund, but will follow voting
instructions received from persons having the voting interest in such Fund
Shares as determined by the Contract.
The number of Fund Shares as to which a person has the voting interest will be
determined as of a date to be chosen by the Trust which will be not more than
ninety days prior to the meeting of the Fund shareholders, and voting
instructions will be solicited by written communication at least ten days prior
to such meeting.
During the accumulation period, the Participant is the person having the voting
interest in the Fund Shares attributable to his Accumulation Account. The number
of Fund Shares held in VAA-I which are attributable to each Accumulation Account
is determined by dividing the Accumulation Account value by the net asset value
of one Fund Share.
During the annuity period, the person then entitled to Annuity Payments has the
voting interest in the Fund Shares attributable to such Variable Annuity. The
number of Fund Shares held in VAA-I which are attributable to each Variable
Annuity is determined by dividing the reserve for such Variable Annuity by the
net asset value of one Fund Share. The reserves for the Variable Annuity used to
determine the Fund Shares will decrease over the period of time that the annuity
is paid.
Fund Shares held in VAA-I as to which no timely instructions are received will
be voted in proportion to the instructions which are received under the Contract
and such other contracts, whether group or individual, providing benefits on a
variable basis as may be designated by CG Life as participating in VAA-I.
All Fund proxy material will be mailed to the last known address of each person
having voting interest in Fund Shares together with an appropriate form which
may be used to give voting instructions to the Custodian. The Custodian of the
Fund is State Street Bank and Trust Company, P.O. Box 2351, Boston,
Massachusetts, 02107.
If CG Life determines pursuant to applicable law that Fund Shares held in VAA-I
need not be voted pursuant to instructions
received from persons otherwise having the voting interest as provided above,
then CG Life may vote Fund Shares held in
VAA-I in its own right. However, until the applicable law is changed, the voting
rights will remain as described in this
Prospectus.
DEDUCTIONS AND EXPENSES
A. Contract Charges:
The following deductions are made under the Contract:
. Administrative Expense: Administrative and recordkeeping expenses
applicable to the Contract include such items as salaries, rent, postage,
telephone, office equipment and legal and audit fees and expenses of the
Separate Account. As compensation for these expenses, CG Life deducts and
retains for its account an expense charge from the Contract value on each
June 1 and on the date an Accumulation Account is canceled in order to effect
an annuity, or as a result of a complete redemption, or in the event of all
transfers except transfers to the Participant's account in an associated
fixed-dollar contract which is not described in this prospectus. The charge
is effected by canceling the number of Accumulation Units equal in value to
the charge.
The amount of this expense charge is set forth in the Contract and is based
upon CG Life's appraisal of the cost involved in administering the Contract.
If the Participant is enrolled under an associated fixed-dollar contract as
well as the Contract the combined expense charge under both contracts will
not exceed $20 annually and will be equitably allocated between the two
contracts in a manner determined by CG Life. If the Participant is enrolled
only under a Contract the expense charge will not exceed $20 annually and
will normally be somewhat lower. If during any 12-month period immediately
preceding a June 1 no payments have been made on behalf of a Participant and
no redemption or transfer payments have been made, the expense charge on such
June 1 will in no event exceed $5 annually. No expense charge will be made on
the date an Accumulation Account is canceled if such cancellation occurs on
or prior
8
<PAGE>
to the first Valuation Date which follows a June 1 or occurs as a result of a
transfer to the Participant's account in an associated contract. Similarly,
no expense charge will be made on the first June 1 following the date
payments are first made on behalf of a Participant if the aggregate amount of
such payments under the Contract and the associated contract is less than
$100.
CG Life may not make any unilateral change in the Contract prior to the third
anniversary of the effective date thereof, except any change may be made that
is required in order to make the Contract conform with any law or regulation
issued by any governmental agency to which CG Life is subject. After such
third anniversary, CG Life may change the sales charge, the expense charge,
the mortality and expense charge, and the annuity purchase rates. CG Life
does not intend to recover from this charge or any modification thereof any
amount above its accumulated expenses in administering the Contract. Any such
charges will not adversely affect Accumulation Units or Annuity Units
credited. Commencing in 1991, payments to CG Life were made through the
General Account. In prior years, payments were made through VAA-I.
. Premium Taxes: At the time any payment is subject to premium taxes, the
amount thereof will be deducted from the Accumulation Account. Premium taxes
(which presently range from .50% to 3.00%) are charged by various
jurisdictions but in many jurisdictions no premium tax is currently charged
with respect to annuities such as those effected under the Contract.
. Sales Charge: From each payment made on behalf of a Participant, CG Life
will deduct a sales charge to cover servicing costs. The amount of this
charge will be determined in accordance with the following schedule. In no
event will this sales charge exceed 9%.
Aggregate Payments Percentage of Aggregate
Received Payment To Be Deducted
-------------------------- -----------------------------
first $1,000 9%
over $1,000 3%
The balance of the payments will be credited, in the form of Accumulation Units,
to the Participant's Accumulation Account in VAA-I.
The effect of these deductions is illustrated in the following table:
<TABLE>
<CAPTION>
Total Charge as a
$20 Monthly Total Sales Sales Charge as a Percentage of Aggregate
Payments Payments Charge Percentage of Total Payments Net Annual Payments*
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 year $ 240 $ 21.60 9.00% 20.97%
6 years 1,440 103.20 7.17 18.34
12 years 2,880 146.40 5.08 15.50
$100 Monthly
Payments
- ------------------------------------------------------------------------------------------------------------------------------------
1 year $ 1,200 $ 96.00 8.00% 10.70%
6 years 7,200 276.00 3.83 5.82
12 years 14,400 492.00 3.42 5.36
</TABLE>
On occasion a group sale will require less service effort than has been assumed
in arriving at the stated sales charge. If CG Life incurs less than normal
service costs, the sales charge involved in such sale will be reduced
accordingly.
CG Life assumes the risk that the sales charge may be insufficient to cover the
actual servicing costs associated with the Contract.
*The aggregate Net Annual Payments are equal to total payments less the sales
charge and the maximum annual administration charge.
The tables assume no applicable state premium taxes and also no change in the
sales or administration charge.
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. Mortality and Expense Deduction:
While Annuity Payments will reflect the investment performance of the Fund,
they will not be affected by adverse mortality experience or by any excess in
the actual sales and administration expenses over the expense deductions
provided for in the Contract, except for the deduction noted below. CG Life
(i) assumes the risk that Annuity Payments will continue for a longer period
than anticipated because the Annuitant lives longer than expected, and
(ii) assumes the risk that the sales charge and administration charge may be
insufficient to cover the actual costs of these items.
For assuming these mortality risks and expenses CG Life, in determining the
Accumulation Unit value and Annuity Unit value, makes a deduction at the end
of each Valuation Period from the then current market value of the account of
each Participant and Annuitant. For Contracts issued prior to May 1, 1976 the
amount of this deduction for each Valuation Period is the rate for the number
of calendar days in such period which is equivalent to an annual rate of
0.25% (0.20% for mortality risks and 0.05% for expenses) under a Contract
having 50 or more Participants on whose behalf payments are being made, or
which is equivalent to an annual rate of 0.50% (0.40% for mortality risks and
0.10% for expenses) under a Contract having less than 50 Participants on
whose behalf payments are being made.
If, under a Contract having an effective annual mortality and expense
charge of 0.25% annually, the number of Participants for whom payments are
being made falls below 50 for a period of 24 consecutive months commencing on
a June 1, the effective annual rate of such charge may be increased to 0.50%
at the expiration of such period. If on any June 1 under a Contract having an
effective mortality and expense charge of 0.50% annually the number of
Participants for whom payments are made is 50 or more, such charge will be
reduced to 0.25% on such June 1.
For Group Tax Deferred Variable Annuities issued on or after May 1, 1976 the
amount of this deduction for each Valuation Period is the rate for the number
of calendar days in such period which is equivalent to an effective annual
rate of 0.60% (0.40% for mortality risks and 0.20% for expenses). After the
third anniversary of the effective date of a Contract issued on or after
May 1, 1976, (the fifth anniversary of the effective date for a Contract
issued prior to such date), CG Life may change the mortality and expense
charge (see "Changes in the Contract").
The Contract is nonparticipating and does not share in the surplus of CG
Life. However, the Contract provides for experience rating, under which the
actual costs each year are compared with the sales charge and expense charges
made during the year. If such costs exceed actual costs, CG Life may allocate
all or a portion of the excess as an experience rating credit, but is not
obligated to do so. Application of any credit will be made within the
Contract year immediately following the period with respect to which the
credit was declared in one of three ways: (a) by a reduction in either the
sales charge or the annual administration charge, or both, or (b) by the
crediting, without deduction for the sales charge, of a number of additional
Accumulation Units or Annuity Units, as applicable, equal in value to the
amount of the credit less any applicable premium taxes or (c) as a credit to
be applied against future payments to be made by the employer.
B. Expenses and Related Information:
The Contract will be sold primarily by persons who are licensed insurance agents
of or brokers for CG Life authorized by applicable law to sell life and other
forms of personal insurance and who will be similarly authorized to sell
variable annuities. In addition, these persons will, for the most part, be
registered representatives of CIGNA Financial Advisors, Inc. ("CFA"), Hartford,
Connecticut, which is a broker-dealer registered under the Securities Exchange
Act of 1934 and a member of the National Association of Securities Dealers, Inc.
CFA is organized under the laws of Connecticut and is a wholly owned subsidiary
of CGC, which is wholly owned by CIGNA Holdings, Inc. which in turn is a wholly
owned subsidiary of CIGNA Corporation. The Contract may also be sold through
other broker-dealers registered under the Securities Exchange Act of 1934 whose
representatives are authorized by applicable law to sell variable annuity
contracts.
In connection with the distribution of the Contract, CG Life pays servicing fees
to certain broker/dealers who agree to provide ongoing Contractholder
administrative services. The charges for this service are assessed under the
Contract and are included in the sales charge.
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The expenses of the Contract consist of the mortality and expense deduction
described under "Mortality and Expense Deduction," above. As a percentage of
average net assets, this expense is a maximum of .6% on an annual basis.
The prospectus of the Fund describes the expenses and fees which are paid out of
the assets of the portfolio used to fund the Contract. For a discussion of such
expenses and fees, please refer to the Fund's prospectus.
GENERAL DESCRIPTION OF THE GROUP VARIABLE ANNUITY CONTRACT
Description of Contract Rights: The Contract will normally be issued to an
employer or an organization representing employers or Participants. Such entity
is the Contractholder. CG Life will also issue a certificate to each Participant
at the time his first Annuity Payment becomes payable, or earlier, if required
by applicable law. The certificate will describe the benefits to which the
Participant is entitled under the Contract. The Contract provides certain rights
during the Accumulation Period, the Annuity Period and upon death of the
Participant or Annuitant:
a. Accumulation Period: During the Accumulation Period, the Participant has the
right to:
. change the beneficiary for death proceeds;
. redeem all or part of his Accumulation Account after age 59 1/2 or under
other limited circumstances;
. change the annuity payout option;
. change the death benefit payout option;
. transfer Contract values to/from an associated fixed-dollar contract
issued by CG Life;
. instruct CG Life as to voting of Fund Shares;
. change the date Annuity Payments commence;
. change the payee to receive Annuity Payments.
b. Annuity Period: During the Annuity Period, the Annuitant has the right to:
. change the payee to receive Annuity Payments, during the lifetime of
Annuitant;
. change the beneficiary under any annuity payout option which provides for
a death benefit upon death of the Annuitant; change may be made only
during the lifetime of the Annuitant;
. instruct CG Life as to voting of Fund Shares.
c. Death Benefits - Accumulation Period:
In the event death benefit proceeds become payable during the Accumulation
Period, the beneficiary designated by the Participant is entitled to payment
of such proceeds. If no designated beneficiary survives the Participant or
no other designation is provided, the surviving spouse will be the
beneficiary, if living; otherwise, death benefit proceeds will be paid in
equal shares to the surviving children of the Participant; or in the event
there are no such children to the executor or administrator of the estate.
If no annuity payout option has been selected by the Participant for death
benefit proceeds, and if CG Life has not previously made a lump sum payment,
the beneficiary may choose an annuity payout option for receipt of such
proceeds.
d. Death Benefits - Annuity Period:
If the Annuitant dies while receiving Annuity Payments, the remaining
payments, if any, will be payable to the designated beneficiary. However, if
Annuity Payments are being paid to the beneficiary as a death benefit, and
such beneficiary dies, the beneficiary's estate shall be entitled to receive
payment of any remaining proceeds.
Limitation on Contract Rights: The Contract is issued pursuant to a tax
qualified retirement Plan or trust. Such Plan or trust may limit the exercise by
Participants in the Plan or trust of certain rights granted by the Contract. For
example, the Contract provides for minimum annual payments on behalf of
Participants and payments may not exceed amounts as provided in the Plan. The
provisions of the Plan or trust instrument should be referred to in connection
with the Contract.
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In addition, assignment of interests under the Contracts is prohibited when the
Contract is used to fund a retirement plan qualified under sections 401(a),
403(a), 403(b) or 408 of the Code.
Transfers Between Group Variable Annuity Contracts: The Participant or a
beneficiary for whom an Accumulation Account is maintained may elect to transfer
all or a portion of his Contract value to an associated fixed-dollar contract
issued by CG Life. The frequency of such transfers may be limited by the terms
of the retirement plan.
No transfer between contracts is permitted: (1) if prohibited by state law, or
(2) if prohibited by the applicable retirement plan.
The number of Accumulation Units credited in the newly elected associated fixed-
dollar contract will be equal to the dollar value of the amount transferred
divided by the current value of one Accumulation Unit in such newly elected
Contract.
Participants and beneficiaries who contemplate making a transfer should first
carefully consider their annuity objectives and the investment objectives of
Fund Shares. Frequent transfers may be inconsistent with the long-term
objectives of the Contract.
Changes in the Contract: The terms of the Contract may be changed from time to
time by agreement between CG Life and the Contractholder. Any such change will
not, however, adversely affect Accumulation Units or Annuity Units credited to a
Participant prior to any such change unless the Participant consents thereto.
CG Life may not make any unilateral change in the Contract prior to the third
anniversary of the effective date thereof, except any change may be made that is
required in order to make the Contract conform with any law or regulation issued
by any governmental agency to which CG Life is subject. After such third
anniversary, CG Life may change the sales charge, the administration charge, the
mortality and expense charge, and the annuity purchase rates. Since the
administration charge is designed only to reimburse CG Life for its actual
administration expenses, CG Life does not expect to recover from this charge or
any modification thereof any amount above its accumulated expenses in
administering the Contract. Any such changes will not adversely affect
Accumulation Units or Annuity Units credited before the effective date of such
changes. Such changes shall become effective 90 days after notice thereof has
been given to the Contractholder. Notice of such changes shall also be given to
each Participant.
Substituted Securities; Change in Operations: If shares of the Fund should not
be available or, if in the judgment of CG Life, investment in shares of the Fund
is no longer appropriate in view of the purposes of VAA-I, shares of another
registered, open-end investment company may be substituted for Fund Shares held
in VAA-I or net payments received after a date specified by CG Life may be
applied to the purchase of shares of another registered, open-end investment
company in lieu of Fund Shares. In either event, approval of the Securities and
Exchange Commission as well as approval by the vote of a majority of the votes
to be cast by persons having a voting interest in VAA-I shall be obtained.
CG Life may also sell other forms of variable annuity contracts from time to
time, such as flexible payment individual contracts.
CG Life reserves the right to amend the Contract to meet the requirements of the
1940 Act, or other applicable federal or state laws or regulations.
Contractholder Inquiries: The Contractholder should direct all inquiries to:
CIGNA, c/o Annuity Service Center, P.O. Box 13146, Kansas City, MO 64199-3146.
Reports: CG Life will send to each Participant and to each beneficiary for whom
an Accumulation Account is maintained at least once during each year after the
first year a statement showing the number of Accumulation Units credited to such
Participant or beneficiary and the Accumulation Unit value. In addition, each
person having voting rights in VAA-I (see "Voting Rights") will receive such
reports or prospectuses covering VAA-I and the Fund as may be required by the
1940 Act.
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THE ANNUITY PERIOD
Annuity Payments: The level of Annuity Payments is based on (i) the tables
specified in the Contract which reflect the adjusted age of the Annuitant,
(ii) the type of annuity payout option selected and (iii) the investment
performance of the underlying Fund Shares. The amount of Annuity Payments will
not be affected by adverse mortality experience or any increase in the expenses
of CG Life in excess of the charges made under the Contract. If CG Life is
required to withhold certain amounts from Annuity Payments, in compliance with
Federal or State law relating to collection of income taxes at the source of
payment, the amount so required will be deducted from each payment.
Annuity Payment Date: Annuity Payments will begin on the first day of the
calendar month selected by the Participant. The selected date may be as early as
the date the Annuitant attains age 59-1/2, but may not extend beyond the later
of the Participant's actual retirement date or the April 1st following the
calendar year in which the Annuitant attains age 70-1/2. The selection of an
Annuity Payment Date may also be affected by the terms of a retirement plan or
trust under which a Contract is issued.
Annuity Payout Options: The Participant may elect to have Annuity Payments made
under any one of the annuity payout options described below. In addition, the
payout options may be selected for payment of the death proceeds during the
Accumulation Period or upon the death of the Annuitant. A change of option is
permitted if made at least 30 days before the Annuity Payments are to commence.
Annuity Payments will be made in the form of a Joint and Survivor Annuity in
accordance with Option 5 below unless a valid election of another option is
made. Annuity Payments will be paid monthly except that (i) if the value of the
Participant's account available for the purchase of a retirement annuity is
$3,500 or less, CG Life may pay, in lieu of a Variable Annuity, an amount in
cash equal to the Accumulation Account value less the expense charge; (ii) if
after the Annuity Payments have commenced, the amount of the monthly payments
should fall below $10.00, CG Life reserves the right to change the frequency of
payments to intervals that will result in payments of at least $10.00.
Once Annuity Payments have commenced, the Annuitant cannot surrender his
Variable Annuity for a cash payment.
1. Forms of Variable Annuities
Option 1 -- Variable Life Annuity: A Variable Annuity payable monthly during
the lifetime of the Annuitant and terminating with the last monthly payment
preceding his death. This option offers a higher level of monthly payments
than Options 2 or 3 because no further payments are payable after the death
of the Annuitant. IT WOULD BE POSSIBLE UNDER THIS OPTION FOR THE ANNUITANT TO
RECEIVE ONLY ONE ANNUITY PAYMENT IF HE DIED PRIOR TO THE DATE OF THE SECOND
PAYMENT, TWO IF HE DIED PRIOR TO THE DUE DATE OF THE THIRD PAYMENT, AND SO
ON.
Option 2 -- Variable Life Annuity With Monthly Payments Certain for 120 or
180 Months: A Variable Annuity which provides monthly payments to the
Annuitant during his lifetime, and further provides that if, at the death of
the Annuitant, monthly payments have been made for less than the period
certain, which may be 120 or 180 months as elected by the Annuitant, Annuity
Payments will be continued during the remainder of such period to the
designated beneficiary. However, if the Participant is married and his
beneficiary is not his spouse, his spouse must consent to the beneficiary
designation in a written statement which is notarized by a Notary Public.
Option 3 -- Contingent Annuitant Variable Annuity: A Variable Annuity which
provides monthly payments to the Annuitant during his lifetime and further
provides that upon his death the monthly payment which would have been
payable to him had he survived will be paid in the same amount (or 66-2/3% or
50% thereof, if so elected by the Annuitant) and paid to any person
designated by him as his contingent annuitant during the latter's further
lifetime. If a contingent annuitant dies before the Annuitant, no more
benefits will be paid. For contingent annuitants other than the spouse of the
Annuitant, this option shall be available only if a valid waiver by
Participant and consent by spouse has been obtained by the Contractholder.
Option 4 -- Period Certain Variable Annuity: A Variable Annuity payable
monthly during the period certain, which may be 36, 60, 120 or 180 months, as
elected by the Annuitant. At any time during the period certain the Annuitant
or beneficiary may elect that any future payments to which he is entitled be
commuted and the value of these payments be
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applied to effect a Variable Annuity under one of the other options described
herein, provided that such value is at least $3,500, subject to spousal
consent, if applicable. Since a Participant has a right to elect an annuity
involving a life contingency, a deduction is made under Option 4 as it is
under the other options described herein, for mortality and expense risks.
Such deduction is reflected in the Annuity Unit Value. If the Annuitant dies
during the period certain, payments will be continued to his designated
beneficiary for the balance of the period certain. However, if the
Participant is married and his beneficiary is not his spouse, his spouse must
consent to the beneficiary designation in a written statement which is
notarized by a Notary Public. No payments are payable after the end of the
period certain either to the Annuitant or the beneficiary. It is therefore
possible under this option for an Annuitant to out-live the Annuity Payments.
Option 5 - Joint and Survivor Variable Annuity: A Variable Annuity which
provides monthly payments to the Annuitant during his lifetime and further
provides that upon his death, monthly payments equal to 50% of the amount
which would have been payable to him (or 66-2/3% or 100%, if so elected by
the Annuitant) will be payable to the surviving spouse of the Annuitant.
(Other forms of Variable Annuities, not in conflict with this prospectus or the
Contract, in addition to those described herein may be effected with the consent
of CG Life. However, any form of Variable Annuity is limited by the terms of the
Plan and the applicable provisions of the Code.
Determination of Monthly Annuity Payments: A description of the method for
determining the first and subsequent Annuity Payments is included in the
Statement of Additional Information. Each Contract contains tables indicating
the dollar amount of the first monthly Annuity Payment which can be purchased
with each $1,000 of value accumulated under the Contract. These tables include
an "assumed investment return," which is the annual rate of return, expressed
as a percentage, that the Contract assumes assets invested in the underlying
Fund will achieve each year. This assumed investment return is the measuring
point for subsequent Annuity Payments. If the actual net investment rate (on an
annual basis) equals the assumed investment return and remains constant, the
Annuity Payments will remain constant. If the actual net investment rate exceeds
the assumed investment return, the Annuity Payments will increase at a rate
equal to the amount of such excess. Conversely, if the actual rate is less than
the assumed investment return, Annuity Payments will decrease.
The selection of the assumed investment return is made by the Contractholder
from a range made available by CG Life, and is used to determine the purchase
rates for all annuities effected under the Contract. Assumed investment returns
of from 3% to 5% are normally available.
The assumed investment return may be changed, by amendment of the Contract, with
respect to annuities effected on or after the date of change.
DEATH BENEFITS
Accumulation Period: If the Participant dies during the Accumulation Period,
the designated beneficiary may, unless otherwise provided by the deceased
Participant or deceased beneficiary, elect any one, or a combination of the
options described below. Any such election by a beneficiary will be effective on
the later of the date received or the date due proof of death of the deceased
Participant or the deceased beneficiary is received by CG Life at its Annuity
Service Center.
Option A - to receive a cash payment equal in amount to the Accumulation Account
value for the Valuation Period during which the election becomes effective, less
the annual administrative charge.
Option B - to have the Accumulation Account value applied to effect a Variable
Annuity for the beneficiary subject to the following: the Accumulation Account
value, or portion thereof which is to be applied to effect an annuity must be at
least $3,500, the beneficiary must be a natural person; the Annuity Payments may
not extend over a period exceeding the life expectancy of the beneficiary and
the initial Annuity Payment must amount to at least $10.00.
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Option C - to have the Accumulation Account value transferred to an associated
fixed-dollar contract. The purpose of the transfer should be for effecting an
annuity under the associated contract subject to the provisions discussed under
Option B above.
The amount of death benefit proceeds payable to a beneficiary will be reduced by
any applicable state premium taxes and by any amounts required to be withheld
for Federal or State income taxes.
If the Participant's death occurs before age 65 and his beneficiary elects
Option A, CG Life will make an additional cash payment to the beneficiary equal
to the excess, if any, of the aggregate of the payments (prior to any deductions
therefrom) made on behalf of the Participant, reduced by any redemptions or
transfers, over the cash payment described in Option A.
An election by the beneficiary of any of the above described options must be
made within 30 days of the close of the accounting year in which the death of
the Participant or beneficiary occurs. If an election has not been made by such
date, CG Life will apply the Accumulation Account, provided that the value
thereof is at least $3,500, to effect a 60-month period certain Variable Annuity
for the beneficiary (see "Forms of Variable Annuities"); otherwise an election
of a cash payment described in Option A will be deemed to become effective on
such date.
Annuity Period: If an Annuitant dies on or after the date his Annuity Payments
commence, no payments will be payable except as may be provided under the form
of annuity effected. The Annuitant may elect that the present value of any
Annuity Payments to which his beneficiary becomes entitled will be commuted and
paid in one sum; or in the absence of such election and unless otherwise
provided by the Annuitant, a beneficiary who becomes entitled to Annuity
Payments may elect that the present value of the remainder of such payments be
paid in one sum. Any such commutation will be equal to the value, in a single
sum, of the remaining Annuity Payments, discounted from their respective due
dates to the date of determination of the single sum at a rate equal to the
assumed investment return, compounded annually, assuming that the Annuity Unit
Value applicable to the payments on the date of determination will remain
unchanged thereafter.
In every case, however, the remaining portion of a Participant's interest, once
distribution has commenced to the Participant, must continue to be distributed
at least as rapidly as under the method of distribution used prior to the
Participant's death. If distribution has not yet commenced to the Participant,
the Participant's entire interest must be distributed within 5 years of the
Participant's death unless payable to a designated beneficiary or the
Participant's spouse. If the distribution is payable to a designated
beneficiary, payment must commence within one year of the Participant's death
and be in equal installments over the designated beneficiary's life or life
expectancy. The rules are the same if the distribution is payable to the
Participant's spouse, except that commencement of payment may be deferred until
any time prior to the spouse attaining age 70-1/2.
PURCHASES AND CONTRACT VALUES
How to Purchase a Contract:
The Contract will be sold primarily by persons who are insurance agents of or
brokers for CG Life authorized by applicable law to sell life and other forms of
personal insurance and who will be similarly authorized to sell variable
annuities. In addition, these persons are for the most part registered
representatives of CIGNA Financial Advisors, Inc., ("CFA"), Hartford,
Connecticut, which is a broker-dealer registered under the Securities Exchange
Act of 1934 and a member of the National Association of Securities Dealers, Inc.
CFA is organized under the laws of Connecticut and is a wholly owned subsidiary
of Connecticut General Corporation, which is wholly owned by CIGNA Holdings,
Inc., which in turn is a wholly owned subsidiary of CIGNA Corporation. The
Contract may also be sold through other broker-dealers registered under the
Securities Exchange Act of 1934 whose representatives are authorized by
applicable law to sell variable annuity contracts.
A Contract may be purchased by delivering a completed application, and such
other forms as CG Life requires, to the soliciting agent who will forward such
forms to CG Life.
If the application is complete and correct upon receipt by CG Life, and if all
other required information have also been received by CG Life at its Annuity
Service Center, the Contract will be issued and delivered to the Contractholder
within six weeks of receipt of all the correct forms.
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Purchase Payment:
The minimum initial Purchase Payment is $10,000 for a Contractholder and $200
for each Participant with a minimum requirement of ten Participants.
After a Contract is issued, any Contractholder may make Purchase Payments by
remitting checks directly to CG Life at its Annuity Service Center. Each
Participant is required to make a minimum subsequent payment of $200 annually.
The maximum amount of payment annually is determinable for each Participant
under limits set forth in the Code.
CG Life reserves the right to reject any Purchase Payment if it is less than the
minimum amount or not in proper order.
A salary deduction mode authorizes a Participant's employer to take deductions
of a set amount from the Participant's salary and remit such amounts to CG Life
as Purchase Payments for a Contract. CG Life assumes no liability for any
amounts so deducted until received in full at its Annuity Service Center.
Application of Net Purchase Payments:
CG Life will reduce a Purchase Payment by a sales charge and any applicable
state premium tax to determine the net Purchase Payment. Upon the purchase of a
Contract, the amount of the net Purchase Payment credited to a Contract will
reflect the net asset value of the underlying class of Fund Shares computed
within the next two business days following CG Life's receipt of the payment.
However, if any of the required material is incomplete, incorrect or if the
payment has not been made, then a delay in Contract issuance or crediting of a
subsequent payment may be encountered.
Crediting Accumulation Units:
Accumulation Units represent the value of the Participant's account attributable
to VAA-I. The number of Accumulation Units to be credited to the Participant's
account is determined by dividing the net Purchase Payment allocated by the
Accumulation Unit value as of the Valuation Date next computed following CG
Life's determination to credit a payment to the Contract. The number of
Accumulation Units will not change because of a subsequent change in the value
of the unit, but the dollar value of an Accumulation Unit will vary to reflect
the investment experience of the class of Fund Shares.
Value of an Accumulation Unit: The value of an Accumulation Unit was
established at $1 as of the date the Fund Shares were first purchased. The value
of Accumulation Units subsequently is determined by multiplying the value of an
Accumulation Unit for the immediately preceding Valuation Date by a net
investment factor for the Valuation Period ending on such date.
A net investment factor for a Valuation Period is the sum of 1.0000000 plus the
net investment rate for VAA-I. The net investment rate for VAA-I is equal to the
gross investment rate for the valuation period expressed in decimal form to
seven places, less a deduction of 0.0000327 for each day in the valuation period
(.50% annually - the fee charged by CG Life for undertaking the mortality and
expense risks). The applicable gross investment rate is equal to (1) the
investment income for the valuation period, plus capital gains and minus capital
losses for the period, whether realized or unrealized on the asset, divided by
(ii) the value of such assets at the beginning of the valuation period. The
gross investment rate may be positive or negative.
REDEMPTIONS
Procedures for Redemption:
Any cash payment to be made from the Contract in accordance with the following
paragraphs will be made within seven days after the date the request for such
payment becomes effective, except as CG Life may be permitted to defer such
payment under the provisions of the 1940 Act. Deferment is currently permissible
only (1) for any period (a) during which the New York Stock Exchange is closed
other than customary weekend and holiday closings or (b) during which trading on
the New York Stock Exchange is restricted; (2) for any period during which an
emergency exists as a result of which (a) disposal of securities held in the
Fund is not reasonably practicable; or (b) it is not reasonably practicable to
determine the value of the Fund's net assets; or (3) for such other periods as
the Commission may by order permit for the protection of security holders. A
request for payment becomes effective when received in writing by CG Life at its
Annuity Service Center.
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The right of any Participant to elect a cash payment may be restricted and will
be determined in accordance with the terms of the Plan and the Contract. Under
Section 403(b)(11) of the Internal Revenue Code, a Participant is not eligible
for a distribution before he attains age 59-1/2, becomes disabled, dies,
separates from service, or has a proven financial hardship. This restriction on
distribution applies to all Participant salary reduction contributions made
after December 31, 1988. If the Participant becomes eligible for a cash payment
under the Plan, CG Life will, upon receipt of such election, reduce the
Accumulation Account by the number of Accumulation Units calculated by dividing
the amount of the requested cash payment by the Accumulation Unit Value for the
Valuation Period in which the election becomes effective.
The restriction on when a participant can make a cash withdrawal under the
Contract is imposed under Section 403(b)(11) of the Code. This provision
conflicts with securities law requirements that, generally, cash withdrawals may
not be restricted, except as described above. However, in order to continue to
qualify as a tax deferred annuity, under Code Section 403(b), the Contract will
impose restrictions on withdrawals. In doing so, CG Life is relying on a "no
action" letter issued by the Office of Insurance Products and Legal Compliance
of the Securities and Exchange Commission (reference number IP-6-88) which
permits restrictions on cash distributions to participants of their salary
deduction contributions to the extent necessary to comply with Section
403(b)(11). CG Life is complying with the provisions of this "no action" letter
which require (1) disclosure of redemption restrictions in the prospectus and
through sales representatives who solicit potential Participants under the
Contract, and (2) obtaining a signed statement from a Participant, prior to the
time contributions are to begin under the Plan, that the Participant understands
the redemption restrictions imposed by Code Section 403(b)(11) and the
investment alternatives available to which he may elect to transfer his
Accumulated Account's value.
If upon termination of employment or at the time a request for a cash payment
becomes effective, the Accumulation Account value, less any redemptions, and the
value of the Participant's account under any associated contract does not exceed
$500, after such cash payment if any, the Accumulation Account will be cancelled
and an amount equal to the Accumulation Account value will be paid after being
reduced by the administration charge. Such payment will be in lieu of all other
rights and benefits under the Contract.
If a Participant's Accumulation Account is cancelled as a result of a
redemption, no further payments may be made to that account without the consent
of CG Life unless an account is being maintained for the Participant under an
associated contract.
A Participant may not elect to redeem his value in the Contract once an annuity
has been effected, unless specifically provided for under the annuity payout
option selected by the Participant.
AMOUNTS WITHDRAWN BY THE PARTICIPANT PRIOR TO THE ANNUITY COMMENCEMENT DATE MAY
BE SUBJECT TO AN ADDITIONAL INCOME TAX AND IMMEDIATE TAXATION OF AMOUNTS
ATTRIBUTABLE TO INVESTMENT GAIN.
Transfer Payments to the Group Variable Annuity Contract
If a Participant is covered under an associated fixed-dollar contract or under
any other group annuity contract issued by CG Life wherein payments under such
contract are intended to be made subject to the provisions of Section 403(b) of
the Code, transfer payments may be made from any such other contract to the
Participant's Accumulation Account under the Contract.
Transfer payments from the associated fixed-dollar contract may be subject to
further restrictions set forth in the associated contract. Amounts transferred
will be credited to the Participant's Accumulation Account without charge.
Transfer Payments From the Group Variable Annuity Contract
If an associated fixed-dollar contract has been issued by CG Life, the
Participant or a beneficiary for whom an Accumulation Account is maintained may
request that CG Life cancel all or part of the Accumulation Account under the
Contract and transfer all or part of the value thereof, computed as of the date
such request becomes effective, without a deduction for the administration
charge, to his account in the associated contract. If a Participant should
become employed by an employer whose employees are covered under another group
annuity contract issued by CG Life wherein payments under such contract are
intended to be made subject to Section 403(b) of. the Code and the Participant
becomes covered under such
17
<PAGE>
contract, he may elect to have a transfer payment made to such other contract of
an amount equal to his Accumulation Account value, computed as of the date such
request becomes effective, less the administration charge.
If, subsequent to the date payments under the Contract are discontinued the
Contractholder files written notice with CG Life that a successor funding agent
has been designated, each Participant, and each beneficiary for whom an
Accumulation Account is maintained, may elect, in lieu of redemption, to have an
amount equal to the Accumulation Account value, computed as of the date such
election becomes effective, less the maximum administration charge transferred
to the successor funding agent. Any such election must be received by CG Life at
its Annuity Service Center within 90 days after the date the notice filed by the
Contractholder designating a successor funding agent is received, but, for
determining the effective date of such election, the election will be deemed to
have been received at the end of such 90-day period. Payment under this election
will be made within seven days of its effective date.
Non-Assignability of Benefits
Any benefits which are, or may become payable under the Contract to a
Participant or his beneficiary may not be assigned, alienated, or otherwise
subject to attachment, garnishment or other legal process, except pursuant to a
qualified domestic relations order as described in the Code.
Right to Cancel:
The Contractholder may cancel the Contract by delivering or mailing a written
notice (or sending a telegram) to CG Life at its Annuity Service Center and by
returning the Contract before midnight of the 10th day after the date of
receipt. CG Life will return all amounts due to the Contractholder within 7 days
after receipt of notice of cancellation and the returned contract. The
Contractholder bears the investment risk with respect to amounts allocated to
the Separate Account, for the period from the date the Purchase Payment was
credited to the Contract to the date the returned Contract is received by CG
Life. Cancellation shalt entitle the Contractholder to an amount equal to (a)
the difference between the amount of the Purchase Payment, including any
contract fees and other charges, and the amount allocated to the Separate
Account, plus (b) the value of the Accumulation Account of the Contractholder on
the date the returned Contract is received by CG Life.
FEDERAL TAX STATUS
General
CG Life is taxed as a life insurance company under the Code. The operations of
VAA-I are part of the total operations of CG Life and are not taxed separately,
although the operations of VAA-I are treated separately for accounting and
financial statement purposes and must be considered separately in computing CG
Life's tax liability.
Investment gains of the Fund credited to VAA-I are not taxable to a
Contractholder or a Participant, whoever is applicable, until received in the
form of a cash redemption from an Accumulation Account or in the form of Annuity
Payments. Cash redemptions will generally be taxed as ordinary income in the
year received, and may be subject to an additional tax under certain
circumstances. Annuity Payments are taxed as ordinary income in accordance with
Section 72 of the Code. This section also provides that, to the extent of the
Participant's non-deductible investment in the Contract (if any), a portion of
each payment is excluded from gross income as a result of the investment in the
Contract. As a general rule, however, a Participant who receives Annuity
Payments at the time of retirement may be taxed at a lower rate due to reduced
income and a larger exemption.
The Contract has been designed so as to qualify as a "variable annuity contract"
for Federal income tax purposes. Thus, the Contract permits the Participant to
defer Federal income taxation on increases in the value of a Contract, until
such time that amounts are withdrawn from the Contract, received in the form of
Annuity Payments or paid as a death benefit.
Under the current provisions of the Code, variable annuity contracts - other
than contracts issued under retirement plans which qualify for Federal tax
benefits under sections 401(a), 403(a), 403(b), 408 or 457 of the Code, or
under government retirement plans (whether or not so qualified) - will not be
treated as annuity contracts for Federal income tax purposes for any period for
which the investments of the segregated asset account on which the Contract is
based are not adequately diversified. This "adequately diversified" requirement
may be met if the underlying investments satisfy either a statutory safe harbor
test or diversification requirements set forth in regulations issued by the
Secretary of the Treasury.
18
<PAGE>
The Secretary of the Treasury has issued regulations pertaining to such
diversification requirements. CG Life believes that the current structure of the
Separate Account satisfies the requirements of the regulations, and it intends
that the Separate Account, as well as the underlying Fund, will operate so as to
continue to meet such requirements.
Tax Qualified Contracts:
Tax Qualified Contracts are Contracts which are issued to or pursuant to a tax
sheltered annuity plan maintained by certain tax exempt organizations, including
educational institutions, to purchase annuity contracts for employees 403(b)
Annuity plans.
Generally, this type of plan has the following common attributes: salary
reduction contributions (to the extent permitted by the Code), tax deferral of
investment income, restrictions on withdrawal of cash amounts, and taxation to
the Participant only upon receipt of a withdrawal or payment. If the Participant
does not have a cost basis in the value of the Contract, payments received by
the Participant are generally taxed as income to the Participant. Under the
Code, certain distributions prior to age 59-1/2 are considered premature
distributions and may result in applicability of a 10% additional income tax. In
addition, the Code requires that tax-qualified retirement plans generally
provide for the commencement of retirement benefits no later than April 1 of the
year following the year in which a Participant attains age 70-1/2.
Taxation of the Separate Account:
Under the current provisions of the Code, CG Life pays no taxes on the
investment income and capital gains of the assets of the Separate Account where
used to determine the value of the Contract. Accordingly, CG Life currently
makes no adjustments for Federal income taxes (or benefits) in connection with
the VAA-I. CG Life retains the right to make adjustments for Federal income
taxes to Separate Account assets should future changes in the Code so warrant.
Tax Withholding and Reporting:
CG Life may be required to withhold certain amounts from both periodic and non-
periodic payments under the Contract in accordance with Federal tax law relating
to the collection of Federal income tax at the source of payment. A payor of
periodic Annuity Payments may be required to withhold amounts as if the payment
were a payment of wages from an employer to an employee. In addition, certain
eligible rollover distributions are subject to mandatory federal income tax
withholding at a rate of 20 percent, unless paid directly to an eligible
retirement plan through a direct rollover.
Similarly, a payor of certain payments is required to withhold amounts unless an
individual recipient elects against tax withholding in a manner prescribed by
the U. S. Treasury Department. Non-periodic payments include payments made
before and after the annuity commencement date such as lump sum death proceeds
and partial or full surrenders (redemptions) of Contract value. The withholding
requirements will not apply to the portion of a payment which is reasonably
believed to be not includable in gross income of the recipient for Federal tax
purposes.
CG Life will transmit a written explanation of the rollover options and related
rules to individual recipients of Contract payments, in a form and containing
such information as the Secretary of the Treasury prescribes.
In addition to tax withholding, CG Life is required to report information on
distributions under the Contract. Distributions include partial and full
redemptions as well as Annuity Payments. Information is reported on forms
pursuant to Internal Revenue Service regulations.
State income or estate tax considerations may also be involved in the purchase
of a Contract or the exercise of elections under the Contract and are not
discussed in this Prospectus. For complete information on particular Federal and
state tax considerations, a qualified tax advisor should be consulted.
State Regulation:
CG Life is subject to the laws of the State of Connecticut governing insurance
companies and to regulation by the Connecticut Commissioner of Insurance. An
annual statement in a prescribed form must be filed with that Commissioner on or
before March 1 in each year and filed in other states and jurisdictions,
covering the operations of CG Life for the preceding year and its financial
condition on December 31st of such year. Its books and assets are subject to
review or examination by the Commissioner or his agents at all times, and a full
examination of its operations is conducted periodically
19
<PAGE>
by state insurance examiners. Connecticut law also prescribes permissible
investments, but does not involve supervision of the investment management or
policy of CG Life.
In addition, CG Life is subject to the insurance laws and regulations of the
other states and jurisdictions in which it is licensed to operate. Generally the
insurance departments of these states and jurisdictions apply the laws of the
state of domicile in reviewing and approving the provisions of the Contract.
Tax Legislation:
The description of federal income tax law provided in the Prospectus
incorporates provisions of the tax law as in effect on the date of the
Prospectus.
General:
Because of the complexity of the law and the fact that tax results will vary
according to the factual status of the individual involved, tax advice may be
needed by a person contemplating purchase of a Contract or the exercise of
rights under a Contract. The above comments concerning Federal income tax
consequences are not an exhaustive discussion of all tax questions that might
arise. In addition, state income or estate tax considerations may also be
involved in the purchase of a Contract or the exercise of rights under a
Contract, and are not discussed in this Prospectus. For complete information on
particular Federal and state tax considerations, a qualified tax advisor should
be consulted.
LEGAL PROCEEDINGS
There are no material legal proceedings pending to which VAA-I is a party or
which would materially or adversely affect VAA-I.
20
<PAGE>
TABLE OF CONTENTS
OF THE STATEMENT OF ADDITIONAL INFORMATION
The Statement of Additional Information includes a description of the
following items:
1. General Information and History
2. Services
3. Purchase of Securities Being Offered
4. Principal Underwriters
5. Annuity Payments
6. Financial Statements
. CG Life
. CG Variable Annuity Account I
21
<PAGE>
To obtain a copy of the Statement of Additional Information for the Group
Tax Deferred Variable Annuities Contract, detach and mail this form.
TO: Connecticut General Life Insurance Company
Legislative Document Services - M-92
P.O. Box 2975
Hartford, CT 06104
I have been furnished with a Prospectus of CG Life VAA-I (dated April 30, 1996),
describing the Group Tax Deferred Variable Annuities Contract. Please send me a
copy of the Statement of Additional Information pertaining to such
Contract.
NAME:
------------------------------------
(Please Print)
- ------------- Mailing
(Date) Address:
-----------------------------------
Street or P.O. Box
-----------------------------------
City State Zip
22
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
CG VARIABLE ANNUITY ACCOUNT I
X GROUP TAX DEFERRED VARIABLE ANNUITIES (the "Contract")
______
issued by
Connecticut General Life Insurance Company ("CG Life")
Hartford, CT 06152
Telephone No. 860-726-6000
This statement of Additional Information is not a prospectus, but should be
read in conjunction with the Prospectus for the Contract offered by CG Life
through its CG Variable Annuity Account I. The Prospectus has the same date
as this Statement of Additional Information. A copy of the Prospectus may be
obtained by writing to Connecticut General Life Insurance Company, LDS - M92,
P. O. Box 2975, Hartford, Connecticut 06104.
April 30, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
ITEMS PAGE
----- ----
<CAPTION>
<S> <C>
General Information and History 1
Services 1
Purchase of Securities Being Offered 2
Underwriters 3
Annuity Payments 3
Financial Statements 4
</TABLE>
<PAGE>
GENERAL INFORMATION AND HISTORY
CG Life is a stock life insurance company specially chartered by the State of
Connecticut on June 22, 1865. It is licensed to write life insurance, annuities,
and accident and health insurance in all fifty states, the District of Columbia,
Puerto Rico, Taiwan and certain Canadian provinces. Its Home Office is located
at 900 Cottage Grove Road, Bloomfield, Connecticut and its mailing address is
Hartford, Connecticut 06152.
The financial statements of CG Life which are part of this Statement of
Additional Information are to be considered only to the extent that they bear
upon the ability of CG Life to meet its obligations under the Contract, which
include death benefits and its assumption of the mortality and expense charge.
CG Life is a wholly owned subsidiary of Connecticut General Corporation ("CGC").
CGC is a wholly owned subsidiary of CIGNA Holdings, Inc. which, in turn, is a
wholly owned subsidiary of CIGNA Corporation, an insurance and financial
services holding company organized to effect the combination of CGC and INA
Corporation, which became effective March 30, 1982. CIGNA Corporation is
publicly held and, as of the date of this prospectus, has no information that
any person or concern beneficially owns more than five percent of the
outstanding Common Stock, except as reported on three Schedules 13G received in
February 1996. CIGNA advises that Sanford C. Bernstein & Co., Inc. ("Sanford
Bernstein"), One State Street Plaza, New York, NY 10004, reported that as of
December 31, 1995, it held 5,402,831 shares, or 7.40%, of the outstanding common
stock of CIGNA for the accounts of discretionary clients who have the right to
receive dividends on these shares and any proceeds from the sale of these
shares. Sanford Bernstein also reported sole voting power as to 2,690,715, and
sole dispositive power as to 5,402,831, of these shares. FMR Corp., 82
Devonshire Street, Boston, MA 02109 reported that as of December 31, 1995 it
held 5,845,823 shares, or 7.70% of the outstanding common stock of CIGNA for the
accounts of discretionary clients who have the right to receive dividends on
these shares and any proceeds from the sale of these shares. FMR Corp. also
reported sole voting power as to 130,639, and sole dispositive power as to
5,845,823, of these shares.
SERVICES
Safekeeping of Assets:
- ---------------------
All assets of the Separate Account are held in custody for safekeeping by the
Separate Account. The assets of the Separate Account are held separate and apart
from assets of other accounts. Shares of CIGNA Variable Products S&P 500 Index
Fund (The "Fund"), if issued, may be left on deposit with the shareholder
servicing agent of the Fund. The Separate Account will maintain a record of all
purchases and redemptions for shares of the Fund by the Separate Account.
Additional protection for the assets of the Separate Account is afforded by CG
Life's fidelity bond, presently in the amount of $50 million, covering all
officers and employees of CG Life.
-1-
<PAGE>
The Custodian:
CG Life executed an agreement as of April 30, 1975 with State Street Bank and
Trust Company ("State Street Bank"), pursuant to which Fund shares and other
assets credited to VAA-I will be held in the custody of State Street Bank. State
Street Bank is a Massachusetts trust company having its principal place of
business at Boston, Massachusetts 02107.
The Agreement of Custodianship provides that State Street Bank will purchase
fund shares at their net asset value with net payments received from CG Life.
Purchases will be made by the Custodian at the net asset value of Fund shares
determined as of the end of the valuation period in which the payments are
received by CG Life. State Street Bank will reinvest all cash distributions of
the Fund and effect redemptions of Fund shares in accordance with instructions
from persons having voting rights in respect of Fund shares (see "Voting
Rights"). In addition, State Street Bank will be responsible for maintaining
appropriate records with respect to all transactions in Fund shares relative to
VAA-I.
The agreement requires State Street Bank to have at all times an aggregate
capital, surplus, and undivided profits of not less than $2,000,000 and
prohibits resignation by State Street Bank until (a) VAA-I has been completely
liquidated and the proceeds of such liquidation properly distributed or (b) a
successor custodian bank having the qualifications enumerated above shall have
agreed to serve as custodian. Subject to these conditions the Agreement of
Custodianship may be terminated by either party upon 30 days of written notice.
For its service as custodian, State Street Bank will be paid a fee to be agreed
upon form time to time by State Street Bank and CG Life. The fee shall be paid
by CG Life and in no event may State Street Bank charge or collect against or
from the property held by it pursuant to the Agreement of Custodianship any of
its fees or expenses without the prior written consent of CG Life. In addition,
CG Life has agreed to indemnify State Street Bank for any liability arising in
connection with its services as custodian so long as such liability is not
attributable to the negligence or bad faith of State Street Bank.
Independent Accountants:
- -----------------------
Price Waterhouse LLP acts as independent accountants for CG Variable Annuity
Accounts and CG Life. Its offices are at One Financial Plaza, Hartford, CT
06103. As independent accountants, Price Waterhouse LLp annually performs an
audit of the financial statements of the CG Variable Annuity Account I and CG
Life.
PURCHASE OF SECURITIES BEING OFFERED
The Contract is sold primarily by persons who are insurance agents of or brokers
for CG Life authorized by applicable law to sell life and other forms of
personal insurance and who are similarly authorized to sell variable annuities.
in addition, these persons are for the most part registered representatives of
CIGNA Financial Advisors, Inc. ("CFA") Hartford, Connecticut, a broker-dealer
registered under the Securities Exchange Act of 1934 and a member of the
national Association of Securities Dealers, Inc. CFA is organized under the laws
of Connecticut and is a wholly owned subsidiary of Connecticut General
Corporation, which is wholly owned by CIGNA Holdings, Inc., which is in turn a
wholly owned subsidiary of CIGNA Corporation. The Contract may also be sold
through other broker-dealers registered under the Securities Exchange Act of
1934 whose representatives are authorized by applicable law to sell variable
annuity contracts.
-2-
<PAGE>
UNDERWRITERS
(a) The principal underwriter of the Contract is CIGNA Financial Advisors, Inc.
("CFA"), Hartford, Connecticut, a broker-dealer registered under the
Securities Exchange Act of 1934 and a member of the National Association of
Securities Dealers, Inc.
(b) The Contract is offered on a continuing basis.
(c) The following table sets forth the aggregate amount of sales load charge
paid to CG Life, for each of the calendar years 1992 to 1995, with respect
to VAA-I Group Tax Deferred Variable Annuities and Group Variable Annuities
for Qualified Retirement Plans. Commencing in 1991, payments to CG Life are
made through the General Account. In prior years, payments were made
through VAA-I.
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
1995 $ 24,885
1994 $ 37,987
1993 $ 44,001
1992 $ 50,040
</TABLE>
ANNUITY PAYMENTS
Annuity Payments - General:
- --------------------------
As described in the Prospectus, annuity payments will be determined on the basis
of (i) the table specified in the Contract which reflects the adjusted age of
the annuitant, (ii) the type of annuity payout option selected, and (iii) the
investment performance of the underlying Fund shares. The amount of Annuity
Payments will not be adversely affected by adverse mortality experience or any
increase in the expenses of CG Life in excess of the charges specified in the
Contract. If CG Life is required to withhold certain amounts from annuity
payments in compliance with Federal or State Law relating to collection of
income taxes at the source of payment, the amount so required will be deducted
from each payment.
Determination of Monthly Annuity Payments:
- -----------------------------------------
The Contract contains tables indicating the dollar amount of the first monthly
Annuity Payment which can be purchased with each $1,000 of value accumulated
under the Contract. These tables include an "assumed investment return," which
is the annual rate of return, expressed as a percentage, that the Contract
assumes assets invested in the underlying Fund will achieve each year. The
assumed investment return is the measuring point for subsequent Annuity
Payments. If the actual net investment rate (on an annual basis) equals the
assumed investment return and remains constant, the Annuity Payments will remain
constant. If the actual net investment rate exceeds the assumed investment
return, the Annuity Payments will increase at a rate equal to the amount of such
excess. Conversely, if the actual rate is less than the assumed investment
return, Annuity payments will decrease.
The selection of the assumed investment return rate is made by the
Contractholder from a range made available by CG Life, and is used to determine
the purchase rates for all annuities effected under the Contract. Assumed
investment returns of from 3% to 5% are normally available.
The assumed investment return may be changed, by amendment of the Contract, with
respect to annuities effected on or after the date of change.
-3-
<PAGE>
[CAPTION]
To determine the amount of the first monthly Variable Annuity payment, the
amount available to effect the Variable Annuity is multiplied by the appropriate
annuity purchase rate from the table specified in the Contract.
Each monthly Variable Annuity payment thereafter is determined by multiplying
the amount of Annuity Units attributable to the Annuitant by the value of the
Annuity Unit for the Valuation Date immediately preceding the payment date.
FINANCIAL STATEMENTS
The following pages set forth the financial statements of:
(a) Connecticut General Life Insurance Company
CG Variable Annuity Account I
(b) Connecticut General Life Insurance Company
Consolidated Financial Statements
<PAGE>
Report of
Independent Accountants
To the Participants of
CG Variable Annuity Account I of
Connecticut General Life
Insurance Company
In our opinion, the accompanying statement of assets and liabilities and the
related statements of operations and of changes in net assets and the selected
per unit data and ratios present fairly, in all material respects, the financial
position of CG Variable Annuity Account I (the "Account") of Connecticut General
Life Insurance Company at December 31, 1995, the results of its operations and
the changes in its net assets and the selected per unit data and ratios for each
of the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and selected per unit data and ratios
(hereafter referred to as "financial statements") are the responsibility of the
Account's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
/s/Price Waterhouse LLP
One Financial Plaza
Hartford, Connecticut
February 13, 1996
<PAGE>
CG VARIABLE ANNUITY ACCOUNT I
Statement of
Assets and Liabilities
December 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investment in CIGNA Variable Products S&P 500 Index Fund
(formerly Companion Fund) at net asset value, 5,408,521
shares at $10.75 per share (cost $54,825,600;
unrealized appreciation $3,315,938) $58,141,538
-----------
Total assets 58,141,538
-----------
LIABILITIES:
Payable to Connecticut General Life Insurance Company 126,510
-----------
Total liabilities 126,510
-----------
NET ASSETS $58,015,028
===========
</TABLE>
NET ASSETS REPRESENTED BY:
<TABLE>
<CAPTION>
Accumulation Unit
Units Value
------------ --------
<S> <C> <C> <C>
Group contracts:
50 participants or more 261,172 $121.763 $31,801,193
Less than 50 participants 45,992 113.772 5,232,527
Tax-deferred annuity contracts issued
after May 1, 1976 115,290 100.335 11,567,671
Individual contracts:
Variable annuity contracts 19,685 106.339 2,093,237
Flexible annuity contracts 17,502 101.272 1,772,476
Reserve for variable annuity contracts
in distribution period 5,547,924
-----------
$58,015,028
===========
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
CG VARIABLE ANNUITY ACCOUNT I
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended December 31, 1995 1994
----------- -----------
<S> <C> <C>
FROM OPERATIONS:
Investment income -- net $ 1,217,190 $ 616,835
Realized gain on investments -- net 1,611,839 4,920,721
Change in unrealized appreciation (depreciation)
on investments -- net 13,658,575 (5,449,093)
----------- -----------
Increase in net assets resulting
from operations 16,487,604 88,463
----------- -----------
FROM UNIT TRANSACTIONS:
Participant contributions -- net 814,579 817,101
Amount transferred out of Account -- net (786,241) (292,943)
Withdrawal of funds on terminated contracts -- net (6,399,909) (5,713,887)
Annuity benefit distributions (772,981) (658,394)
Mortality guarantee adjustment 305,637 117,321
Equalization adjustment 4,075 (2,543)
----------- -----------
Decrease in net assets derived
from unit transactions (6,834,840) (5,733,345)
----------- -----------
9,652,764 (5,644,882)
INCREASE (DECREASE) IN NET ASSETS
NET ASSETS:
Beginning of year 48,362,264 54,007,146
----------- -----------
End of year $58,015,028 $48,362,264
=========== ===========
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
CG VARIABLE ANNUITY ACCOUNT I
Notes to
Financial Statements
The Account is registered as a Unit Investment Trust under the Investment
Company Act of 1940, as amended. The operations of the Account are part of the
operations of Connecticut General Life Insurance Company (CG Life).
1. The following is a summary of significant accounting policies consistently
applied in the preparation of the Account's financial statements:
A. The investment in CIGNA Variable Products S&P 500 Index Fund (known as the
Companion Fund prior to January 2, 1996) (Fund) shares is valued at the
closing net asset value per share as determined by the Fund on December
31, 1995. The Fund was organized by CG Life in 1968.
B. The amount of the reserve for contracts in the distribution period is
determined by actuarial assumptions which meet statutory requirements. Gains
or losses resulting from actual mortality experience, the full responsibility
for which is assumed by CG Life, are offset by transfers to or from CG Life.
C. Investment transactions are accounted for on the trade date (date the order
to buy or sell is executed), and income is recorded on the ex-dividend date.
Cost of investments sold is determined on the basis of the last-in. first-out
method.
D. The operations of the Account are included in, and taxed as part of, CG
Life's tax return, which is taxed as a life insurance company. Under Internal
Revenue Code Section 817 there is no taxable income attributable to the
Account.
2. Under the terms of the annuity contracts, the Individual participant can
elect either a fixed or variable annuity benefit at retirement. The Group
participant can elect either a fixed or variable annuity benefit during the
accumulation phase and at retirement. The assets providing for the variable
annuity benefit will be invested in the Fund, and the fixed annuity contract
will be purchased from the Account's sponsor, CG Life.
1995 1994
-------- --------
Transfers to CG Life
for purchase of fixed
annuity contracts during
accumulation phase
(included in net
amount transferred
out of Account) $831,061 $330,412
Transfers from CG Life
for purchase of variable
annuity contracts during
accumulation phase
(included in net
amount transferred
out of Account) $ 44,820 $ 37,469
Transfers from
accumulation period
to distribution period $210,235 $ 39,720
3. The cost of investments represents the accumulated cost of Fund shares
purchased by the Account at net asset value with net participant contributions
received and from reinvestment of all distributions made by the Fund.
4. Participant contributions are net of mortality and expense risk charges,
which generally range from 0.25% to 0.60%, depending on contract size, premium
taxes (if any), and sales load of $22,833 and $25,254 for the years ended
December 31, 1995 and 1994, respectively. These amounts are deducted from
participant contributions and paid to CG Life in accordance with the contract.
5. Withdrawal of funds on terminated contracts is net of administrative
charges of $12,189 and $12,740 for the years ended December 31, 1995 and 1994,
respectively. These amounts are paid to CG Life in accordance with the contract.
6. Contracts are sold primarily by persons who are insurance agents of or
brokers for CG Life authorized by applicable law to sell life and other forms of
personal insurance and who are similarly authorized to sell variable annuities.
These persons are for the most part registered representatives of CIGNA
Financial Advisors, Inc.
<PAGE>
CG VARIABLE ANNUITY ACCOUNT I
Statement of
Operations
<TABLE>
<CAPTION>
Year ended December 31, 1995 1994
----------- -----------
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 1,439,181 $ 829,994
Expenses:
Mortality and expense risk 221,991 213,159
----------- -----------
Investment Income -- Net 1,217,190 616,835
----------- -----------
REALIZED GAIN (LOSS) ON INVESTMENTS:
Proceeds from sale of shares 7,853,234 7,152,907
Cost of shares sold 7,176,648 7,229,717
----------- -----------
Realized gain (loss) from security
transactions -- net 676,586 (76,810)
Capital gains distribution 935,253 4,997,531
----------- -----------
Realized Gain on
Investments -- Net 1,611,839 4,920,721
----------- -----------
UNREALIZED (DEPRECIATION) APPRECIATION
ON INVESTMENTS:
Beginning of year (10,342,637) (4,893,544)
End of year 3,315,938 (10,342,637)
----------- -----------
Change in Unrealized Appreciation (Depreciation)
on Investments -- Net 13,658,575 (5,449,093)
----------- -----------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $16,487,604 $ 88,463
=========== ===========
RATIO OF EXPENSES TO AVERAGE NET ASSETS .417% .416%
RATIO OF NET INVESTMENT INCOME TO AVERAGE
NET ASSETS 2.288% 1.205%
NUMBER OF ACCUMULATION UNITS OUTSTANDING
AT END OF YEAR 459,641 523,214
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
CG VARIABLE ANNUITY ACCOUNT I
Notes to
Financial Statements (Continued)
7. ACCUMULATION UNITS INFORMATION
<TABLE>
<CAPTION>
SCHEDULE OF SELECTED PER-UNIT DATA
----------------------------------
December 31,
--------------------------------------------------------------------
Group Contracts: 1995 1994 1993 1992 1991
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
50 participants or more:
Net asset value:
----------------------------------
Beginning of year $ 89.219 $88.848 $86.503 $83.718 $61.058
End of year 121.763 89.219 88.848 86.503 83.718
-------- ------- ------- ------- -------
Net increase in net asset value
resulting from operations $ 32.544 $ 0.371 $ 2.345 $ 2.785 $22.660
======== ======= ======= ======= =======
Accumulation units outstanding:
----------------------------------
End of year 261,172 308,233 353,129 403,359 459,344
======= ======= ======= ======= =======
Less than 50 participants:
Net asset value:
----------------------------------
Beginning of year $ 83.580 $83.449 $81.459 $79.044 $57.799
End of year 113.772 83.580 83.449 81.459 79.044
-------- ------- ------- ------- -------
Net increase in net asset value
resulting from operations $ 30.192 $ 0.131 $ 1.990 $ 2.415 $21.245
======== ======= ======= ======= =======
Accumulation units outstanding:
----------------------------------
End of year 45,992 50,443 52,486 63,109 66,565
======== ======= ======= ======= =======
Tax-deferred annuity contracts
issued after May 1, 1976:
Net asset value:
----------------------------------
Beginning of year $ 73.775 $73.725 $72.031 $69.957 $51.201
End of year 100.335 73.775 73.725 72.031 69.957
-------- ------- ------- ------- -------
Net increase in net asset value
resulting from operations $ 26.560 $ 0.050 $ 1.694 $ 2.074 $18.756
======== ======= ======= ======= =======
Accumulation units outstanding:
----------------------------------
End of year 115,290 121,840 124,827 128,504 136,843
======== ======= ======= ======= ========
</TABLE>
<PAGE>
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995
<PAGE>
Northeast Insurance Services Telephone 860 240 2000
One Financial Plaza Facsimile 860 240 2282
Hartford, CT 06103
Price Waterhouse LLP [LOGO OF PRICE WATERHOUSE APPEARS HERE]
REPORT OF INDEPENDENT ACCOUNTANTS
February 13, 1996
The Board of Directors and Shareholder of
Connecticut General Life Insurance Company
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income and retained earnings and of cash flows
present fairly, in all material respects, the financial position of Connecticut
General Life Insurance Company and its subsidiaries at December 31, 1995 and
1994, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 1995, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
- ------------------------
Offices in Boston, Burlington, Hartford, New York, Providence
<PAGE>
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
(In millions)
- ---------------------------------------------------------------------------------------------------------
For the year ended December 31, 1995 1994 1993
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES
Premiums and fees $ 4,998 $ 4,960 $ 4,704
Net investment income 3,138 2,805 2,742
Realized investment gains (losses) (7) 27 (65)
Other revenues 9 8 15
------- ------- -------
Total revenues 8,138 7,800 7,396
------- ------- -------
BENEFITS, LOSSES AND EXPENSES
Benefits, losses and settlement expenses 5,892 5,574 5,215
Policy acquisition expenses 127 89 84
Other operating expenses 1,358 1,363 1,351
------- ------- -------
Total benefits, losses and expenses 7,377 7,026 6,650
------- ------- -------
INCOME BEFORE INCOME TAXES 761 774 746
------- ------- -------
Income taxes (benefits):
Current 301 220 433
Deferred (44) 45 (197)
------- ------- -------
Total taxes 257 265 236
------- ------- -------
NET INCOME 504 509 510
Dividends declared (252) (300) (190)
Retained earnings, beginning of year 2,968 2,759 2,439
------- ------- -------
RETAINED EARNINGS, END OF YEAR $ 3,220 $ 2,968 $ 2,759
- -----------------------------------------------------------------========================================
</TABLE>
The notes to Financial Statements are an integral part of these statements.
-2-
<PAGE>
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
(In Millions)
- ------------------------------------------------------------------------------------------------------
As of December 31, 1995 1994
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments:
Fixed maturities:
Available for sale, at fair value (amortized cost, $20,031; $8,571) $ 22,046 $ 8,324
Held to maturity, at amortized cost (fair value, $10,075) - 10,061
Mortgaged loans 10,218 8,975
Equity securities, at fair value (cost, $54; $109) 66 119
Policy loans 6,925 5,237
Real estate 1,158 1,442
Other long-term investments 193 128
Short-term investments 254 143
-------- ________
Total investments 40,860 34,429
Cash and cash equivalents - 80
Accrued investment income 626 578
Premiums and accounts receivable 991 911
Reinsurance recoverables 1,258 2,533
Deferred policy acquisition costs 689 700
Property and equipment, net 319 346
Current income taxes 21 119
Deferred income taxes, net 403 661
Goodwill 503 518
Other assets 149 135
Separate account assets 18,177 14,498
- ------------------------------------------------------------------------------------------------------
Total $ 63,996 $ 55,508
- -------------------------------------------------------------------------------=======================
LIABILITIES
Contractholder deposit funds $ 29,762 $ 26,696
Future policy benefits 8,547 7,875
Unpaid claims and claim expenses 1,151 1,096
Unearned premiums 95 84
-------- --------
Total insurance and contractholder liabilities 39,555 35,751
Accounts payable, accrued expenses
and other liabilities 1,872 1,632
Separate account liabilities 18,075 14,427
- ------------------------------------------------------------------------------------------------------
Total liabilities 59,502 51,810
- ------------------------------------------------------------------------------------------------------
CONTINGENCIES - NOTE 11
SHAREHOLDER'S EQUITY
Common stock (6 shares outstanding) 30 30
Additional paid-in capital 766 764
Net unrealized appreciation (depreciation) on investments 476 (66)
Net translation of foreign currencies 2 2
Retained earnings 3,220 2,968
- ------------------------------------------------------------------------------------------------------
Total shareholder's equity 4,494 3,698
- ------------------------------------------------------------------------------------------------------
Total $ 63,996 $ 55,508
- -------------------------------------------------------------------------------=======================
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
(In millions)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the year ended December 31, 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 504 $ 509 $ 510
Adjustments to reconcile net income to net cash
Provided by (used in) operating activities:
Insurance liabilities (90) (249) 251
Reinsurance recoverables 1,201 282 (392)
Premiums and accounts receivable 32 (188) 85
Deferred income taxes, net (44) 45 (197)
Other assets (14) 68 54
Accounts payable, accrued expenses,
other liabilities and current income taxes 212 (192) 5
Other, net 22 (24) (82)
------ ------ ------
Net cash provided by operating activities 1,823 251 234
------ ------ ------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from investments sold:
Fixed maturities--available for sale 1,070 1,389 --
Fixed maturities--held to maturity -- 12 599
Mortgage loans 383 496 1,004
Equity securities 119 41 41
Real Estate 299 242 78
Other (primarily short-term investments) 2,268 1,005 3,762
Investment maturities and repayments:
Fixed maturities--available for sale 478 686 --
Fixed maturities--held to maturity 1,756 1,764 3,167
Mortgage loans 420 194 202
Investments purchased:
Fixed maturities--available for sale (3,054) (2,390) --
Fixed maturities--held to maturity (1,385) (1,788) (5,128)
Mortgage loans (1,908) (882) (823)
Equity securities (20) (12) (112)
Policy loans (2,129) (1,614) (1,561)
Other (primarily short-term investments) (2,334) (1,093) (3,587)
Other, net (119) (129) (48)
------ ------ ------
Net cash used in investing activities (4,156) (2,079) (2,406)
------ ------ ------
CASH FLOWS FROM FINANCING ACTIVITIES
Deposits and interest credited to contractholder
deposit funds 7,489 6,388 7,537
Withdrawals and benefit payments from contractholder deposit funds (4,985) (4,216) (5,166)
Dividends paid to Parent (252) (300) (190)
Other, net 1 36 (30)
------ ------ ------
Net cash provided by financing activities 2,253 1,908 2,151
- -----------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents (80) 80 (21)
Cash and cash equivalents, beginning of year 80 -- 21
- -----------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of year $ -- $ 80 $ --
- -----------------------------------------------------------------------------------------------------------
Supplemental Disclosure of Cash Information:
Income taxes paid, net of refunds $ 211 $ 411 $ 352
Interest paid $ 7 $ 5 $ 5
- -----------------------------------------------------------------------------------------------------------
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
-4-
<PAGE>
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF BUSINESS
Connecticut General Life Insurance Company and its subsidiaries (the Company)
provide insurance and related financial services throughout the United States
and in many locations worldwide. Principal products and services include group
life and health insurance, individual life insurance and annuity products, and
retirement and investment products and services.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) Basis of Presentation: The consolidated financial statements include the
accounts of the Company and all significant subsidiaries. The Company is a
wholly-owned subsidiary of Connecticut General Corporation, which is an indirect
wholly-owned subsidiary of CIGNA Corporation (CIGNA). These consolidated
financial statements have been prepared in conformity with generally accepted
accounting principles, and reflect management's estimates and assumptions, such
as those regarding medical costs and interest rates, that affect the recorded
amounts. Significant estimates used in determining insurance and contractholder
liabilities, related reinsurance recoverables, and valuation allowances for
investment assets are discussed throughout the Notes to the Financial
Statements. Certain reclassifications have been made to prior years' amounts to
conform with the 1995 presentation.
B) Recent Accounting Pronouncements: In 1993, the Company implemented
Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for
Certain Investments in Debt and Equity Securities." SFAS No. 115 requires that
debt and equity securities be classified into different categories and carried
at fair value if they are not classified as held to maturity. During the fourth
quarter of 1995, the Financial Accounting Standards Board (FASB) issued a guide
to implementation of SFAS No. 115, which permits a one-time opportunity to
reclassify securities subject to SFAS No. 115. Consequently, the Company
reclassified all held-to-maturity securities to available-for-sale as of
December 31, 1995. The non-cash reclassification of these securities, which had
an aggregate amortized cost of $9.2 billion and fair value of $10.1 billion,
resulted in an increase of approximately $396 million, net of
policyholder-related amounts and deferred income taxes, in net unrealized
appreciation included in Shareholders' Equity as of December 31, 1995.
In 1993, the Financial Accounting Standards Board (FASB) issued SFAS No. 114,
"Accounting by Creditors for Impairment of a Loan," which provides guidance on
the accounting and disclosure for impaired loans. In 1994, the FASB issued SFAS
No. 118, "Accounting by Creditors for Impairment of a Loan-Income Recognition
and Disclosures," which eliminates the income recognition requirements of SFAS
No. 114. The Company adopted SFAS Nos. 114 and 118 in the first quarter of
1995, which resulted in a $6 million increase in net income.
In 1995, the FASB issued SFAS No. 121, ""Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." SFAS No. 121
requires write-down to fair value when long-lived assets to be held and used are
impaired. Long-lived assets to be disposed of, including real estate held for
sale, must be carried at the lower of cost or fair value less costs to sell.
Depreciation of assets to be disposed of is prohibited. The Company will adopt
this standard in the first quarter of 1996. The effect on the Company's results
of operations, liquidity and financial condition is not expected to be material.
C) Financial Instruments: In the normal course of business, the Company
enters into transactions involving various types of financial instruments,
including investments such as fixed maturities and equity securities and
off-balance-sheet financial instruments such as investment and loan commitments
and financial guarantees. These instruments have credit risk and also may be
subject to risk of loss due to interest rate and market fluctuations. The
Company evaluates and monitors each financial instrument individually and, where
appropriate, uses certain derivative instruments or obtains collateral or other
forms of security to minimize risk of loss.
See Note 12 for additional information on the fair value of financial
instruments.
-5-
<PAGE>
D) Investments: Investments in fixed maturities include bonds, asset-backed
securities, including collateralized mortgage obligations (CMOs), and
redeemable preferred stocks. Fixed maturities classified as held to maturity
are carried at amortized cost, net of impairments, and those classified as
available for sale are carried at fair value, with unrealized appreciation or
depreciation included in Shareholder's Equity. Fixed maturities are considered
impaired and written down to fair value when a decline in value is considered to
be other than temporary.
Mortgage loans are carried principally at unpaid principal balances, net of
valuation reserves. Mortgage loans are considered impaired when it is probable
that the Company will be unable to collect all amounts according to the
contractual terms of the loan agreement. If impaired, a valuation reserve is
utilized when a decline in the fair value of the underlying collateral is below
the carrying value.
Fixed maturities and mortgage loans that are delinquent or restructured to
modify basic financial terms, typically to reduce the interest rate and, in
certain cases, extend the term, are placed on non-accrual status, and thereafter
interest income is recognized only when payment is received.
Real estate investments are either held for the production of income or held
for sale. Real estate investments held for the production of income are carried
at depreciated cost less valuation reserves when a decline in value is other
than temporary. Depreciation is generally calculated using the straight-line
method based on the estimated useful lives of the assets. Real estate
investments held for sale are generally those which are acquired through the
foreclosure of mortgage loans. These assets are valued at their fair value at
the time of foreclosure. The fair value is established as the new cost basis
and the asset acquired is reclassified from mortgage loans to real estate held
for sale. Subsequent to foreclosure, these investments are carried at the lower
of depreciated cost or current fair value less estimated costs to sell.
Adjustments to the carrying value as a result of changes in fair value
subsequent to foreclosure are recorded as valuation reserves and reported in
realized investment gains and losses. The Company considers several methods in
determining fair value for real estate acquired through foreclosure, with
greater emphasis placed on the use of discounted cash flow analyses and, in some
cases, the use of third-party appraisals. Assets held for sale are depreciated
using the straight-line method based on the estimated useful lives of the
assets.
Equity securities, which include common and non-redeemable preferred stocks,
are carried at fair value. Short-term investments are carried at fair value,
which approximates cost. Equity securities and short-term investments are
classified as available for sale.
Policy loans are generally carried at unpaid principal balances,
Realized investment gains and losses result from sales, investment asset
write-downs and changes in valuation reserves, after deducting amounts
attributable to experience-rated pension policyholders' contracts and
participating life policies ("policyholder share"). Generally, realized
investment gains and losses are based upon specific identification of the
investment assets.
Unrealized investment gains and losses, after deducting policyholder-related
amounts and net of deferred income taxes, if applicable, for investments carried
at fair value are included in Shareholder's Equity.
See Note 3(F) for a discussion of the Company's accounting policies for
derivative financial instruments.
E) Cash and Cash Equivalents: Short-term investments with a maturity of three
months or less at the time of purchase are reported as cash equivalents.
F) Reinsurance Recoverables: Reinsurance recoverables are estimates of
amounts to be received from reinsurers, including amounts under reinsurance
agreements with affiliated companies. Allowances are established for amounts
deemed uncollectible.
G) Deferred Policy Acquisition Costs: Acquisition costs consist of
commissions, premium taxes and other costs, which vary with, and are primarily
related to, the production of revenues. Group life and a portion of group
health insurance business acquisition costs are deferred and amortized over the
terms of the insurance policies. Acquisition costs related to universal life
products and contractholder deposit funds are deferred and amortized in
proportion to total estimated gross profits over the expected life of the
contracts. Acquisition costs related to annuity and other life insurance
businesses are deferred and amortized, generally in proportion to the ratio of
annual revenue to the estimated total revenues over the contract periods.
Deferred acquisition costs are reviewed to determine if they are recoverable
from future income, including investment income. If such costs are estimated to
be unrecoverable, they are expensed. If such costs are estimated to be
unrecoverable or are accelerated as a result of treating unrealized investment
gains and losses as though they had been realized, a deferred acquisition cost
valuation allowance may be established or adjusted, with a comparable offset in
net unrealized appreciation (depreciation).
H) Property and Equipment: Property and equipment are carried at cost less
accumulated depreciation. When applicable, cost includes interest and real
estate taxes incurred during construction and other construction-related costs.
Depreciation is calculated principally on the straight-line method based on the
estimated useful lives of the assets. Accumulated depreciation was $387 million
and $333 million at December 31, 1995 and 1994, respectively.
-6-
<PAGE>
I) Other Assets: Other Assets consists of various insurance-related assets,
principally ceded unearned premiums, reinsurance deposits and other amounts
due from affiliated companies.
J) Goodwill: Goodwill represents the excess of the cost of businesses
acquired over the fair value of their net assets. These costs are amortized on
systematic bases over periods, not exceeding 40 years, that correspond with the
benefits estimated to be derived from the acquisitions. The Company evaluates
the carrying amount of goodwill by analyzing historical and estimated future
income and undiscounted estimated cash flows of the related businesses.
Goodwill is written down when impaired. Amortization periods are revised if it
is estimated that the remaining period of benefit of the goodwill has changed.
Accumulated amortization was $84 million and $70 million at December 31, 1995
and 1994, respectively.
K) Separate Accounts: Separate account assets and liabilities are principally
carried at market value, with less than 5% carried at amortized cost, and
represent policyholder funds maintained in accounts having specific investment
objectives. The investment income, gains and losses of these accounts generally
accrue to the policyholders and, therefore, are not included in the Company's
net income.
L) Contractholder Deposit Funds: Contractholder Deposit Funds are
liabilities for investment-related and universal life products which were $19.8
billion and $10.0 billion, respectively, as of December 31, 1995, compared with
$18.6 billion and $8.1 billion, respectively, as of December 31, 1994. These
liabilities consist of deposits received from customers and investment earnings
on their fund balances, less administrative charges and, for universal life fund
balances, mortality charges.
M) Future Policy Benefits: Future policy benefits are liabilities for life,
health and annuity products. Such liabilities are established in amounts
adequate to meet the estimated future obligations of policies in force. These
liabilities are computed using premium assumptions for group annuity policies
and the net level premium method for individual life and annuity policies, and
are based upon estimates as to future investment yield, mortality and
withdrawals that include provisions for adverse deviation. Future policy
benefits for individual life insurance and annuity policies are computed using
interest rates ranging from 2% to 11%, generally graded down after 10 to 30
years. Mortality, morbidity, and withdrawal assumptions are based on either the
Company's own experience or various actuarial tables.
N) Unpaid Claims and Claim Expenses: Liabilities for unpaid claims and claim
expenses are estimates of payments to be made on insurance claims for reported
losses and estimates of losses incurred but not reported.
O) Unearned Premiums: Premiums for group life, and accident and health
insurance are reported as earned on a pro rata basis over the contract period.
The unexpired portion of these premiums is recorded as Unearned Premiums.
P) Other Liabilities: Other Liabilities consists principally of postretirement
and postemployment benefits and various insurance-related liabilities, including
amounts related to reinsurance contracts. Also included in Other Liabilities are
liabilities for guaranty fund assessments that can be reasonably estimated.
Q) Translation of Foreign Currencies: Foreign operations primarily utilize the
local currencies as their functional currencies and assets and liabilities are
translated at the rates of exchange as of the balance sheet date. The
translation gain or loss on such functional currencies, net of applicable taxes,
is generally reflected in Shareholder's Equity. Revenues and expenses are
translated at the average rates of exchange prevailing during the year.
R) Premium and Fees, Revenues and Related Expenses: Premiums for group life
and accident and health insurance are recognized as revenue on a pro rata basis
over their contract periods. Premiums for individual life and health insurance
as well as individual and group annuity products, excluding universal life and
investment-related products, are recognized as revenue when due. Benefits,
losses and expenses are matched with premiums.
Revenues for universal life products consist of net investment income and
mortality, administration and surrender fees assessed against the fund values
during the period. Benefit expenses for universal life products consists of
benefit claims in excess of fund values and interest credited to fund values.
Revenues for investment-related products consist of net investment income and
contract charges assessed against the fund values during the period. Benefit
expenses for investment-related products primarily consist of interest credited
to the fund values after deduction for investment and risk fees.
S) Participating Business: Certain life insurance policies contain dividend
payment provisions that enable the policyholder to participate in the earnings
of the Company's business. The participating insurance in force accounted for
7.0% of total insurance in force at December 31, 1995, compared with 5.2% at
December 31, 1994 and 3.6% at December 31, 1993.
<PAGE>
T) Income Taxes: The Company and its domestic subsidiaries are included in the
consolidated United States federal income tax return filed by CIGNA. In
accordance with a tax sharing agreement with CIGNA, the provision for federal
income tax is computed as if the Company were filing a separate federal income
tax return, except that benefits arising from tax credits and net operating and
capital losses are allocated to those subsidiaries producing such attributes to
the extent they are utilized in CIGNA's consolidated federal income tax
provision.
Deferred income taxes are generally recognized when assets and liabilities
have different values for financial statement and tax reporting purposes. See
Note 6 for additional information.
NOTE 3 - INVESTMENTS
A) Fixed Maturities: Fixed maturities are net of cumulative write-downs of
$103 million and $78 million, including policyholder share, as of December 31,
1995 and 1994, respectively.
As of December 31, 1995, all fixed maturities are classified as available for
sale and are carried at fair value. See Note 2(B) for additional information.
The amortized cost and fair value by contractual maturity periods for available-
for-sale fixed maturities (carried at fair value), including policyholder share,
as of December 31, 1995 were as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Amortized Fair
(In millions) Cost Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Due in one year or less $ 944 $ 980
Due after one year through five years 5,260 5,566
Due after five years through ten years 4,936 5,404
Due after ten years 3,401 4,276
Asset-backed securities 5,490 5,820
- --------------------------------------------------------------------------------
Total $ 20,031 $ 22,046
- -----------------------------------------------------------=====================
</TABLE>
Actual maturities could differ from contractual maturities because issuers may
have the right to call or prepay obligations with or without call or prepayment
penalties. Also, the Company may extend maturities in some cases.
Gross unrealized appreciation (depreciation) for fixed maturities, including
policyholder share, by type of issuer was as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
December 31, 1995
- -------------------------------------------------------------------------------------------
Amortized Fair
(In millions) Cost Appreciation Depreciation Value
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Available for Sale (Carried at Fair Value)
Federal government bonds $ 497 $ 300 $ - $ 797
State and local government bonds 161 24 (1) 184
Foreign government bonds 131 9 (1) 139
Corporate securities 13,752 1,427 (73) 15,106
Asset-backed securities 5,490 371 (41) 5,820
- -------------------------------------------------------------------------------------------
Total $20,031 $ 2,131 $ (116) $ 22,046
- ---------------------------------------====================================================
</TABLE>
-8-
<PAGE>
- --------------------------------------------------------------------------------
December 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Amortized Fair
(In millions) Cost Appreciation Depreciation Value
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Available for Sale (Carried at Fair Value)
Federal government bonds $ 393 $ 35 $ (13) $ 415
State and local government bonds 48 -- (4) 44
Foreign government bonds 135 1 (6) 130
Corporate securities 5,042 84 (244) 4,882
Asset-backed securities 2,953 98 (198) 2,853
- -----------------------------------------------------------------------------------------------------------------------
Total $ 8,571 $ 218 $ (465) $ 8,324
- ---------------------------------------------------------==============================================================
Held to Maturity (Carried at Amortized Cost)
State and local government bonds $ 61 $ 4 $ (1) $ 64
Foreign government bonds 49 1 (1) 49
Corporate securities 8,088 293 (232) 8,149
Asset-backed securities 1,863 46 (96) 1,813
- -----------------------------------------------------------------------------------------------------------------------
Total $ 10,061 $ 344 $ (330) $ 10,075
- ---------------------------------------------------------==============================================================
</TABLE>
Asset-backed securities include investments in CMOs as of December 31, 1995
of $2.1 billion carried at fair value (amortized cost, $2.0 billion). As of
December 31, 1994, investments in CMOs consisted of $1.5 billion carried at fair
value (amortized cost, $1.6 billion), and $150 million carried at amortized cost
(fair value, $160 million). Certain of these securities are backed by
Aaa/AAA-rated government agencies. All other CMO Securities have high quality
standards through use of credit enhancement provided by subordinated securities
or mortgage insurance from an Aaa/AAA-rated insurance company. CMO holdings are
concentrated in securities with limited prepayment, extension and default risk,
such as planned amortization class bonds. The Company's investments in
interest-only and principal-only CMOs, which are also subject to interest rate
risk resulting from accelerated prepayments, represented approximately 2% and 6%
of total CMO investments at December 31, 1995 and 1994, respectively.
At December 31, 1995, contractual fixed maturity investment commitments
approximated $229 million. The majority of investment commitments are for the
purchase of investment grade fixed maturities, bearing interest at a fixed
market rate, and require no collateral. These commitments are diversified by
issuer and maturity date, and it is estimated that the full amount will be
disbursed in 1996, with the majority occurring within the first three months.
B) Short-Term Investments and Cash Equivalents: Short-term investments and
cash equivalents, in the aggregate, included debt securities, principally
corporate securities of $259 million and $323 million and federal government
securities of $70 million and $7 million at December 31, 1995 and 1994,
respectively, and foreign government securities of $1 million at December 31,
1994.
C) Mortgage Loans and Real Estate: The Company's mortgage loans and real
estate investments are diversified by property type and location and, for
mortgage loans, by borrower. Mortgage loans are collateralized by the related
properties and generally approximate 80% of the property's value at the time the
original loan is made.
At December 31, the carrying values of mortgage loans and real estate
investments, including policyholder share, were as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
(In millions) 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Mortgage Loans $ 10,218 $ 8,975
------- -------
Real estate:
Held for sale 671 760
Held for production of income 487 682
------- -------
Total real estate 1,158 1,442
- --------------------------------------------------------------------------------
Total $ 11,376 $ 10,417
- -------------------------------------------------------=========================
</TABLE>
Valuation reserves for mortgage loans, including policyholder share, were $82
million and $115 million as of December 31, 1995 and 1994, respectively.
Valuation reserves are cumulative write-downs related to real estate, including
policyholder share, were $310 million and $309 million as of December 31, 1995
and 1994, respectively.
-9-
<PAGE>
During 1995, 1994 and 1993, non-cash investing activities included real estate
acquired through foreclosure of mortgage loans, which totaled $144 million, $127
million and $458 million, respectively.
At December 31, mortgage loans and real estate investments comprised the
following property types and geographic regions:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
(In millions) 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Property type:
Office buildings $ 4,493 $ 4,092
Retail facilities 4,327 3,867
Hotels 711 819
Apartment buildings 1,246 997
Other 599 642
- --------------------------------------------------------------------------------
Total $ 11,376 $ 10,417
- -------------------------------------------------===============================
Geographic region:
Central $ 4,032 $ 3,664
Pacific 2,580 2,558
Middle Atlantic 1,951 1,652
South Atlantic 1,647 1,585
New England 1,166 958
- --------------------------------------------------------------------------------
Total $ 11,376 $ 10,417
- -------------------------------------------------===============================
</TABLE>
At December 31, 1995, scheduled mortgage loan maturities were as follows:
1996 - $1.1 billion; 1997 - $1 billion; 1998 - $750 million; 1999 - $1.3
billion; 2000 - $1.6 billion; and $4.5 billion thereafter. Actual maturities
could differ from contractual maturities because borrowers may have the right
to prepay obligations with or without prepayment penalties, and loans may be
refinanced. During 1995 and 1994, the Company refinanced approximately $379
million and $600 million, respectively, of its mortgage loans relating to
borrowers that were unable to obtain alternative financing.
At December 31, 1995, the Company's total investment in impaired mortgage
loans was $838 million, including $447 million, before valuation reserves
totaling $82 million, and $391 million, which had no valuation reserves.
During 1995, valuation reserves for mortgage loans, including policyholder
share, decreased from $127 million as of December 31, 1994 to $82 million as of
December 31, 1995. The net decrease for the year reflects: (1) $27 million of
mortgage loan reserves transferred to foreclosed real estate, (2) $33 million
of charge-offs, and (3) a $15 million net increase in valuation reserves.
During 1995, the average total investment in impaired mortgage loans, before
valuation reserves, was approximately $935 million, and interest income recorded
and cash received on these loans was approximately $71 million.
At December 31, 1995, contractual commitments to extend credit under
commercial mortgage loan agreements amounted to approximately $580 million, all
of which were at a fixed market rate of interest. These commitments expire
within three months, and are diversified by property type and geographic region.
D) Net Unrealized Appreciation (Depreciation) of Investments: Unrealized
appreciation (depreciation) for investments carried as fair value as of
December 31 were as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
(In millions) 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Unrealized appreciation:
Fixed maturities $ 2,131 $ 218
Equity securities 23 22
------- ------
2,154 240
------- ------
Unrealized depreciation:
Fixed maturities (116) (465)
Equity securities (11) (12)
------- ------
(127) (477)
------- ------
Less policyholder-related amounts 1,279 (141)
------- ------
Shareholder net unrealized appreciation
(depreciation) 748 (96)
Less deferred income taxes (benefits) 272 (30)
- --------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) $ 476 $ (66)
- -------------------------------------------------===============================
</TABLE>
-10-
<PAGE>
Net unrealized appreciation (depreciation) for investments carried at fiar
value is included as a separate component of Shareholders' Equity, net of
policyholder-related amounts and deferred income taxes. The net unrealized
appreciation (depreciation) for these investments, primarily fixed maturities,
during 1995, 1994 and 1993 was $542 million, ($494) million and $423 million,
respectively.
During 1995, 1994 and 1993, the net unrealized appreciation (depreciation) for
fixed maturities that were carried at amortized cost in the financial statements
was ($14) million, ($1.2) billion and $129 million, respectively.
E) Non-Income Producing Investments: At December 31, the carrying values of
investments that were non-income producing during the preceding 12 months,
including policyholder share, were as follows:
- --------------------------------------------------------------------------------
(In millions) 1995 1994
- --------------------------------------------------------------------------------
Fixed maturities $ 75 $ 71
Mortgage loans 17 81
Real estate 234 280
- --------------------------------------------------------------------------------
Total $326 $432
- ------------------------------------------------================================
F) Derivative Financial Instruments: The Company's investment strategy is to
manage the characteristics of investment assets, such as liquidity, currency,
yield and duration, to reflet the underlying characteristics of the related
insurance and contractholder liabilities, which vary among the Company's
principal product lines. In connection with this investment strategy, the
Company used derivative instruments through hedging applications to manage
market risk.
Generally, the Company uses interest rate swap contracts to create, when
combined with cash flows from variable rate bonds, fixed rate cash flows that
meet its portfolio investment strategy. Currency swaps are used to match the
currency of individual investments to that of the associated liabilities.
Interest rate futures are used to temporarily hedge against changes in market
Values of bonds and mortgage loans to be purchased or sold, and stock index
futures may be used to hedge the temporary cash position of equity accounts.
Interest rate futures also are used to hedge interest rate risk associated
with withdrawals by contractholders over a scheduled time period.
Cash requirements arise as a result of the Company's derivative activities.
Under interest rate swaps, the Company agrees with other parties to exchange, at
specified intervals, the difference between fixed rate and variable rate
interest amounts calculated by reference to an agree-upon notional principal
amount. Under futures contracts, initial margin requirements are settled with
cash or other instruments and changes in the contract values are settled in cash
daily with the exchange on which the instrument is traded. Under currency swaps,
the parties generally exchange a principal amount in the two relevant
currencies, agreeing to re-exchange principal amounts at a specified future date
using an agreed-upon exchange rate, and agreeing to periodically exchange
amounts equal to interest payments using the agreed-upon exchange rate.
Because the Company's use of derivatives is limited to hedging applications,
changes in the market value of the derivatives are substantially offset by
changes in the market value of the hedged assets or underlying liabilities,
minimizing market risk. The Company routinely monitors, by individual
counterparty, exposure to credit risk associated with swap contracts. Futures
contracts are exchange-traded and, therefore, credit risk is limited since the
exchange assumes the obligations. The Company manages legal risks by following
industry standardized documentation procedures, by monitoring legal
developments and, consistent with its credit exposure policies, by limited risks
associated with counterparty failure by diversifying the swaps portfolio among
approved dealers of high credit quality.
Changes in the market value of futures contracts that qualify for hedge
accounting are deferred and recorded as adjustments to the carrying value of the
related bond or mortgage loan. Deferred gains and losses are amortized into net
investment income over the life of the investments purchased or recognized in
full as realized investment gains and losses in the event that the investment or
futures contract is sold prior to maturity. Futures contracts totaled $22
million and $142 million as of December 31, 1995 and 1994, respectively, and
were accounted for as hedges. At December 31, 1995, gains and losses on futures
contracts deferred in anticipation of investment purchases were $4 million and
$1 million, respectively. At December 31, 1994, gains and losses on futures
contracts deferred in anticipation of investment purchases were $1 million and
$3 million, respectively.
Net interest received or paid on an interest rate swap contract is recognized
currently as an adjustment to net investment income. The fair value of interest
rate swap contracts is reported as an adjustment to the fair value of the
related investment. Underlying notional principal amounts associated with
interest rate swap contracts outstanding were $508 million and $596 million at
December 31, 1995 and 1994, respectively.
<PAGE>
The interest payment cash flows received in U.S. dollars from currency swaps
related to foreign currency denominated investment securities (primarily
Canadian dollars, pound sterling, Swiss francs and Japanese yen) are recognized
as net investment income when received. The fair value of currency swaps is
reported as an adjustment to the fair value of the related investment.
Underlying principal amounts associated with currency swap contracts outstanding
were $335 million and $325 million at December 31, 1995 and 1994, respectively.
As of December 31, 1995 and 1994, respectively, the Company's variable rate
investments consisted of approximately $1.4 billion and $810 million of fixed
maturities, respectively. As of December 31, 1995 and 1994, the Company's fixed
rate investments consisted of $20.6 billion and $17.6 billion, respectively, of
fixed maturities and $10 billion and $9 billion, respectively, of mortgage
loans. As a result of recognizing amortization of deferred market value charges
in futures contracts, net investment income on bonds and mortgage loans was
increased by $10 million and $1 million, respectively, for the year ended
December 31, 1995 and by $7 million and $1 million, respectively, for the year
ended December 31, 1994. In addition, the increase in net investment income for
bonds resulting from interest rate swap contracts was $3 million, $12 million
and $19 million for 1995, 1994 and 1993, respectively.
G) Other: As of December 31, 1995 and 1994, the Company had no concentration
of investments in a single investee exceeding 10% of Shareholder's Equity.
NOTE 4 - INVESTMENT INCOME AND GAINS AND LOSSES
A) Net Investment Income: The components of net investment income, including
policyholder share, for the year ended December 31 were as follows:
- --------------------------------------------------------------------------------
(In millions) 1995 1994 1993
- --------------------------------------------------------------------------------
Fixed maturities $ 1,669 $ 1,596 $ 1,547
Mortgage loans 866 776 892
Equity securities 15 20 16
Policy loans 499 365 253
Real estate 301 291 238
Other long-term investments 33 23 20
Short-term investments 40 8 18
----- ----- -----
3,423 3,079 2,984
Less investment expenses 285 274 242
- --------------------------------------------------------------------------------
Net investment income $ 3,138 $ 2,805 $ 2,742
- -----------------------------------------------------===========================
Net investment income attributable to policyholder contracts, which is
included in the Company's revenues and is primarily offset by amounts included
in Benefits, Losses and Settlement Expenses, was approximately $1.8 billion,
$1.5 billion and $1.6 billion for 1995, 1994 and 1993, respectively. Net
investment income for separate accounts, which is not reflected in the Company's
revenues, was $885 million, $693 million and $604 million for December 31, 1995,
1994 and 1993, respectively.
As of December 31, 1995, fixed maturities and mortgage loans on non-accrual
status, including policyholder share, were $149 million and $523 million
including restructured investments of $105 million and $447 million,
respectively. Amounts on non-accrual status as of December 31, 1994 were $272
million of fixed maturities and $743 million of mortgage loans, including
restructurings of $148 million and $543 million, respectively. If interest on
these investments had been recognized in accordance with their original terms,
net income would have been increased by $12 million, $14 million and $17 million
in 1995, 1994 and 1993, respectively.
<PAGE>
B) Realized Investment Gains and Losses: Realized gains and losses on
investments, excluding policyholder share, for the year ended December 31 were
as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
(In millions) 1995 1994 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Realized investment gains (losses):
Fixed maturities $ (10) $ 4 $ 28
Mortgage loans (5) - (5)
Equity securities 5 2 (5)
Real estate 4 15 (66)
Other (1) 6 (17)
------- ------ --------
(7) 27 (65)
Income tax (benefits) expenses (2) 12 (16)
- --------------------------------------------------------------------------------
Net realized investment gains (losses) $ (5) $ 15 $ (49)
- ------------------------------------------------================================
</TABLE>
Impairments in the value of investments, net of recoveries, that are included
in realized investment gains and losses were $27 million, $33 million and $55
million in 1995, 1994 and 1993, respectively.
Realized investment gains (losses) for separate accounts, which are not
reflected in the Company's revenues, were $412 million, ($51) million and $612
million for the years ended December 31, 1995, 1994 and 1993, respectively.
Realized investment (losses) attributable to policyholder contracts, which also
are not reflected in the Company's revenues, were ($6) million and ($5) million
for the years ended December 31, 1995 and 1993, respectively. Realized
investment gains (losses) attributable to policyholder contracts were zero for
the year ended December 31, 1994.
Sale of available-for-sale fixed maturities and equity securities, including
policyholder share, for the year ended December 31 were as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
(In millions) 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Proceeds from sales $ 1,667 $ 2,116
Gross gains on sales $ 78 $ 73
Gross losses on sales $ (53) $ (70)
- --------------------------------------------------------------------------------
</TABLE>
Prior to the SFAS No. 115 reclassification described in Note 2(B), $171
million of fixed maturities classified as held-to-maturity, including
policyholder share, were transferred to the available-for-sale category in 1995
resulting in the recognition in Shareholder's Equity of unrealized depreciation
of $15 million, net of policyholder-related amounts and deferred income taxes.
During 1994, the Company sold $14 million of held-to-maturity fixed maturities,
including policyholder share, resulting in gross proceeds of $12 million and a
pre-tax realized loss of $2 million,. In addition, in 1994 $82 million of fixed
maturities classified as held-to-maturity, including policyholder share, were
transferred to the available-for-sale category at fair value, which was not
significantly different from the carrying value. The sales of fixed maturities
classified as held to maturity and the transfer of such securities to the
available-for-sale category were the result of significant credit deterioration
of the issuers of the affected investments.
Prior to adoption of SFAS No. 115, proceeds from voluntary sales of
investments in fixed maturities, including policyholder share, were $599 million
in 1993. Such sales resulted in gross realized gains and gross realized
(loses), including policyholder share, of $36 million and ($3) million,
respectively. These amounts exclude the effects of sales of fixed maturities
that, prior to the implementation of SFAS No. 115, were classified as short-term
investments.
NOTE 5 - SHAREHOLDER'S EQUITY AND DIVIDEND RESTRICTIONS
The Connecticut Insurance Department (the Department) recognizes as net income
and surplus (shareholder's equity) those amounts determined in conformity with
statutory accounting practices prescribed or permitted by the Department, which
differ in certain respects from generally accepted accounting principles. As of
December 31, 1994, there were no permitted accounting practices utilized by the
Company that were materially different from those prescribed by the Department.
Capital stock of the Company at December 31, 1995 and 1994 consisted of
5,978,322 shares of common stock authorized, issued and outstanding (par value
$5.00).
The Company's statutory net income was $390 million, $428 million and $397
million for 1995, 1994 and 1993, respectively. Statutory surplus was $2.1
billion and $2.0 billion at December 31, 1995 and 1994, respectively. The
Connecticut Insurance Holding Company Act limits the amount of annual dividends
or other distributions available to shareholders of Connecticut insurance
companies without prior approval of the Insurance Commissioner. Under
-13-
<PAGE>
current law, the maximum dividend distribution that may be made by the Company
during 1996 without prior approval is $432 million. The amount of restricted
net assets as of December 31, 1995 was approximately $4.1 billion.
NOTE 6 - INCOME TAXES
The Company's net deferred tax asset of $403 million and $661 million as of
December 31, 1995 and 1994, respectively, reflects management's belief that the
Company's taxable income in future years will be sufficient to realize the net
deferred tax asset based on the Company's earnings history and its future
expectations. In determining the adequacy of future taxable income, management
considered the future reversal of its existing taxable temporary differences and
available tax planning strategies that could be implemented, if necessary.
In accordance with the Life Insurance Company Income Tax Act of 1959, a
portion of the Company's statutory income was not subject to current income
taxation but was accumulated in an account designated Policyholders' Surplus
Account. Under the Tax Reform Act of 1984, no further additions may be made to
the Policyholders' Surplus Account for tax years ending after December 31,
1983. The balance in the account of approximately $450 million at December 31,
1995 would result in a tax liability of $158 million, only if distributed to
the shareholders or if the account balance exceeded a prescribed maximum. No
income taxes have been provided on this amount because, in management's opinion,
the likelihood that these conditions will be met is remote.
CIGNA's federal income tax returns are routinely audited by the Internal
Revenue Service (IRS), and provisions are made in CIGNA's financial statements
in anticipation of the results of these audits.
In managment's opinion, adequate tax liabilities have been established for
all years.
The tax effect of temporary differences which give rise to deferred income tax
assets and liabilities as of December 31 were as follows:
- --------------------------------------------------------------------------------
(In millions) 1995 1994
- --------------------------------------------------------------------------------
Deferred tax assets:
Insurance and contractholder liabilities $ 324 $ 337
Employee and retiree benefit plans 176 175
Investments, net 225 220
Unrealized depreciation on investments - 30
Other 72 71
---- ----
Total deferred tax assets 797 833
Deferred tax liabilities:
Policy acquisition expenses 25 60
Depreciation 97 102
Unrealized appreciation on investments 272 -
Other - 10
---- ----
Total deferred tax liabilities 394 172
- --------------------------------------------------------------------------------
Deferred income taxes, net $ 403 $ 661
- --------------------------------------------------------========================
Total income tax expense was less than the amount computed using the nominal
federal income tax rate of 35% for the following reasons:
- --------------------------------------------------------------------------------
(In millions) 1995 1994 1993
- --------------------------------------------------------------------------------
Tax expense at nominal rate $ 266 $ 271 $261
Tax-exempt interest income (6) (7) (6)
Dividends received deduction (7) (3) (4)
Amortization of goodwill 4 4 5
Resolved federal tax audit issues - (2) (3)
Increase in deferred tax asset for
tax rate change - - (13)
Other, net - 2 (4)
- --------------------------------------------------------------------------------
Total income tax expense $ 257 $ 265 $ 236
- ----------------------------------------========================================
<PAGE>
Temporary and other differences which resulted in the deferred tax expense
(benefit) for the year ended December 31 were as follows:
- --------------------------------------------------------------------------------
(In millions) 1995 1994 1993
- --------------------------------------------------------------------------------
Insurance and contractholder liabilities $ 13 $ 93 $ (80)
Policy acquisition expenses (35) (8) (39)
Investments, net (21) (19) (36)
Employee and retiree benefit plans (1) (9) (16)
Realized investment (gains) losses 16 (20) (24)
Other (16) 8 (2)
- --------------------------------------------------------------------------------
Deferred taxes (benefits) $(44) $ 45 $(197)
- -------------------------------------------------------=========================
NOTE 7 - PENSION AND OTHER POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS PLANS
A) Pension Plans: The Company provides retirement benefits to eligible
employees and agents. These benefits are provided through a plan sponsored by
CIGNA covering most domestic employees (the Plan) and by several separate
pension plans for various subsidiaries, agents and foreign employees.
The Plan is a non-contributory, defined benefit, trusteed plan available to
eligible domestic employees. Benefits are based on employees' years of service
and compensation during the highest three or, if service commenced after
December 31, 1988, five consecutive years of employment, offset by a portion of
the Social Security benefit for which they are eligible. CIGNA funds at least
the minimum amount required by the Employee Retirement Income Security Act of
1974. Allocated pension cost for the Company was $23 million, $31 million and
$27 million in 1995, 1994 and 1993, respectively.
The Plan, and several separate pension plans for various subsidiaries and
agents, had deposits with the Company totalling approximately $2.0 billion and
$1.7 billion at December 31, 1995 and 1994, respectively.
B) Other Postretirement Benefits Plans: In addition to providing pension
benefits, the Company provides certain health care and life insurance benefits
to retired employees, spouses and other eligible dependents through various
plans sponsored by CIGNA. A substantial portion of the Company's employees may
become eligible for these benefits upon retirement. CIGNA's contributions for
health care benefits depend upon a retiree's date of retirement, age, years of
service and other cost-sharing features, such as deductibles and coinsurance.
Under the terms of the benefit plans, benefit provisions and cost-sharing
features can be adjusted. In general, retiree health care benefits are not
funded by CIGNA, but are paid as covered expenses are incurred. Retiree life
insurance benefits are paid from plan assets or as covered expenses are
incurred.
An employer's postretirement benefit liability is primarily measured by
determining the present value of the projected future costs of health benefits
based on an estimate of health care cost trend rates. Expense for postretirement
benefits other than pensions allocated to the Company totalled $20 million for
1995, $28 million for 1994 and $15 million for 1993. The other postretirement
benefit liability included in Accounts Payable, Accrued Expenses and Other
Liabilities as of December 31, 1995 and 1994 was $427 million and $422 million,
including net intercompany payables of $28 million and $29 million,
respectively, for services provided by affiliates' employees.
C) Other Postemployment Benefits: The Company provides certain salary
continuation (severance and disability), health care and life insurance benefits
to inactive and former employees, spouses and other eligible dependents through
various employee benefit plans sponsored by CIGNA.
Although severance benefits accumulate with additional service, the Company
recognizes severance expense when severance is probable and the costs can be
reasonably estimated. Postemployment benefits other than severance generally do
not vest or accumulate; therefore, the estimated cost of benefits is accrued
when determined to be probable and estimable, generally upon disability or
termination. See Note 8 for additional information regarding severance accrued
as part of cost reduction initiatives.
D) Capital Accumulation Plans: CIGNA sponsors various capital accumulation
plans which employee contributions on a pre-tax basis (401(k)) are supplemented
by CIGNA matching contributions. Contributions are invested, at the election of
the employee, in one or more of the following investments: CIGNA common stock
fund, several non-CIGNA stock and bond portfolios and a fixed-income fund. The
Company's expense for such plans totaled $14 million for 1995 and 1994 and $13
million for 1993.
<PAGE>
NOTE 8 - SEGMENT INFORMATION
The Company operates principally in three segments: Employee Life and Health
Benefits, Employee Retirement and Savings Benefits, and Individual Financial
Services. Other Operations consists principally of the results of the Company's
settlement annuity business.
Summarized financial information with respect to the business segments for
the year ended and as of December 31 was a follows:
- --------------------------------------------------------------------------------
(in millions) 1995 1994 1993
- --------------------------------------------------------------------------------
REVENUES
Employee Life and Health Benefits $ 4,243 $ 4,194 $ 3,811
Employee Retirement and Savings
Benefits 1,914 1,887 2,044
Individual Financial Services 1,800 1,546 1,351
Other Operations 181 173 190
- --------------------------------------------------------------------------------
Total $ 8,138 $ 7,800 $ 7,396
- --------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES
Employee Life and Health Benefits $ 294 $ 323 $ 378
Employee Retirement and Savings
Benefits 232 258 172
Individual Financial Services 252 237 198
Other Operations (17) (44) (2)
- --------------------------------------------------------------------------------
Total $ 761 $ 774 $ 746
- --------------------------------------------------------------------------------
IDENTIFIABLE ASSETS
Employee Life and Health Benefits $ 7,629 $ 7,197 $ 7,307
Employee Retirement and Savings
Benefits 37,609 33,588 34,068
Individual Financial Services 16,189 12,612 9,824
Other Operations 2,569 2,111 2,283
- --------------------------------------------------------------------------------
Total $63,996 $55,508 $53,482
- --------------------------------------------------------------------------------
During 1995, the Company recorded a $13 million pre-tax charge, include in
Other Operating Expenses, for cost reduction initiatives in the Employee Life
and Health Benefits segment. The charge consisted primarily of severance-
related expenses representing costs associated with nonvoluntary employee
terminations covering approximately 1,100 employees. The cash outlays
associated with the restructuring initiatives began in the third quarter of
1995 and will continue through 1997, with most of the cash outlays expected to
occur in 1996. During 1995, $3 million of severance was paid to 500 terminated
employees. During 1993, the Company implemented cost reduction initiatives in
the Employee Life and Health Benefits segment to reduce operating expenses.
Results for 1993 reflected a pre-tax charge of $8 million for the estimated
costs of these cost reduction actions. The Company has funded, and will
continue to fund, these costs through liquid assets, and such funding will not
have a material adverse effect on its liquidity.
<PAGE>
NOTE 9 - LEASES AND RENTALS
Rental expenses for operating leases, principally with respect to buildings,
amounted to $60 million, $62 million and $66 million in 1995, 1994 and 1993,
respectively.
As of December 31, 1995, future net minimum rental payments under
non-cancelable operating leases were $92 million, payable as follows:
1996 - $37 million; 1997 - $24 million; 1998 - $13 million; 1991 - $9 million;
2000 - $4 million: and $5 million thereafter.
NOTE 10 - REINSURANCE
In the normal course of business, the Company enters into agreements,
primarily relating to short-duration contracts, to assume and cede reinsurance
with other insurance companies. Reinsurance is ceded primarily to limit loses
from large exposures and to permit recovery of a portion or direct losses,
although ceded reinsurance does not relieve the originating insurer of
liability. The Company evaluates the financial condition of its reinsurers and
monitors concentrations of credit risk arising from similar geographic regions,
activities, or economic characteristic of its reinsurers.
Failure of reinsurers to indemnify the Company, as a result of reinsurer
insolvencies and disputes, could result in losses. As of December 31, 1995 and
1994 there were no allowances for uncollectible amounts. While future charges
for unrecoverable reinsurance may materially affect results of operations in
future periods, such amounts are not expected to have a material adverse effect
on the Company's liquidity or financial condition.
The effects of reinsurance on net earned premiums and fees for the year ended
December 31 were as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
(In Millions) 1995 1994 1993
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Short-duration contracts
Premiums and Fees:
Direct $ 3,374 $ 3,419 $ 2,666
Assumed 818 716 1,248
Ceded (391) (291) (329)
- ---------------------------------------------------------------------------------------
Net earned premiums and fees $ 3,801 $ 3,844 $ 3,585
- ------------------------------------------------=======================================
Long-duration contracts
Premiums and Fees:
Direct $ 1,189 $ 1,068 $ 1,023
Assumed 127 126 166
Ceded (119) (78) (70)
- ---------------------------------------------------------------------------------------
Net earned premiums and fees $ 1,197 $ 1,116 $ 1,119
- ------------------------------------------------=======================================
</TABLE>
The effects of reinsurance on written premiums and fees for short-duration
contracts were not materially different from the amounts shown above. Benefits,
Losses and Settlement Expenses for 1995, 1994 and 1993 were net of reinsurance
recoveries of $574 million, $415 million and $603 million, respectively.
NOTE 11 - CONTINGENCIES
A) Financial Guarantees: The Company is contingently liable for financial
guarantees provided in the ordinary course of business on the repayment of
principal and interest on certain industrial revenue bonds. The contractual
amounts of financial guarantees reflect the Company's maximum exposure to credit
loss in the event of nonperformance. To limit the Company's exposure in the
event of default of any guaranteed obligation, various programs are in place to
ascertain the creditworthiness of guaranteed parties, to monitor this status on
a periodic basis and to reduce risk through security arrangements.
-17-
<PAGE>
The industrial revenue bonds guaranteed directly by the Company have remaining
maturities of up to 20 years. The guarantees provide for payment of debt
service only as it becomes due; consequently, an event of default would not
cause an acceleration of scheduled principal and interest payments. The
principal amount of the bonds guaranteed by the Company at December 31, 1995
and 1994 was $266 million and $296 million, respectively. Revenues in
connection with industrial revenue bond guarantees are derived principally from
equity participation in the related projects and are included in Net Investment
Income as earned. Loss reserves for financial guarantees are established when
a default has occurred or when the Company believes that a loss has been
incurred. During 1994, losses for industrial revenue bonds were $1 million.
There were no such losses in 1995 and 1993.
The Company also guarantees a minimum level of benefits for certain separate
account contracts and, in the event that separate account assets are
insufficient to fund minimum policy benefits, the Company is obligated to fund
the difference. As of December 31, 1995 and 1994, the amount of minimum
benefit guarantees for separate account contracts was $5.1 billion and $4.8
billion, respectively. Reserves in addition to the separate account liabilities
are established when the Company believes a payment will be required under one
of these guarantees. As of December 31, 1994, reserves of $6 million were
recorded. No such reserves were required as of December 31, 1995. Guarantee
fees are part of the overall management fee charged to separate accounts and are
recognized in income as earned.
Although the ultimate outcome of any loss contingencies arising from the
Company's financial guarantees may adversely affect results of operations in
future periods, they are not expected to have a material adverse effect on the
Company's liquidity or financial condition.
B) Regulatory and Industry Developments: The Company's businesses are subject
to a changing social, economic, legal, legislative and regulatory environment
that could affect them. Some of the changes include initiatives to: reform the
federal tax system; restrict insurance pricing and the application of
underwriting standards; reform health care; and expand regulation. Some of the
more significant issues are discussed below.
Legislation is expected to be considered by Congress that is likely to
limit, and eventually substantially eliminate, the tax deductibility of policy
loan interest for corporate-owned life insurance. The outcome of such
legislation is uncertain and, although it could have a material adverse effect
on results of operations for the Individual Financial Services segment, it is
not expected to be material to the Company's consolidated results of operations,
liquidity or financial condition.
The Company expects proposals for federal and state legislation seeking some
health care insurance reforms. Due to uncertainties associated with the timing
and content of any health car legislation, the effect on the Company's future
results of operations, liquidity or financial condition cannot be reasonably
estimated at this time.
In recent years, the number of insurance companies that are impaired or
insolvent has increased. This is expected to result in an increase in mandatory
assessments by state guaranty funds of, or voluntary payments by, solvent
insurance companies to cover losses to policyholders of insolvent or
rehabilitated companies. Mandatory assessments, which are subject to statutory
limits, can be partially recovered through a reduction in future premium taxes
in some states. The Company recorded pre-tax charged of $17 million, $12
million and $10 million for 1995, 1994 and 1993, respectively, for guaranty
fund assessments that can be reasonably estimated before giving effect to future
premium tax recoveries. Although future assessments and payments may adversely
affect results of operations in future periods, such amounts are not expected
to have a material adverse effect on the Company's liquidity or financial
condition.
The eventual effect on the Company of the changing environment in which it
operates remains uncertain.
C) Litigation: The Company is routinely engaged in litigation incidental to
its business, including litigation associated with syndicated investment
products. While the outcome of all litigation involving the Company, including
insurance-related litigation, cannot be determined, litigation is not expected
to result in losses that differ from recorded reserves by amounts that would be
material to results of operations, liquidity or financial condition.
-18-
<PAGE>
NOTE 12 - FAIR VALUE OF FINANCIAL INSTRUMENTS
Financial instruments that are subject to fair value disclosure requirements
(insurance contracts, real estate, goodwill and taxes are excluded) are carried
in the financial statements at amounts that approximate fair values, unless
otherwise indicated in the following table. The fair values used for financial
instruments are estimates that in many cases may differ significantly from the
amounts that could be realized upon immediate liquidation. In cases where market
prices are not available, estimates of fair value are based on discounted cash
flow analyses which utilize current interest rates for similar financial
instruments with comparable terms and credit quality. The fair value of
liabilities for contractholder deposit funds was estimated using the amount
payable on demand and, for those not payable on demand, discounted cash flow
analyses.
The following table presents carrying amounts and estimated fair values as of
December 31 for the Company's financial instruments that are not carried in the
financial statements at amounts approximating fair value.
1995 1994
- --------------------------------------------------------------------------------
Carrying Fair Carrying Fair
(In millions) Amount Value Amount Value
- --------------------------------------------------------------------------------
Assets:
Fixed maturities-held $ - $ - $ 10,061 $ 10,075
to maturity
Mortgage loans $ 10,218 $ 10,364 $ 8,975 $ 8,610
Liabilities:
Contractholder deposit funds-
non-insurance products $ 19,797 $ 19,890 $ 18,561 $ 18,381
================================================================================
For additional information on fair values of fixed maturities, see Note 2(A).
Fair values of off-balance-sheet financial instruments as of December 31, 1995
and 1994 were not material.
NOTE 13 - RELATED PARTY TRANSACTIONS
The Company has ceded group accident and health business under an
experienced-rated stop loss agreement to CIGNA P&C. Reinsurance recoverables
from CIGNA P&C were $1.3 billion at December 31, 1994. During 1993, the Company
earned experience-rated refunds from CIGNA P&C, net of premiums ceded, of $63
million. Effective January 1, 1995 the treaty was cancelled. Reserves of
approximately $300 million, primarily related to long-term disability business,
were recaptured in 1995, with CIGNA P&C assuming responsibility for runout
claims on the remaining reserves. Assets, principally mortgages, with a fair
market value equal to reserves were received as part of the recapture. The
Company has assumed the settlement annuity and group pension business written by
Life Insurance Company of North America (LINA), an affiliate. Reserves held by
the Company with respect to this business were $1.7 billion at December 31, 1995
and 1994.
The Company cedes long-term disability business to LINA. Reinsurance
recoverables from LINA at December 31, 1995 and 1994 were $996 million and $992
million, respectively.
The Company had lines of credit available from affiliates totaling $600
million at both December 31, 1995 and 1994. All borrowings are payable upon
demand with interest rates equivalent to CIGNA's average monthly short-term
borrowing rate plus 1/4 of 1%. Interest expense was $1 million and $3 million
for 1994 and 1993 respectively. As of December 31, 1995 and 1994, there were no
borrowings outstanding under such lines.
The Company extended lines of credit to affiliates totalling $600 million at
December 31, 1995 and 1994. All loans are payable upon demand with interest
rates equivalent to CIGNA's average monthly short-term borrowing rate. As of
December 31, 1994, the Company had $1.5 million in outstanding loans to
affiliates under such lines. There were no amounts outstanding as of December
31, 1995.
The Company, together with other CIGNA subsidiaries, has entered into a
pooling arrangement known as the CIGNA Corporate Liquidity Account (the Account)
for the purpose of maximizing earnings on funds available for short-term
investments. Withdrawals from the Account, up to the total amount of the
participant's investment in the Account, are allowed on a demand basis. As of
December 31, 1995 and 1994, the Company had a balance in the Account of $212
million and $259 million, respectively.
CIGNA allocates to the Company its share of operating expenses incurred at the
corporate level. The Company also allocates a portion of its operating expenses
to affiliated companies on whose behalf it performs certain administrative
services.
<PAGE>
REGISTRATION STATEMENT
ON
FORM N-4
Part C: OTHER INFORMATION
Item 24. Financial Statements and Exhibits
- ------------------------------------------
The following financial statements and exhibits are included as part of this
registration statement:
(a) Financial Statements:
--------------------
Part A: None
------
Part B:
------
(i) Registrant:
Report of Independent Accountants.
Statement of Assets and Liabilities, as of
December 31, 1995.
Statements of Changes in Net
Assets, Years ended December 31, 1995 and
December 31, 1994.
Statements of Operations,Years
ended December 31, 1995 and December 31, 1994.
Notes to Financial Statements.
(ii) Depositor:
Report of Independent Accountants.
Consolidated Statements of Income and Retained Earnings
for the three Years ended December 31, 1995.
Consolidated Balance Sheets as of December 31, 1995
and December 31, 1994.
Consolidated Statements of Cash Flows
for the three Years ended December 31, 1995.
Notes to Consolidated Financial Statements.
(b) Exhibits:
--------
(6) Charter and ByLaws of Connecticut General Life Insurance
Company, filed herewith.
(10) Consent of Independent Accountants is filed herewith.
<PAGE>
Item 25. Directors and Officers of the Depositor
- ------- ---------------------------------------
The list called for by this Item 25 is filed herewith, as attachment (I).
Item 26. Persons Controlled by or Under Common
- ------- -------------------------------------
Control with the Depositor or Registrant
----------------------------------------
CIGNA Corporation is publicly held and, as of the date of this prospectus, has
no information that any person or concern beneficially owns more than five
percent of the outstanding Common Stock, except as reported on three Schedules
13G received in February 1996. CIGNA advises that Sanford C. Bernstein & Co.,
Inc. ("Sanford Bernstein"), One State Street Plaza, New York, NY 10004,reported
that as of December 31, 1995 it held 5,402,831 shares, or 7.40%, of the
outstanding common stock of CIGNA for the accounts of discretionary clients
who have the right to receive dividends on these shares and any proceeds from
the sale of these shares. Sanford Bernstein also reported sole voting power as
to 2,690,715, and sole dispositive power as to 5,402,831, of these shares. FMR
Corp., 82 Devonshire Street, Boston, MA 02109 reported that as of December 31,
1995 it held 5,845,823 shares, or 7.70% of the outstanding common stock of CIGNA
for the accounts of discretionary clients who have the right to receive
dividends on these shares and any proceeds from the sale of these shares. FMR
Corp. also reported sole voting power as to 130,639 and sole dispositive power
as to 5,845,823 of these shares.
The list called for by this Item 26 is filed herewith, as attachment (II).
Item 27. Number of Contractholders
- ------- -------------------------
As of December 31, 1995, the number of Contractholders of CG Variable Annuity
Account I, Group Tax Deferred Variable Annuities was 229.
Item 28. Indemnification
- ------- --------------
(a) The Depositor: The information called for by this item 28 is filed
-------------
herewith, as attachment (III).
(b) The Principal Underwriter: The information called for by this item 28
-------------------------
is filed herewith, as attachment (IV).
Item 29. Principal Underwriter:
---------------------
(a) The principal underwriter for the Contract issued by the Registrant is
CIGNA Financial Advisors, Inc. (F/K/A CIGNA Securities, Inc.) Other
investment companies for which CIGNA Financial Advisors, Inc. act as
principal underwriters are as follows:
- (2 other Variable Annuities)
- CG Variable Annuity Separate Account
- CG Variable Annuity Separate Account II
- CG Variable Life Insurance Separate Account I
In addition, there are two investment companies that are in
registration as of the date of this filing.
<PAGE>
(b) The officers and directors of CIGNA Financial Advisors, Inc.:
<TABLE>
Name and Positions and Offices
Business Address* with Underwriter
---------------- ---------------------
<S> <C>
Edward M. Berube Director & President
John Wilkinson Director
Karen E. Goldman Director & Assistant Vice President
Joy P. McConnell Vice President
Karen R. Matheson Vice President
James F. Meehan Vice President
Michael D. Arnold Vice President
Robert B. Pinkham Assistant Vice President
Allan P. Wick Vice President & Treasurer
David C. Kopp Secretary
Robert A. Picarello Chief Counsel & Assistant Secretary
David A. Carlson Assistant Secretary
Pamela S. Williams Assistant Secretary
Therese M. Squillacote Director of Compliance
Peter R. Scanlon Vice President
Dawn M. Cormier Assistant Secretary
Michael M. Sinisgalli Assistant Treasurer
Brian W. Villalobos Assistant Treasurer
Mary K. Cristino Assistant Treasurer
David M. Porcello Assistant Secretary
H. Edward Cohen Assistant Vice President
</TABLE>
*Address for all is Connecticut General Life Insurance Company,
900 Cottage Grove Road, Bloomfield, Connecticut 06002
Item 30. Location of Accounts and Records
- ------- --------------------------------
Books and other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, and Rules 31a-1 to 31a-3 thereunder are
maintained by CG Life at its Annuity Service Center, and records relating to
Shareholders are maintained by State Street Bank and Trust, P.O. Box 2351,
Boston, Massachusetts 02107
Item 31. Management Services
- ------- -------------------
Not Applicable.
Item 32. Undertakings
- ------- ------------
Not Applicable.
<PAGE>
DIRECTORS AND OFFICERS OF CONNECTICUT GENERAL ATTACHMENT (I)
The following list of directors and officers of Connecticut General Life
Insurance Company ("Connecticut General") includes a brief statement of the
principal business experience during the last five years of each director.
Correspondence with any director or officer may be addressed to Hartford, CT
06152 and will be delivered to the office of Connecticut General at 900 Cottage
Grove Road, Bloomfield, CT 06002.
Thomas C. Jones, President (Principal Executive Officer)
President, CIGNA Individual Insurance, CIGNA Companies. Previously,
President, CIGNA Reinsurance - Property & Casualty, CIGNA Companies;
Executive Vice President and Director, NAC RE CORPORATION.
Harold W. Albert, Director
Chief Counsel, CIGNA Investment Management, CIGNA Companies; Director,
CIGNA Life Insurance Company. Previously, Assistant General Counsel,
Investment Law Department/Department Head, CIGNA Companies.
S. Tyrone Alexander, Director and Senior Vice President
Senior Vice President, Human Resources, CIGNA HealthCare, CIGNA Companies;
Senior Vice President, CIGNA Health Corporation; Director, CIGNA Life
Insurance Company. Previously, Director, Human Resources, E. I. Dupont de
Nemours, Inc.; Director, Human Resources, Dupont Chemicals, E. I. Dupont de
Nemours, Inc.; Director, Human Development, Staffing and Personnel
Relations, E. I. Dupont de Nemours, Inc.
Martin A. Brennan, Director and Senior Vice President
Senior Vice President, CIGNA HealthCare Systems, CIGNA Companies.
Previously, Senior Vice President, CIGNA Worldwide Systems, CIGNA
Companies.
Robert W. Burgess, Director
Senior Vice President and Chief Financial Officer, CIGNA Investment
Management, CIGNA Companies; Director, CIGNA Life Insurance Company.
John G. Day, Director and Chief Counsel
Senior Vice President and Chief Counsel, Insurance Law and Investment Law,
CIGNA Companies; Chief Counsel, Connecticut General Corporation; Director
and Chief Counsel, CIGNA Life Insurance Company. Previously, Director,
Connecticut General Corporation; Director and Chief Counsel, CIGNA
Investment Group, Inc.
Joseph M. Fitzgerald, Director and Senior Vice President
Senior Vice President of Underwriting, CIGNA HealthCare, CIGNA Companies.
Previously, Senior Vice President and Chief Financial Officer, Employee
Benefits Division, CIGNA Companies; Vice President and Chief Financial
Officer, Group Pension Division, CIGNA Companies.
H. Edward Hanway, Director and Chairman of the Board
President, CIGNA HealthCare, CIGNA Companies; Director and Chairman of the
Board, CIGNA Life Insurance Company. Previously, President, CIGNA
International Division, CIGNA Companies; Senior Vice President, Insurance
Company of North America; Vice President of Planning and Business Control,
CIGNA Companies.
Arthur C. Reeds, III, Director and Senior Vice President
President, CIGNA Investment Management, CIGNA Companies; President and
Director , CIGNA Investment Group, Inc. and CIGNA Investments, Inc.;
Director, CIGNA International Investment Advisors, LTD.; Director, CIGNA
Life Insurance Company. Previously, Managing Director, Division Head and
Senior Vice President, CIGNA Investments, Inc.
Patricia L. Rowland, Director and Senior Vice President
Senior Vice President, CIGNA HealthCare, CIGNA Companies; Senior Vice
President and Director, CIGNA Health Corporation. Previously, President,
International Rehabilitation Associates, Inc.; Senior Vice President,
Connecticut General.
W. Allen Schaffer, M.D., Director and Senior Vice President
Senior Vice President, CIGNA HealthCare, CIGNA Companies; President, CIGNA
Health Corporation. Previously, Vice President, Professional Affairs, Aetna
Health Plans, Aetna Life and Casualty; Assistant Vice President, Quality
Management and Training, Aetna Health Plans, Aetna Life and Casualty; Vice
President, Quality Management, Humana, Inc.; Director, Quality Management,
Humana, Inc.
John Wilkinson, Director, Senior Vice President and Chief
Financial Officer
Director, Senior Vice President and Chief Financial Officer, CIGNA Health
Corporation; Senior Vice President, CIGNA HealthCare, CIGNA Companies;
Senior Vice President, Connecticut General Corporation; President and
Director, CIGNA Life Insurance Company. Previously, President, Connecticut
General; Chief Financial Officer, CIGNA Individual Insurance, CIGNA
Companies; Director, Connecticut General Corporation.
Bradley K. Miller, Assistant Vice President and Actuary
Assistant Vice President and Actuary, Corporate Finance, CIGNA Companies.
Previously, Assistant Vice President and Actuary, Pricing, CIGNA Retirement
& Investment Services, CIGNA Companies; Actuary, People Planning and
Development, CIGNA Companies; Associate Actuary, Actuarial Research, CIGNA
HealthCare, CIGNA Companies.
Robert Moose, Vice President (Principal Accounting Officer)
Assistant Vice President, Life Accounting, CIGNA Companies. Previously,
Assistant Vice President, Financial Reporting, CIGNA Companies.
David C. Kopp - Corporate Secretary
Stephen C. Stachelek - Treasurer
Andrew G. Helming - Secretary
<PAGE>
PAGE 1
Attachment (II)
As of 12/31/95
Company Name
- ------------
SOUTHLAND JOINT VENTURE
TERRA NOVA (BERMUDA) HOLDINGS LTD.
AFIA
AFIA (CIGNA) CORPORATION, LIMITED
AFIA (INA) CORPORATION, LIMITED
AFIA FINANCE CORPORATION
AIC HOLDINGS, INC.
AIRPARK ASSOCIATES
ALIC, INCORPORATED
ALL-NET PREFERRED PROVIDERS, INC.
ALLIED INSURANCE COMPANY
AMERICAN ADJUSTMENT COMPANY, INC.
AMERICAN CULTURAL ALLIANCE
AMERICAN LENDERS FACILITIES, INC.
ANF PARTNERS #1
ARABIA CIGNA INSURANCE COMPANY LIMITED E.C.
ASSUREX DEVELOPMENT CORPORATION
ATLANTIC EMPLOYERS INSURANCE COMPANY
BANKERS STANDARD FIRE AND MARINE COMPANY
BANKERS STANDARD INSURANCE COMPANY
BBC WARRANT ACQUISITION CORP.
BENJAMIN CENTER ASSOCIATES
BENJAMIN COOKE ASSOCIATES
BOSTON COMPANIA ARGENTINA DE SEGUROS S.A.
BRANDYWINE HOLDINGS CORPORATION
BRAUN'S FASHION CORPORATION
C&D GROVES
CALIFORNIA SEVEN ASSOCIATES LIMITED PARTNERSHIP
CAPITOL OUTDOOR ACQUISITION CO., INC.
CAPITOL OUTDOOR ADVERTISING, INC.
CAPITOL OUTDOOR LEASING CO., INC.
CB PARTNERS
CENTURY INDEMNITY COMPANY
CENTURY REINSURANCE COMPANY
CG INDIVIDUAL TAX BENEFITS PAYMENTS, INC.
CG LIFE PENSION BENEFITS PAYMENTS, INC.
CG LINA PENSION BENEFITS PAYMENTS, INC.
CG TRUST COMPANY
CGI PARTNERS LP
CGLIC-BOC LIMITED PARTNERSHIP
CHANTILLY PARTNERS
CHAPPARAL PARTNERS
CHARTER OAK VENTURES
CIGNA ADVISORY PARTNERS, INC.
CIGNA ANNUITY FUNDS GROUP
CIGNA ARGENTINA COMPANIA DE SEGUROS S.A.
CIGNA ASSOCIATES, INC.
CIGNA BENEFITS PROCESSING IRELAND LTD.
CIGNA BOND SERVICES, INC.
<PAGE>
PAGE 2
As of 12/31/95
Company Name
- ------------
CIGNA BRASIL EMPREENDIMENTOS LTDA.
CIGNA COMMUNITY CHOICE, INC.
CIGNA COMPANIA DE SEGUROS (CHILE) S.A.
CIGNA COMPANIA DE SEGUROS DE PANAMA S.A.
CIGNA COMPANIA DE SEGUROS DE VIDA (CHILE) S.A.
CIGNA CONFERENCE FACILITIES, INC.
CIGNA CORPORATION
CIGNA DE VENEZUELA INTERMEDIARIOS DE REASEGUROS S.A.
CIGNA DENTAL HEALTH OF CALIFORNIA, INC.
CIGNA DENTAL HEALTH OF COLORADO, INC.
CIGNA DENTAL HEALTH OF DELAWARE, INC.
CIGNA DENTAL HEALTH OF FLORIDA, INC.
CIGNA DENTAL HEALTH OF ILLINOIS, INC.
CIGNA DENTAL HEALTH OF KANSAS, INC.
CIGNA DENTAL HEALTH OF KENTUCKY, INC.
CIGNA DENTAL HEALTH OF MARYLAND, INC.
CIGNA DENTAL HEALTH OF NEW JERSEY, INC.
CIGNA DENTAL HEALTH OF NEW MEXICO, INC.
CIGNA DENTAL HEALTH OF NORTH CAROLINA, INC.
CIGNA DENTAL HEALTH OF OHIO, INC.
CIGNA DENTAL HEALTH OF PENNSYLVANIA, INC.
CIGNA DENTAL HEALTH OF TEXAS, INC.
CIGNA DENTAL HEALTH PLAN OF ARIZONA, INC.
CIGNA DENTAL HEALTH, INC.
CIGNA DIRECT MARKETING COMPANY, INC.
CIGNA EMPLOYERS INSURANCE COMPANY
CIGNA EXCESS AND SURPLUS INSURANCE SERVICES, INC. (PA)
CIGNA EXCESS AND SURPLUS INSURANCE SERVICES, INC. (CA)
CIGNA EXCESS AND SURPLUS INSURANCE SERVICES, INC. (GA)
CIGNA EXCESS AND SURPLUS INSURANCE SERVICES, INC. (IL)
CIGNA FINANCIAL ADVISORS, INC.
CIGNA FINANCIAL FUTURES, INC.
CIGNA FINANCIAL PARTNERS, INC.
CIGNA FINANCIAL SERVICES, INC.
CIGNA FIRE UNDERWRITERS INSURANCE COMPANY
CIGNA FOUNDATION
CIGNA FUND MANAGERS LIMITED
CIGNA FUNDING LIMITED PARTNERSHIP
CIGNA G. B. HOLDINGS, LTD
CIGNA HEALTH CORPORATION
CIGNA HEALTHCARE BENEFITS, INC.
CIGNA HEALTHCARE MID-ATLANTIC, INC.
CIGNA HEALTHCARE OF ARIZONA, INC.
CIGNA HEALTHCARE OF CALIFORNIA, INC.
CIGNA HEALTHCARE OF COLORADO, INC.
CIGNA HEALTHCARE OF CONNECTICUT, INC.
CIGNA HEALTHCARE OF DELAWARE, INC.
CIGNA HEALTHCARE OF FLORIDA, INC.
CIGNA HEALTHCARE OF GEORGIA, INC.
<PAGE>
PAGE 3
As of 12/31/95
Company Name
- ------------
CIGNA HEALTHCARE OF ILLINOIS, INC.
CIGNA HEALTHCARE OF KANSAS/MISSOURI, INC.
CIGNA HEALTHCARE OF LOUISIANA, INC.
CIGNA HEALTHCARE OF MASSACHUSETTS, INC.
CIGNA HEALTHCARE OF NEW JERSEY, INC.
CIGNA HEALTHCARE OF NEW YORK, INC.
CIGNA HEALTHCARE OF NORTH CAROLINA, INC.
CIGNA HEALTHCARE OF NORTH LOUISIANA, INC.
CIGNA HEALTHCARE OF NORTHERN NEW JERSEY, INC.
CIGNA HEALTHCARE OF OHIO, INC.
CIGNA HEALTHCARE OF OKLAHOMA, INC.
CIGNA HEALTHCARE OF PENNSYLVANIA, INC.
CIGNA HEALTHCARE OF ST. LOUIS, INC.
CIGNA HEALTHCARE OF TENNESSEE, INC.
CIGNA HEALTHCARE OF TEXAS, INC.
CIGNA HEALTHCARE OF UTAH, INC.
CIGNA HEALTHCARE OF VIRGINIA, INC.
CIGNA HIGH INCOME SHARES
CIGNA HOLDINGS, INC.
CIGNA HOTEL ASSOCIATES-I LIMITED PARTNERSHIP
CIGNA INCOME REALTY-I LIMITED PARTNERSHIP
CIGNA INDEMNITY INSURANCE COMPANY
CIGNA INFORMATION SERVICES, INC.
CIGNA INSTITUTIONAL FUNDS GROUP
CIGNA INSURANCE ASIA PACIFIC LIMITED
CIGNA INSURANCE COMPANY
CIGNA INSURANCE COMPANY (HELLAS) S.A.
CIGNA INSURANCE COMPANY LIMITED
CIGNA INSURANCE COMPANY OF CANADA
CIGNA INSURANCE COMPANY OF EUROPE S.A.-N.V.
CIGNA INSURANCE COMPANY OF ILLINOIS
CIGNA INSURANCE COMPANY OF OHIO
CIGNA INSURANCE COMPANY OF PUERTO RICO
CIGNA INSURANCE COMPANY OF TEXAS
CIGNA INSURANCE COMPANY OF THE MIDWEST
CIGNA INSURANCE NEW ZEALAND LIMITED
CIGNA INTERNATIONAL ASSET FUND LTD.
CIGNA INTERNATIONAL BROKERS, LTD.
CIGNA INTERNATIONAL CORPORATION
CIGNA INTERNATIONAL FINANCE INC.
CIGNA INTERNATIONAL HOLDINGS, LTD.
CIGNA INTERNATIONAL INSURANCE MANAGERS, LTD.
CIGNA INTERNATIONAL INVESTMENT ADVISORS AUSTRALIA LIMITED
CIGNA INTERNATIONAL INVESTMENT ADVISORS K.K.
CIGNA INTERNATIONAL INVESTMENT ADVISORS, LTD.
CIGNA INTERNATIONAL REINSURANCE COMPANY LTD.
CIGNA INTERNATIONAL STRATEGIC FUNDS, L.P.
CIGNA INVESTMENT ADVISORY COMPANY, INC.
CIGNA INVESTMENT GROUP, INC.
<PAGE>
PAGE 4
As of 12/31/95
Company Name
- ------------
CIGNA INVESTMENTS AND PLACEMENTS COMPANY
CIGNA INVESTMENTS, INC.
CIGNA ITALY - SOCIETA A RESPONSABILITA LIMITATA
CIGNA LEVERAGED CAPITAL FUND, INC.
CIGNA LIFE INSURANCE COMPANY
CIGNA LIFE INSURANCE COMPANY OF CANADA
CIGNA LIFE INSURANCE COMPANY OF EUROPE S.A.-N.V.
CIGNA LIFE INSURANCE NEW ZEALAND LIMITED
CIGNA LLOYDS INSURANCE COMPANY
CIGNA MANAGED CARE BENEFITS COMPANY
CIGNA MEZZANINE CAPITAL, INC.
CIGNA MEZZANINE HOLDINGS II, INC.
CIGNA MEZZANINE HOLDINGS, INC.
CIGNA MEZZANINE PARTNERS II, L.P.
CIGNA MEZZANINE PARTNERS III, INC.
CIGNA MEZZANINE PARTNERS III, L.P.
CIGNA MORTGAGE SECURITIES, INC.
CIGNA OVERSEAS FINANCE N.V.
CIGNA OVERSEAS INSURANCE COMPANY LTD.
CIGNA PRIVATE EQUITIES, INC.
CIGNA PROPERTIES, INC.
CIGNA PROPERTY AND CASUALTY INSURANCE COMPANY
CIGNA RE CORPORATION
CIGNA REAL ESTATE FUND S LIMITED PARTNERSHIP
CIGNA REAL ESTATE FUND T LTD PTNRSHP
CIGNA REAL ESTATE, INC.
CIGNA REALTY RESOURCES, INC.-ELEVENTH
CIGNA REALTY RESOURCES, INC.-FIFTEENTH
CIGNA REALTY RESOURCES, INC.-FIFTH
CIGNA REALTY RESOURCES, INC.-FOURTEENTH
CIGNA REALTY RESOURCES, INC.-NINTH
CIGNA REALTY RESOURCES, INC.-SEVENTH
CIGNA REALTY RESOURCES, INC.-TENTH
CIGNA REALTY RESOURCES, INC.-TWELFTH
CIGNA REASEGUROS, S.A.
CIGNA REINSURANCE COMPANY
CIGNA REINSURANCE COMPANY (UK) LIMITED
CIGNA REINSURANCE COMPANY S.A.-N.V.
CIGNA ROAD & TRAVEL CLUB, INC.
CIGNA SALUD ISAPRE S.A.
CIGNA SEGURADORA S.A.
CIGNA SEGUROS DE COLOMBIA S.A.
CIGNA SERVICES U.K. LIMITED
CIGNA SICAV I
CIGNA STAFF PENSION INVESTMENTS LIMITED
CIGNA SUPERANNUATION PTY. LIMITED
CIGNA THAI COMPANY LIMITED
CIGNA VARIABLE PRODUCTS GROUP
CIGNA WORLDWIDE INSURANCE COMPANY
<PAGE>
PAGE 5
As of 12/31/95
Company Name
- ------------
CIGNA-SABANCI SIGORTA ANONIM SIRKETI
CIGNA/WILLOWBROOK ASSOCIATES LIMITED PARTNERSHIP
CIGNA/WILLOWBROOK II ASSOCIATES LIMITED PARTNERSHIP
COAST TO COAST CORPORATION
COLINA INSURANCE COMPANY LIMITED
COLUMBUS SQUARE SHOPPING CENTER COMPANY
COMBINED STATES HOLDING CORPORATION
COMPANIA ANONIMA DE SEGUROS "AVILA"
CONGEN PROPERTIES, INC.
CONNECTICUT GENERAL BENEFIT PAYMENTS, INC.
CONNECTICUT GENERAL CORPORATION
CONNECTICUT GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
CONNECTICUT GENERAL PENSION SERVICES, INC.
CONNECTICUT GENERAL REALTY INVESTORS-III LIMITED PARTNERSHIP
CONNECTICUT GENERAL REALTY RESOURCES, INC.-FOURTH
CONNECTICUT GENERAL REALTY RESOURCES, INC.-THIRD
COTTAGE GROVE VESSELS, INC.
COUNTY SEAT HOLDINGS, INC.
CRAVENS, DARGAN & COMPANY, PACIFIC COAST
CRAVENS, DARGAN & COMPANY, PACIFIC COAST OF ILLINOIS, INC.
CROW-O.C. FUND T
CRUSADER COMPANY (GHANA) LIMITED
CRUSADER INSURANCE COMPANY (GHANA) LIMITED
DELPANAMA S.A.
DISABILITY CLAIM SERVICES, INC.
DIVERSIFIED INSURANCE AGENCY, INC.
DON CE SAR RESORT HOTEL, LTD.
DUTTON PARTNERS
ELLIOTT GROVE ASSOCIATES
EMPRESA GUATEMALTECA CIGNA DE SEGUROS, SOCIEDAD ANONIMA
ERNEST LINSDELL LIMITED
ESIS INTERNATIONAL ASESORIAS LIMITADA
ESIS INTERNATIONAL, INC.
ESIS, INC.
FALKLAND PARTNERS
FIDELITY GAS SYSTEMS, INC.
FIRE, EQUITY AND GENERAL INSURANCE COMPANY LIMITED
FOREST PLACE ASSOCIATES
GLENDALE ASSOCIATES
GLENDALE LIMITED PARTNERSHIP ASSOCIATES - II
GLENDALE OHRBACH'S ASSOCIATES
GOODWIN HOTEL, INC.
GOODWIN SQUARE LLC
GPM GAS GATHERING L.L.C.
GRACE BROADCASTING LIMITED PARTNERSHIP
GRANCOL, ASESORAMIENTO Y SERVICIOS LTDA.
GREYLANDS BUSINESS PARK, PHASE 2
GWYNEDD PARTNERS
<PAGE>
PAGE 6
As of 12/31/95
Company Name
- ------------
HAMPTON LAKES ASSOCIATES
HAZARD CENTER ASSOCIATES
HCW OIL INCOME FUND (DEVONIAN)
HORIZON PLACE ASSOCIATES
ICO, INC.
IFD PROPERTIES, INC.-FIRST
ILLINOIS UNION INSURANCE COMPANY
INA CORPORATION
INA COUNTY MUTUAL INSURANCE COMPANY
INA FINANCIAL CORPORATION
INA HOLDINGS, CORPORATION
INA INVESTMENT SECURITIES, INC.
INA LIFE INSURANCE CO., LTD.
INA LIFE INSURANCE COMPANY OF NEW YORK
INA OVERSEAS PROPERTIES, LTD.
INA SURPLUS INSURANCE COMPANY
INA TAX BENEFITS REPORTING, INC.
INAC CORP.
INAC CORP. OF CALIFORNIA
INACAN HOLDINGS LTD.
INAMAR, LTD.
INAMEX, S.A.
INDEMNITY INSURANCE COMPANY OF NORTH AMERICA
INDI SERVICIOS C. LTDA.
INSTITUTIONAL REGIONAL MALL INVESTORS
INSURANCE COMPANY OF NORTH AMERICA
INSURANCE COMPANY OF NORTH AMERICA (U.K.) LIMITED
INTERNATIONAL REHABILITATION ASSOCIATES, INC.
INTERNATIONAL SURPLUS ADJUSTING SERVICES
INTRACORP PEER REVIEW ORGANIZATION, INC.
INTRACORP, INC.
INVERSIONES CONTINENTAL, S.A. DE C.V.
INVERSIONES INA LIMITADA
JACOMO PRIMARY CARE, P.C.
KNOLLWOOD ASSOCIATES LIMITED PARTNERSHIP
KOLL CENTER IRVINE NO. 2 PARTNERSHIP
KOLL-TUSTIN BUSINESS CENTER
L. S. HOLDING COMPANY
LA POSITIVA, COMPANIA NACIONAL DE SEGUROS SOCIEDAD ANONIMA
LA VENEZOLANA DE VIDA COMPANIA ANONIMA DE SEGUROS
LATINA HOLDINGS, LTD.
LEWIS & NORWOOD, GENERAL AGENTS, INC.
LIFE INSURANCE COMPANY OF NORTH AMERICA
LINA BENEFIT PAYMENTS, INC.
LOVELACE HEALTH SYSTEMS, INC.
LP ASSOCIATES
LPA ASSOCIATES
LPB ASSOCIATES
LPC ASSOCIATES
<PAGE>
PAGE 7
As of 12/31/95
Company Name
- ------------
LPD ASSOCIATES
LPY ASSOCIATES
LPZ ASSOCIATES
MAINE ASSOCIATES
MALROSIAN, INC.
MARITIME GENERAL INSURANCE COMPANY LIMITED
MARKETDYNE INTERNATIONAL, INC.
MCC BEHAVIORAL CARE OF CALIFORNIA, INC.
MCC BEHAVIORAL CARE, INC.
MCC INDEPENDENT PRACTICE ASSOCIATION OF GREATER NEW YORK, INC
MCCANDLESS SAN TOMAS NO. 2
MCCANDLESS SANTOMAS NO. 1
METROPOLIS GENERAL PARTNERSHIP
MISSION VIEJO ASSOCIATES
MNH MALL, LLC
NATIONAL ELECTRONIC INFORMATION CORPORATION
NATIONAL EMPLOYEE BENEFITS CORPORATION
NEW ORLEANS RIVERWALK ASSOCIATES
NORTH CENTRAL TEXAS INDEPENDENT PRACTICE ASSOCIATION, P.A.
NORTH COAST INVESTMENT CORPORATION
NORTH LAUREL JOINT VENTURE
OAKS AT BAYMEADOW ASSOCIATES
OAKS AT REGENCY ASSOCIATES
OPENCONNECT SYSTEMS, INC.
ORCHARD GLEN VENTURE
P.T. ASURANSI CIGNA INDONESIA
P.T. ASURANSI NIAGA CIGNA LIFE
PACIFIC EMPLOYERS INSURANCE COMPANY
PALMER PLAZA, LIMITED
PARCWOOD-SACRAMENTO JOINT VENTURE
PARKVILLE PRIMARY CARE, P.C.
PCC ENERGY INC.
PCGP, INC.
PEACHTREE WYNFREY ASSOCIATES
PETROCORP HOLDINGS, INC.
PETROCORP INCORPORATED
PETROCORP MANAGEMENT, INC.
PETROCORP PRIVATE DRILLING LIMITED PARTNERSHIP 1983-1
PETROCORP PRIVATE DRILLING LTD. 1984-1
PETROCORP PRIVATE DRILLING LTD. 1984-2
PETROCORP PRIVATE DRILLING LTD. 1985-1
PETROCORP RESERVE ACQUISITION FUND, LTD.-l
PHILADELPHIA INVESTMENT CORPORATION OF DELAWARE
PROGRESSIVE PARTNERS (FORT STREET)
PROGRESSIVE PARTNERS (WING WO TAI BUILDING)
PSYCHOLOGICAL MANAGED CARE CONSULTANT, P.C.
PUEBLO MALL LIMITED PARTNERSHIP
QUEBEC STREET INVESTMENTS, INC.
R&B METRO CENTER ASSOCIATES
<PAGE>
PAGE 8
As of 12/31/95
Company Name
- ------------
RAILROAD INSURANCE BROKERS, INC.
RAIN AND HAIL INSURANCE SERVICE INCORPORATED
RECOVERY SERVICES INTERNATIONAL, INC.
REFLECTIONS PARTNERS CORP.
REGIONAL MALL - CII, L.P.
REGIONAL MALL DEVELOPMENT PARTNERS LIMITED PARTNERSHIP
RETAIL/INSTITUTIONAL JOINT VENTURE
RIDGEDALE JOINT VENTURE
RIDGEDALE REIT PARTNERSHIP
RIDGEDALE REIT, INC.
RIYAD INSURANCE COMPANY LTD.
ROBERT F. COLEMAN, INC.
ROSS LOOS HOSPITAL, INC.
SADDLEBACK ASSOCIATES
SADDLEBACK II ASSOCIATES
SAFIRE PRIVATE LIMITED
SAN RAMON CORPORATION
SAN RAMON PARTNERS
SAN TOMAS NO. 1 LIMITED PARTNERSHIP
SECON PROPERTIES
SEGUROS AZTECA, S.A.
SEGUROS CIGNA, S.A.
SEGUROS SAINT PAUL DE VENEZUELA, C.A.
SELF-INSURERS' MANAGEMENT CORPORATION
SILVER BROOK REAL ESTATE DEVELOPMENT COMPANY
SOUTH BAY TECH CENTER ASSOCIATES
SOUTH BAY/VIADEL ORO
SOUTH PASADENA ASSOCIATES
SOUTHLAND REIT PARTNERSHIP
SOUTHLAND REIT, INC.
SUMARE PROCESSAMENTO E SERVICOS S.A.
SWIFT CREEK JOINT VENTURE
TEL-DRUG, INC.
TEMPLE INSURANCE COMPANY LIMITED
THE ARAB INTERNATIONAL INSURANCE COMPANY
THE CROSSINGS ASSOCIATES
THE FIFTH AND RACE COMPANY LIMITED PARTNERSHIP
THE MORGAN STANLEY LEVERAGED EQUITY FUND L.P.
THE MORGAN STANLEY LEVERAGED MEZZANINE FUND L.P.
THE MORGAN STANLEY LEVERAGED SENIOR DEBT FUND L.P.
THE TULSA CORPORATION
TOWN COLONY ASSOCIATES
TOWN COLONY II ASSOCIATES
TRILOG, INC.
TYSON'S CORNER HOTEL ASSOCIATES
UNIVERSITY COLLECTION ASSOCIATES
VICTORIA HALL COMPANY LIMITED
WARNER NEWHOPE ASSOCIATES
WATERFORD PARTNERSHIP
<PAGE>
PAGE 9
As of 12/31/95
Company Name
- ------------
WESTERN AGENCY MANAGEMENT, INC.
WESTFORD OFFICE VENTURE
WOOD FOREST ASSOCIATES
WOOD HILLS ASSOCIATES
WORCESTER CENTER JOINT VENTURE
1717 MAIN STREET CORPORATION
2525 EAST ARIZONA BILTMORE CIRCLE CORPORATION
6100 FAIRVIEW ASSOCIATES
<PAGE>
Attachment III
STATEMENT
---------
The undersigned, Vice President and Principal Accounting Officer of the
depositor, Connecticut General Life Insurance Company, pursuant to
Rule 27d-2(a)(2) under the Investment Company Act of 1940, as amended, certifies
as follows:
The fiscal year of the depositor, Connecticut General Life Insurance Company,
extends from January 1 through December 31. During the most recent complete
fiscal year (January 1, 1995 through December 31, 1995), and from
January 1, 1996 to date, said insurance company has, continuously and at all
times, met the requirements of paragraph (a) (1) of Rule 27d-2 under the
Investment Company Act of 1940, as amended.
/s/ Robert Moose
----------------------
Robert Moose
Vice President (Principal
Accounting Officer)
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it meets all the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) or 486(b) under the Securities
Act of 1933 and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Bloomfield
and State of Connecticut on the 8th day of March, 1996.
By Connecticut General Life Insurance Company
(Depositor)
By /s/ Thomas C. Jones
------------------------------------------
Thomas C. Jones
Pursuant to the Requirements of the Securities Act of 1933, this amended
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Date Signature Title
- ---- --------- -----
<S> <C> <C>
3/08/96 /s/ Thomas C. Jones
- -------- ----------------------- President (Principal
Thomas C. Jones Executive Officer
2/29/96 /s/ Bradley K Miller
- ------- ----------------------- Assistant Vice President
Bradley K Miller and Actuary (Principal
Financial Officer)
2/28/96 /s/ Robert Moose
- ------- ----------------------- Vice President
Robert Moose (Principal Accounting
Officer)
2/27/96 /s/ Andrew G. Helming
- ------- ----------------------- Secretary
Andrew G. Helming
2/27/96 /s/ Harold W. Albert
- ------- ----------------------- Director
Harold W. Albert
2/23/96 /s/ S. Tyrone Alexander
- ------- ----------------------- Director
S. Tyrone Alexander
2/28/96 /s/ Martin A. Brennan
- ------- ----------------------- Director
Martin A. Brennan
</TABLE>
<PAGE>
Date Signature Title
- ---- --------- -----
2/27/96 /s/ Robert W. Burgess Director
- -------- ---------------------------
Robert W. Burgess
3/5/96 /s/ John G. Day Director
- -------- ---------------------------
John G. Day
2/23/96 /s/ Lawrence P. English Director
- -------- --------------------------- Resigned 2/29/96
Lawrence P. English
2/23/96 /s/ Joseph M. Fitzgerald Director
- -------- ---------------------------
Joseph M. Fitzgerald
Director
- -------- ---------------------------
Arthur C. Reeds, III
/s/ Patricia L. Rowland Director
- -------- ---------------------------
Patricia L. Rowland
3/1/96 /s/ W. Allen Schaffer, M.D. Director
- -------- ---------------------------
W. Allen Schaffer, M.D.
2/23/96 /s/ John Wilkinson Director
- -------- ---------------------------
John Wilkinson
<PAGE>
Exhibit Index
(b) Exhibits
(6) Charter and Bylaws of Connecticut General Life Insurance Company,
filed herewith.
(10) Consent of Independent Accountants, filed herewith.
<PAGE>
Exhibit 6
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
CERTIFICATE OF BYLAWS
This is to certify that, effective July 25, 1983, the bylaws of Connecticut
General Life Insurance Company were amended to read as follows:
=================
ARTICLE 1
The annual meeting of the stockholders shall be held on the fourth Monday in
April or on such other date as the directors may designate and at such place as
they may determine. All other meetings of the stockholders shall be held at
such times and places as the directors may determine. A written or printed
notice of any meeting shall be mailed to each stockholder at least ten days
prior to the meeting.
ARTICLE 2
The number and terms of office of the directors shall be determined from time to
time by the board of directors. No person shall be elected as a director after
attaining the age of 70 years. The compensation of directors shall be as
determined by the directors.
ARTICLE 3
The directors shall hold meetings at such times and places as they may
determine. Special meetings of the directors may be called by the chairman of
the board and shall be called by the chairman of the board or in his absence by
another director upon request in writing of the president or of any three
directors. One-third of the total number of directors shall constitute a
quorum. Action of the directors shall be by majority vote of the directors
present.
ARTICLE 4
The directors shall determine the order of their business and their rules of
order and they shall preserve a written record of their doings.
<PAGE>
ARTICLE 5
The directors, by resolution adopted by a majority of the entire board, may
appoint from their number one or more committees, each consisting of two or more
directors and each of which, to the extent provided in such resolution, shall
have all the authority of the board. A majority of the members of a committee
shall constitute a quorum.
ARTICLE 6
The directors shall choose from among their number a chairman of the board and
shall elect a president, one or more vice presidents and one or more
secretaries, including a corporate secretary. They may also authorize the
chairman of the board, the president or other designated officers to appoint
such officers, other than the chairman of the board, the president and the
corporate secretary, with such titles, duties and powers as the appointing
officer may deem desirable.
ARTICLE 7
All loans and purchases for investment shall be authorized or approved by the
directors or by an authorized committee of the board.
ARTICLE 8
Real estate may be sold by the president or a vice president or an assistant
vice president and the instrument of conveyance shall be executed by the
president or a vice president or an assistant vice president and by a secretary
or an assistant secretary or an investment officer or an assistant investment
officer.
The sale of real estate where either the cost or the sale price exceeds
$1,000,000 shall be authorized or approved by the directors or an authorized
committee of the board, and all sales of real estate shall be reported to the
directors or an authorized committee of the board.
The president or a vice president or an assistant vice president or a secretary
or an assistant secretary or an investment officer or an assistant investment
officer is authorized to execute releases (or to execute powers authorizing
specific releases), assignments, or other instruments relating to mortgages,
trust deeds, judgment liens, or other liens, and to execute leases or other
contracts relating to real estate, and the president or a vice president or an
assistant vice president may delegate to others by written instrument authority
to execute leases.
<PAGE>
ARTICLE 9
The sale or other disposition of any investments other than those specifically
provided for in Article 8 shall be authorized or approved by the directors or an
authorized committee of the board.
The president or a vice president or an assistant vice president or a secretary
or an assistant secretary or an investment officer or an assistant investment
officer is authorized to execute any instruments necessary in connection with
the purchase or the sale or other disposition of any investments other than
those specifically provided for in Article 8 and to execute any agreements
relating to any such investments.
The directors or an authorized committee of the board may at any time and from
time to time enlarge, restrict or in any way modify the authorizations granted
in Article 8 and 9.
ARTICLE 10
Auditors shall be chosen at each annual meeting of the stockholders and their
compensation shall be as determined by the directors.
ARTICLE 11
Transfers of stock shall be made only upon the books of the company. A transfer
agent may be employed.
===================
I further certify that the above bylaws are now in full force and effect, and
that I am an official of Connecticut General Life Insurance Company with the
title indicated.
Dated at Bloomfield, Connecticut this day of ,
19
__________________________________________
Signature of Official
__________________________________________
Title
<PAGE>
Charter
of
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
________________________
Consisting of Connecticut Special Act No. 173 of 1947 and the amendments
made by Special Act No. 530 of 1953, Special Act No. 76 of 1959, Special
Act No. 358 of 1963 and Special Act No. 351 of 1967.
This document also contains the Resolution of the General Assembly of
Connecticut, approved June 22, 1865, under which Connecticut General Life
Insurance Company was organized June 26, 1865, together with all amendments
to date.
October 27, 1967
<PAGE>
Charter
of
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
SECTION 1. Connecticut General Life Insurance Company shall continue under
that name, a body corporate, with power to purchase or otherwise acquire, have,
hold and enjoy lands, tenements, hereditaments, chattels, bonds, stocks, monies,
choses in action and property and effects of every kind, and the same to sell,
grant, demise, alien and convey and to loan, invest and reinvest any of such
assets in any manner now or hereafter permitted in the case of any other
corporation now or hereafter chartered by Connecticut and empowered to do a life
insurance business; to sue and be sued and to plead and be impleaded in all
courts of law and equity; to have and to hold and to change at pleasure a common
seal, and to ordain and to put into execution and to change at pleasure by-laws
consistent with the laws of this state and of the United States.
SEC. 2. The business of the corporation shall be life insurance,
endowments, annuities, accident insurance, health insurance and any other
business or type of business which any other corporation now or hereafter
chartered by Connecticut and empowered to do a life insurance business may now
or hereafter lawfully do; and the corporation is specifically empowered to
accept and to cede reinsurance of any such risks or hazards. The corporation
may exercise such powers outside of Connecticut to the extent permitted by the
laws of the particular jurisdiction. Policies or other contracts may be issued
stipulated to be with or without participation in profits; and they may be with
or without seal.
SEC. 3. The capital stock of the corporation shall be not less than three
million dollars and may from time to time be increased when and as authorized by
the stockholders and, unless the stockholders otherwise authorize, shall be
divided into shares of the par value of five dollars each. The capital stock of
the corporation shall be transferable in accordance with the bylaws; and a
transfer agent may be employed.
SEC. 4. The annual meeting of the stockholders of the corporation shall be
held at such time during the first half of each year and upon such notice as may
be determined from time to time either by or in accordance with the by-laws. If
the corporation shall fail to hold its annual meeting at the time specified for
the meeting in any year or shall fail to elect directors thereat, the
corporation shall not be dissolved nor shall its rights be impaired thereby, but
a special meeting of the stockholders shall be called; and at such meeting
directors to fill the places of the directors whose terms shall have expired may
be
2
<PAGE>
elected and any other proper business may be transacted. At all meetings of the
stockholders each stockholder shall be entitled to vote in person or by an
attorney duly authorized by a written proxy, each share of stock represented at
the meeting shall be entitled to one vote and the stockholders represented at
the meeting shall constitute a quorum.
SEC. 5. The corporate office shall be at Hartford or at some other town in
Connecticut and the corporation may establish and maintain other offices and
agencies in other towns of Connecticut and elsewhere. The property and affairs
of the corporation shall be managed by a board of not less than nine directors,
the number and the terms of office to be determined from time to time by the
board of directors in accordance with the by-laws, provided no director shall be
elected for a longer term than five years. The directors shall be chosen by
ballot by the stockholders except that if any vacancy occurs in the board of
directors such vacancy may be filled by the remaining directors for the
unexpired portion of the term, and if the number of directors is increased by
vote of the board of directors between meetings of stockholders, the additional
directors, not to exceed three, may be chosen by the board of directors for
terms expiring with the next annual meeting thereafter. Unless the bylaws
provide otherwise, five directors shall constitute a quorum. Directors serving
on the date of the acceptance of this act shall continue to serve for the terms
for which they were elected.
SEC. 6. The directors of the corporation shall choose from among their
number a president and shall elect one or more vice presidents, one or more
secretaries and such other officers as they may deem desirable. The president
shall be elected to hold office until the next annual meeting, but he may
continue to serve until his successor shall have been chosen; and the other
officers may be elected for like or for different terms and they may be removed
at any time at the pleasure of the directors.
SEC. 7. Connecticut General Life Insurance Company is authorized to adopt a
plan of exchange under the terms of which the shares of its issued and
outstanding capital stock shall be exchanged for shares of Connecticut General
Insurance Corporation on a basis which shall be specified in the plan of
exchange. No such exchange shall be effected unless the plan of exchange is
first adopted by the board of directors of Connecticut General Life Insurance
Company and approved by the affirmative vote of the holders of at least two-
thirds of the voting power of the outstanding shares of its capital stock, nor
unless there has been filed in the office of the secretary of the state a
certificate setting forth the plan of exchange and the stockholder vote thereon,
and a copy of a certificate of the insurance commissioner stating that he has
approved and authorized the plan of exchange as provided in section 38-35 of the
general statutes. Any shareholder of Connecticut General Life Insurance Company
who objects to the plan of exchange shall have the right to be paid the value of
all
3
<PAGE>
shares of Connecticut General Life Insurance Company owned by him (but excluding
such value as is attributable to his interest as a beneficiary under the CG
Stockholders Trust and for which he is entitled to be compensated by Aetna
Insurance Company) in accordance with the provisions of section 33-374 of the
general statutes. For purposes of section 33-374, such shareholder shall be
deemed to be designated in subsection (c) of section 33-373 of the general
statutes; and Connecticut General Life Insurance Company shall have all the
rights and obligations of a "corporation" under section 33-374, provided the
term "corporation," as used in said section, shall refer only to Connecticut
General Life Insurance Company and the third sentence of section 33-374(h) shall
have no application. Except as may be otherwise provided in the plan of
exchange, and except as to shares for which payment must be made pursuant to the
two previous sentences, on the date on which the exchange becomes effective, all
certificates representing shares of the issued and outstanding stock of
Connecticut General Life Insurance Company shall automatically and without any
physical transfer or deposit be deemed for all purposes to be certificates
representing shares of the issued and outstanding stock of Connecticut General
Insurance Corporation.
SEC. 8. The charter of the Connecticut General Life Insurance Company,
incorporated by a resolution approved June 22, 1865, as amended, is hereby
further amended to read as above; and this act shall be valid as an amendment to
the charter of the corporation and shall constitute the charter of the
corporation if, within two years after its passage, it shall be accepted at a
meeting of the corporation duly warned and held for that purpose and an attested
copy of such acceptance filed in the office of the secretary of the state.
Special Act No. 173 of 1947 approved May 28, 1947; Certificate of Acceptance
filed February 3, 1948.
Special Act No. 536 of 1953 approved July 1, 1953; Certificate of Acceptance
filed February 23, 1954.
Special Act No. 76 of 1959 approved May 11, 1959; Certificate of Acceptance
filed January 26, 1960.
Special Act No. 358 of 1963 approved June 27, 1963; Certificate of Acceptance
filed March 10, 1964.
Special Act No. 351 of 1967 approved June 28, 1967; Certificate of Acceptance
filed October 27, 1967.
____________________
4
<PAGE>
STATE OF CONNECTICUT, GENERAL ASSEMBLY,
May Session, A. D. 1865.
Incorporating the Connecticut General Life Insurance Company.
Upon the petition of Edwin D. Tiffany and others, praying for an act of
incorporation:
Resolved by this Assembly, SEC. 1. That Edwin D. Tiffany, Henry C. Deming,
John C. Palmer, Jonathan B. Bunce, George S. Gilman, Ebenezer N. Kellogg, John
A. Butler, Henry J. Johnson and George D. Jewett, with all others that may
become associated with them as stockholders, as hereinafter provided, and their
successors, be and they are hereby created a body corporate, for the purpose of
life insurance, and other purposes hereinafter mentioned, by the name of the
Connecticut General Life Insurance Company, and by that name are empowered to
purchase, have, hold and enjoy lands, tenements, hereditaments, chattels,
stocks, choses in action, and effects of every kind, and the same to sell,
grant, demise, aliene and convey; to sue and be sued, plead and be impleaded in
all courts of law and equity; to have and hold a common seal, and the same to
change at pleasure; and to ordain and put into execution by-laws and
regulations, as they may deem proper for the well ordering of said corporation,
and the transaction of its business: provided such by-laws and regulations be
consistent with the laws of this state and of the United States.
SEC. 2. The capital stock of said corporation shall not be less than five
hundred thousand dollars, and may be increased by vote of the stockholders, at
any time, to one million of dollars; the shares of the capital stock to be of
the value of one hundred dollars each; upon which ten dollars shall be paid upon
each share at the time it is subscribed for, as hereinafter provided, and ten
dollars additional shall be paid upon each share of stock subscribed for, to
said corporation, within twenty days from the time of the organization of said
company, and the remaining eighty dollars per share shall, within twenty days
from the organization of said company, be paid into the treasury of said
corporation, or be secured to be- paid, either by mortgage of real estate, or by
such indorsed promissory notes as shall be approved by the directors of said
company.
SEC. 3. The capital stock of said company shall be transferable according
to their by-laws; and if any subscriber to said stock shall fail to pay his
subscription or secure the same to be paid as aforesaid for the space of thirty
days after the same shall become due, and if, upon the increase of the capital
stock of said company, any subscriber to the same shall fail to pay the
installments as called for by the directors of said company for the space of
thirty days after the same shall become due, then said stock of such delinquent
subscriber shall be sold by the directors
5
<PAGE>
at public auction upon at least fifteen days notice of such sale by publication
in some newspaper published in Hartford, and the proceeds of said sale shall be
first applied to the expenses of said sale and payment of the installments due
upon the stock, and the balance of proceeds, if any, shall be refunded to the
owner of said stock. The delinquent stockholders may be notified in such way as
the by-laws may provide of the maturity of the installments. The stock, sold in
manner above provided for, shall entitle the purchaser to all the rights of a
stockholder, to the extent of shares so Purchased.
SEC. 4. The business of said corporation shall be life insurance and
annuities, and contracts of insurance may be made, providing for all risks,
hazards, guarantees and contingencies to which life insurance is applicable,
conferring endowments and granting and purchasing annuities upon such conditions
and for such periods of time as may be determined by said corporation; and said
company may procure such re-insurance of their risks as may be deemed desirable.
Policies may be issued, stipulated to be with or without participation in
profits, and all dividends which shall be allotted to such participating
policies which are not claimed and called for within two years after the same
shall have been declared shall be forfeited to said company.
SEC. 5. Said company may issue policies upon lives for the benefit of and
payable to married women; and all contracts of insurance, so beneficial to
married women, whether made with said married women or with other persons in
their behalf, shall be, if so expressed in the policy, the sole and separate
estate of said married woman, and may be made payable at the maturity of said
policies, in case of previous death of said married women, to their children;
and the discharge of said policies by said married women, or their assigns and
their children (or their guardians, if minors), in case of death of said married
women, shall be a valid discharge of said contracts.
SEC. 6. The office of said company shall be located at Hartford, and its
affairs shall be managed by not less than seven nor more than twenty directors
(their number to be determined by the by-laws), to be chosen by ballot from
among and by the stockholders, a majority of whom shall be residents of this
state, which directors first chosen shall hold office until the first Tuesday in
May next ensuing the date of their election, and until others are chosen to
supply their places; and the annual meetings for the choice of directors shall,
after the first election, be holden at the city of Hartford on the first Tuesday
in May, or on such other day in the month of May as shall be determined by the
by-laws of said corporation. Each share of stock represented by the holder or
his proxy shall be entitled to one vote in the choice of directors.
SEC. 7. If it shall so happen that a choice of directors shall not be made
at the time of any annual meeting, said corporation
6
<PAGE>
shall not be thereby dissolved, but an election may be had within one year
thereafter at some time signified by the directors last chosen. Public notice
by order of the directors shall always be given at least ten days previous to
any meeting of the stockholders in a newspaper printed at Hartford. The
president may call a special meeting of stockholders at the request of five of
the directors.
SEC. 8. To carry out the provisions of this charter, and to organize the
said corporation, Edwin D. Tiffany, Jonathan B. Bunce and George S. Gilman are
authorized and appointed to receive subscriptions to the capital stock thereof
and the payment of the first installment thereon, and when three thousand shares
of said stock shall have been subscribed for, and the first installment has been
paid thereon, upon their said Tiffany, Bunce and Gilman's call, by notice
published in a newspaper printed in Hartford ten days before the time of said
meeting, the subscribers may meet at the time and place named in said call, and
adopt such by-laws, rules and regulations as they may deem proper, in compliance
with this act; and said subscribers may at said meeting elect a board of
directors in the manner aforesaid, to hold office as above provided; and when
the by-laws have been adopted, and the board of directors have been organized by
the choice of a president and secretary, the said corporation may exercise all
the power conferred by this act.
SEC. 9. The directors may choose a president, vice-president and secretary,
and appoint such other officers, clerks and agents, and establish such agencies
in this state and elsewhere as shall be by them deemed advisable for conducting
the business of said company; fix their compensation, and take bonds of any and
all of them for the faithful discharge of their duties, and may make such
covenants and agreements as may be deemed necessary, and such contracts and
agreements signed either by the president or secretary shall be binding on said
company. The president and vice-president shall be chosen from the board of
directors, and may hold their appointments for one year, and until others are
chosen in their places; the other officers and employees of said company may be
removed, and new ones appointed at the pleasure of the directors. In the
absence or disability of the president and vice-president, the directors may
choose a president pro tempore, and in case a vacancy occurs in the board of
directors, the remaining directors may fill such vacancy.
SEC. 10. All policies or other contracts of insurance authorized by this
act may be made with or without the seal of said corporation, and shall be
signed by the president or vice-president and the secretary, and when so signed
and executed shall be binding and obligatory upon said corporation, according to
the true intent and meaning of said policies and contracts.
SEC. 11. The capital stock acquired monies and personal estate of said
corporation may be invested, at the discretion of
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the directors, in loans upon real estate, in bonds and mortgages, in loans upon
or purchase of United States notes and bonds, bank stocks or bonds issued by
states or by municipal or other corporations, or may be loaned upon indorsed
promissory notes not having more than twelve months to run; and the same may be
called in and re-invested under the provisions of this act; and it shall be the
duty of said corporation to make an annual report to the general assembly,
containing a full and accurate statement of its condition and affairs.
SEC. 12. This act shall take effect from the day of its passage, and may
be altered, amended or repealed at the pleasure of the general assembly; and
nothing contained therein shall be so construed as to authorize said company to
engage in the business of banking.
Approved, June 22, 1865.
____________________
STATE OF CONNECTICUT, GENERAL ASSEMBLY.
January Session, A. D. 1873.
Authorizing the Connecticut General Life Insurance Company to Reduce its
Capital Stock.
Upon the petition of the Connecticut General Life Insurance Company for
reduction of its capital stock:
Resolved by this Assembly. SECTION 1. That power and authority be, and
hereby are, given to the Connecticut General Life Insurance Company to reduce
its capital stock, from time to time, to any amount not less than $125,000, by
reducing the number of shares, or the par value of the shares, of the respective
stockholders of said company, pro rata, and to return that portion of the
capital represented by stock notes to the respective stockholders whenever the
stockholders and directors shall so elect, and to return the cash portion of
said capital authorized by this act whenever the assets of said company shall
show a net surplus by the official valuation of the insurance department of this
state, exclusive of its capital stock, of the sum of twenty-five thousand
dollars, and a majority of the stockholders shall so vote, at a meeting or
meetings duly warned and held for acting on said subject, and said stockholders'
vote shall have been approved by a vote of at least two-thirds of the directors
of said company.
SEC. 2. Whenever the stockholders and directors of said company shall have
voted any reduction of the capital stock as aforesaid the directors shall
immediately cause a certificate of said action, signed by their president in the
name and behalf of said company, and countersigned by their secretary, and under
the
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corporate seal of said company, and acknowledged in the manner required by law
for conveyance of land, to be filed in the office of the secretary of this state
for record, and thereupon the charter of said company shall be deemed to be
amended in respect to the amount of its capital, and the number or the par value
of its shares, so as to conform to the said reduction voted and certified to the
secretary of state; and said company shall, with such reduced capital, possess
the same rights, and be subject to the same liabilities, that it possessed or
was subject to at the time of said reduction.
SEC. 3. After said reduction of capital as aforesaid said company, by a
majority vote of its directors, may require each stockholder to return his
original certificate of stock held by him, and in lieu thereof shall issue new
certificates of stock for such number of shares, or of such par value as said
stockholders shall be entitled to in the proportion that the reduced capital
shall bear to the capital before said reduction; and said company shall
reimburse and pay each stockholder the par value of the reduced amount of his
stock in said company by first returning to him, or endorsing as paid on his
stock-note or notes held by the company the amount of said reduction if said
notes equal said reduction; and, in case said notes do not equal the amount of
said reduction, shall pay the balance in cash upon surrender of the original
certificate of stock.
Approved, June 19, 1873.
(Certificate of Acceptance filed February 28, 1874.)
____________________
STATE OF CONNECTICUT, GENERAL ASSEMBLY,
January Session, A. D. 1911.
[Senate Joint Resolution No. 51.]
[27.]
AMENDING THE CHARTER OF THE CONNECTICUT GENERAL LIFE INSURANCE COMPANY.
Resolved by this Assembly. SECTION 1. That the annual meeting of the
Connecticut General Life Insurance Company, after the year 1911, shall be holden
at the city of Hartford on the first Tuesday of February, or on such other day
in the month of February as shall be determined by the bylaws of said
corporation.
SEC. 2. Said corporation is hereby authorized and empowered to insure
persons against loss of life or personal injury resulting
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from any cause, and against loss resulting from disabilities caused by disease.
SEC. 3. The affairs of said corporation shall be managed by not less than
nine nor more than fifteen directors, the number thereof to be determined by the
by-laws, a majority of whom shall be residents of this state, and who shall be
chosen by ballot from among and by the stockholders in manner following: at the
next annual meeting after the acceptance of this amendment the stockholders
shall elect not less than three nor more than five directors to serve for the
term of one year, not less than three nor more than five directors to serve for
the term of two years, and not less than three nor more than five directors to
serve for the term of three years; and annually thereafter not less than three
nor more than five directors shall be elected to hold office for the term of
three years. Whenever any vacancy shall occur in the board of directors by the
death or resignation of a director, such vacancy may be filled by the remaining
directors for the remainder of the term for which such director was elected.
SEC. 4. So much of the resolution incorporating said company, approved
June 22, 1865, as is inconsistent herewith is hereby, repealed.
Approved, March 9, 1911.
(Certificate of Acceptance filed June 1, 1911.)
____________________
STATE OF CONNECTICUT, GENERAL ASSEMBLY,
January Session, A. D. 1921.
[House Bill No. 510.]
[101.]
AN ACT AMENDING THE CHARTER OF THE CONNECTICUT GENERAL LIFE INSURANCE COMPANY.
Be it enacted by the Senate and House of Representatives in General Assembly
convened:
SECTION 1. The Connecticut General Life Insurance Company, incorporated
under resolution approved June 22, 1865, is hereby authorized to increase its
capital stock to an amount not exceeding in the aggregate the sum of five
million dollars.
SEC. 2. This act shall become operative as an amendment to the charter of
the Connecticut General Life Insurance Company if within one year after its
approval it shall be accepted at a meeting of
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said corporation duly warned and held for that purpose and an attested copy of
such acceptance filed in the office of the secretary of the state.
Approved, April 13, 1921.
(Certificate of Acceptance filed February 9, 1922.)
____________________
STATE OF CONNECTICUT, GENERAL ASSEMBLY,
January Session, A. D. 1929.
[Substitute for Senate Bill No. 207.]
[96.]
AN ACT AMENDING THE CHARTER OF THE CONNECTICUT GENERAL LIFE INSURANCE COMPANY.
Be it enacted by the Senate and House of Representatives in General Assembly
convened:
SECTION 1. The Connecticut General Life Insurance Company, incorporated by
resolution approved June 22, 1865, from time to time, may change the par value
and number of shares of its issued and outstanding capital stock, provided the
par value shall be not less than ten dollars for each share and the aggregate
par value be not altered by such change; but no such change shall be valid
unless approved by a vote of at least two-thirds of the stock represented at a
meeting of the stockholders duly warned and held for that purpose nor unless a
majority of the directors shall make, sign and swear to and file in the office
of the secretary of the state a certificate stating that such change has been
duly approved by the stockholders and setting forth a copy of the vote of the
stockholders, which vote shall show the details of such change.
SEC. 2. Said corporation may, from time to time, and to the amount of
capital stock authorized by its charter, issue shares of stock with the same par
value as that of its then outstanding capital stock.
SEC. 3. This act shall be valid as an amendment to the charter of said
corporation if, within one year after its passage, it shall be accepted at a
meeting of said corporation duly warned and held
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for that purpose and an attested copy of such acceptance filed in the office of
the secretary of the state.
Approved, April 18, 1929.
(Certificate of Acceptance filed November 18, 1929.)
____________________
STATE OF CONNECTICUT, GENERAL ASSEMBLY,
January Session, A. D. 1941.
[Senate Bill No. 694.]
[480.]
AN ACT AMENDING THE CHARTER OF THE CONNECTICUT GENERAL LIFE INSURANCE COMPANY.
Be it enacted by the Senate and House of Representatives in General Assembly
convened:
SECTION 1. The Connecticut General Life Insurance Company incorporated
under a resolution approved June 22, 1865, is authorized to increase its capital
stock to an amount not exceeding in the aggregate the sum of ten million
dollars.
SEC. 2. The Connecticut General Life Insurance Company is authorized to
subscribe for, purchase, hold or dispose of capital stock of the Connecticut
General Casualty Insurance Company and the Connecticut General Insurance
Company.
SEC. 3. This act shall be valid as an amendment to the charter of said
corporation if, within two years after its passage, it shall be accepted at a
meeting of said corporation duly warned and held for that purpose and an
attested copy of such acceptance filed in the office of the secretary of the
state.
Approved, June 24, 1941.
(Certificate of Acceptance filed February 3, 1942.)
____________________
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STATE OF CONNECTICUT, GENERAL ASSEMBLY,
January Session, A. D. 1947.
[Substitute for Senate Bill No. 639.]
[173.]
AN ACT AMENDING THE CHARTER OF THE CONNECTICUT GENERAL LIFE INSURANCE COMPANY.
SECTION 1. Connecticut General Life Insurance Company shall continue
under that name, a body corporate, with power to purchase or otherwise acquire,
have, hold and enjoy lands, tenements, hereditaments, chattels, bonds, stocks,
monies, choses in action and property and effects of every kind, and the same to
sell, grant, demise, alien and convey and to loan, invest and reinvest any of
such assets in any manner now or hereafter permitted in the case of any other
corporation now or hereafter chartered by Connecticut and empowered to do a life
insurance business; to sue and be sued and to plead and be impleaded in all
courts of law and equity; to have and to hold and to change at pleasure a common
seal, and to ordain and to put into execution and to change at pleasure by-laws
consistent with the laws of this state and of the United States.
SEC. 2. The business of the corporation shall be life insurance,
endowments, annuities, accident insurance, health insurance and any other
business or type of business which any other corporation now or hereafter
chartered by Connecticut and empowered to do a life insurance business may now
or hereafter lawfully do; and the corporation is specifically empowered to
accept and to cede reinsurance of any such risks or hazards. The corporation
may exercise such powers outside of Connecticut to the extent permitted by the
laws of the particular jurisdiction. Policies or other contracts may be issued
stipulated to be with or without participation in profits; and they may be with
or without seal.
SEC. 3. The capital stock of the corporation shall be not less than
three million dollars and may from time to time be increased when and as
authorized by the stockholders to any sum not exceeding in the aggregate twenty
million dollars and, unless the stockholders otherwise authorize, shall be
divided into shares of the par value of ten dollars each. The capital stock of
the corporation shall be transferable in accordance with the by-laws; and a
transfer agent may be employed.
SEC. 4. The annual meeting of the stockholders of the corporation
shall be held at such time during the first half of
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each year and upon such notice as may be determined from time to time either by
or in accordance with the by-laws. If the corporation shall fail to hold its
annual meeting at the time specified for the meeting in any year or shall fail
to elect directors thereat, the corporation shall not be dissolved nor shall its
rights be impaired thereby, but a special meeting of the stockholders shall be
called; and at such meeting directors to fill the places of the directors whose
terms shall have expired may be elected and any other proper business may be
transacted. At all meetings of the stockholders each stockholder shall be
entitled to vote in person or by an attorney duly authorized by a written proxy,
each share of stock represented at the meeting shall be entitled to one vote and
the stockholders represented at the meeting shall constitute a quorum.
SEC. 5. The corporate office shall be at Hartford but the corporation
may establish and maintain other offices and agencies in other towns of
Connecticut and elsewhere. The property and affairs of the corporation shall be
managed by a board of not less than nine directors, the number from time to time
to be determined either by or in accordance with the by-laws. The directors
shall be chosen by ballot from among and by the stockholders and shall be
divided into three classes. At each annual meeting one class of directors shall
be elected, each director so elected to hold office for a term expiring with the
third annual meeting thereafter, but he may continue to serve until his
successor shall have been chosen. In the event of an increase in the number of
directors the term of any such additional director shall expire at the same time
as the terms of the other members of the class to which he shall have been
assigned. When any vacancy shall occur in the board of directors such vacancy
may be filled by the remaining directors for the unexpired portion of the term.
Unless the by-laws provide otherwise, three directors shall constitute a quorum.
Directors serving on the date of the acceptance of this act shall continue to
serve for the terms for which they were elected.
SEC. 6. The directors of the corporation shall choose from among their
number a president and shall elect one or more vice presidents, one or more
secretaries and such other officers as they may deem desirable. The president
shall be elected to hold office until the next annual meeting, but he may
continue to serve until his successor shall have been chosen; and the other
officers may be elected for like or for different terms and they may be removed
at any time at the pleasure of the directors.
SEC. 7. The charter of the Connecticut General Life Insurance Company,
incorporated by a resolution approved June 22, 1865, as amended, is hereby
further amended to read as above; and this act shall be valid as an amendment to
the charter of the corporation and shall constitute the charter of the
corporation if, within two years after its passage, it shall be accepted at a
meeting of the corporation duly warned and held for that purpose and an attested
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copy of such acceptance filed in the office of the secretary of the state.
Approved, May 28, 1947.
(Certificate of Acceptance filed February 3, 1948.)
____________________
STATE OF CONNECTICUT, GENERAL ASSEMBLY,
January Session, A. D. 1953.
[Substitute for Senate Bill No. 462.]
[536.]
AN ACT AMENDING THE CHARTER OF THE CONNECTICUT GENERAL LIFE INSURANCE COMPANY.
SECTION 1. Section 3 of number 173 of the special acts of 1947 is
amended to read as follows: The capital stock of the corporation shall be not
less than three million dollars and may from time to time be increased when and
as authorized by the stockholders to any sum not exceeding in the aggregate
fifty million dollars and unless the stockholders otherwise authorize, shall be
divided into shares of the par value of ten dollars each. The capital stock of
the corporation shall be transferable in accordance with the by-laws; and a
transfer agent may be employed.
SEC. 2. Section 5 of said act is amended to read as follows: The
corporate office shall be at Hartford or at some other town in Connecticut and
the corporation may establish and maintain other offices and agencies in other
towns of Connecticut and elsewhere. The property and affairs of the corporation
shall be managed by a board of not less than nine directors, the number from
time to time to be determined either by or in accordance with the by-laws. The
directors shall be chosen by ballot from among and by the stockholders and shall
be divided into three classes. At each annual meeting one class of directors
shall be elected, each director so elected to hold office for a term expiring
with the third annual meeting thereafter, but he may continue to serve until his
successor shall have been chosen. In the event of an increase in the number of
directors the term of any such additional director shall expire at the same time
as the terms of the other members of the class to which he shall have been
assigned. When any vacancy shall occur in the board of directors such vacancy
may be filled by the remaining directors for the unexpired portion of the term.
Unless the by-laws provide otherwise, three directors shall constitute a quorum.
Directors serving on the date of the acceptance
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of this act shall continue to serve for the terms for which they were elected.
SEC. 3. This act shall be valid as an amendment to the charter of the
corporation if, within two years after its passage, it shall be accepted at a
meeting of the corporation duly warned and held for that purpose and an attested
copy of such acceptance filed in the office of the secretary of the state.
Approved, July 1, 1953.
(Certificate of Acceptance filed February 23, 1954.)
____________________
STATE OF CONNECTICUT, GENERAL ASSEMBLY,
January Session, A. D. 1959.
[Substitute for House Bill No. 2655.]
[76.]
AN ACT AMENDING THE CHARTER OF CONNECTICUT GENERAL LIFE INSURANCE COMPANY,
CONCERNING THE BOARD OF DIRECTORS.
SECTION 1. Section 5 of the charter of the Connecticut General Life
Insurance Company, incorporated under a resolution approved June 22, 1865, as
amended by number 173 of the special acts of 1947, and section 2 of number 536
of the special acts of 1953, is amended to read as follows: The corporate office
shall be at Hartford or at some other town in Connecticut and the corporation
may establish and maintain other offices and agencies in other towns of
Connecticut and elsewhere. The property and affairs of the corporation shall be
managed by a board of not less than nine directors, the number and the terms of
office to be determined from time to time by the board of directors in
accordance with the by-laws, provided no director shall be elected for a longer
term than five years. The directors shall be chosen by ballot from among and by
the stockholders except that if any vacancy shall occur in the board of
directors such vacancy may be filled by the remaining directors for the
unexpired portion of the term, and if the number of directors shall be increased
by vote of the board of directors between meetings of stockholders the
additional directors, not to exceed three, may be chosen by the board of
directors for terms expiring with the next annual meeting thereafter. Unless
the by-laws provide otherwise, five directors shall constitute a quorum.
Directors serving on the date of the acceptance of this act shall continue to
serve for the terms for which they were elected.
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SEC. 2. This act shall be valid as an amendment to the charter of the
corporation if, within two years after its passage, it shall be accepted at a
meeting of the corporation duly warned and held for that purpose and an attested
copy of such acceptance filed in the office of the secretary of the state.
Approved May 11, 1959.
(Certificate of Acceptance filed January 26, 1960.)
____________________
STATE OF CONNECTICUT, GENERAL ASSEMBLY,
January Session, A. D. 1963
[House Bill No. 3699.]
[358.]
AN ACT CONCERNING THE CAPITAL STOCK OF CONNECTICUT GENERAL LIFE INSURANCE
COMPANY.
SECTION 1. Section 3 of the charter of the Connecticut General Life
Insurance Company is amended to read as follows: The capital stock of the
corporation shall be not less than three million dollars and may from time to
time be increased when and as authorized by the stockholders and, unless the
stockholders otherwise authorize, shall be divided into shares of the par value
of five dollars each. The capital stock of the corporation shall be
transferable in accordance with the bylaws; and a transfer agent may be
employed.
SEC. 2. This act shall be valid as an amendment to the charter of the
corporation if, within two years after its passage, it shall be accepted at a
meeting of the corporation duly warned and held for that purpose and an attested
copy of such acceptance filed in the office of the secretary of the state.
Approved June 27, 1963.
(Certificate of Acceptance filed March 10, 1964.)
____________________
17
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STATE OF CONNECTICUT, GENERAL ASSEMBLY,
January Session, A. D. 1967
[Substitute for House Bill No. 2626.]
[351.]
AN ACT AMENDING THE CHAPTER OF CONNECTICUT GENERAL LIFE INSURANCE COMPANY.
SECTION 1. The charter of Connecticut General Life Insurance Company
is amended by inserting immediately after section 6 the following new section 7:
Connecticut General Life Insurance Company is authorized to adopt a plan of
exchange under the terms of which the shares of its issued and outstanding
capital stock shall be exchanged for shares of Connecticut General Insurance
Corporation on a basis which shall be specified in the plan of exchange. No
such exchange shall be effected unless the plan of exchange is first adopted by
the board of directors of Connecticut General Life Insurance Company and
approved by the affirmative vote of the holders of at least two-thirds of the
voting power of the outstanding shares of its capital stock, nor unless there
has been filed in the office of the secretary of the state a certificate setting
forth the plan of exchange and the stockholder vote thereon, and a copy of a
certificate of the insurance commissioner stating that he has approved and
authorized the plan of exchange as provided in section 38-35 of the general
statutes. Any shareholder of Connecticut General Life Insurance Company who
objects to the plan of exchange shall have the right to be paid the value of all
shares of Connecticut General Life Insurance Company owned by him (but excluding
such value as is attributable to his interest as a beneficiary under the CG
Stockholders Trust and for which he is entitled to be compensated by Aetna
Insurance Company) in accordance with the provisions of section 33-374 of the
general statutes. For purposes of section 33-374, such shareholder shall be
deemed to be designated in subsection (c) of section 33-373 of the general
statutes; and Connecticut General Life Insurance Company shall have all the
rights and obligations of a "corporation" under section 33-374, provided the
term "corporation," as used in said section, shall refer only to Connecticut
General Life Insurance Company and the third sentence of section 33-374(h) shall
have no application. Except as may be otherwise provided in the plan of
exchange, and except as to shares for which payment must be made pursuant to the
two previous sentences, on the date on which the exchange becomes effective, all
certificates representing shares of the issued and outstanding stock of
Connecticut General Life Insurance Company shall automatically and without any
physical transfer or deposit be deemed for all purposes to be certificates
representing shares of the issued and outstanding stock of Connecticut General
Insurance Corporation.
18
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SEC. 2. The charter of Connecticut General Life Insurance Company, as
amended by number 173 of the special acts of 1947, is amended by renumbering
present section 7 as section 8.
SEC. 3. Section I of number 76 of the special acts of 1959, being
section 5 of the charter of Connecticut General Life Insurance Company, is
amended to read as follows: The corporate office shall be at Hartford or at some
other town in Connecticut and the corporation may establish and maintain other
offices and agencies in other towns of Connecticut and elsewhere. The property
and affairs of the corporation shall be managed by a board of not less than nine
directors, the number and the terms of office to be determined from time to time
by the board of directors in accordance with the bylaws, provided no director
shall be elected for a longer term than five years. The directors shall be
chosen by ballot by the stockholders except that if any vacancy occurs in the
board of directors such vacancy may be filled by the remaining directors for the
unexpired portion of the term, and if the number of directors is increased by
vote of the board of directors between meetings of stockholders, the additional
directors, not to exceed three, may be chosen by the board of directors for
terms expiring with the next annual meeting thereafter. Unless the bylaws
provide otherwise, five directors shall constitute a quorum. Directors serving
on the date of the acceptance of this act shall continue to serve for the terms
for which they were elected.
SEC. 4. This act shall be valid as an amendment to the charter of the
corporation if, within two years after its passage, it is accepted at a meeting
of the corporation duly warned and held for that purpose and an attested copy of
such acceptance is filed in the office of the secretary of the state.
Approved June 28, 1967.
(Certificate of Acceptance filed October 27, 1967.)
____________________
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CONNECTICUT GENERAL LIFE INSURANCE COMPANY
Attachment to Certificate
-------------------------
Amending Certificate of Incorporation (Charter)
-----------------------------------------------
RESOLVED: That Section 5 of the Corporation's Charter is hereby amended to read
as follows:
"The corporate office shall be at Bloomfield, Connecticut or at some
other place within or without the State of Connecticut and the
corporation may establish and maintain other offices and agencies in
other locations within or without the State. The property and affairs
of the corporation shall be managed under the direction of a board of
not less than nine directors, the number and the terms of office to be
determined from time to time by the board of directors in accordance
with the bylaws, provided no directors shall be elected for a longer
term than five years. The directors shall be chosen by ballot by the
stockholders except that, if any vacancy occurs in the board of
directors, such vacancy may be filled by the remaining directors for
the unexpired portion of the term, and if the number of directors is
increased by vote of the board of directors between meetings of
stockholders, the additional directors may be chosen by the board of
directors for terms expiring with the next annual meeting thereafter.
Unless the bylaws provide for a lesser or greater quorum as may be
permitted by law, a majority of the authorized number of directors, as
fixed by the board of directors from time to time, shall constitute a
quorum."
RESOLVED: That Section 6 of the Corporation's Charter is hereby amended to read
as follows:
"The directors of the corporation shall elect a president, one or more
vice presidents, one or more secretaries, including a corporate
secretary, and such other officers as they may deem desirable. If
authorized by the board of directors, the chairman of the board, the
president and other designated officers shall each have the power to
appoint such officers, other than the chairman of the board, the
president and the corporate secretary, as the appointing officer may
deem desirable. The president shall be elected to hold office until
the next annual meeting, but he may continue to service until his
successors has been chosen; and the other officers may be elected or
appointed for like or different terms and they may be removed at any
time at the pleasure of the directors or, in the case of appointed
officers only, of the appointing officer."
<PAGE>
Exhibit 10
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the use in the Statement of Additional Informational
constituting part of this Post-Effective Amendment No. 42 to the registration
statement on Form N-4 (the "Registration Statement") of our reports dated
February 13, 1996, relating to the financial statements and selected per unit
data and ratios of CG Variable Annuity Account I and the financial statements of
Connecticut General Life Insurance Company, which appear in such Statement of
Additional Information, and to the incorporation by reference of our reports
into the Prospectus which constitutes part of this Registration Statement. We
also consent to the reference to us under the heading "Independent Accountants"
in such Statement of Additional Information.
/s/PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Hartford, Connecticut
April 19, 1996
