As filed with the Securities and Exchange Commission on March 1, 1999
Registration No. 33-82610
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. ( )
POST-EFFECTIVE AMENDMENT NO. 5 (X)
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
Amendment No. 17 (X)
(Check appropriate box or boxes)
MAXIM SERIES ACCOUNT
(Exact name of Registrant)
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
(Name of Depositor)
8515 East Orchard Road
Englewood, Colorado 80111
(Address of Depositor's Principal Executive Officers) (Zip Code)
Depositor's Telephone Number, including Area Code:
(800) 537-2033
William T. McCallum
President and Chief Executive Officer
Great-West Life & Annuity Insurance Company
8515 East Orchard Road
Englewood, Colorado 80111
(Name and Address of Agent for Service)
Copy to:
James F. Jorden, Esq.
Jorden Burt Boros Cicchetti Berenson & Johnson, LLP
1025 Thomas Jefferson Street, N.W., Suite 400 East
Washington, D.C. 20007-0805
It is proposed that this filing will become effective (check appropriate
space):
Immediately upon filing pursuant to paragraph (b) of Rule
485 _ On May 1, 1998, pursuant to paragraph (b) of Rule 485.
60 days after filing pursuant to paragraph (a)(1) of Rule
485. X On May 1, 1999 , pursuant to paragraph (a)(1) of Rule
485.
75 days after filing pursuant to paragraph (a)(2) of Rule
485. On , pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following:
This post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
<PAGE>
MAXIM SERIES ACCOUNT
Cross Reference Sheet
Showing Location in Prospectus
and Statement of Additional Information
As Required by Form N-4
<TABLE>
<S> <C>
FORM N-4 ITEM PROSPECTUS CAPTION
1. Cover Page...................................................Cover Page
2. Definitions Definitions
3. Synopsis Variable Annuity Fee Table;
Key Features of the Annuity
4. Condensed Financial Information Condensed Financial
Information, Appendix A
5. General Description of Registrant, Depositor and
Portfolio Companies Great-West Life & Annuity
Insurance Company; Maxim
Series Account; Eligible
Funds; Voting Rights
6. Deductions Charges and Deductions;
Distribution of the
Contracts
7. General Description of Variable Annuity Contracts Key Features of the Annuity
8. Annuity Period Annuity Commencement Date;
Annuity Payment Options
9. Death Benefit Death Benefit
<PAGE>
FORM N-4 ITEM PROSPECTUS CAPTION
10 Purchases and Contract Value Key Features of the
Annuity; Applications and
Contributions; Annuity
Account Value
11. Redemptions Cash Withdrawals, Payment
Options; Free Look
12. Taxes Federal Tax Matters
13. Legal Proceedings Legal Proceedings
14. Table of Contents of Statement of Additional Information Statement of Additional
Information
<PAGE>
STATEMENT OF ADDITIONAL
FORM N-4 ITEM INFORMATION CAPTION
15. Cover Page Cover Page
16. Table of Contents Table of Contents
17. General Information and History Not Applicable
18. Services Custodian and Accountants
19. Purchase of Securities Being Offered Not Applicable
20. Underwriters Underwriter
21. Calculation of Performance Data Calculation of Performance
Data
22. Annuity Payments Not Applicable
23. Financial Statements Financial Statements
</TABLE>
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
<PAGE>
Maximum Value Plan
An Individual flexible premium deferred variable annuity
Distributed by
BenefitsCorp Equities, Inc.
Issued by
Great-West Life & Annuity Insurance Company
<PAGE>
Overview
This prospectus describes the Maximum Value Plan--an individual flexible premium
deferred annuity contract issued by Great-West Life & Annuity Insurance Company
(we, us, Great-West or GWL&A). The Maximum Value Plan provides an annuity
insurance contract whose value is based on the investment performance of the
Investment Divisions that you select. When you participate in the Maximum Value
Plan you are issued a contract, to which we will refer throughout this
prospectus as the "Contract."
Who Should Invest
The Contract is designed for investors who are seeking long-term, tax-deferred
asset accumulation with a wide range of investment options. The Contract can be
used to provide an Individual Retirement Annuity (IRA) or for other long-term
investment purposes.
Allocating your money
You can allocate your money among 22 Investment Divisions of Maxim Series
Account. Each Investment Division invests all of its assets in one of 22
corresponding mutual funds (Eligible Funds). Each Eligible Fund is offered by
one of the following fund families: Maxim Series Fund, Inc., Fidelity Variable
Investment Products II Fund, American Century Variable Portfolios, Inc. You can
also select a fixed option, in which case your money will be allocated to a
Guaranteed Sub-Account. Your interest in a fixed option is not considered a
security and is not subject to review by the Securities and Exchange Commission.
Payment Options
The Contract offers a variety of annuity payment options. The annuity payment
options you select may be payable on a fixed, variable or a combination basis.
Under a variable annuity payment option, annuity payments will continue to
reflect the investment performance of the Investment Divisions you select.
Payments can be guaranteed for your lifetime, your spouse's and/or
beneficiaries' lifetime or for a specified period of time, depending on your
needs and circumstances.
For more information, please contact:
Great-West Life & Annuity Insurance Company
8515 East Orchard Road
Englewood, Colorado 80111
800-228-8706
This Prospectus presents important information you should read before purchasing
the Contract. Please read it carefully and retain it for future reference. You
can find more detailed information about the Contract in the Statement of
Additional Information (SAI) dated MONTH X, 1999, which has been filed with the
Securities and Exchange Commission. The S AI is incorporated by reference into
this prospectus, which means that it is legally a part of this prospectus. The
SAI may be obtained without charge by contacting Great-West at the above address
or phone number, or, by visiting the Securities and Exchange Commission's web
site at www.sec.gov.
These securities have not been approved or disapproved by the Securities and
Exchange Commission or any state securities commission nor has the Securities
and Exchange Commission or any state securities commission passed upon the
accuracy or adequacy of the prospectus.
Any representation to the contrary is a criminal offense.
The date of this prospectus is Month X, 1999.
<PAGE>
This prospectus does not constitute an offering in any jurisdiction in which
such offering may not lawfully be made. No dealer, salesperson or other person
is authorized to give any information or make any representations in connection
with this offering other than those contained in this prospectus, and if given
or made, such other information or representations must not be relied upon.
The contract is not available in all states.
2
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Table of Contents
Definitions...........................................................................3
Key Features of the Contract..........................................................5
Fee Table.............................................................................6
Eligible Fund Annual Expenses.................................................7
Examples......................................................................8
Condensed Financial Information.......................................................9
Great-West Life & Annuity Insurance Company and the Series Account....................9
The Eligible Funds...................................................................10
Application and Initial Contributions................................................12
Ongoing Contributions................................................................13
Annuity Account Value................................................................13
Transfers............................................................................14
Automatic Custom Transfers...................................................14
Telephone/Internet Transactions..............................................15
Cash Withdrawals.....................................................................16
Death Benefit........................................................................16
Charges and Deductions...............................................................18
Payment Options......................................................................19
Periodic Payments............................................................19
Annuity Payments.....................................................................20
Annuity Commencement Date....................................................20
Annuity Options..............................................................21
Annuity Payment Options......................................................21
Variable Annuity Payment Provisions..........................................22
Federal Tax Matters..................................................................23
Assignments or Pledges...............................................................26
Performance Data.....................................................................26
Distribution of the Contracts........................................................29
Voting Rights........................................................................29
Year 2000............................................................................29
Rights Reserved by Great-West........................................................29
Adding and Discontinuing Investment Options..........................................30
Substitution of Investments..........................................................30
Legal Matters........................................................................30
Available Information................................................................31
Appendix A: Condensed Financial Information.........................................32
Appendix B: Net Investment Factor Calculation.......................................34
</TABLE>
<PAGE>
3
<PAGE>
4
Definitions
Accumulation Period
The period between the Effective Date and the Annuity Commencement Date. During
this period, you are contributing money to the Contract.
Accumulation Unit
An accounting measure used to determine your Variable Account Value during the
Accumulation Period.
Administrative Offices
The administrative offices of Great-West located at 8515 East Orchard Road,
Englewood, Colorado 80111.
Annuitant
The person named in the application upon whose life the payment of an annuity is
based and who will receive annuity payments. Unless you elect otherwise the
Owner will be the Annuitant.
Annuity Commencement Date
The date payments begin under an annuity payment option.
Annuity Account
An account established by us in your name that reflects all account activity
under the Contract.
Annuity Account Value
The sum of the Variable and Guaranteed Sub-Accounts less any withdrawals,
amounts applied to an annuity option, periodic payments, charges deducted under
the Contract and any applicable Premium Tax.
Annuity Payment Period
The period beginning on the Annuity Commencement during which we make annuity
payments.
Annuity Unit
An accounting measure used to determine the amount of each variable annuity
payment after the first annuity payment is made.
Automatic Contribution Plan
A plan which allows you to make automatic scheduled Contributions to the
Contract. Contributions will be withdrawn from a designated pre-authorized
account and automatically credited to your Annuity Account.
Beneficiary
The person(s) designated by you to receive any death benefit which may become
payable under the Contract.
Contributions
Amounts you pay to purchase a Contract.
Contingent Owner
The person who becomes entitled to all rights and benefits under the Contract
when the Owner dies, if there is no Joint Owner, as long as the Annuitant is
living.
Effective Date
The date on which the initial Contribution is credited to your Annuity Account.
Eligible Fund
A mutual fund in which an Investment Division invests all if its assets.
Guaranteed Account Value
The sum of the values of the Guaranteed Sub-Accounts credited to the Owner under
the Annuity Account.
Guaranteed Sub-Account
The sub-division(s) of the Annuity Account to which your fixed account
allocations are credited. You receive a fixed rate of return on amounts
allocated to a Guaranteed Sub-Account. Your interest in a fixed option is not
considered a security and is not subject to review by the Securities and
Exchange Commission.
Individual Retirement Annuity
An annuity contract used in a retirement savings program that is intended to
satisfy the requirements of Section 408 of the Internal Revenue Code of 1986.
Investment Division
The Series Account is divided into Investment Divisions, one for each Eligible
Fund. You select one or more Investment Divisions to which you allocate Contract
value - your allocated Contract value will reflect the investment performance of
the corresponding Eligible Funds..
Owner (Joint Owner) or You
The person(s) , named in the application who is entitled to exercise all rights
and privileges under the Contract. Joint Owners must be husband and wife on the
date the Contract is issued. The Annuitant will be the Owner unless otherwise
indicated in the application. If a Contract is purchased as an IRA, the Owner
and the Annuitant must be the same individual and no Joint Owner may be named.
Premium Tax
The amount of tax, if any, charged by a state or other governmental authority in
connection with your Contract.
Request
Any request either written, by telephone, or computerized which is in a form
satisfactory to Great-West and received at our Administrative Offices.
Series Account
The segregated investment account established by Great-West to provide the
funding options for the Contract. It is registered as a unit investment trust
under the Investment Company Act of 1940 and consists of the individual
Investment Divisions.
Surrender Charge
A charge you pay upon withdrawing all or a portion of your Annuity Account
Value. This charge is assessed as a percentage of the amount withdrawn based on
the number of years you have held the Contract.
Surrender Value
The Annuity Account Value less any applicable Surrender Charge, less any
applicable Premium Tax, on the effective date of the surrender.
Transaction Date
The date on which any Contribution or Request from you will be processed.
Contributions and Requests received after the close of the New York Stock
Exchange (generally 4:00 p.m. ET) will be deemed to have been received on the
next business day. Requests will be processed and the Variable Account Value
will be determined on each day that the New York Stock Exchange is open for
trading. On the day after Thanksgiving, however, you can only submit Requests
for transactions by automated voice response unit or by fully automated computer
link.
Transfer
When you move your Annuity Account Value between and among the Investment
Division(s) and/or the Guaranteed Sub-Account(s).
Valuation Date
A date on which we calculate the value of the Investment Divisions. This
Calculation is made as of the close of business of the New York Stock Exchange
(generally 4:00 p.m. ET).
Variable Account Value
The total value of your Variable Sub-Accounts. This is based on the amounts you
have allocated to the Investment Divisions and will reflect the investment
performance of the Eligible Funds, less all applicable charges and taxes.
Variable Sub-Accounts
An account we maintain for you that reflects the value credited to you from an
Investment Division.
<PAGE>
7
<PAGE>
Key features of the Contract
Following are some of the key features of the Contract. These topics are
discussed in more detail throughout the prospectus so please be sure to read
through it carefully.
How to Invest
You must complete an application and pay by check or through an Automatic
Contribution Plan.
The minimum initial Contribution is:
o $5,000
o $2,000 if an IRA
The minimum ongoing Contribution is:
o $500
o $50 if made via Automatic Contribution Plan
Allocation of Your Contributions
Your initial Contribution and any subsequent Contributions will be allocated to
the Investment Divisions based on the instructions you provide in the
application. You can change your allocation instructions at any time by Request.
Free Look Period
The Contract provides for a "free look" period which allows you to cancel your
Contract generally within 10 days (30 days for replacement policies) of your
receipt of the Contract. You can cancel the Contract during the free look period
by delivering or mailing the Contract to our Administrative Offices. The
cancellation is not effective unless we receive a notice which is postmarked
before the end of the free look period. If the Contract is returned, the
Contract will be void from the start and all Contributions, less surrenders, and
withdrawals, will be refunded to you.
A Wide Range of Investment Choices The Contract gives you an opportunity to
select among twenty-two different Investment Divisions. Each Investment
Division invests in shares of an Eligible Fund. The Eligible Funds cover a
wide range of investment objectives.
The distinct investment objectives and policies of each Eligible Fund are fully
described in the individual fund prospectuses. You can obtain the prospectus for
any Eligible Fund by contacting Great-West.
The portion of your Annuity Account Value allocated to an Investment Division
will vary with the investment performance of that Investment Division. You bear
the entire investment risk for all amounts invested in the Investment
Division(s). Your Annuity Account Value could be less than the total amount of
your Contributions.
Charges and Deductions Under the Contract You pay the following charges under
the Contract:
An annual contract maintenance charge
A mortality and expense risk charge
You may also have to pay:
A Surrender Charge (if you withdraw Annuity Account Value within 7 years after
purchasing the Contract)
A Premium Tax (depending on your state of residence)
In addition, you pay for management fees and other expenses relating to the
Eligible Funds.
Making Transfers
You may Transfer among the Investment Divisions and between the Investment
Divisions and the Guaranteed Sub-Account(s) as often as you like prior to the
Annuity Commencement Date. There are certain restrictions on Transferring from a
Guaranteed Sub-Account to the Investment Divisions.
Full and Partial Withdrawals
You may withdraw all or part of your Annuity Account Value before the earlier of
the Annuity Commencement Date or the Annuitant's or Owner's death.
Withdrawals may be taxable and if made prior to age 59 1/2 , may be subject to a
10% federal tax early withdrawal penalty.
There is no limit on the number of withdrawals you can make, however, the
withdrawals may be subject to a Surrender charge.
Payment Options
A wide range of annuity options are available to provide flexibility in choosing
an annuity payment schedule that meets your needs. Payments may be made on a
variable, fixed or combination basis. Under a variable payment arrangement, the
annuity payments you receive continue to reflect the performance of the
Investment Divisions you select.
Death Benefit
The amount of the death benefit, if payable before the Annuity Commencement
Date, and before age 75, will be the greater of: o the Annuity Account Value on
the date of death, less any applicable Premium Tax; or o the sum of
Contributions paid, less any withdrawals or periodic payments, and any
applicable Premium Tax.
The amount of death benefit payable before the Annuity Commencement Date, and
after age 75 will be the amount of the Annuity Account Value on the date of
death, less any applicable Premium Taxes.
<PAGE>
Fee Table
The purpose of this table and the examples that follow is to assist you in
understanding the various costs and expenses that you will bear directly or
indirectly when investing in the Contract. The table and examples reflect
expenses related to the Investment Divisions and the Eligible Funds.
Contract Owner transaction expenses
Sales load None
Surrender Charge 7% maximum
Transfer fee None
Annual contract maintenance charge $27.00
Investment Division annual expenses
(as a percentage of average Variable Sub-Account assets)
Mortality and expense risk charge 1.25%
<PAGE>
Eligible fund annual expenses
<TABLE>
Eligible fund annual expenses
(as a percentage of eligible fund net assets, before waivers and reimbursements)
Portfolio Management Other Total eligible fund
fees expenses expenses
<S> <C> <C> <C>
Maxim INVESCO ADR 1.00% .30% 1.30%
Maxim INVESCO Small-Cap Growth .95% .15% 1.10%
Maxim Small-Cap Index .60% 0% .60%
Maxim Small-Cap Value (Ariel Value) 1.00% .28% 1.28%
Maxim MidCap Growth 1.00% .05% 1.05%
Maxim Mid-Cap (managed by Ariel) .95% .11% 1.06%
American Century VP Capital Appreciation 1.00% 0% 1.00%
Maxim Blue Chip 1.00% .15% 1.15%
Maxim Growth Index .60% 0% .60%
Maxim Stock Index .60% 0% .60%
Maxim T. Rowe Price Equity/Income .80% .11% .91%
Maxim Value Index .60% 0% .60%
Fidelity VIP II Contrafund .61% .10% .71%
Maxim INVESCO Balanced 1.00% 0% 1.00%
Maxim Corporate Bond .90% 0% .90%
Maxim Bond .60% 0% .60%
Maxim U.S. Government Securities .60% 0% .60%
Maxim Money Market .46% 0% .46%
Maxim Aggressive Profile+ .25% 0% .25%
Maxim Moderately Aggressive Profile+ .25% 0% .25%
Maxim Moderate Profile+ .25% 0% .25%
Maxim Moderately Conservative Profile+ .25% 0% .25%
Maxim Conservative Profile+ .25% 0% .25%
Minimum Total Maxim Series Maximum Total Maxim Series
Fund Annual Expenses* Fund Annual Expenses**
Aggressive Profile 1.16% 1.51%
Moderately Aggressive Profile 1.08% 1.44%
Moderate Profile 1.02% 1.35%
Moderately Conservative Profile 1.00% 1.26%
Conservative Profile 0.85% 1.11%
</TABLE>
+ Each Profile Portfolio will invest primarily in shares of other Maxim
Portfolios ("Underlying Portfolios"). Therefore, each Profile Portfolio willbear
its pro rata share of the fees and expenses incurred by the Underlying
Portfolios in addition to its own expenses.
* The Minimum Fees are determined by assuming the allocation of each Profile
Portfolio's assets to those Underlying Portfolios (please see the Maxim Series
Fund prospectus for the Profile Portfolios for further information on the
Profile Portfolios) with the lowest Total Annual Expenses.
** The Maximum Fees are determined by assuming the allocation of each Profile
Portfolio's assets to those Underlying Portfolios (please see the Maxim Series
Fund prospectus for the Profile Portfolios for further information on the
Profile Portfolios) with the highest Total Annual Expenses.
<PAGE>
EXAMPLES
<TABLE>
If you do not take a distribution from your Contract, or if you elect to take
annuity payments at the end of the applicable time period, you would pay the
following expenses on a $1,000 investment, assuming a 5% annual return:
- --------------------------------------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Investment Divisions 1 Year 3 Year 5 Year 10 Year
Maxim Money Market
Maxim Bond, Maxim Stock Index, Maxim U.S.
Government Securities, Maxim Value Index,
Maxim Growth Index and Maxim Small-Cap
Index
Maxim MidCap (Growth Fund I) and
Maxim INVESCO Small-Cap Growth
American Century VP Capital Appreciation
and Maxim INVESCO Balanced
Maxim Small-Cap Value (Ariel Value)
Maxim INVESCO ADR
Maxim T. Rowe Price Equity/Income
Maxim Corporate Bond
Maxim Blue Chip
Maxim MidCap Growth
Maxim Aggressive Profile
Maxim Moderately Aggressive Profile
Maxim Moderate Profile
Maxim Moderately Conservative Profile
Maxim Conservative Profile
Fidelity VIP II Contrafund
- --------------------------------------------- ------------ ------------ ------------ ------------
If you take a distribution in whole from your Contract at the end of the
applicable time period, you would pay the following expenses on a $1,000
investment, assuming a 5% annual return:
- --------------------------------------------- ------------ ------------ ------------ ------------
Investment Divisions 1 Year 3 Year 5 Year 10 Year
Maxim Money Market
Maxim Bond, Maxim Stock Index, Maxim U.S.
Government Securities, Maxim Value Index,
Maxim Growth Index and Maxim Small-Cap
Index
Maxim MidCap (Growth Fund I) and Maxim
INVESCO Small-Cap Growth
American Century VP Capital Appreciation
and Maxim INVESCO Balanced
Maxim Small-Cap (Ariel Value)
Maxim INVESCO ADR
Maxim T. Rowe Price Equity/Income
Maxim Corporate Bond
Maxim Blue Chip
Maxim MidCap Growth
Maxim Aggressive Profile
Maxim Moderately Aggressive Profile
Maxim Moderate Profile
Maxim Moderately Conservative Profile
Maxim Conservative Profile
Fidelity VIP II Contrafund
- --------------------------------------------- ------------ ------------ ------------ ------------
</TABLE>
These examples should not be considered representations of past or future
expenses. Actual expenses paid may be greater or less than those shown.
<PAGE>
34
Condensed Financial Information
Attached as Appendix A is a table showing selected information concerning
Accumulation Units for each Investment Division. The Accumulation Unit values do
not reflect the decuction of certain charges that are subtracted from your
Annuity Account Value, such as the Contract Maintenance Charge. The information
in the table is included in the Series Account's financial statements, which
have been audited by Deloitte & Touche LLP, independent auditors. To obtain a
fuller picture of each Investment Division's finances and performance, you
should also review the Series Account's financial statements, which are
contained in the SAI.
Great-West Life & Annuity Insurance Company and the Series Account
Great-West Life & Annuity Insurance Company
Great-West is a stock life insurance company originally organized under the laws
of the state of Kansas as the National Interment Association. Its name was
changed to Ranger National Life Insurance Company in 1963 and to Insuramerica
Corporation prior to changing to its current name in 1982. In September of 1990,
Great-West re-domesticated and is now organized under the laws of the state of
Colorado.
Great-West is authorized to engage in the sale of life insurance, accident and
health insurance and annuities. It is qualified to do business in the District
of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam and 49 states in the
United States.
Great-West is an indirect wholly-owned subsidiary of The Great-West Life
Assurance Company ("Great-West Life"). Great-West Life is a subsidiary of
Great-West Lifeco Inc., a holding company. Great-West Lifeco Inc. is in turn a
subsidiary of Power Financial Corporation, a financial services company. Power
Corporation of Canada, a holding and management company, has voting control of
Power Financial Corporation. Mr. Paul Desmarais, through a group of private
holding companies which he controls, has voting control of Power Corporation of
Canada.
The Series Account
Great-West originally established the Series Account under Kansas law on June
24, 1981. The Series Account now exists under Colorado law as a result of our
redomestication. The Series Account consists of the Investment Divisions and is
registered with the Securities and Exchange Commission as a unit investment
trust under the Investment Company Act of 1940. This registration does not
involve supervision of the management of the Series Account or Great-West by the
Securities and Exchange Commission.
We do not guarantee the investment performance of the Investment Divisions. The
portion of your Annuity Account Value allocated to the Investment Divisions and
the amount of variable annuity payments depend on the investment performance of
the Eligible Funds. Thus, the Owner bears the full investment risk for all
Contributions allocated to the Investment Divisions.
The Series Account and its Investment Divisions are administered and accounted
for as part of the general business of Great-West. However, the income, capital
gains, or capital losses of each Investment Division are credited to or charged
against the assets held in that Investment Division without regard to other
income, capital gains or capital losses of any other Investment Division and
without regard to any other business Great-West may conduct. Under Colorado law,
the assets of the Series Account are not chargeable with liabilities arising out
of any other business Great-West may conduct. Nevertheless, all obligations
arising under the Contracts are generally corporate obligations of Great-West.
The Series Account currently has twenty-two Investment Divisions available for
allocation of Contributions. Each Investment Division invests in shares of one
Eligible Fund. If we decide to make additional Investment Divisions available to
Owners of the Contracts, we may or may not make them available to you based on
our assessment of marketing needs and investment conditions.
The Eligible Funds
Each Eligible Fund is a separate mutual fund having its own investment
objectives and policies. The investment performance of one Eligible Fund has no
effect on the investment performance of any other Eligible Fund.
Each Eligible Fund is registered with the Securities and Exchange Commission as
an open-end management investment company or portfolio thereof. The Securities
and Exchange Commission does not supervise the management or the investment
practices and policies of any of the Eligible Funds.
The following sets forth the investment objective of each Eligible Fund and
summarizes its principle investment strategy:
Maxim Series Fund, Inc.
Maxim Money Market Portfolio seeks as high a level of current income as is
consistent with the preservation of capital and liquidity. Investment in the
Maxim Money Market Portfolio is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the portfolio
seeks to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in this portfolio.
Maxim Bond Portfolio seeks maximum total return consistent with the preservation
of capital. This portfolio invests primarily in bonds issued by the U.S.
Government and its agencies and by domestic or foreign corporations.
Maxim Stock Index Portfolio seeks investment results that track the total return
of the common stocks that comprise Standard & Poor's (S&P) 500 Composite Stock
Price Index and the S&P Mid-Cap Index, weighted according to their respective
pro-rata shares of the market.1
Maxim U.S. Government Securities Portfolio seeks the highest level of return
consistent with preservation of capital and substantial credit protection. This
portfolio invests at least 65% of its total assets in securities issued or
guaranteed by the U.S. Government or one of its agencies or instrumentalities.
Maxim Small-Cap Index Portfolio seeks investment results that track the total
return of the common stocks that comprise the S&P Small-Cap 600 Stock Index.1
Maxim Mid-Cap Portfolio (sub-advised by Ariel) seeks long-term appreciation.
This portfolio will invest primarily in equity securities of mid-cap companies
which are believed to be undervalued but demonstrate a strong potential for
growth.
Maxim INVESCO Balanced Portfolio seeks high total return on investment through
capital appreciation and current income. This portfolio invests 50% to 70% in
common stocks and at least 25% in fixed income securities.
Maxim INVESCO Small-Cap Growth Portfolio seeks to achieve long-term capital
growth. This portfolio will invest primarily in a diversified group of equity
securities of emerging growth companies with market capitalizations of $1
billion or less at the time of initial purchase.
Maxim INVESCO ADR Portfolio seeks a high total return through capital
appreciation and current income, while reducing risk through diversification.
This portfolio invests primarily in foreign securities that are issued in the
form of American Depositary Receipts ("ADRs") or foreign stocks that are
registered with the Securities and Exchange Commission and traded in the U.S.
Maxim T. Rowe Price Equity/Income Portfolio seeks substantial dividend income
and also capital appreciation. This portfolio invests primarily in
dividend-paying common stocks of established companies.
Maxim Corporate Bond Portfolio seeks high total investment return through a
combination of current income and capital preservation. This portfolio will
invest at least 65% of its total assets in corporate debt securities of any
maturity. It may also invest up to 20% of its total assets in preferred stocks
or foreign securities and up to 35% in below investment grade quality
securities.
Maxim Small-Cap Value Portfolio (Ariel Value Investment Division) seeks long
term appreciation, by investing primarily in small-cap common stocks. This
portfolio will emphasize small companies that are believed to be undervalued and
may invest in mid-sized companies with similar characteristics.
Maxim Value Index Portfolio seeks investment results that track the total return
of the common stocks that comprise the Russell 1000 Value Index.2
Maxim Growth Index Portfolio seeks investment results that track the total
return of the common stocks that comprise the Russell 1000 Growth Index.2
Maxim Blue Chip Portfolio seeks long-term growth of capital and income. This
portfolio invests primarily in common stocks of large, well established, stable
and mature companies, commonly known as "Blue Chip" companies.
Maxim MidCap Growth Portfolio seeks long-term appreciation. This portfolio will
invest primarily in a diversified portfolio of mid-cap companies emphasizing
companies whose earnings are expected to grow at a faster rate than the average
mid-cap company.
Maxim Profile Portfolios
Each of the following five Maxim Profile Portfolios seeks to provide an asset
allocation program designed to meet certain investment goals based on an
investor's risk tolerance.
Maxim Aggressive Profile Portfolio seeks long-term capital appreciation
primarily through investments in other portfolios of Maxim Series Fund that
emphasize equity investments.
Maxim Moderately Aggressive Profile Portfolio seeks long-term capital
appreciation primarily through investments in other portfolios of Maxim Series
Fund that emphasize equity investments, though income is a secondary
consideration.
Maxim Moderate Profile Portfolio seeks long-term capital appreciation primarily
through investments in other portfolios of Maxim Series Fund with a relatively
equal emphasis on equity and fixed income investments.
Maxim Moderately Conservative Profile Portfolio seeks capital appreciation
primarily through investments in other portfolios of Maxim Series Fund that
emphasize fixed income investments, and to a lesser degree equity investments
Maxim Conservative Profile Portfolio seeks capital preservation primarily
through investments in other Maxim Series Fund, Inc. portfolios that emphasize
fixed income investments.
American Century Variable Portfolios, Inc.
American Century VP Capital Appreciation, seeks capital growth. The fund will
seek to achieve its investment objective by investing primarily in common stocks
that are considered by management to have better-than-average prospects for
appreciation. This portfolio is closed to new investments.
Fidelity Variable Insurance Products II Fund
Fidelity VIP II Contrafund seeks long-term capital appreciation by investing
primarily in common stocks. The fund invests its assets in securities of
companies whose value its investment advisor believes is not fully recognized by
the public.
Eligible Fund Investment Advisers
Maxim Series Fund, Inc. is advised by GW Capital Management, LLC. 8515 E.
Orchard Road, Englewood, Colorado 80111, a wholly owned subsidiary of
Great-West.
American Century Variable Portfolios, Inc. is advised by American Century
Investment Management, Inc. American Century Tower, 4500 Main Street, Kansas
City, Missouri, 64111.
Fidelity Variable Insurance Products and Variable Insurance Products II are
advised by Fidelity Management & Research Company, 2 Devonshire Street, Boston
Massachusetts 02109.
Maxim Series Fund Sub-Advisers
G.W. Capital hires sub-advisers to manage the investment and reinvestment of the
assets of some of the portfolios of Maxim Series Fund. These sub-advisers are
subject to the review and supervision of G.W. Capital and the board of directors
of Maxim Series Fund.
Ariel Capital Corporation is the sub-adviser to the Maxim Mid-Cap Portfolio and
the Maxim Small-Cap Value (Ariel Value) Portfolio. Ariel is located at 307 N.
Michigan Avenue, Chicago, Illinois 60601. Founders Asset Management, LLC. is the
sub-adviser of the Maxim Blue Chip Portfolio. Founders is located at 2930 East
Third Avenue. Denver, CO 80206.
INVESCO Capital Management, Inc. is the sub-adviser to the Maxim INVESCO ADR
Portfolio. INVESCO Capital Management, Inc. is located at 1315 Peachtree Street,
Atlanta, Georgia 30309.
INVESCO Trust Company is the sub-adviser of the Maxim INVESCO Small-Cap Growth
Portfolio and the Maxim INVESCO Balanced Portfolio. INVESCO Trust Company is
located at 7800 E. Union Avenue, Denver, Colorado 80237.
Loomis, Sayles & Company, LP ("Loomis Sayles") is the sub-adviser to the Maxim
Corporate Bond Portfolio and the Maxim Small-Cap Aggressive Growth Portfolio.
Loomis Sayles is located at One Financial Center, Boston, Massachusetts 02111.
T. Rowe Price Associates, Inc. is the sub-adviser to the Maxim T. Rowe Price
Equity/Income Portfolio and the Maxim MidCap Growth Portfolio. T. Rowe Price is
located at 100 East Pratt Street, Baltimore, Maryland 21202.
Meeting Investment Objectives
Meeting investment objectives depends on various factors, including, but not
limited to, how well the Eligible Fund advisers anticipate changing economic and
market conditions. There is no guarantee that any of these Eligible Funds will
achieve their stated investment objectives.
Reinvestment
All dividend and capital gain distributions made by an Eligible Fund will be
automatically reinvested in shares of the Eligible Fund on the date of the
distribution.
Where to Find More Information About the Eligible Funds
Additional information about the Eligible Funds can be found in the current
prospectuses for the Eligible Funds, which can be obtained by calling Great-West
at 800-228-8706, or by writing to Great-West's Administrative Offices, 8515 East
Orchard Road, Englewood, Colorado 80111. The Eligible Funds' prospectuses should
be read carefully before you make a decision to invest in an Investment
Division.
Application and Contributions
The first step to purchasing the Contract is to fill out your application. When
you submit it, you must make your initial Contribution of:
o $5,000
o $2,000 if an IRA
All Contributions should be made by check (payable to Great-West) or via an
Automatic Contribution Plan.
An Automatic Contribution Plan allows you to make automatic scheduled
Contributions. Contributions will be withdrawn from a designated pre-authorized
bank account and automatically credited to your Annuity Account.
If your application is complete and your check for the initial Contribution is
included (or you have made your initial Contribution via the Automatic
Contribution Plan), your Contract will be issued. Your initial Contribution will
be credited within two business days after receipt at Great-West's
Administrative Offices. Acceptance is subject to our receiving sufficient
information in a form acceptable to us and we reserve the right to reject any
application or Contribution.
If your application is incomplete, Great-West will contact you by telephone to
obtain the required information. If your application remains incomplete for five
business days, we will return to you the application and the initial
Contribution unless you consent to our retaining the initial Contribution and
crediting it as soon as we have your completed application.
During the 10 day (or longer where required by law) free look period you may
cancel your Contract. During the free look period, all Contributions will be
allocated according to your written allocation instructions specified in the
application.
Any returned Contracts will be void from the start and all Contributions
received less any withdrawals, will be refunded to you.
If you exercise the free look privilege, you must return the Contract to
Great-West's Administrative Offices. We must receive it in person or postmarked
prior to the end of the free look period.
Ongoing Contributions
You can make additional Contributions at any time prior to the Annuity
Commencement Date, as long as the Annuitant is living. Additional Contributions
must be at least:
o $500 or
o $50 if made via an Automatic Contribution Plan.
You may make total Contributions in excess of $1,000,000 with our prior
approval.
Great-West reserves the right to modify the limitations set forth in this
section.
Annuity Account Value
Before the Annuity Commencement Date, your Annuity Account Value is the total
value of your Variable and Guaranteed Sub-Accounts.
Before the Annuity Commencement Date, the Variable Account Value is the total
dollar amount of all Accumulation Units credited to you. When you allocate
Contributions to an Investment Division we credit you with Accumulation Units.
We determine the number of Accumulation Units credited to you by dividing your
Contribution to an Investment Division by that Investment Division's
Accumulation Unit value. We determine the Accumulation Unit value on each
Valuation Date.
We calculate each Investment Division's Accumulation Unit value at the end of
each valuation period by multiplying the value of that unit at the end of the
prior valuation period by the Investment Division's Net Investment Factor for
the valuation period. The formula used to calculate the Net Investment Factor is
set forth in Appendix B. Your Variable Account Value reflects the value of the
Accumulation Units credited to you in each Investment Division.
The value of an Investment Division's assets is determined at the end of each
Valuation Date. A valuation period is the period between two successive
Valuation Dates. On the day after Thanksgiving, transactions submitted other
than by KeyTalk(R), or through the Internet will not be processed.
Your Variable Account Value will reflect the investment performance of the
selected Investment Division(s) which in turn reflect the investment performance
of the corresponding Eligible Funds, which we factor in by using the Net
Investment Factor referred to above.
Transfers
In General
Prior to the Annuity Commencement Date you may Transfer all or part of your
Annuity Account Value among and between the Variable and Guaranteed Sub-Accounts
by telephone, by sending a Request to Great-West's Administrative offices, by
calling KeyTalk(R) - the voice response unit at 1-800-701-8255, or through the
Internet at www.benefitscorp.com.
Your Request must specify:
o the amounts being Transferred,
o the Investment Division(s) or Guaranteed Sub-Account(s) from which the
Transfer is to be made, and
o the Investment Division(s) or Guaranteed Sub-Account(s) that will receive
the Transfer.
o If a Transfer Request is received by Great-West within 30 days of the
Annuity Commencement Date, Great-West may delay the Annuity Commencement
Date by up to 30 days.
Currently, there is no limit on the number of Transfers you can make among the
Investment Divisions each calendar year. However, we reserve the right to limit
the number of Transfers you make. There is no charge for Transfers.
A Transfer will be effective on the Transaction Date.
A Transfer from the Guaranteed Sub-Account shall be subject to any limitations
or charges set forth in the Contract.
Possible Restrictions
We reserve the right without prior notice to modify, restrict, suspend or
eliminate the Transfer privileges (including telephone and Internet Transfers)
at any time. Transfer restrictions may be necessary to protect investors from
the negative effect large and/or numerous Transfers can have on portfolio
management. Moving large amounts of money may also cause a substantial increase
in Eligible Fund transaction costs which must be borne by you.
Although you are permitted to make Transfers by telephone, or via the Internet,
we reserve the right to require that each Transfer Request be made by a separate
communication to us. We also reserve the right to request that each Transfer
Request be submitted in writing and be signed by you. Transfer Requests by fax
will not be accepted. Transfers among the Investment Divisions may also be
subject to terms and conditions imposed by the Eligible Funds.
Automatic Custom Transfers
Dollar Cost Averaging
Dollar cost averaging allows you to make systematic Transfers from one
Investment Division to another Investment Division. It does not assure a greater
profit, or any profit, and will not prevent or necessarily alleviate losses in a
declining market. It does, however, allow you to buy more units when the price
is lower and fewer units when the price is higher. Over time, your average cost
per unit may be more or less than if you invested all your money at one time.
You can set up automatic dollar cost averaging on the following frequency
periods: monthly, quarterly, semi-annual or annual basis. Your Transfer will be
initiated on the Transaction Date you select, one frequency period following the
date of the Request. For example, if we receive a Request for quarterly
Transfers on January 9, your first Transfer will be made on April 9 (or the
following business day, as applicable) and every three months thereafter on the
9th. Transfers will continue on that same day each interval unless terminated by
you or for other reasons as set forth in the Contract.
If there are insufficient funds in the applicable Variable Sub-Account on the
date your Transfer is scheduled, your Transfer will not be made. However, your
dollar cost averaging Transfers will resume once there are sufficient funds in
the applicable Variable Sub-Account. Dollar cost averaging will terminate
automatically when you start taking payments from the annuity.
Dollar cost averaging Transfers must meet the following conditions:
o The minimum amount that can be Transferred out of an Investment Division is
$100 per month.
o You must: (1) specify the dollar amount to be Transferred, (2) designate the
Investment Division(s) to which the Transfer will be made, and (3) the
percent of the dollar amount to be allocated to each Investment Division
into which you are Transferring money.
You may terminate dollar cost averaging at any time.
Great-West reserves the right to modify, suspend or terminate dollar cost
averaging at any time and for any reason.
Rebalancer
Because the value of your Variable Sub-Accounts will fluctuate with the
investment performance of the Investment Divisions, your asset allocation
percentages may become out of balance over time. Rebalancer allows you to
automatically reallocate your Variable Account Value to maintain your desired
asset allocation. Participation in Rebalancer does not assure a greater profit,
or any profit, nor will it prevent or necessarily alleviate losses in a
declining market.
You can set up Rebalancer as a one-time Transfer or on a quarterly, semi-annual
or annual basis. If you select to rebalance only once, the Transfer will take
place on the Transaction Date of the Request.
If you select to rebalance on a quarterly, semi-annual or annual basis, the
first Transfer will be initiated on the Transaction Date one frequency period
following the date of the Request. For example, if we receive a Request for
quarterly Transfers on January 9, your first Transfer will be made on April 9
(or the following business day, as applicable) and every three months thereafter
on the 9th. Transfers will continue on that same day each interval unless
terminated by you or for other reasons as set forth in the Contract.
On a Rebalancing Transaction Date your money will be automatically reallocated
among the Investment Divisions based on your allocation instructions. You can
change your allocation instructions at any time by Request. The Rebalancer
option will terminate automatically when you start taking payments from the
annuity.
Rebalancer Transfers must meet the following conditions:
o Your entire Variable Account Value must be included.
o You must specify the percentage of your Variable Account Value you'd like
allocated to each Investment Division and the frequency of rebalancing. You
may modify the allocations or stop the Rebalancer option at any time, by
Request.
You may not participate in dollar cost averaging and Rebalancer at the same
time.
Great-West reserves the right to modify, suspend, or terminate the Rebalancer
option at any time and for any reason.
Telephone/Internet Transactions
You may make Transfer Requests by telephone by using KeyTalk(R) or via the
Internet at www.benefitscorp.com.
We will use reasonable procedures in monitoring and accepting Transfer Requests
such as requiring certain identifying information, tape recording telephone
instructions, and providing written confirmation of a transaction. Telephone
instructions we reasonably believe to be genuine will be your financial
responsibility.
We reserve the right to suspend these privileges at any time, for some or all
Contracts, and for any reason. Withdrawals are not permitted by telephone.
Cash withdrawals
You may withdraw all or part of your Annuity Account Value at any time during
the life of the Annuitant and prior to the Annuity Commencement Date by
submitting a withdrawal Request to Great-West's Administrative Offices.
Withdrawals are subject to the rules below; and federal or state may also apply.
The amount payable to you if you withdrawal all of your Annuity Account Value is
your Annuity Account Value, less any applicable Surrender Charge on the
effective date of the withdrawal (and any applicable Premium Tax).
The following terms apply to withdrawals:
o No withdrawals may be made after the Annuity Commencement Date.
o If you Request a partial withdrawal, your Annuity Account Value will be
reduced by the dollar amount Requested and any applicable Surrender Charge.
o Partial withdrawals are unlimited. However, you must specify the
Sub-Account(s) from which the withdrawal is to be made, otherwise your
Request will not be processed.
o If your remaining Annuity Account Value, after any partial withdrawal, is
less than $2,000, then we may, at our discretion require you to withdraw the
entire amount.
o If a partial withdrawal is made within 30 days prior to the Annuity
Commencement Date, we may delay the Annuity Commencement Date by 30 days.
o Proceeds will generally be paid in one lump sum within 7 days of the
Transaction Date, though payment of proceeds may be delayed for a period in
excess of 7 days as permitted by the 1940 Act.
Withdrawal Requests must be in writing. If your instructions aren't clear, your
Request will be denied and your withdrawal will not be processed.
After a withdrawal of all of your total Annuity Account Value, or at any time
that your Annuity Account Value is zero, all your rights under the Contract will
terminate.
Tax Consequences of Withdrawals
Withdrawals made for any purpose may be taxable. If your Annuity Account Value
exceeds your investment in the Contract, then you may be subject to income tax
on withdrawals made from your Annuity Account. Additionally, the Internal
Revenue Code states that a 10% penalty tax may be imposed on the taxable
portions of certain early withdrawals.
The Internal Revenue Code generally requires us to withhold federal income tax
from withdrawals and report the withdrawals to the IRS. However, you will be
entitled to elect, in writing, not to have tax withholding apply unless
withholding is mandatory for your Contract. Withholding applies to the portion
of the withdrawal which is included in your income and subject to federal income
tax. The tax withholding rate is 10% of the taxable amount of the withdrawal.
Withholding applies only if the taxable amount of the withdrawal is at least
$200. Some states also require withholding for state income taxes. For details
about state withholding, please see "Federal Tax Matters."
If you are interested in this Contract as an IRA, please refer to Section 408 of
the Internal Revenue Code of 1986, as amended, for limitations and restrictions
on cash withdrawals.
Death Benefit
Death Benefit Payments--After Annuity Commencement Date
If the Annuitant dies after the Annuity Commencement Date and before the entire
interest has been distributed, payments will continue to the Beneficiary under
the payment option applicable to the Annuitant on the Annuitant's date of death.
The Beneficiary cannot change the method of distribution in effect on the date
of the Annuitant's death or elect a new payment option.
Death Benefit Payments--Before Annuity Commencement Date
If the Owner of the Contract or the named Annuitant dies before the Annuity
Commencement Date, a death benefit may be payable. The rules applicable in
various circumstances are described below.
Death of Owner-Annuitant Before the Annuity Commencement Date
If an Owner-Annuitant dies before the Annuity Commencement Date, and if the
surviving spouse of the Owner-Annuitant is the sole Beneficiary, then the
surviving spouse will become the new Owner and Annuitant and the Contract will
continue in force. If the Owner-Annuitant dies before the Annuity Commencement
Date and the surviving spouse of the Owner-Annuitant is not the sole
Beneficiary, then the Company will pay the death benefit under the Contract to
the Beneficiary.
Death of Non-Annuitant Owner Before the Annuity Commencement Date
If the Owner of the Contract who is not the Annuitant dies before the Annuity
Commencement Date, the Company will pay the death benefit described under the
Contract as follows:
(a) First, to the surviving Joint Owner.
(b) If there is no surviving Joint Owner, then to the Contingent Owner.
(c) If there is no Contingent Owner, then to the Annuitant.
If the Owner's surviving spouse is the person entitled to receive benefits upon
the Owner's death, the surviving spouse shall be treated as the Owner and will
be allowed to continue the Contract.
Death of Non-Owner Annuitant Before the Annuity Commencement Date
If a Non-Owner Annuitant dies before the Annuity Commencement Date, the Company
will pay the death benefit under the Contract to the Beneficiary.
Death Benefit Computation and Procedure
If the Owner-Annuitant, Non-Annuitant Owner, or Non-Owner Annuitant dies before
the Annuity Commencement Date and before reaching age 75, the death benefit will
be the greater of:
o the Annuity Account Value as of the date of death, less any applicable
Premium Tax; or
o the sum of Contributions paid, less partial withdrawals and periodic
payments, less any applicable Premium Tax.
If the Owner-Annuitant, Non-Annuitant Owner, or Non-Owner Annuitant dies before
the Annuity Commencement Date, but after reaching age 75, the death benefit will
be the Annuity Account Value as of the date of death, less any applicable
Premium Tax. No Surrender Charge will apply to the amounts payable to a
Beneficiary.
The death benefit proceeds payable to a Beneficiary will remain invested in
accordance with the allocation instruction given by the Owner until either:
o new allocation instructions are requested by the Beneficiary; or
o the death benefit is actually paid to the Beneficiary
The death benefit will become payable following receipt by the Company of the
Beneficiary's request. Unless otherwise specified by the Owner prior to the
Annuitant's death, the Beneficiary may elect, within 60 days after proceeds are
payable, to receive:
o payment in a single sum; or
o payment under any of the payment options provided under the Contract.
o Any payment of benefits under the Contract must satisfy the
requirements of the Internal Revenue Code and any other applicable
federal or state laws, rules or regulations. All distributions of
death benefits upon a Contract Owner's death before the Annuity
Commencement Date (or upon the death of a Non-Owner Annuitant if the
Owner is a non-individual entity, such as a trust or estate) must be
made pursuant to IRCss. 72(s). These requirement are met if the entire
amount is paid on or before December 31 of the year containing the
fifth anniversary of the Owner's death. This rule, called the 5-year
rule, always applies to payments due to non-individual entities.
However, if the person entitled to receive payments required under
IRCss.72(s) is an individual, the 5-year rule will not apply if an
election is made to begin taking substantially equal periodic payments
no later than one year after the Owner's death. Payments may be paid
over a period not exceeding the life or life expectancy of such
person.
Beneficiary
You may select one or more Beneficiaries. If more than one Beneficiary is
selected, unless you indicate otherwise, they will share equally in any death
benefit payable.
You may, at any time, while the Annuitant is living, change the Beneficiary by
Request. A change of Beneficiary will take effect as of the date the Request is
processed by Great-West's Administrative Offices, unless a certain date is
specified by the Owner. If the Owner dies before the Request is processed, the
change will take effect as of the date the Request was made, unless we have
already made a payment or otherwise taken action on a designation or change
before receipt or processing of such Request. A Beneficiary designated
irrevocably may not be changed without the written consent of that Beneficiary,
except as allowed by law.
The interest of any Beneficiary who dies before the Owner or the Annuitant will
terminate at the death of the Beneficiary. The interest of any Beneficiary who
dies at the time of, or within 30 days after, the death of an Owner or the
Annuitant will also terminate if no benefits have been paid to such Beneficiary,
unless the Owner otherwise indicates by Request. The benefits will then be paid
as though the Beneficiary had died before the deceased Owner or Annuitant. If no
Beneficiary survives the Owner or Annuitant, as applicable, we will pay the
death benefit proceeds to the Owner's estate.
Charges and Deductions
No amounts will be initially deducted from your Contributions except for any
applicable Premium Tax. As a result, the full amount of your Contributions (less
any applicable Premium Tax) are invested based on your allocation instructions.
You pay the following charges under the Contract:
o a Contract Maintenance Charge, and
o a mortality and expense risk charge,
You may also pay:
o as a Surrender Charge (only for withdrawals within the first 7 Contract
years), o deductions for Premium Tax (only if applicable depending on your state
of residence),
You also bear the expenses of the Eligible Funds.
Contract Maintenance Charge
Prior to the Annuity Commencement Date, you will pay a $27 annual Contract
Maintenance Charge from your Annuity Account Value. This charge partially covers
our costs for administering the Contracts and the Series Account.
The Contract Maintenance Charge is deducted on a proportionate basis from all
your Variable and Guaranteed Sub-Accounts.
Mortality and Expense Risk Charge
We deduct a Mortality and Expense Risk Charge from your Variable Sub-Account(s)
for our assumption of certain mortality and expense risks under the Contract.
This is a daily charge equal to an effective annual rate of 1.25% of the value
of your Variable Sub-Account(s). We guarantee that this charge will never
increase beyond 1.25%.
The Mortality and Expense Risk Charge is reflected in the unit values of the
Variable Sub-Accounts. This charge will continue to be applicable should you
choose a variable annuity payment option or a periodic payment option.
Premium Tax
We may be required to pay state Premium Taxes or retaliatory taxes currently
ranging from 0% to 3.5% in connection with Contributions or values under the
Contracts. Depending upon applicable state law, we will deduct charges for the
Premium Taxes we incur with respect to your Contributions, from amounts
withdrawn, or from amounts applied on the Annuity Commencement Date. In some
states, charges for both direct Premium Taxes and retaliatory Premium Taxes may
be imposed at the same or different times with respect to the same Contribution,
depending on applicable state law.
The applicable Premium Tax rates that states and other governmental entities
impose on the purchase of an annuity are subject to change by the respective
state legislatures, by administrative interpretations or by judicial acts. Such
Premium Taxes will depend, among other things, on the state of residence of the
Contract Owner and the insurance laws, tax laws and status of Great-West in
these states when premium takes are incurred.
Surrender Charge
We deduct a Surrender Charge for certain partial or total withdrawals. The
Surrender Charge will cause the amount received to be less than the amount
Requested for withdrawal. A Surrender Charge "Free Amount" may be applied in
some circumstances. o The Surrender Charge "Free Amount" is an amount against
which the Surrender Charge
will not be assessed.
o The Free Amount is equal to 10% of the Annuity Account Value at
December 31 of the previous calendar year.
o Only one Free Amount is available in each calendar year.
o The Free Amount will be applied on the first withdrawal made in that year.
We will not deduct the Surrender Charge in the following instances: o you
Request an annuity option with a payment period of at least 36 months; or o you
Request a periodic payment option (in accordance with the applicable periodic
payment restrictions); or
o the withdrawal is due to a medical condition requiring your confinement to
an eligible nursing home for 90 consecutive days.
The Surrender Charge is equal to the percentage of the amount distributed less
the Free Amount based on the table below:
Contract Years Completed Percentage of
Distribution
1 7%
2 6%
3 5%
4 4%
5 3%
6 2%
7 0%
Expenses of the Eligible Funds
The net asset value of the Eligible Funds reflect the deduction of the Eligible
Funds' fees and deductions. You bear these costs indirectly when you allocate to
an Investment Division.
Other Taxes
Under present laws, we will incur state or local taxes (in addition to the
Premium Tax described above) in several states. No charges are currently made
for taxes other than Premium Tax. However, we reserve the right to deduct
charges in the future for federal, state, and local taxes or the economic burden
resulting from the application of any tax laws that we determine to be
attributable to the Contracts.
Payment Options
Periodic Payments
You may Request that all or part of the Annuity Account Value be applied to a
periodic payment option.
In Requesting periodic payments, you must elect:
o The payment frequency of either 12-, 6-, 3- or 1-month intervals o A payment
amount--a minimum of $50 is required o The calendar day of the month on which
payments will be made o One payment option o The allocation of payments from the
Variable and/or Guaranteed Sub-Account(s) as
follows: 1) Prorate the amount to be paid across all variable and Guaranteed
Sub-Accounts in proportion to the assets in each sub-account; or 2) Select
the Investment Division(s)from which payments will be made. Once the
Investment Division(s) have been depleted, Great-West will automatically
prorate the remaining payments unless you Request the selection of another
Investment Division(s).
While periodic payments are being received:
o You may continue to exercise all contractual rights that are available prior
to electing a payment option, except that no Contributions may be made.
o You may keep the same investment options as were in force before periodic
payments began.
o Charges and fees under the Contract continue to apply.
o The Surrender Charge does not apply to the periodic payments. However, if a
partial surrender is made during the time you participate in periodic
payments, a Surrender Charge and other Contract charges, as applicable, will
be deducted and the Free Amount will not apply.
Periodic payments will cease on the earlier of:
o the date the amount elected to be paid under the option selected has been
reduced to zero.
o the Annuity Account Value is zero.
o You Request that withdrawals stop.
o You or the Annuitant die.
Periodic Payment Options
If you choose to receive payments from your Contract through periodic payments,
you must select from the following payment options.
Option 1--Income for a specified period (at least 36 months)
You elect the length of time over which payments will be made. The amount paid
will vary based on the duration you choose.
Option 2--Income of a specified amount (at least 36 months)
You elect the dollar amount of the payments. Based on the amount elected, the
duration may vary.
Option 3 -Interest Only
The payments will be based on the amount of the interest credited to the
Guaranteed Sub-Account(s) between each payment. Available only if 100% of the
account value is invested in the Guaranteed Sub-Account.
Option 4 --Minimum distribution
If you are using this Contract as an IRA, you may Request minimum distributions
as specified under Internal Revenue Code Section 401(a)(9).
Option 5 - Any Other Form (at least 36 months)
Any other form of periodic payment which is acceptable to Great-West.
If periodic payments cease, you may resume making Contributions, at which time
the Surrender Charge Free Amount will be in effect. However, we may limit the
number of times you may restart a periodic payment program.
Periodic payments made for any purpose may be taxable, subject to withholding
and to the 10% penalty tax. IRAs are subject to complex rules with respect to
restrictions on and taxation of distributions, including penalty taxes. A
competent tax adviser should be consulted before a periodic payment option is
Requested.
Annuity Payments
Annuity Commencement Date
You choose the date you'd like annuity payments to start when you purchase the
Contract. The Annuity Commencement Date and options available for IRAs may be
controlled by endorsements, or applicable law.
You may change your Annuity Commencement Date at any time prior to 30 days
before an Annuity Commencement date you already selected. If you have not
elected a payment option within 30 days of the Annuity Commencement Date, the
portion of your Annuity Account Value held in the Guaranteed Sub-Account(s) will
be paid out as a fixed life annuity with a guarantee period of 20 years. The
Annuity Account Value held in the Variable Sub-Account(s) will be paid out as a
variable life annuity with a guarantee period of 20 years
Under the Internal Revenue Code, a Contract purchased and used in connection
with an Individual Retirement Account is subject to complex "minimum
distribution" requirements. Minimum distribution requirements require
distributions to begin under such a plan by a specific date, and that the entire
interest must be distributed within certain specified periods. The application
of the minimum distribution requirements vary according to your age and other
circumstances. If you're using this annuity as an IRA, you should consider
consulting a competent tax adviser regarding the application of the minimum
distribution requirements.
Annuity Options
You can choose your annuity payment option either when you purchase the Contract
or at a later date. You can change your selection at any time up to 30 days
before an Annuity Commencement Date you previously selected.
The amount to be paid out is the Annuity Account Value on the Annuity
Commencement Date. The minimum amount that may be withdrawn from the Annuity
Account Value to purchase an annuity payment option is $2,000. If your Annuity
Account Value is less than $2,000, we may pay the amount in a single sum subject
to the Contract provisions applicable to a cash withdrawal.
Payments to be made under the annuity payment option you select must be at least
$50. We reserve the right to make payments using the most frequent payment
interval which produces a payment of at least $50. The maximum amount that may
be applied under any payment option is $1,000,000, unless prior approval is
obtained from us.
For annuity options involving life income, the actual age and/or sex of the
Annuitant will affect the amount of each payment. We reserve the right to ask
for satisfactory proof of the Annuitant's age. We may delay annuity payments
until satisfactory proof is received. Since payments to older Annuitants are
expected to be fewer in number, the amount of each annuity payment under a
selected annuity form will be greater for older Annuitants than for younger
Annuitants.
If the age of the Annuitant has been misstated, the payments established will be
made on the basis of the correct age. If payments were too large because of
misstatement, the difference with interest may be deducted by us from the next
payment or payments. If payments were too small, the difference with interest
may be added by us to the next payment. This interest is at an annual effective
rate which will not be less than the Guaranteed Interest Rate.
Annuity Payment Options
Option 1--Income of specified amount
(Available as fixed payments only)
The amount applied under this option may be paid in equal annual, semi-annual,
quarterly or monthly installments in the dollar amount elected for not more than
240 months.
Option 2--Income for a specified period
(Available as fixed payments only)
Payments are paid annually, semi-annually, quarterly or monthly, as elected, for
a selected number of years not to exceed 240 months.
Option 3--Life annuity with guaranteed period
This option provides annual, semi-annual, quarterly or monthly payments during a
guaranteed period or for the lifetime of the Annuitant, whichever is longer. The
guaranteed period may be 5, 10, 15 or 20 years. This option is available on
either a variable or fixed dollar payment basis.
Option 4--Life annuity
This option provides for annual, semi-annual, quarterly or monthly payments
during the lifetime of the Annuitant. The annuity terminates with the last
payment due prior to the death of the Annuitant. Since no minimum number of
payments is guaranteed, this option may offer the maximum level of monthly
payments. It is possible that only one payment may be made if the Annuitant died
before the date on which the second payment is due. This option is available on
either a variable or fixed dollar payment basis.
Option 5 - Any other form
Any other form of fixed or variable annuity payment which is acceptable to
Great-West.
Variable Annuity Payment Provisions
Amount of first payment
The first payment under a variable annuity payment option will be based on the
value of the amounts held in each Variable Sub-Account on the 5th valuation date
preceding the Annuity Commencement Date. It will be determined by applying the
appropriate rate to the amount applied under the payment option.
Annuity units
The number of Annuity Units paid for each Variable Sub-Account is determined by
dividing the amount of the first monthly payment by its Annuity Unit Value on
the 5th valuation date preceding the date the first payment is due. The number
of Annuity Units used to calculate each payment for a Variable Sub-Account
remains fixed during the Annuity Payment Period.
Amount of payments after the first payment
After the first payment, future payments will vary depending upon the investment
experience of the Variable Sub-Accounts. The subsequent amount paid from each
sub-account is determined by multiplying (a) by (b) where (a) is the number of
sub-account Annuity Units to be paid and (b) is the sub-account Annuity Unit
value on the 5th valuation date preceding the date the annuity payment is due.
The total amount of each variable annuity payment will be the sum of the
variable annuity payments for each Variable Sub-Account. We guarantee that the
dollar amount of each payment after the first will not be affected by variations
in expenses or mortality experience.
Transfers after the Annuity Commencement Date
Once annuity payments have begun, no Transfers may be made from a fixed annuity
payment option to a variable annuity payment option, or vice versa. However, for
variable annuity payment options, Transfers may continue to be made among the
Investment Divisions. Transfers after the Annuity Commencement Date will be made
by converting the number of Annuity Units being Transferred to the number of
Annuity Units of the Variable Sub-Account to which the Transfer is made. The
result will be that the next annuity payment, if it were made at that time,
would be the same amount that it would have been without the Transfer.
Thereafter, annuity payments will reflect changes in the value of the new
Annuity Units.
Other restrictions
Once payments start under the annuity form you select:
o no changes can be made in the annuity form,
o no additional Contributions will be accepted under the Contract and o no
further withdrawals, other than withdrawals made to provide annuity benefits,
will
be allowed.
A portion or the entire amount of the annuity payments may be taxable as
ordinary income. If, at the Annuity Commencement Date, we have not received a
proper written election not to have federal income taxes withheld, we must by
law withhold such taxes from the taxable portion of such annuity payments and
remit that amount to the federal government (an election not to have taxes
withheld is not permitted for certain Contracts). State income tax withholding
may also apply. Please see "Federal Tax Matters" for details.
Federal Tax Matters
Introduction
The following discussion is a general description of federal income tax
considerations relating to the Contract and is not intended as tax advice. This
discussion assumes that the Contract qualifies as an annuity contract for
federal income tax purposes. This discussion is not intended to address the tax
consequences resulting from all situations. If you are concerned about these tax
implications you should consult a competent tax adviser before initiating any
transaction.
This discussion is based upon our understanding of the present federal income
tax laws as they are currently interpreted by the Internal Revenue Service. No
representation is made as to the likelihood of the continuation of the present
federal income tax laws or of the current interpretations by the Internal
Revenue Service. Moreover, no attempt has been made to consider any applicable
state or other tax laws.
The Contract may be purchased on a non-tax qualified basis ("Non-Qualified
Contract") or purchased and used in connection with IRAs. The ultimate effect of
federal income taxes on the amounts held under a Contract, on annuity payments,
and on the economic benefit to you, the Owner, or the Beneficiary, may depend on
the type of Contract, and on the tax status of the individual concerned. In
addition, certain requirements must be satisfied in purchasing an IRA and
receiving distributions from an IRA in order to continue receiving favorable tax
treatment. As a result, purchasers of IRAs should seek competent legal and tax
advice regarding the suitability of the Contract for their situation, the
applicable requirements, and the tax treatment of the rights and benefits of the
Contract. The following discussion assumes that an IRA is purchased with
proceeds and/or Contributions that qualify for the intended special federal
income tax treatment.
Taxation of Annuities
In General
Section 72 of the Internal Revenue Code governs taxation of annuities in
general. You, as a "natural person" will not generally be taxed on increases (if
any) in the value of your Annuity Account Value until a distribution occurs by
withdrawing all or part of the Annuity Account Value (for example, withdrawals
or annuity payments under the annuity payment form elected). However, under
certain circumstances, you may be subject to taxation currently. In addition, an
assignment, pledge, or agreement to assign or pledge any portion of the Annuity
Account Value generally will be treated as a distribution. The taxable portion
of a distribution (in the form of a single sum payment or an annuity) is taxable
as ordinary income. An IRA Contract may not be assigned as collateral.
If you are not a natural person (e.g. a corporation), you generally must include
in income any increase in the excess of the Annuity Account Value over the
"investment in the contract" (discussed below) during each taxable year. The
rule does not apply where the non-natural person is the nominal owner of a
Contract and the beneficial owner is a natural person.
The rule also does not apply in the following circumstances:
o Where the annuity Contract is acquired by the estate of a decedent.
o Where the Contract is held under an IRA.
o Where the Contract is a qualified funding asset for a structured
settlement.
o Where the Contract is purchased on behalf of an employee upon termination
of a qualified plan.
If you are a non-natural person, you may wish to discuss these matters with a
competent tax adviser.
The following discussion generally applies to a Contract owned by a natural
person.
Withdrawals
In the case of a withdrawal under an IRA, including withdrawals under the
periodic payment option, a portion of the amount received may be non-taxable.
The amount of the non-taxable portion is generally determined by the ratio of
the "investment in the contract" to the individual's total accrued benefit under
the plan. The "investment in the contract" generally equals the amount of any
nondeductible Contributions paid by or on behalf of any individual. Special tax
rules may be available for certain distributions from an IRA.
With respect to Non-Qualified Contracts; partial withdrawals, including periodic
payment, are generally treated as taxable income to the extent the Annuity
Account Value immediately before the withdrawal exceeds the "investment in the
contract" at that time. Full surrenders are treated as taxable income to the
extent that the amount received exceeds the "investment in the contract." The
taxable portion of any annuity payment is taxed at ordinary income tax rates.
Annuity payments
Although the tax consequences may vary depending on the annuity form elected
under the Contract, in general, only the portion of the annuity payment that
represents the amount by which the Annuity Account Value exceeds the "investment
in the contract" will be taxed. After the investment in the contract is
recovered, the full amount of any additional annuity payments is taxable. For
fixed annuity payments, in general there is no tax on the portion of each
payment which represents the same ratio that the "investment in the contract"
bears to the total expected value of the annuity payments for the term of the
payments. However, the remainder of each annuity payment is taxable. Once the
"investment in the contract" has been fully recovered, the full amount of any
additional annuity payments is taxable. If the annuity payments stop as a result
of an Annuitant's death before full recovery of the "investment in the
contract," you should consult a competent tax adviser regarding the
deductibility of the unrecovered amount.
Penalty tax
For distributions from a Non-Qualified Contract, there may be a federal income
tax penalty imposed equal to 10% of the amount treated as taxable income. In
general, however, there is no penalty tax on distributions:
o Made on or after the date on which the recipient of payments under the
Contract attains age 59 1/2,
o Made as a result of death of the Owner or disability of the recipient of
payments under the Contract,
o Received in substantially equal periodic payments (at least annually) for
your life expectancy or the joint life expectancies of you and the
Beneficiary,
o Received under an immediate annuity
Other exemptions or tax penalties may apply to distributions from a
Non-Qualified Contract or certain distributions from an IRA. For more details
regarding these exemptions or penalties consult a competent tax adviser.
Taxation of death benefit proceeds
Amounts may be distributed from the Contract because of the death of an Owner or
the Annuitant. Generally such amounts are included in the income of the
recipient as follows:
o If distributed in a lump sum, they are taxed in the same manner as a full
surrender, as described above, however, the Surrender Charge will not apply.
o If distributed under an annuity form, they are taxed in the same manner as
annuity payments, as described above.
Distribution at death
In order to be treated as an annuity contract, the terms of the Contract must
provide the following two distribution rules:
1. If you die on or after the date annuity payments start, and before the
entire interest in the Contract has been distributed, the remainder of your
interest will be distributed on the same or on a more rapid schedule than
that provided for in the method in effect on the date of your death.
2. If you die before the Annuity Commencement Date starts, your entire interest
must generally be distributed within five years after the date of your
death. If payable to a designated Beneficiary, the distributions may be paid
over the life of that designated Beneficiary or over a period not extending
beyond the life expectancy of that Beneficiary, so long as payments start
within one year of your death. If the sole designated Beneficiary is your
spouse, the Contract may be continued in force in the name of your spouse.
If the Owner is not an individual, then for purposes of the distribution at
death rules, the Primary Annuitant is considered the Owner. In addition, when
the Owner is not an individual, a change in the Primary Annuitant is treated as
the death of the Owner.
Distributions made to a Beneficiary upon the Owner's death from an IRA must be
made pursuant to the rules in Section 401(a)(9) of the Internal Revenue Code.
Transfers, assignments or exchanges
A transfer of ownership of a Contract, the designation of an Annuitant or other
Beneficiary who is not also the Owner, or the exchange of a Contract may result
in adverse tax consequences that are not discussed in this prospectus. If you
are contemplating any these types of changes, you should contact a competent tax
adviser with respect to the potential tax effects of such a transaction.
Multiple Contracts
All deferred, non-qualified annuity contracts that are issued by Great-West (or
our affiliates) to the same Owner during any calendar year will be treated as
one annuity contract for purposes of determining the taxable amount. You should
consult a tax adviser before purchasing more than one Contract.
Withholding
Annuity distributions generally are subject to withholding at rates that vary
according to the type of distribution and the recipient's tax status.
Recipients, however, generally are provided the opportunity to elect not to have
tax withheld from distributions. Certain distributions from IRAs are subject to
mandatory federal income tax withholding.
Section 1035 exchanges
Internal Revenue Code Section 1035 provides that no gain or loss shall be
recognized on the exchange of one annuity contract for another. Generally,
contracts issued in an exchange for another annuity contract are treated as new
contracts for purposes of the penalty and distribution at death rules.
Prospective Owners wishing to take advantage of a Section 1035 exchange should
consult their tax adviser.
Individual Retirement Annuities
The Contract may be used with IRAs as described in Section 408 of the Internal
Revenue Code. Section 408 of the Internal Revenue Code permits eligible
individuals to contribute to an individual retirement program known as an
Individual Retirement Annuity. Also, certain kinds of distributions from certain
types of qualified and non-qualified retirement plans may be "rolled over" to an
Individual Retirement Annuity following the rules set out in the Internal
Revenue Code. If you purchase this Contract for use with an IRA, you will be
provided with supplemental information and you have the right to revoke your
purchase within seven days of purchasing the IRA Contract.
If a Contract is purchased to fund an IRA you must be the Annuitant and the
Owner. In addition, if a Contract is purchased to fund an IRA, minimum
distributions must commence not later than April 1st of the calendar year
following the calendar year in which you attain age 70 1/2. You should consult
your tax adviser concerning these matters.
Various tax penalties may apply to Contributions in excess of specified limits,
distributions that do not satisfy specified requirements, and certain other
transactions. The Contract will be amended as necessary to conform to the
requirements of the Internal Revenue Code if there is a change in the law.
Purchasers should seek competent advice as to the suitability of the Contract
for use with IRAs.
When you make your initial Contribution, you must specify whether you are
purchasing a Non-Qualified Contract or an IRA. If the initial Contribution is
made as a result of an exchange or surrender of another annuity contract, we may
require that you provide information with regard to the federal income tax
status of the previous annuity contract.
We will require that you purchase separate Contracts if you want to invest
monies qualifying for different annuity tax treatment under the Internal Revenue
Code. For each separate Contract you will need to make the required minimum
initial Contribution. Additional Contributions under the Contract must qualify
for the same federal income tax treatment as the initial Contribution. We will
not accept an additional Contribution under a Contract if the federal income tax
treatment of the Contribution would be different from the initial Contribution.
Seek Tax Advice
The above discussion of the federal income tax consequences is only a brief
summary and is not intended as tax advice. The federal income tax consequences
discussed here reflect our understanding of current law and the law may change.
Federal estate tax consequences and state and local estate, inheritance, and
other tax consequences of ownership or receipt of distributions under a Contract
depend on your individual circumstances or the circumstances of the recipient of
the distribution. A competent tax adviser should be consulted for further
information.
Assignments or Pledges
Generally, rights in the Contract may be assigned or pledged for loans at any
time during the life of the Annuitant, however, if the Contract is an IRA, you
may not assign the Contract as collateral.
If a non-IRA Contract is assigned, the interest of the assignee has priority
over you and the interest of the Beneficiary. Any amount payable to the assignee
will be paid in a single sum.
A copy of any assignment must be submitted to our Administrative Offices. Any
assignment is subject to any action taken or payment made by Great-West before
the assignment was processed. We are not responsible for the validity or
sufficiency of any assignment.
If any portion of the Annuity Account Value is assigned or pledged for a loan,
it may be treated as a distribution. Please consult a competent tax adviser for
further information.
Performance Data
From time to time, we may advertise yields and average annual total returns for
the Investment Divisions. In addition, we may advertise the effective yield of
the Maxim Money Market Investment Division. We may advertise both standardized
and non-standardized performance data for the Investment Divisions. All
performance information will be based on historical information and is not
intended to indicate future performance.
The yield of the Maxim Money Market Investment Division refers to the annualized
income generated by an investment in that Investment Division over a specified
7-day period. It is calculated by assuming that the income generated for that
seven-day period is generated each 7-day period over a period of 52 weeks and is
shown as a percentage of the investment.
The effective yield is calculated similarly but, when annualized, the income
earned by an investment in that Investment Division is assumed to be reinvested.
The effective yield will be slightly higher than the yield because of the
compounding effect of the assumed reinvestment.
The yield calculations do not reflect the effect of any Surrender Charge or any
Premium Tax that may be applicable to a particular Contract. To the extent that
any Surrender Charge or Premium Taxes are applicable to a particular Contract,
the yield of that Investment Division will be reduced. For a description of the
methods used to determine yield and total returns, see the Statement of
Additional Information.
Investment Division Yield Effective
Yield
Maxim Money Market x.xx% x.xx%
The following table illustrates standardized and non-standardized average annual
total return for one, five and ten-year periods (or since inception, as
appropriate) ended December 31, 1998. Average annual total return quotations
represent the average annual compounded rate of return that would equate an
initial investment of $1,000 to the redemption value of that investment
(excluding Premium Taxes, if any) as of the last day of each of the periods for
which total return quotations are provided.
Both the standardized and non-standardized data reflect the deduction of all
fees and charges under the Contract including the applicable Surrender Charge.
The standardized data is calculated from the inception date of an Investment
Division. The non-standardized data is calculated from the inception of the
Eligible Fund and includes periods preceding the inception date of the
corresponding Investment Division
Performance information and calculations for any Investment Division are based
only on the performance of a hypothetical Contract under which the Annuity
Account Value is allocated to an Investment Division during a particular time
period. Performance information should be considered in light of the investment
objectives and policies and characteristics of the Eligible Funds invests and
the market conditions during the given time period. It should not be considered
as a representation of future investment performance.
We may from time to time also disclose cumulative (non-annualized) total
returns, yield and standardized and nonstandardized total returns for the
Investment Divisions.
<PAGE>
Average Annual Total Return for the period ended December 31, 1998
<TABLE>
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
Eligible Investment One Year Five Ten Years Ten Years
Investment Division Fund Division Years or Life of or Life of
Inception Inception in Investment Underlying
Separate Division Eligible
Account in Fund
Separate
Account
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Maxim Bond 7/1/82 10/14/82 0.04% 3.66% 6.25% 6.60%
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
Maxim Stock Index 7/1/82 2/24/83 23.04% 15.81% 13.60% 14.12%
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
Maxim U.S. Government 4/8/85 4/12/85 1.48% 4.00% 5.22% 7.30%
Securities
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
Maxim Small-Cap Index 12/1/93 9/1/94 11.13% N/A 14.44% 11.38%
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
Maxim MidCap (Growth Fund I) 12/31/93 9/1/94 3.74% N/A 12.60% 11.32%
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
Maxim Corporate Bond 11/1/94 11/1/94 3.53% N/A 12.62% 12.62%
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
Maxim INVESCO Balanced 11/1/96 11/1/96 15.57% N/A 14.53% 14.53%
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
Maxim Small-Cap Value (Ariel 12/1/93 11/1/94 17.45% N/A 16.08% 12.21%
Value)
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
Maxim INVESCO Small-Cap Growth 11/1/94 11/1/94 9.02% N/A 20.95% 20.95%
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
Maxim T. Rowe Price 11/1/94 11/1/94 18.33% N/A 21.43% 21.43%
Equity/Income
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
Maxim INVESCO ADR 11/1/94 11/1/94 2.94% N/A 11.60% 11.60%
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
Maxim Value Index 12/1/93 1/15/98 23.15% N/A N/A 18.41%
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
Maxim Growth Index 12/1/93 1/15/98 18.72% N/A N/A 18.53%
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
Maxim Blue Chip 7/1/97 1/15/98 N/A N/A N/A -4.66%
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
Maxim MidCap Growth 7/1/97 1/15/98 N/A N/A N/A 2.45%
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
Maxim Aggressive Profile 9/8/97 1/15/98 N/A N/A N/A -4.28%
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
Maxim Moderately Aggressive 9/8/97 1/15/98 N/A N/A N/A -3.96%
Profile
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
Maxim Moderate Profile 9/8/97 1/15/98 N/A N/A N/A -4.93%
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
Maxim Moderately Conservative 9/8/97 1/15/98 N/A N/A N/A -5.23%
Profile
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
Maxim Conservative Profile 9/8/97 1/15/98 N/A N/A N/A -4.24%
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
American Century VP Capital 11/20/87 12/1/91 -9.55% 3.02% 3.66% 7.36%
Appreciation
--------------------------------- ---------- -------------- --------- ------- ------------ -------------
</TABLE>
<PAGE>
Reports and promotional literature may also contain other information including
(1) the ranking of any Investment Division derived from rankings of variable
annuity separate accounts or their investment products tracked by Lipper
Analytical Services, Inc., VARDS, Morningstar, Value Line, IBC/Donoghue's Money
Fund Report, Financial Planning Magazine, Money Magazine, Bank Rate Monitor,
Standard & Poor's Indices, Dow Jones Industrial Average, and other rating
services, companies, publications or other people who rank separate accounts or
other investment products on overall performance or other criteria, and (2) the
effect of tax-deferred compounding on investment returns, or returns in general,
which may be illustrated by graphs, charts, or otherwise, and which may include
a comparison, at various points in time, of the return from an investment in a
Contract (or returns in general) on a tax-deferred basis (assuming one or more
tax rates) with the return on a currently taxable basis. Other ranking services
and indices may be used.
Distribution of the Contracts BenefitsCorp Equities, Inc. (BCE) is the principal
underwriter and distributor of the Contracts. BCE is registered with the
Securities and Exchange Commission as a broker/dealer and is a member of the
National Association of Securities Dealers, Inc. (NASD). Its principal offices
are located at 8515 East Orchard Road, Englewood, Colorado 80111, telephone
800-228-8706.
The maximum commission as a percentage of the Purchase Payment(s) made under a
Contract payable to BCE representatives is 6.25%. In addition, BCE may reimburse
portions of expenses incurred pursuant to BCE's expense reimbursement allowance
program.
Voting Rights
To the extent required by applicable law, all Eligible Fund shares held in the
Series Account will be voted by Great-West at regular and special shareholder
meetings of the respective Eligible Funds in accordance with instructions
received from Ownerswho have allocated Contract value to the corresponding
Investment Division(s). If, however, the 1940 Act or any regulation should be
amended, or if the present interpretation thereof should change, or if we
determine that we are allowed to vote all Eligible Funds shares in our own
rights, we may elect to do so.
Before the Annuity Commencement Date, you have the voting interest. The number
of votes which are available to you will be calculated separately for each of
your Variable Sub-Accounts. That number will be determined by applying your
percentage interest, if any, in a particular Investment Division to the total
number of votes attributable to that Investment Division. You hold a voting
interest in each Investment Division to which your Annuity Account Value is
allocated. If you select a variable annuity option, the votes attributable to
your Contract will decrease as annuity payments are made.
Voting instructions will be solicited by written communication prior to such
meeting in accordance with procedures established by the respective Eligible
Funds. Shares for which we do not receive timely instructions and shares held by
us as to which Owners have no beneficial interest will be voted in proportion to
the voting instructions which are received with respect to all Contracts
participating in the Investment Division. Voting instructions to abstain on any
item to be voted upon will be applied on a pro rata basis to reduce the votes
eligible to be cast.
Contract Owners have no voting rights in Great-West.
Year 2000
We have a number of existing computer programs that use only two digits to
identify a year in the date field, which creates a problem with the upcoming
change in the century. We have developed detailed plans that we expect to
rectify the year 2000 problem. These plans include modifying programs where
necessary, replacing certain programs with year 2000 compliant software, and
working with vendors and business partners, including banks, custodians and
investment managers, who need to become year 2000 compliant. The resources that
are being devoted to this effort are substantial. Management estimates that the
total cost to implement these plans will not be material, and has budgeted the
expense as part of its computer systems operating costs in 1998 and early 1999.
We anticipate that our systems will be year 2000 compliant on or about first
quarter 1999, but there can be no assurance that we will be successful, or that
interaction with other service providers will not impair our services at that
time.
Rights Reserved by Great-West
We reserve the right to make certain changes if, in our judgment, they would
best serve the interests of Owners and Annuitants or would be appropriate in
carrying out the purposes of the Contracts. Any changes will be made only as
permitted by applicable laws. Also, when required by law, we will obtain your
approval of the changes and approval from any appropriate regulatory authority.
Approval may not be required in all cases, however.
Examples of the changes we may make include:
o To operate the Series Account in any form permitted under the Investment
Company Act of 1940 or in any other form permitted by law.
o To Transfer any assets in any Investment Division to another Investment
Division, or to one or more separate accounts, or to add, combine or remove
Investment Divisions of the Series Account.
o To substitute, for the Eligible Fund shares in any Investment Division, the
shares of another Eligible Fund or any other investment permitted by law.
o To make any changes required by the Internal Revenue Code or by any other
applicable law in order to continue treatment of the Contract as an annuity.
o To change the time or time of day at which a valuation date is deemed to
have ended.
o To make any other necessary technical changes in the Contract in order to
conform with any action the above provisions permit us to take, including
to change the way we assess charges, but without increasing as to any then
outstanding Contract the aggregate amount of the types of charges which we
have guaranteed. o To reject any application for any reason.
Since some of the Eligible Funds are available to registered separate accounts
of other insurance companies offering variable annuity and variable life
products, there is a possibility that a material conflict may arise between the
interests of the Series Account and one or more other separate accounts
investing in the Eligible Funds. If a material conflict arises, the affected
insurance companies are required to take any necessary steps to resolve the
matter, including stopping their separate accounts from investing in the
Eligible Funds. See the Eligible Funds' prospectuses for more details.
Adding and Discontinuing Investment Options
We may, upon 30 days written notice to you, direct that you may not make any
future Contributions or Transfers to a particular Investment Division or
Guaranteed Sub-Account.
When we inform you that we are discontinuing an Investment Division or
Guaranteed Sub-Account to which you are allocating money, we will ask that you
promptly submit alternative allocation instructions. If we do not receive your
changed allocation instructions, we may return all affected Contributions or
allocate those Contributions as indicated in the written notice provided to you.
Contributions and Transfers you make to a discontinued Investment Division or
Guaranteed Sub-Account before the effective date of the notice may be kept in
those Investment Divisions or Guaranteed Sub-Accounts.
In addition, we may discontinue all investment options under the Contracts and
refuse to accept any new Contributions.
If we determine to make new investment options available under the Contracts, in
our sole discretion we may or may not make those new investment options
available to you.
Substitution of Investments
When we determine to discontinue an Investment Division, in our sole discretion,
we may substitute shares of another mutual fund for the shares of the
corresponding Eligible Fund. No substitution may take place without prior
approval of the Securities and Exchange Commission, and prior notice to you.
Legal Matters
Advice regarding certain legal matters concerning the federal securities laws
applicable to the issue and sale of the Contract has been provided by Jorden
Burt Boros Cicchetti Berenson & Johnson LLP. The organization of Great-West,
Great-West's authority to issue the Contract, and the validity of the form of
the Contract have been passed upon by Ruth B. Lurie, Vice President, Counsel and
Associate Secretary of Great-West.
Available Information
We have filed a registration statement ("Registration Statement") with the
Securities and Exchange Commission ("SEC")under the 1933 Act relating to the
Contracts offered by this Prospectus. This Prospectus has been filed as a part
of the Registration Statement and does not contain all of the information set
forth in the Registration Statement and exhibits thereto. Reference is made to
the Registration Statement and exhibits for further information relating to us
and the Contracts. Statements contained in this Prospectus, regarding the
content of the Contracts and other legal instruments, are summaries. For a
complete statement of the terms thereof, reference is made to the instruments as
filed as exhibits to the Registration Statement. The Registration Statement and
its exhibits may be inspected and copied at the offices of the SEC located at
450 Fifth Street, N.W., Washington, D.C.
The Statement of Additional Information contains more specific information
relating to the Series Account and Great-West, such as:
o discussion about the Series Account's Custodian and Independent Auditors o
discussion about the Series Account's Underwriter o discussion about the
calculation of performance data o the financial statements for the Series
Account and Great-West
<PAGE>
APPENDIX A
CONDENSED FINANCIAL INFORMATION
Selected Data for Accumulation Units
Outstanding Throughout Each Period
For the Periods Ended December 31,
<TABLE>
- -------------------------------------------- ------------ ------------- ------------ ------------ -----------
Investment Division 1998 1997 1996 1995 1994
------------ ------------ -----------
- -------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
MAXIM BOND a
Value at beginning of period $ 11.43 $ 11.10 $ 9.76 $ 10.00
Value at end of period $ 12.09 $ 11.43 $ 11.10 $ 9.76
Increase (decrease) in value of $ 0.66 $ $ 1.34 $
accumulation units 0.33 (0.24)
Number of accumulation units outstanding 7,412.56 5,196.46 1,675.75
at end of period 455.62
- -------------------------------------------- ------------ ------------- ------------ ------------ -----------
- -------------------------------------------- ------------ ------------- ------------ ------------ -----------
MAXIM STOCK INDEXa
Value at beginning of period $ 15.70 $ $ 9.74 $ 10.00
13.05
Value at end of period $ 20.50 $ $ 13.05 $
15.70 9.74
Increase (decrease) in value of $ 4.80 $ $ 3.31 $
accumulation units 2.65 (0.26)
Number of accumulation units outstanding 169,289.23 130,996.47 17,200.32 2,306.48
at end of period
- -------------------------------------------- ------------ ------------- ------------ ------------ -----------
MAXIM MIDCAP (sub-advised by ARIEL)a
Value at beginning of period $ 14.12 $ $ 10.80 $
13.49 10.00
Value at end of period $ 15.75 $ $ 13.49 $
14.12 10.80
Increase (decrease) in value of $ 1.63 $ $ 2.69 $
accumulation units 0.63 0.80
Number of accumulation units outstanding 49,565.38 83,398.90 24,467.21
at end of period 4,508.26
- -------------------------------------------- ------------ ------------- ------------ ------------ -----------
MAXIM SMALL-CAP INDEX a
Value at beginning of period $ 13.87 $ 12.18 $ 9.77 $
10.00
Value at end of period $ 16.57 $ 13.87 $ 12.18 $
9.77
Increase (decrease) in value of $ 2.70 $ $ 2.41 $
accumulation units 1.69 (0.23)
Number of accumulation units outstanding 14,918.01 10,975.88 2,705.63
at end of period 986.29
-----------
- -------------------------------------------- ------------ ------------- ------------ ------------
MAXIM CORPORATE BOND f
Value at beginning of period $ 13.12 $ 12.03 $
10.00
Value at end of period $ 14.60 $ 13.12 $
12.03
Increase (decrease) in value of $ 1.48 $ $
accumulation units 1.09 2.03
Number of accumulation units outstanding 23,403.30 12,487.29
at end of period 799.35
- -------------------------------------------- ------------ ------------- ------------ ------------
MAXIM INVESCO ADR b
Value at beginning of period $ 13.46 $ 11.25 $
10.00
Value at end of period $ 14.90 $ 13.46 $
11.25
Increase (decrease) in value of $ 1.44 $ $
accumulation units 2.21 1.25
Number of accumulation units outstanding 31,948.04 15,132.95 2,623.01
at end of period
- -------------------------------------------- ------------ ------------- ------------ ------------
MAXIM INVESCO SMALL-CAP GROWTH b
Value at beginning of period $ 16.39 $ 13.09 $
10.00
Value at end of period $ 19.21 $ 16.39 $
13.09
Increase (decrease) in value of $ 2.82 $ $
accumulation units 3.30 3.09
Number of accumulation units outstanding 44,396.72 33,993.67 4,511.19
at end of period
- -------------------------------------------- ------------ ------------- ------------ ------------
MAXIM MONEY MARKET e
Value at beginning of period $ 10.55 $ 10.17 $
10.00
Value at end of period $ 10.97 $ 10.55 $
10.17
Increase (decrease) in value of $ 0.42 $ $
accumulation units 0.38 0.17
Number of accumulation units outstanding 55,509.88 30,070.95 15,499.45
at end of period
- -------------------------------------------- ------------ ------------- ------------ ------------
MAXIM SMALL-CAP VALUE (ARIEL VALUE)d
Value at beginning of period $ 13.51 $ 11.60 $
10.00
Value at end of period $ 17.01 $ 13.51 $
11.60
Increase (decrease) in value of $ 3.50 $ $
accumulation units 1.91 1.60
Number of accumulation units outstanding 3,045.87 1,551.40
at end of period 697.92
- -------------------------------------------- ------------ ------------- ------------ ------------
CONDENSED FINANCIAL INFORMATION
Selected Data for Accumulation Units
Outstanding Throughout Each Period
For the Periods Ended December 31,
- -------------------------------------------- ------------ ------------- ------------ ------------
Investment Division 1998 1997 1996 1995
------------ ------------
- -------------------------------------------- ------------ -------------
MAXIM T. ROWE PRICE EQUITY/INCOME b
Value at beginning of period $ 15.24 $ 12.92 $
10.00
Value at end of period $ 19.39 $ 15.24 $
12.92
Increase (decrease) in value of $ 4.15 $ $
accumulation units 2.32 2.92
Number of accumulation units outstanding 106,469.26 67,415.13 19,500.37
at end of period
- -------------------------------------------- ------------ ------------- ------------ ------------
- -------------------------------------------- ------------ ------------- ------------ ------------
MAXIM U.S. GOVERNMENT SECURITIES c
Value at beginning of period $ 11.41 $ 11.12 $
10.00
Value at end of period $ 12.23 $ 11.41 $
11.12
Increase (decrease) in value of $ 0.82 $ $
accumulation units 0.29 1.12
Number of accumulation units outstanding 12,345.78 15,784.10
at end of period 14,812.67
- -------------------------------------------- ------------ ------------- ------------ ------------
AMERICAN CENTURY VP CAPITAL APPRECIATION c
Value at beginning of period $ 12.23 $ 12.94 $
10.00
Value at end of period $ 11.68 $ 12.23 $
12.94
Increase (decrease) in value of $ ( $ ( $
accumulation units 0.55) 0.71) 2.94
Number of accumulation units outstanding 16,591.59 15,595.65
at end of period 6,110.86
------------
- -------------------------------------------- ------------ ------------- ------------
MAXIM INVESCO BALANCED g
Value at beginning of period $ 10.13 $ 10.00
Value at end of period $ 12.59 $ 10.13
Increase (decrease) in value of $ 2.46 $ 0.13
accumulation units
Number of accumulation units outstanding 32,937.69 1,307.11
at end of period
- -------------------------------------------- ------------ ------------- ------------
FIDELITY VIP II CONTRAFUND Value at beginning of period Value at end of period
Increase (decrease) in value of accumulation units
Number of accumulation units outstanding
at end of period
- -------------------------------------------- ------------
</TABLE>
KEY
Current Accumulation Unit Values can be obtained by calling GWL&A toll-free at
1-800-523-4106 a The Investment Division first received contributions on
September 19, 1994, at a unit value of $10.00 b The Investment Division first
received contributions on January 6, 1995, at a unit value of $10.00. c The
Investment Division first received contributions on January 18, 1995, at a unit
value of $10.00. d The Investment Division first received contributions on March
9, 1995, at a unit value of $10.00. e The Investment Division first received
contributions on August 4, 1995, at a unit value of $10.00. f The Investment
Division first received contributions on August 8, 1995, at a unit value of
$10.00. g The Investment Division first received contributions on October 1,
1996, at a unit value of $10.00.
<PAGE>
APPENDIX B - CALCULATION OF THE NET INVESTMENT FACTOR
The Net Investment Factor for each Variable Sub-Account for any Valuation
Period is determined by dividing (a) by (b), and subtracting (c) from the result
where:
(a) is the net result of:
(i) the net asset value per share of the Eligible Fund shares determined as
of the end of the current Valuation Period, plus
(ii)the per share amount of any dividend (or, if applicable, capital gain
distributions) made by the Eligible Fund on shares if the "ex-dividend"
date occurs during the current Valuation Period, minus or plus
(iii) a per unit charge or credit for any taxes incurred by or provided for
in the Variable Sub-Account, which is determined by GWL&A to have
resulted from the investment operations of the Variable Sub-Account; and
(b) is the net asset value per share of the Eligible Fund shares determined as
of the end of the immediately preceding Valuation Period, minus or plus
(c) is an amount representing the Mortality and Expense Risk Charge deducted
from each Variable Sub-Account on a daily basis. Such amount is equal to
1.25%.
The Net Investment Factor may be greater than, less than, or equal to
one. Therefore, the Accumulation Unit Value may increase, decrease or remain
unchanged.
The net asset value per share referred to in paragraphs (a) (i) and (b)
above, reflect the investment performance of the Eligible Fund as well as the
payment of Eligible Fund expenses.
1Standard & Poor, S&P 500 Composite Index, S&P Mid-Cap Index and S&P Small-Cap
600 Stock Index are trademarks of The McGraw-Hill Companies, Inc. and have been
licensed for use by Maxim Series Fund, Inc. and Great-West Life & Annuity
Insurance Company. The Portfolios are not sponsored, endorsed, sold or promoted
by Standard & Poor's and Standard & Poor's makes no representation regarding the
advisability of using this index.
2 The Frank Russell Company is not a sponsor of , or in any other way affiliated
with the Growth Index and Value Index Portfolios or the Maxim Series Fund, Inc.
<PAGE>
PART B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
B-5
MAXIM SERIES ACCOUNT
Individual Flexible Premium Variable Annuity Contracts
issued by
Great-West Life & Annuity Insurance Company
8515 E. Orchard Road
Englewood, Colorado 80111
Telephone: (800) 468-8661 (Outside Colorado)
(800) 547-4957 (Colorado)
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information is not a Prospectus and should
be read in conjunction with the Prospectus, dated Month X, 1999, which is
available without charge by contacting Great-West Life & Annuity Insurance
Company ("GWL&A") at the above address or at the above telephone number.
Month X, 1999
<PAGE>
TABLE OF CONTENTS
Page
CUSTODIAN AND INDEPENDENT AUDITORS............B-3
UNDERWRITER...................................B-3
CALCULATION OF PERFORMANCE DATA...............B-4
FINANCIAL STATEMENTS..........................B-5
<PAGE>
CUSTODIAN AND INDEPENDENT AUDITORS
A. Custodian
The assets of Maxim Series Account (the "Series Account") are
held by GWL&A. The assets of the Series Account are kept physically segregated
and held separate and apart from the general account of GWL&A. GWL&A maintains
records of all purchases and redemptions of shares of the Fund. Additional
protection for the assets of the Series Account is afforded by blanket fidelity
bonds issued to The Great-West Life Assurance Company ("Great-West") in the
amount of $50 million (Canadian), per occurrence, which covers all officers and
employees of GWL&A.
B. Independent Auditors
The accounting firm of Deloitte & Touche LLP performs certain
accounting and auditing services for GWL&A and the Series Account. The principal
business address of Deloitte & Touche LLP is 555 Seventeenth Street, Suite 3600,
Denver, Colorado 80202-3942.
The statements of assets and liabilities of Maxim Series Account
as of December 31, 1998, the related statements of operations for the year then
ended, the statements of changes in net asset for each of the two years in the
period then ended and the consolidated balance sheets for Great-West Life &
Annuity Insurance Company at December 31, 1998 and 1997 and the related
consolidated statements of income, stockholder's equity and cash flows for each
of the three years in the period ended December 31, 1998, included in this
Statement of Additional Information have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their reports appearing herein and are
included in reliance upon the reports of such firm given upon their authority as
experts in accounting and auditing.
UNDERWRITER
The offering of the Contracts is made on a continuous basis by
BenefitsCorp Equities, Inc. ("BCE"), a wholly owned subsidiary of GWL&A. Prior
to 1996, the Contracts were offered through Great-West an affiliate of GWL&A.
The payments made between 1996 and 1998 will be filed by amendment.
<PAGE>
CALCULATION OF PERFORMANCE DATA
A. Yield and Effective Yield Quotations for the Money Market Investment Division
The yield quotation for the Money Market Investment Division set forth
in the Prospectus is for the seven-day period ended December 31, 1998 and is
computed by determining the net change, exclusive of capital changes, in the
value of a hypothetical pre-existing account having a balance of one
Accumulation Unit in the Money Market Investment Division at the beginning of
the period, subtracting a hypothetical charge reflecting deductions from
Participant accounts, and dividing the difference by the value of the account at
the beginning of the base period to obtain the base period return, and then
multiplying the base period return by (365/7) with the resulting yield figure
carried to the nearest hundredth of one percent.
The effective yield quotation for the Money Market Investment Division
set forth in the Prospectus is for the seven-day period ended December 31, 1998
and is carried to the nearest hundredth of one percent, computed by determining
the net change, exclusive of capital changes, in the value of a hypothetical
pre-existing account having a balance of one Accumulation Unit in the Money
Market Investment Division at the beginning of the period, subtracting a
hypothetical charge reflecting deductions from Participant accounts, and
dividing the difference by the value of the account at the beginning of the base
period to obtain the base period return, and then compounding the base period
return by adding 1, raising the sum to a power equal to 365 divided by 7, and
subtracting 1 from the result, according to the following formula:
EFFECTIVE YIELD = [(BASE PERIOD RETURN +1) 365/7]-1.
For purposes of the yield and effective yield computations, the
hypothetical charge reflects all deductions that are charged to all Participant
accounts in proportion to the length of the base period, and for any fees that
vary with the size of the account, the account size is assumed to be the Money
Market Investment Division's mean account size. The specific percentage
applicable to a particular withdrawal would depend on a number of factors
including the length of time the Contract Owner has participated under the
Contracts. (See "Administrative Charges, Risk Charges and Premium Taxes" in the
prospectus.) No deductions or sales loads are assessed upon annuitization under
the Contracts. Realized gains and losses from the sale of securities and
unrealized appreciation and depreciation of the Money Market Investment Division
and the Fund are excluded from the calculation of yield.
<PAGE>
B. Total Return Quotations for All Investment Divisions (Other than Money
Market)
The total return quotations set forth in the Prospectus are average
annual total return quotations for the one, five and ten year periods (or since
inception) ended December 31, 1998. The quotations are computed by finding the
average annual compounded rates of return over the relevant periods that would
equate the initial amount invested to the ending redeemable value, according to
the following formula:
P(1+T)n = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical
$1,000 payment made at the beginning of the
particular period at the end of the
particular period
For purposes of the total return quotations, the calculations take into effect
all fees that are charged to the Contract Value, and for any fees that vary with
the size of the account, the account size is assumed to be the respective
Investment Divisions' mean account size. The calculations also assume a complete
redemption as of the end of the particular period.
FINANCIAL STATEMENTS
The financial statements of GWL&A as contained herein should be
considered only as bearing upon GWL&A's ability to meet its obligations under
the Contracts, and they should not be considered as bearing on the investment
performance of the Series Account. The variable interest of Contract Owners
under the Contracts are affected solely by the investment results of the Series
Account.
<PAGE>
MAXIM SERIES ACCOUNT
OF
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
- ------------------------------------------------------------------------------
FINANCIAL STATEMENTS FOR THE YEARS
ENDED DECEMBER 31, 1998 AND 1997
AND INDEPENDENT AUDITORS' REPORT
<PAGE>
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
CONSOLIDATED FINANCIAL STATEMENTS FOR THE
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
AND INDEPENDENT AUDITORS' STATEMENT
<PAGE>
C-13
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
The statements of assets and liabilities of Maxim series
Account as of December 31, 1998, the related statements of
operations for the year then ended, the statements of changes
in net asset for each of the two years in the period then
ended and the consolidated balance sheets for Great-West Life
& Annuity Insurance Company at December 31, 1998 and 1997 and
the related consolidated statements of income, stockholder's
equity and cash flows for each of the three years in the
period ended December 31, 1998, are included in Part B.
(b) Exhibits
Items (1), (2), and (8) are incorporated by reference to
Registrant's Form S-6 Registration Statement filed February
21, 1984 and Pre-Effective Amendment No. 1 thereto filed June
29, 1984.
(3) The Underwriting Agreement is incorporated by reference
to Registrant's Post Effective Amendment No. 3 filed
April 24, 1997.
(4) Form of variable annuity contracts no longer being
offered by are incorporated by reference to
Registrant's Pre-Effective Amendment No. 2 to its Form
S-6 Registration Statement filed March 10, 1982. Copy
of variable annuity contract currently being offered by
Registrant is incorporated by reference to Registrant's
Post-Effective Amendment No. 9.
(5) Form of application used with variable annuity
contracts no longer being offered by Registrant are
incorporated by reference to Registrant's Pre-Effective
Amendment No. 2 to its Form S-6 Registration Statement
filed March 10, 1982. Copy of application used with
variable annuity contract currently is incorporated by
reference to Registrant's Post-Effective Amendment No.
9.
(6) Copy of Articles of Redomestication and Bylaws of
Depositor is incorporated by reference to Registrant's
Post-Effective Amendment No. 9.
(7) Not Applicable
(9) Copy of opinion of counsel for contracts no longer
being offered by Registrant are incorporated by
reference to Registrant's Post-Effective Amendment No.
14 to its Registration Statement filed April 30, 1987.
Copy of opinion of counsel for contracts currently
being offered by Registrant is incorporated by
reference to Registrant's Post-Effective Amendment No.
9.
(10) (a) Written Consent of Jorden Burt Berenson &
Johnson, LLP to be filed by amendment.
(b) Written Consent of Deloitte & Touche LLP to be
filed by amendment.
(c) Written Consent of Ruth B. Lurie to be filed by
amendment.
(11) Not Applicable
(12) Not Applicable
(13) Item (13) is incorporated by reference to registrant's
Post-Effective Amendment No. 3 to Form N-4 registration
statement filed on April 25, 1997.
(14) Not Applicable
<PAGE>
<TABLE>
Item 25. Directors and Officers of the Depositor
Position and Offices
Name Principal Business Address with Depositor
James Balog 2205 North Southwinds Boulevard Director
Vero Beach, Florida 39263
<S> <C>
James W. Burns, O.C. (4) Director
Orest T. Dackow (3) Director
Andre Desmarais (4) Director
Paul Desmarais, Jr. (4) Director
Robert G. Graham 574 Spoonbill Drive Director
Sarasota, FL 34236
Robert Gratton (5) Chairman
N. Berne Hart 2552 East Alameda Avenue Director
Denver, Colorado 80209
Kevin P. Kavanagh (1) Director
William Mackness 61 Waterloo Street Director
Winnipeg, Manitoba R3N 0S3
William T. McCallum (3) Director, President and
Chief Executive Officer
Jerry E.A. Nickerson H.B. Nickerson & Sons Limited Director
P.O. Box 130
275 Commercial Street
North Sydney, Nova Scotia B2A 3M2
P. Michael Pitfield, P.C., Q.C. (4) Director
Michel Plessis-Belair, F.C.A. (4) Director
Brian E. Walsh Veritas Capital Management LLC Director
115 Putnam Ave.
Greenwich, Connecticut
John A. Brown (3) Senior Vice-President,
Financial Services, Sales
<PAGE>
Position and Offices
Name Principal Business Address with Depositor
Donna A. Goldin (2) Executive Vice-President,
and Chief Operating
Officer,
One Corporation
Mitchell T.G. Graye (3) Executive
Vice-President,
Chief Financial Officer
John T. Hughes (3) Senior Vice-President,
Chief Investment Officer
D. Craig Lennox (3) Senior Vice-President,
General Counsel and
Secretary
Steven H. Miller (2) Senior Vice-President,
Employee Benefits, Sales
James D. Motz (2) Executive Vice-President,
Employee Benefits
Charles P. Nelson (3) Senior Vice President,
Financial Services
Public Non-Profit Markets
Martin Rosenbaum (2) Senior Vice-President,
Employee Benefits,
Operations
Gregg E. Seller (3) Senior Vice President,
Major Accounts
Douglas L. Wooden (3) Executive Vice-President,
Financial Services
--------------------------------------
(1) 100 Osborne Street North, Winnipeg, Manitoba, Canada R3C 3A5.
(2) 8505 East Orchard Road, Englewood, Colorado 80111.
(3) 8515 East Orchard Road, Englewood, Colorado 80111.
(4) Power Corporation of Canada, 751 Victoria Square, Montreal, Quebec, Canada H2Y
2J3.
(5) Power Financial Corporation, 751 Victoria Square, Montreal, Quebec, Canada H2Y
2J3.
<PAGE>
Item 26. Persons controlled by or under common control with the Depositor or Registrant
ORGANIZATIONAL CHART
Power Corporation of Canada
100% - 2795957 Canada Inc.
100% - 171263 Canada Inc.
67.7% - Power Financial Corporation
81.2% - Great-West Lifeco Inc.
99.5% - The Great-West Life Assurance Company 100% - GWL&A Financial
(Nova Scotia) Inc.
100% - GWL&A Financial Inc.
100% - Great-West Life & Annuity Insurance Company
100% - First Great-West Life & Annuity Insurance
Company
100% - GW Capital Management, LLC 100%
- Orchard Capital Management, LLC
100% - Greenwood Investments,
Inc.
100% - Financial Administrative Services Corporation
100% - One Corporation
100% - One Health Plan of Arizona, Inc.
100% - One Health Plan of Illinois, Inc.
100% - One Health Plan of Texas, Inc.
100% - One Health Plan of California, Inc.
100% - One Health Plan of Colorado, Inc.
100% - One Health Plan of Georgia, Inc.
100% - One Health Plan of North Carolina, Inc.
100% - One Health Plan of South Carolina, Inc.
100% - One Health Plan of Washington, Inc.
100% - One Health Plan of Ohio, Inc.
100% - One Health Plan of Tennessee, Inc.
100% - One Health Plan of Oregon, Inc.
100% - One Health Plan of Florida, Inc.
100% - One Health Plan of Indiana, Inc.
100% - One Health Plan of Massachusetts, Inc.
100% - One Health Plan of Maine, Inc.
100% - One Health Plan of New Jersey, Inc.
100% - One Health Plan of New Hampshire, Inc.
100% - One Health Plan of Pennsylvania, Inc.
100% - One Health Plan, Inc. (Vermont)
100% - One Orchard Equities, Inc.
100% - Great-West Benefit Services, Inc.
13% - Private Healthcare Systems, Inc.
100% - Benefits Communication
Corporation 100% - BenefitsCorp
Equities, Inc.
95% - Maxim Series Fund, Inc.* 100% -
Greenwood Property Corporation 100% - GWL
Properties Inc.
100% - Great-West Realty Investments Inc.
50% - Westkin Properties, Ltd.
100% - Confed Admin Services, Inc.
92% - Orchard Series Fund**
* New England Life Insurance Company - 5%
** New England Life Insurance Company - 8%
</TABLE>
Item 27. Number of Contract Owners
As of February 26, 1999, there were XX Contract Owners.
Item 28. Indemnification
Provisions exist under the Colorado General Corporation Code and the
Bylaws of GWL&A whereby GWL&A may indemnify a director, officer, or
controlling person of GWL&A against liabilities arising under the
Securities Act of 1933. The following excerpts contain the substance
of these provisions:
Colorado Business Corporation Act
Article 109 - INDEMNIFICATION
Section 7-109-101. Definitions.
As used in this Article:
(1) "Corporation" includes any domestic or foreign entity that is a
predecessor of the corporation by reason of a merger, consolidation,
or other transaction in which the predecessor's existence ceased upon
consummation of the transaction.
(2) "Director" means an individual who is or was a director of a
corporation or an individual who, while a director of a corporation,
is or was serving at the corporation's request as a director,
officer, partner, trustee, employee, fiduciary or agent of another
domestic or foreign corporation or other person or employee benefit
plan. A director is considered to be serving an employee benefit plan
at the corporation's request if his or her duties to the corporation
also impose duties on or otherwise involve services by, the director
to the plan or to participants in or beneficiaries of the plan.
(3) "Expenses" includes counsel fees.
(4) "Liability" means the obligation incurred with respect to a
proceeding to pay a judgment, settlement, penalty, fine, including an
excise tax assessed with respect to an employee benefit plan, or
reasonable expenses.
(5) "Official capacity" means, when used with respect to a director,
the office of director in the corporation and, when used with respect
to a person other than a director as contemplated in Section
7-109-107, means the office in the corporation held by the officer or
the employment, fiduciary, or agency relationship undertaken by the
employee, fiduciary, or agent on behalf of the corporation. "Official
capacity" does not include service for any other domestic or foreign
corporation or other person or employee benefit plan.
(6) "Party" includes a person who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
(7) "Proceeding" means any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal.
Section 7-109-102. Authority to indemnify directors.
(1) Except as provided in subsection (4) of this section, a
corporation may indemnify a person made a party to the proceeding
because the person is or was a director against liability incurred in
any proceeding if:
(a) The person conducted himself or herself in good faith;
(b) The person reasonably believed:
(I) In the case of conduct in an official capacity with
the corporation, that his or her conduct was in the
corporation's best interests; or
(II) In all other cases, that his or her conduct was at
least not opposed to the corporation's best interests;
and
(c) In the case of any criminal proceeding, the person had no
reasonable cause to believe his or her conduct was unlawful.
(2) A director's conduct with respect to an employee benefit plan for
a purpose the director reasonably believed to be in the interests of
the participants in or beneficiaries of the plan is conduct that
satisfies the requirements of subparagraph (II) of paragraph (b) of
subsection (1) of this section. A director's conduct with respect to
an employee benefit plan for a purpose that the director did not
reasonably believe to be in the interests of the participants in or
beneficiaries of the plan shall be deemed not to satisfy the
requirements of subparagraph (a) of subsection (1) of this section.
(3) The termination of any proceeding by judgment, order, settlement,
or conviction, or upon a plea of nolo contendere or its equivalent,
is not, of itself, determinative that the director did not meet the
standard of conduct described in this section.
(4) A corporation may not indemnify a director under this section:
(a) In connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the
corporation; or
(b) In connection with any proceeding charging that the
director derived an improper personal benefit, whether or not
involving action in his official capacity, in which proceeding
the director was adjudged liable on the basis that he or she
derived an improper personal benefit.
(5) Indemnification permitted under this section in connection with a
proceeding by or in the right of a corporation is limited to
reasonable expenses incurred in connection with the proceeding.
Section 7-109-103. Mandatory Indemnification of Directors.
Unless limited by the articles of incorporation, a corporation
shall be required to indemnify a person who is or was a director of
the corporation and who was wholly successful, on the merits or
otherwise, in defense of any proceeding to which he was a party,
against reasonable expenses incurred by him in connection with the
proceeding.
Section 7-109-104. Advance of Expenses to Directors.
(1) A corporation may pay for or reimburse the reasonable expenses
incurred by a director who is a party to a proceeding in advance of
the final disposition of the proceeding if:
(a) The director furnishes the corporation a written
affirmation of his good-faith belief that he has met the
standard of conduct described in Section 7-109-102;
(b) The director furnishes the corporation a written
undertaking, executed personally or on the director's behalf,
to repay the advance if it is ultimately determined that he or
she did not meet such standard of conduct; and
(c) A determination is made that the facts then know to those
making the determination would not preclude indemnification
under this article.
(2) The undertaking required by paragraph (b) of subsection (1) of
this section shall be an unlimited general obligation of the
director, but need not be secured and may be accepted without
reference to financial ability to make repayment.
(3) Determinations and authorizations of payments under this section
shall be made in the manner specified in Section 7-109-106.
Section 7-109-105. Court-Ordered Indemnification of Directors.
(1) Unless otherwise provided in the articles of incorporation, a
director who is or was a party to a proceeding may apply for
indemnification to the court conducting the proceeding or to another
court of competent jurisdiction. On receipt of an application, the
court, after giving any notice the court considers necessary, may
order indemnification in the following manner:
(a) If it determines the director is entitled to mandatory
indemnification under section 7-109-103, the court shall order
indemnification, in which case the court shall also order the
corporation to pay the director's reasonable expenses incurred
to obtain court-ordered indemnification.
(b) If it determines that the director is fairly and
reasonably entitled to indemnification in view of all the
relevant circumstances, whether or not the director met the
standard of conduct set forth in section 7-109-102 (1) or was
adjudged liable in the circumstances described in Section
7-109-102 (4), the court may order such indemnification as the
court deems proper; except that the indemnification with
respect to any proceeding in which liability shall have been
adjudged in the circumstances described Section 7-109-102 (4)
is limited to reasonable expenses incurred in connection with
the proceeding and reasonable expenses incurred to obtain
court-ordered indemnification.
Section 7-109-106. Determination and Authorization of Indemnification of
Directors.
(1) A corporation may not indemnify a director under Section
7-109-102 unless authorized in the specific case after a
determination has been made that indemnification of the director is
permissible in the circumstances because he has met the standard of
conduct set forth in Section 7-109-102. A corporation shall not
advance expenses to a director under Section 7-109-104 unless
authorized in the specific case after the written affirmation and
undertaking required by Section 7-109-104(1)(a) and (1)(b) are
received and the determination required by Section 7-109-104(1)(c)
has been made.
(2) The determinations required to be made subsection (1) of this
section shall be made:
(a) By the board of directors by a majority vote of those
present at a meeting at which a quorum is present, and only
those directors not parties to the proceeding shall be counted
in satisfying the quorum.
(b) If a quorum cannot be obtained, by a majority vote of a
committee of the board of directors designated by the board of
directors, which committee shall consist of two or more
directors not parties to the proceeding; except that directors
who are parties to the proceeding may participate in the
designation of directors for the committee.
(3) If a quorum cannot be obtained as contemplated in paragraph (a)
of subsection (2) of this section, and the committee cannot be
established under paragraph (b) of subsection (2) of this section, or
even if a quorum is obtained or a committee designated, if a majority
of the directors constituting such quorum or such committee so
directs, the determination required to be made by subsection (1) of
this section shall be made:
(a) By independent legal counsel selected by a vote of the
board of directors or the committee in the manner specified in
paragraph (a) or (b) of subsection (2) of this section or, if
a quorum of the full board cannot be obtained and a committee
cannot be established, by independent legal counsel selected
by a majority vote of the full board of directors; or
(b) By the shareholders.
(4) Authorization of indemnification and evaluation as to
reasonableness of expenses shall be made in the same manner as the
determination that indemnification is permissible; except that, if
the determination that indemnification is permissible is made by
independent legal counsel, authorization of indemnification and
advance of expenses shall be made by the body that selected such
counsel.
Section 7-109-107. Indemnification of Officers, Employees, Fiduciaries, and
Agents.
(1) Unless otherwise provided in the articles of incorporation:
(a) An officer is entitled to mandatory indemnification under
section 7-109-103, and is entitled to apply for court-ordered
indemnification under section 7-109-105, in each case to the
same extent as a director;
(b) A corporation may indemnify and advance expenses to an
officer, employee, fiduciary, or agent of the corporation to
the same extent as a director; and
(c) A corporation may indemnify and advance expenses to an
officer, employee, fiduciary, or agent who is not a director
to a greater extent, if not inconsistent with public policy,
and if provided for by its bylaws, general or specific action
of its board of directors or shareholders, or contract.
Section 7-109-108. Insurance.
A corporation may purchase and maintain insurance on behalf of
a person who is or was a director, officer, employee, fiduciary, or
agent of the corporation and who, while a director, officer,
employee, fiduciary, or agent of the corporation, is or was serving
at the request of the corporation as a director, officer, partner,
trustee, employee, fiduciary, or agent of any other domestic or
foreign corporation or other person or of an employee benefit plan
against any liability asserted against or incurred by the person in
that capacity or arising out of his or her status as a director,
officer, employee, fiduciary, or agent whether or not the corporation
would have the power to indemnify the person against such liability
under the Section 7-109-102, 7-109-103 or 7-109-107. Any such
insurance may be procured from any insurance company designated by
the board of directors, whether such insurance company is formed
under the laws of this state or any other jurisdiction of the United
States or elsewhere, including any insurance company in which the
corporation has an equity or any other interest through stock
ownership or otherwise.
Section 7-109-109. Limitation of Indemnification of Directors.
(1) A provision concerning a corporation's indemnification of, or
advance of expenses to, directors that is contained in its articles
of incorporation or bylaws, in a resolution of its shareholders or
board of directors, or in a contract, except for an insurance policy
or otherwise, is valid only to the extent the provision is not
inconsistent with Sections 7-109-101 to 7-109-108. If the articles of
incorporation limit indemnification or advance of expenses,
indemnification or advance of expenses are valid only to the extent
not inconsistent with the articles of incorporation.
(2) Sections 7-109-101 to 7-109-108 do not limit a corporation's
power to pay or reimburse expenses incurred by a director in
connection with an appearance as a witness in a proceeding at a time
when he or she has not been made a named defendant or respondent in
the proceeding.
Section 7-109-110. Notice to Shareholders of Indemnification of Director.
If a corporation indemnifies or advances expenses to a
director under this article in connection with a proceeding by or in
the right of the corporation, the corporation shall give written
notice of the indemnification or advance to the shareholders with or
before the notice of the next shareholders' meeting. If the next
shareholder action is taken without a meeting at the instigation of
the board of directors, such notice shall be given to the
shareholders at or before the time the first shareholder signs a
writing consenting to such action.
Bylaws of GWL&A
Article II, Section 11. Indemnification of Directors.
The Company may, by resolution of the Board of Directors,
indemnify and save harmless out of the funds of the Company to the
extent permitted by applicable law, any director, officer, or
employee of the Company or any member or officer of any committee,
and his heirs, executors and administrators, from and against all
claims, liabilities, costs, charges and expenses whatsoever that any
such director, officer, employee or any such member or officer
sustains or incurs in or about any action, suit, or proceeding that
is brought, commenced, or prosecuted against him for or in respect of
any act, deed, matter or thing whatsoever made, done, or permitted by
him in or about the execution of his duties of his office or
employment with the Company, in or about the execution of his duties
as a director or officer of another company which he so serves at the
request and on behalf of the Company, or in or about the execution of
his duties as a member or officer of any such Committee, and all
other claims, liabilities, costs, charges and expenses that he
sustains or incurs, in or about or in relation to any such duties or
the affairs of the Company, the affairs of such Committee, except
such claims, liabilities, costs, charges or expenses as are
occasioned by his own willful neglect or default. The Company may, by
resolution of the Board of Directors, indemnify and save harmless out
of the funds of the Company to the extent permitted by applicable
law, any director, officer, or employee of any subsidiary corporation
of the Company on the same basis, and within the same constraints as,
described in the preceding sentence.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
Item 29. Principal Underwriter
(a) BenefitsCorp Equities, Inc. ("BCE") currently distributes securities
of Great-West Variable Annuity Account A, FutureFunds Series Account,
and Pinnacle Series Account in addition to those of the Registrant.
(b) Directors and Officers of BCE
<TABLE>
Position and Offices
Name Principal Business Address with
Underwriter
<S> <C>
Charles P. Nelson (1) Director and President
Robert K. Shaw (1) Director
Dennis Low (1) Director
John Brown (1) Director
Gregg E. Seller 18101 Von Karman Ave. Vice President
Suite 1460 Major Accounts
Irvine, CA 92715
Jack Baker (1) Vice President, Licensing
and Contracts
Glen R. Derback (1) Treasurer
Beverly A. Byrne (1) Secretary
Teresa Buckley (1) ComplianceOfficer
- ------------
</TABLE>
(1) 8515 E. Orchard Road, Englewood, Colorado 80111
(c) Commissions and other compensation received by Principal Underwriter
during Registrant's last fiscal year:
<TABLE>
Net
Name of Underwriting Compensation
Principal Discounts and on Brokerage
Underwriter Commissions Redemption Commissions
Compensation
<S> <C> <C> <C> <C>
BCE -0- -0- -0- -0-
</TABLE>
Item 30. Location of Accounts and Records
All accounts, books, or other documents required to be maintained by
Section 31(a) of the 1940 Act and the rules promulgated thereunder
are maintained by the Registrant through GWL&A, 8515 E. Orchard Road,
Englewood, Colorado 80111.
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
(a) Registrant undertakes to file a post-effective amendment to
this Registration Statement as frequently as is necessary to
ensure that the audited financial statements in the
Registration Statement are never more than 16 months old for
so long as payments under the variable annuity contracts may
be accepted.
(b) Registrant undertakes to include either (1) as part of any
application to purchase a contract offered by the Prospectus,
a space that an applicant can check to request a Statement of
Additional Information, or (2) a postcard or similar written
communication affixed to or included in the Prospectus that
the applicant can remove to send for a Statement of Additional
Information.
(c) Registrant undertakes to deliver any Statement of Additional
Information and any financial statements required to be made
available under this form promptly upon written or oral
request.
(d) GWL&A represents that the fees and charges deducted under the
Contracts, in the aggregate, are reasonable in relation to the
services rendered, the expenses expected to be incurred, and
the risks assumed by GWL&A.
<PAGE>
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 5 to its Registration Statement on Form N-4 to be
signed on its behalf, in the City of Englewood, State of Colorado, on this 26
day of ___February___, 1999.
MAXIM SERIES ACCOUNT
(Registrant)
By: /s/ William T. McCallum
William T. McCallum, President
and Chief Executive Officer of
Great-West Life & Annuity
Insurance Company
GREAT-WEST LIFE & ANNUITY
INSURANCE COMPANY
(Depositor)
By: /s/ William T. McCallum
William T. McCallum, President
and Chief Executive Officer
As required by the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities with Great-West Life
& Annuity Insurance Company and on the dates indicated:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Signature and Title Date
/s/ Robert Gratton* February 26, 1999
February 26, 1999
Director and Chairman of the Board
(Robert Gratton)
/s/ William T. McCallum February 26,
1999
Director, President and Chief Executive
Officer (William T. McCallum)
/s/ Mitchell T.G. Graye February 26, 1999
February 26, 1999
Executive Vice President and
Chief Financial Officer
(Mitchell T.G. Graye)
/s/ James Balog* February 26, 1999
February 26, 1999
Director, (James Balog)
<PAGE>
Signature and Title Date
/s/ James W. Burns* February 26, 1999
February 26, 1999
Director, (James W. Burns)
/s/ Orest T. Dackow* February 26, 1999
February 26, 1999
Director (Orest T. Dackow)
/s/Andre Desmarais* February 26, 1999
February 26, 1999
Director Andre Desmarais
/s/ Paul Desmarais, Jr.* February 26, 1999
February 26, 1999
Director (Paul Desmarais, Jr.)
/s/ Robert G. Graham* February 26, 1999
February 26, 1999
Director (Robert G. Graham)
/s/ N. Berne Hart* February 26, 1999
February 26, 1999
Director (N. Berne Hart)
/s/ Kevin P. Kavanagh* February 26, 1999
February 26, 1999
Director (Kevin P. Kavanagh)
/s/ William Mackness* February 26, 1999
February 26, 1999
Director (William Mackness)
/s/ Jerry E.A. Nicherson* February 26, 1999
February 26, 1999
Director (Jerry E.A. Nickerson)
/s/ P.Michael Pitfield* February 26, 1999
February 26, 1999
Director (P. Michael Pitfield)
/s/ Michel Plessis-Belair* February 26, 1999
February 26, 1999
Director (Michel Plessis-Belair)
/s/ Brian E. Walsh* February 26, 1999
February 26, 1999
Director (Brian E. Walsh)
*By: /s/ D.C. Lennox February 26, 1999
February 26, 1999
D. C. Lennox
Attorney-in-fact pursuant to Powers of Attorney filed under initial
registration statement on Form N-4; Post-Effective Amendment No. 14 under the
Investment Company Act of 1940, as amended filed on January 23, 1998, and Post
Effective Amendment No. 15 under the Investment Company Act of 1940, as amended
filed on April 6, 1998.
</TABLE>
