As filed with the Securities and Exchange Commission on March 1, 1999
Registration No. 33-44839
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
(X)
PRE-EFFECTIVE AMENDMENT NO. ( )
-----
POST-EFFECTIVE AMENDMENT NO. 1
------
(X )
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
(X)
Amendment No. 18
(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 Offices) (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
Title of Securities Being Registered: Flexible Premium Deferred Annuity
Contracts.
It is proposed that this filing will become effective (check appropriate space):
_____ Immediately upon filing pursuant to paragraph (b) of Rule 485.
_____ On ____________, pursuant to paragraph (b) of Rule 485.
X____ 60 days after filing pursuant to paragraph (a)(1) of Rule 485.
_____ On ____________, 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>
FORM N-4 ITEM PROSPECTUS CAPTION
<S> <C>
1. Cover Page.......................... Cover Page
2. Definitions......................... Definitions
3. Synopsis............................ Overview; Fee
Table; Key
Features of the Contract
4. Condensed Financial Information..... Not Applicable
5. General Description of Registrant,
Depositor and Portfolio Companies............... Great-West Life &
Annuity
Insurance Company; the
Series Account; Account; The
Eligible Funds;
Voting Rights
6. Deductions and Expenses............ Charges and Deductions;
Appendix A A; Distribution of
the Contracts
7. General Description of Variable
Annuity Contracts........ Key Features of the
Contract; The
Eligible Funds; Application
and
Initial Contribution;
Ongoing Contributions; Transfers; Death
Benefit; Annuity Payment
Options; Rights
Reserved by Great-West;
Statement of Additional
Information
8. Annuity Period...................... Annuity
Payment Options
9. Death Benefit....................... Death Benefit
10. Purchases and Contract Value........ Application and
Initial Contribution;
Ongoing Contributions;
Annuity Account Value
11. Redemptions......................... Cash
Withdrawals; Payment
Options; Key Features of
the Contract
12. Taxes............................... Federal Tax
Matters
13. Legal Proceedings................... Not Applicable
14. Table of Contents of Statement
of Additional Information....................... Available
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...........................
General Information
18. Services............................ Services
19. Purchase of Securities
Being Offered..................... Not Applicable
20. Underwriters........................ Services -
Principal Underwriter
21. Calculation of
Performance Data.................. Calculation
of Performance
Data
22. Annuity Payments.................... Calculation
of Annuity Payments
23. Financial Statements................ Financial
Statements
</TABLE>
Part A
Information Required in a Prospectus
<PAGE>
The AICPA Variable Annuity
A flexible premium deferred variable annuity
Distributed by
BenefitsCorp Equities, Inc.
---------------------------------------------
Issued by
Great-West Life & Annuity Insurance Company
<PAGE>
OVERVIEW
This Prospectus describes The AICPA Variable Annuity--a flexible premium
deferred annuity contract designed to help you in long-term financial planning.
The Contract provides an annuity insurance contract whose value is based on the
investment performance of Investment Divisions that you select. It is issued as
a group contract by Great-West Life & Annuity Insurance Company (we, us,
Great-West or GWL&A) and is issued to the American Institute of Certified Public
Accountants. Depending on your state, members, spouses of members and employees
of AICPA may be eligible to participate in The AICPA Variable Annuity. When you
participate in The AICPA Variable Annuity, you will be issued a certificate
showing your interest under the group contract--both the group contract and the
certificate will be referred to as the "Contract" throughout this prospectus.
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. It is intended for
individuals who are affiliated with the American Institute of Certified Public
Accountants.
Allocating Your Money
You can allocate your money among 8 Investment Divisions of the Maxim Series
Account - each Investment Division invests all of its assets in one of 8
corresponding mutual funds ("Eligible Funds"). The Eligible Funds are:
Maxim Series Fund, Inc.: Maxim Money Market Portfolio; Maxim T. Rowe Price
Equity/Income Portfolio; Maxim INVESCO Balanced Portfolio; Maxim Growth Index
Portfolio Dreyfus Stock Index Fund: Dreyfus Stock Index Fund Janus Aspen Series:
Janus Aspen Flexible Income Portfolio Neuberger & Berman Advisers Management
Trust: Neuberger & Berman AMT Partners Investments Templeton Variable Product
Series Fund: Templeton International Fund
Payment Options
You may choose from a wide range of annuity options to provide flexibility in
choosing an annuity payment schedule that meets your needs. These annuity
options include alternatives designed to provide payments for life (for either a
single or joint life), with or without a guaranteed minimum number of payments.
For more information, please contact the Annuity Service Center.
This prospectus presents important information you should read before purchasing
the Contract. Please read it carefully and keep it for future reference. You can
find more detailed information about the Contract in the Statement of Additional
Information dated ______, ___, 1999, and filed with the Securities and Exchange
Commission. The Statement of Additional Information is incorporated by reference
into this prospectus, which means it is legally a part of this prospectus, and
may be obtained without charge by contacting the Annuity Service Center at
800-355-1608, or P.O. Box 1700, Denver, Colorado 80201. Or, you can obtain it 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 this Prospectus. Any representation to the contrary is a
criminal offense. Please read this Prospectus and keep it for future reference.
The date of this Prospectus is __________, _____, 1999.
<PAGE>
3
TABLE OF CONTENTS
<PAGE>
6
Definitions..................................3
Key Features of the Contract.................5
How to Invest............................5
Allocation of Your Contributions.........5
Free Look Period.........................5
A Wide Range of Investment Choices.......5
Charges and Deductions Under the Contract5
Full and Partial Withdrawals.............5
Making Transfers.........................5
Payment Options..........................5
Death Benefit............................5
Customer Service.........................6
Fee Table....................................7
Eligible Fund Annual Expenses................7
Great-West Life & Annuity Insurance Company..8
The Series Account...........................8
The Eligible Funds...........................9
Meeting Investment Objectives............9
Reinvestment.............................9
Where to Find More Information
About the Eligible Funds.................9
Application and Initial Contribution........10
Ongoing Contributions.......................10
Annuity Account Value.......................10
Transfers...................................11
In General..............................11
Possible Restrictions...................11
Dollar Cost Averaging.......................11
Rebalancer..................................12
Cash Withdrawals............................13
Tax Consequences of Withdrawals.........13
Telephone Transactions......................13
Death Benefit...............................13
Beneficiary.............................14
Contingent Annuitant....................15
Charges and Deductions......................15
Mortality and Expense Risk Charge.......15
Certificate Maintenance Charge..........15
Premium Tax.............................15
Transfer Fee............................15
Other Taxes.............................15
Expenses of the Eligible Funds..........15
Periodic Withdrawals........................15
Periodic Withdrawal Payment Options.....16
Annuity Payment Options.....................16
Annuity Commencement Date...............16
Annuity Payment Options.................16
Annuity Options.........................16
Variable Annuity Payment Options........17
Variable Annuity Payment Provisions.....17
Federal Tax Matters.........................17
Taxation of Annuities...................18
Withdrawals.............................18
Annuity Payments........................18
Penalty Tax.............................18
Taxation of death benefit proceeds......19
Distribution at death...................19
Transfers, Assignments or Pledges.......19
Multiple Transfers......................19
Withholding.............................19
Section 1035 Exchanges..................19
Seek Tax Advice.............................19
Assignments or Pledges......................19
Performance Data............................20
Distribution of the Contracts...............22
Voting Rights...............................22
Rights Reserved by Great-West...............23
Adding and Discontinuing Investment Options.23
Substitution of Investments.................23
Legal Matters...............................23
Available Information.......................23
Net Investment Factor...............Appendix A
<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 on.
The Contract is not available in all states.
<PAGE>
DEFINITIONS
Accumulation Period
The period between the Effective Date and the Annuity Commencement Date. During
this period, you are making Contributions to the Contract.
Accumulation Unit
An accounting measure used to determine the Annuity Account Value before the
date annuity payments commence.
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. If a Contingent Annuitant is named, the Annuitant
will be considered the Primary Annuitant.
Annuity Account
An account established by us in your name that reflects all account activity
under this Contract.
Annuity Account Value
The total value of your Variable Sub-Accounts--less any withdrawals, amounts
applied to an annuity option, charges deducted under the Contract, and any
applicable Premium Tax.
Annuity Commencement Date
The date on which annuity payments commence under a payment option. The Annuity
Commencement Date must be at least one year after the Effective Date. If you do
not indicate an Annuity Commencement Date on your application or written Request
to us and are not exercising a periodic withdrawal option, annuity payments will
commence on the first day of the month of the Annuitant's 91st birthday. You may
change the Annuity Commencement Date within 60 days prior to commencement of
annuity payments or your Beneficiary may change it upon your death.
Payments made after the Annuity Commencement Date are referred to as annuity
payments. Contractual rights that were available prior to electing an annuity
option are no longer applicable after the Annuity Commencement Date.
Annuity Payment Period
The period beginning on the Annuity Commencement Date during which we make
annuity payments.
Annuity Service Center
P.O. Box 1700, Denver, Colorado 80201, telephone 800-355-1608.
Annuity Unit
An accounting measure we use to determine the amount of any 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 under the terms of
the Contract.
Contingent Annuitant
The person named in the application who becomes the Annuitant when the Primary
Annuitant dies. The Contingent Annuitant must be designated before the death of
the Primary Annuitant.
Contract Anniversary Date
The anniversary of the Effective Date of your Contract.
Contributions
Amounts you pay to purchase a Contract.
Eligible Fund
A mutual fund in which an Investment Division invests all of its assets.
Effective Date
The date on which the initial Contribution is credited to your Annuity Account.
Investment Division
The Series Account is divided into Investment Divisions, one for each Eligible
Fund. Each Investment Division invests all of its assets in the corresponding
Eligible Fund. You select one or more Investment Divisions to which you allocate
Annuity Account Value - your allocated Annuity Account 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.
Payment Commencement Date
The date on which periodic withdrawals begin under a payout option. The Payment
Commencement Date must be at least one year after the Effective Date.
While you are receiving periodic withdrawals you may continue to exercise all
contractual rights that are available prior to electing an annuity option,
except that no Contributions may be made. You may request that periodic
withdrawals stop and you may change the withdrawal option and/or frequency once
each calendar year.
Premium Tax
A tax charged by a state or other governmental authority. The range of Premium
Taxes currently is 0% to 3.50% and may be assessed at the time you make a
Contribution or when you make withdrawals or annuitize.
Request
Any written, telephoned, or computerized instruction in a form satisfactory to
Great-West and received at the Annuity Service Center (or other annuity service
center subsequently named) from you, your designee (as specified in a form
acceptable to Great-West) or the Beneficiary (as applicable).
Series Account
The segregated 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 various Investment Divisions.
Surrender Value
The Annuity Account Value 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 at the Annuity Service Center after the
close of the New York Stock Exchange (generally 4:00 p.m. EST/EDT) will be
deemed to have been received on the next business day. Transaction Requests will
be processed and the Annuity 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 submit transaction Requests only by automated voice response
unit or by fully automated computer link.
Transfer
When you move money from and among the Investment Divisions.
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.
EST/EDT).
Variable Sub-Accounts
An account we maintain for you that reflects the value credited to you from an
Investment Division.
<PAGE>
KEY FEATURES OF THE CONTRACT
Following are some of the key features of The AICPA Variable Annuity. 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 Automatic Contribution
Plan.
The minimum initial investment is:
o $2,000
o $1,000 if Contributions are made via Automatic Contribution Plan
The minimum ongoing Contribution:
o $250
o $100 per month if made via Automatic Contribution Plan
Allocation of Your Contributions Your initial Contribution will be allocated to
the Maxim Money Market Investment Division during the free look period. Within
five days after the end of the applicable free look period, your Annuity Account
Value will be allocated to the Investment Divisions based on the instructions
specified in your 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 of your receipt of the Contract. You can
cancel the Contract during the free look period by delivering or mailing the
Contract to the Annuity Service Center. The cancellation is not effective unless
we receive the Contract in person or post-marked before the end of the free look
period. If the Contract is returned, the Contract will be void from the start
and the greater of the following will be refunded:
o Contributions received, less surrenders, withdrawals and distributions, or
o The Annuity Account Value.
A Wide Range of Investment Choices
The Contract gives you an opportunity to select among eight different Investment
Divisions. Each Investment Division invests in shares of an Eligible Fund. The
Eligible Funds cover a wide range of investment choices. The distinct investment
objectives and policies for each Eligible Fund are more fully described in the
individual fund prospectuses. You can obtain the prospectuses 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 will pay no sales charges,
redemption, or withdrawal charges. You will, however, pay the following annual
charges:
o A mortality and expense risk charge of 0.50% of the net assets in the
Variable Sub-Account.
o A Certificate Maintenance Charge of up to $30 will be deducted annually from
your Annuity Account Value. This charge is waived if your Annuity Account
Value equals or exceeds $25,000.
o A Transfer fee of $10 for each Transfer in excess of twenty-four Transfers
per calendar year.
Depending on your state of residence, we may be required to deduct a charge for
Premium Tax from Contributions or amounts withdrawn or at the Annuity
Commencement Date.
Making Transfers
You can Transfer among the Investment Divisions as often as you like. Each
Transfer in excess of 24 in a calendar year will be subject to a $10 charge.
Full and Partial Withdrawals
You may withdraw all or part of your Annuity Account Value before the earlier of
the Annuity Commencement Date you selected 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 penalty tax. There is no limit on the number of withdrawals you can
make.
Payment Options
You may choose from a wide range of annuity options to provide flexibility in
choosing an annuity payment schedule that meets your needs. These annuity
options include alternatives designed to provide payments for life (for either a
single or joint life), with or without a guaranteed minimum number of payments.
Death Benefit
The amount of the death benefit, if payable before annuity payments commence,
will be the greater of:
o the Annuity Account Value as of the date a Request for payment is received,
less Premium Tax, if any; or
o the sum of Contributions paid, less partial withdrawals, periodic
withdrawals, any charges deducted under the Contract and Premium Tax, if
any.
Customer Service
Professional representatives are available toll-free to assist you. If you have
any questions about your Contract, please telephone the Annuity Service Center
at 800-355-1608 or write to the Annuity Service Center at:
P.O. Box 1700
Denver, Colorado 80201
All inquiries should include the Contract number and your name as Owner. As an
Owner, you will receive statements confirming any transactions relating to your
Contract, as well as a quarterly statement and annual reports.
<PAGE>
8
FEE TABLE1
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.
Owner transaction expenses
Sales load None
Surrender fee None
Transfer fee (first 24 per year)2 None
Annual Certificate Maintenance Charge3 $30.00
Investment Division annual expenses (as a percentage of average account assets)
Mortality and expense risk charge 0.50% Administrative expense charge 0.00%
Total Investment Division annual expenses 0.50%
1 The Eligible Fund Annual Expenses and the examples are based on data provided
by the Eligible Funds. Great-West has no reason to doubt the accuracy or
completeness of that data, but Great-West has not verified the Eligible Funds'
figures, other than the portfolios of Maxim Series Fund, Inc.
2There is a $10 fee for each Transfer in excess of twenty-four in any calendar
year. 3The Certificate Maintenance Charge is currently waived for Contracts with
an Annuity Account Value of at least $25,000 on a Contract Anniversary Date. If
your Annuity Account Value falls below $25,000 on your Contract Anniversary Date
due to withdrawals or charges, the Certificate Maintenance Charge will be
reinstated until such time as your Annuity Account Value equals or exceeds
$25,000.
<TABLE>
ELIGIBLE FUND ANNUAL EXPENSES
(as a percentage of Eligible Fund net assets, before waivers and reimbursements)
- ------------------------------------------------ -------------- ----------- -------- ---------------------
Portfolio Management Other Distrib-uTotal eligible fund
fees expenses (12b-1) expenses
fees
- ------------------------------------------------ -------------- ----------- -------- ---------------------
- ------------------------------------------------ -------------- ----------- -------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Maxim Money Market Portfolio
- ------------------------------------------------ -------------- ----------- -------- ---------------------
- ------------------------------------------------ -------------- ----------- -------- ---------------------
Janus Aspen Flexible Income Portfolio
- ------------------------------------------------ -------------- ----------- -------- ---------------------
- ------------------------------------------------ -------------- ----------- -------- ---------------------
Maxim T. Rowe Price Equity/Income Portfolio
- ------------------------------------------------ -------------- ----------- -------- ---------------------
- ------------------------------------------------ -------------- ----------- -------- ---------------------
Maxim INVESCO Balanced Portfolio
- ------------------------------------------------ -------------- ----------- -------- ---------------------
- ------------------------------------------------ -------------- ----------- -------- ---------------------
Dreyfus Stock Index Fund
- ------------------------------------------------ -------------- ----------- -------- ---------------------
- ------------------------------------------------ -------------- ----------- -------- ---------------------
Maxim Growth Index Portfolio
- ------------------------------------------------ -------------- ----------- -------- ---------------------
- ------------------------------------------------ -------------- ----------- -------- ---------------------
Neuberger & Berman AMT Partners Investments
- ------------------------------------------------ -------------- ----------- -------- ---------------------
- ------------------------------------------------ -------------- ----------- -------- ---------------------
Templeton International Fund (Class 1)
- ------------------------------------------------ -------------- ----------- -------- ---------------------
Examples
If you retain, annuitize or surrender the Contract at the end of the applicable
time period, you would pay the following fees and expenses on a $1,000
investment, assuming a 5% annual return. These examples assume that no Premium
Taxes have been assessed.
- ------------------------------------------------- ----------- ------------- ------------- ----------------
Investment Divisions 1 year 3 years 5 years 10 years
- ------------------------------------------------- ----------- ------------- ------------- ----------------
- ------------------------------------------------- ----------- ------------- ------------- ----------------
Maxim Money Market Portfolio
- ------------------------------------------------- ----------- ------------- ------------- ----------------
- ------------------------------------------------- ----------- ------------- ------------- ----------------
Janus Aspen Flexible Income Portfolio
- ------------------------------------------------- ----------- ------------- ------------- ----------------
- ------------------------------------------------- ----------- ------------- ------------- ----------------
Maxim T. Rowe Price Equity/Income Portfolio
- ------------------------------------------------- ----------- ------------- ------------- ----------------
- ------------------------------------------------- ----------- ------------- ------------- ----------------
Maxim INVESCO Balanced Portfolio
- ------------------------------------------------- ----------- ------------- ------------- ----------------
- ------------------------------------------------- ----------- ------------- ------------- ----------------
Dreyfus Stock Index Fund
- ------------------------------------------------- ----------- ------------- ------------- ----------------
- ------------------------------------------------- ----------- ------------- ------------- ----------------
Maxim Growth Index Portfolio
- ------------------------------------------------- ----------- ------------- ------------- ----------------
- ------------------------------------------------- ----------- ------------- ------------- ----------------
Neuberger & Berman AMT Partners Investments
- ------------------------------------------------- ----------- ------------- ------------- ----------------
- ------------------------------------------------- ----------- ------------- ------------- ----------------
Templeton International Fund (Class 1)
- ------------------------------------------------- ----------- ------------- ------------- ----------------
</TABLE>
These examples should not be considered representations of past or future
expenses. Actual expanses paid may be greater or less than those shown.
<PAGE>
20
GREAT-WEST LIFE ANNUITY INSURANCE COMPANY
Great-West is a stock life insurance company that was originally organized under
the laws of the state of Kansas as the National Interment Association. Our name
was changed to Ranger National Life Insurance Company in 1963 and to
Insuramerica Corporation prior to changing to our current name in 1982. In
September of 1990, we re-domesticated under the laws of the state of Colorado.
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, Jr. through a group of private
holding companies, which he controls, has voting control of Power Corporation of
Canada.
We are authorized to do business in 49 states, the District of Columbia, Puerto
Rico, the U.S. Virgin Islands and Guam.
THE SERIES ACCOUNT
We established the Maxim Series Account in accordance with Kansas law on June
24, 1981. The Series Account now exists pursuant to Colorado law as a result of
the redomestication of Great-West.
The Series Account consists of the Investment Divisions and is registered with
the Securities and Exchange. Commission (the "SEC") as a unit investment trust
under the Investment Company Act of 1940 (the "1940 Act"). This registration
does not involve supervision by the SEC of the Series Account or Great-West.
The Series Account is organized as a "separate account" of Great-West under
Colorado law. The Series Account and its Investment Divisions are administered
and accounted for as part of the general business of Great-West. However, the
income, gains, or losses of each Investment Division are credited to or charged
against the assets held in that Investment Division in accordance with the terms
of the Contracts, without regard to other income, gains or losses arising out of
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.
We do not guarantee the investment performance of the Investment Divisions. Your
Annuity Account Value and the amount of variable annuity payments depend on the
investment performance of the Eligible Funds. Therefore, Owners bear the full
investment risk for all Contributions allocated to the Investment Divisions.
The Series Account currently has 8 Investment Divisions available for allocation
of Contributions. Each Investment Division invests exclusively in shares of one
Eligible Fund. If we decide to make additional Investment Divisions available in
the future, we may or may not make them available to existing Owners, based on
our assessment of marketing needs and investment conditions.
THE ELIGIBLE FUNDS
Each Investment Division invests in a single Eligible Fund. Each Eligible Fund
is a separate mutual fund having its own investment objectives and policies. The
Eligible Funds are each registered with the SEC under the 1940 Act. This
registration does not involve supervision of the management or investment
practices of the Eligible Funds by the SEC.
Some of the Funds have been established by investment advisers which manage
publicly traded mutual funds having similar names and investment objectives.
While some of the Eligible Funds may be similar to, and may in fact be modeled
after publicly traded mutual funds, you should understand that the Eligible
Funds are not otherwise directly related to any publicly traded mutual fund.
Consequently, the investment performance of publicly traded mutual funds and any
corresponding Eligible Funds may differ substantially.
The following sets forth the investment objective of each Eligible Fund and
summarizes its principal investment strategy: o the Maxim Money Market Portfolio
seeks as high a level of current income as is consistent with the preservation
of capital and liquidity. Shares of the Maxim Money Market Portfolio are neither
insured nor guaranteed by the U.S. Government. 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. o the Janus Aspen Flexible Income
Portfolio seeks to obtain maximum total return, from a combination of income and
capital appreciation. The Portfolio pursues its objective primarily through
investments in income-producing securities. o the Maxim T. Rowe Price
Equity/Income Portfolio seeks substantial dividend income and also capital
appreciation. This portfolio invests primarily in divdend-paying common stocks
of established companies. o the Maxim INVESCO Balanced Portfolio seeks high
total return on investment through capital apprecation and current income. This
portfolio invests 50% to 70% in common stocks and at least 25% in fixed income
securities. o the Dreyfus Stock Index Fund's investment objective is to provide
investment results that correspond to the price and yield performance of
publicly traded common stocks in the aggregate, as represented by the Standard &
Poor's 500 Composite Stock Price Index. The Dreyfus Stock Index Fund is neither
sponsored by nor affiliated with Standard & Poor's Corporation. o the Maxim
Growth Index Portfolio seeks investment results that, before fees, track the
total return of the common stocks that comprise the Russell 1000 Growth Index.
The Russell 1000 Growth Index was developed by the Frank Russell Company to
track stock market performance of stocks from the Russell 1000 Index exhibiting
certain characteristics suggesting growth potential. The Frank Russell Company
is not a sponsor of, or in any other way affiliated with the Portfolio or the
Fund. o the Neuberger & Berman AMT Partners Investments seeks capital growth.
This investment objective is non-fundamental. Neuberger & Berman AMT Partners
Investments invests principally in common stocks of medium to large
capitalization established companies using the value-oriented investment
approach. The Portfolio seeks capital growth through an investment approach that
is designed to increase capital with reasonable risk. o the Templeton
International Fund's investment objective is long-term capital growth through a
flexible policy of investing in stocks and debt obligations of companies and
governments outside the United States. Any income realized will be incidental.
Meeting Investment Objectives
The ability of the Eligible Funds to meet their investment objectives depends on
various factors, including, but not limited to, how well the Eligible Fund
managers anticipate changing economic and market conditions. There is no
guarantee that any of the Eligible Funds will achieve their stated 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 the
Annuity Service Center at 800-355-1608, or by writing to the Annuity Service
Center, P.O. Box 1700, Denver, Colorado 80201. The Eligible Funds' Prospectuses
should be read carefully before you make a decision to invest in an Investment
Division.
APPLICATION AND INITIAL CONTRIBUTION 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 $2,000
o $1,000 if you are setting-up an Automatic Contribution Plan
All checks should be made payable to Great-West. When you sign up for an
Automatic Contribution Plan, we take the amount of money you designate for your
ongoing Contributions directly from your bank or savings account. You can
designate the date you would like your ongoing Contributions deducted from your
account each month.
If your application is complete, including your initial Contribution, generally,
your Contract will be issued and your Contribution will be credited within two
business days after our receipt. Acceptance is subject to our receipt of
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 your initial Contribution and application
unless you consent to our retaining the initial Contribution and crediting it as
soon as we have your completed application.
During the ten-day (or longer where required by law) free look period, you may
cancel your Contract within ten days after your receipt of the Contract. During
the free look period, all Contributions will be processed as follows:
o Amounts you allocate to the Investment Divisions will be allocated to the
Maxim Money Market Investment Division during the free look period. The
Annuity Account Value held in the Maxim Money Market Investment Division
will be allocated to the Investment Division(s) you selected within 5 days
after the end of the applicable free look period in your state.
o During the free look period, you may change the Investment Divisions in
which you'd like to invest as well as your allocation percentages. Any
changes you make during the free look period will take effect within 5 days
after the free look period has expired.
Any returned Contracts will be void from the start and the greater of the
following will be refunded:
o Contributions received less surrenders and withdrawals, or
o The Annuity Account Value.
If you exercise the free look privilege, you must return the Contract. We must
receive it in person or post-marked 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. Subsequent Contributions
must be at least $250 or $100 per month if made via an Automatic Contribution
Plan. Subsequent Contributions will be credited on the Transaction Date. You can
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
dollar amount of all Accumulation Units in your Variable Sub-Accounts.
Each Variable Sub-Account's value prior to the Annuity Commencement Date is
equal to:
o net Contributions allocated to the corresponding Investment Division,
o plus or minus any increase or decrease in the value of the assets of the
Variable Sub-Account due to investment results,
o minus the daily mortality and expense risk charge,
o minus reductions for the Certificate Maintenance Charge deducted on each
Contract Anniversary Date,
o minus any applicable Transfer fees and
o minus any withdrawals or Transfers from the Variable Sub-Account.
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.
Your Annuity Account Value reflects the investment performance of the selected
Investment Division(s).
Upon allocating Contributions to an Investment Division you will be credited
with variable accumulation units in that Investment Division. The number of
Accumulation Units credited to you is determined by dividing the portion of each
Contribution allocated to the Investment Division by the value of an
Accumulation Unit. The value of the Accumulation Unit is determined and credited
at the end of the valuation period during which the Contribution was received.
We calculate each Investment Division's Accumulation Unit value at the end of
each valuation period. It is calculated 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 discussed in Appendix A.
TRANSFERS
In General
Prior to the Annuity Commencement Date you may Transfer all or part of your
Annuity Account Value among and between the Investment Divisions by telephone,
by sending a Request to the Annuity Service Center or by calling KeyTalkTM - the
voice response unit - at 800-355-1608.
Your Request must specify:
o the amounts being transferred,
o the Investment Division(s) from which the Transfer is to be made, and o the
Investment Division(s) that will receive the Transfer.
Currently, there is no limit on the number of Transfers you can make among the
Investment Divisions during any calendar year. However, we reserve the right to
limit the number of Transfers you make. Transfers will be effective on the
Transaction Date.
There is no charge for the first twenty-four Transfers each calendar year, but
there will be a charge of $10 for each additional Transfer made. The charge will
be deducted from the amount transferred. All Transfers made on a single
Transaction Date will count as only one Transfer toward the twenty-four free
Transfers. However, if a one-time rebalancing Transfer also occurs on the
Transaction Date, it will be counted as a separate and additional Transfer.
Transfers will result in the purchase and cancellation of Accumulation Units
having a total value equal to the dollar amount being transferred. The purchase
and cancellation of such units is made using the Annuity Account Value as of the
end of the Valuation Date on which the Transfer is effective.
Possible Restrictions
We reserve the right without prior notice to modify, restrict, suspend or
eliminate the Transfer privileges (including telephone 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.
Although you can Request a Transfer by telephone, we reserve the right to
require 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 any terms and conditions imposed by the
Eligible Funds.
DOLLAR COST AVERAGING
Dollar cost averaging allows you to make systematic Transfers from one available
Investment Division to another Investment Division. Dollar cost averaging allows
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. However, dollar cost averaging does not
assure a greater profit, or any profit, and will not prevent or necessarily
alleviate losses in a declining market.
You can set up automatic dollar cost averaging on a monthly, quarterly,
semi-annual or annual basis. Your 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 and every three months on the 9th thereafter (if the 9th is
not a Valuation Date, on the next immediately following Valuation Date).
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 as of the next frequency period 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 are not counted against the twenty-four
free Transfers allowed in a calendar year.
Dollar cost averaging Transfers must meet the following conditions:
o The minimum amount that can be transferred out of the selected 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 not participate in dollar cost averaging and rebalancer at the same
time.
Great-West reserves the right to modify, suspend or terminate dollar cost
averaging at any time and for any reason.
- --------------------------------------------------------------------------------
Dollar cost averaging permits you to Transfer your Variable Account Value at
regular intervals from one or more Investment Divisions to other Investment
Divisions. Doing so allows 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. Please note
that dollar cost averaging does not assure a greater profit or any profit, and
will not prevent or necessarily alleviate losses in a declining market.
- --------------------------------------------------------------------------------
REBALANCER
Over time, differences in the investment results of the Investment Divisions
will cause the actual allocation of your assets to differ from your selected
asset allocation percentages. 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. One-time rebalancer Transfers
count toward the twenty-four free Transfers allowed in a calendar year.
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
and every three months on the 9th thereafter (if the 9th is not a Valuation
Date, on the next immediately following Valuation Date). Transfers will continue
on that same day each interval unless terminated by you or for other reasons as
set forth in the Contract. Quarterly, semi-annual and annual Transfers will not
count toward the 24 free Transfers.
On a rebalancing Transaction Date, your money will be automatically reallocated
among the Investment Divisions based on your allocation instructions. The
rebalancer option will terminate automatically when you start taking payments
from the annuity.
Rebalancer Transfers must meet the following conditions:
o In order to participate in the rebalancer option, your entire Annuity
Account Value must be included.
o You must specify the percentage of your Annuity 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.
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.
- -------------------------------------------------------------------------------
Rebalancer permits you to rebalance your Variable Account Value so that you may
maintain your chosen percentage allocation among Investment Divisions. Please
note, Participation in
Rebalancer does not assure a greater profit, or any profit, nor will it prevent
or necessarily alleviate losses in a declining market.
- -------------------------------------------------------------------------------
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 the Annuity Service Center. Withdrawals are
subject to the rules below and federal or state laws, rules or regulations may
also apply. The amount payable to you if you surrender your Contract is your
Annuity Account Value, on the effective date of surrender, less any applicable
Premium Tax. No withdrawals may be made after the Annuity Commencement Date.
If you request a partial withdrawal, your Annuity Account Value will be reduced
by the dollar amount withdrawn.
Partial withdrawals are unlimited. However, you must specify the Investment
Division(s) from which the withdrawal is to be made. After any partial
withdrawal, if your remaining Annuity Account Value is less than $2,000 we may
require a full surrender. The minimum partial withdrawal is $250.
Withdrawal Requests must be in writing. If your instructions are not clear, your
Request for a withdrawal will be denied.
After a withdrawal of all 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.
In addition, the Internal Revenue Code may require us to withhold federal income
taxes from withdrawals and report such withdrawals to the IRS.
You may elect, in writing, to have us not withhold federal income tax from
withdrawals, unless withholding is mandatory for your Contract. If you are
younger than 59 1/2, the taxable portion of any withdrawal is generally
considered to be an early withdrawal and is subject to an additional federal tax
of 10%.
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."
TELEPHONE TRANSACTIONS
You may make Transfer Requests by telephone or by using KeyTalkTM. The cut off
time for telephone Transfer Requests is 4:00 p.m. Eastern time. Requests made
via telephone are effective on the Transaction Date.
We will use reasonable procedures to confirm that instructions communicated by
telephone are genuine, such as:
o requiring some form of personal identification prior to acting on
instructions, o providing written confirmation of the transaction and/or o tape
recording the instructions given by telephone.
If we follow such procedures we will not be liable for any losses due to
unauthorized or fraudulent instructions.
We reserve the right to suspend telephone transaction privileges at any time,
for some or all Contracts, and for any reason. Withdrawals are not permitted by
telephone.
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 there is a Joint Owner who is the surviving spouse of the
deceased Owner and a Contingent Annuitant, the Joint Owner will become the Owner
and the Beneficiary, the Contingent Annuitant will become the Annuitant, and the
Contract will continue in force. If there is a Joint Owner who is the surviving
spouse of the deceased Owner but no Contingent Annuitant, the Joint Owner will
become the Owner, Annuitant and Beneficiary and may elect to take the death
benefit or continue the Contract in force.
In all other cases, we will pay the death benefit to the Beneficiary, unless the
sole Beneficiary is the deceased Owner's surviving spouse and the Beneficiary
requests to become the Owner and Annuitant and to continue the Contract in
force.
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:
o First, to the surviving Joint Owner.
o If there is no surviving Joint Owner, then to the Contingent Owner.
o 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, and if no
Contingent Annuitant has been named and is then living, the Company will pay the
death benefit under the Contract to the Beneficiary. If a Contingent Annuitant
has been named prior to the Annuitant's death and is living at the time the
Annuitant dies, then no death benefit will be payable by reason of the
Annuitant's death and the Contingent Annuitant will become the Annuitant.
Death Benefit Computation and Procedure
If the Owner-Annuitant, Non-Annuitant Owner, or Non-Owner Annuitant (where there
is no Contingent Annuitant) dies before the Annuity Commencement Date, the death
benefit will be the greater of: o the Annuity Account Value as of the date of
the Request, less Premium Tax, if any; or o the sum of Contributions paid, less
partial withdrawals, periodic payments, and
Premium Tax, if any.
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.
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, where there is no Contingent Annuitant, if the Owner is a
non-individual entity, such as a trust or estate) must be made pursuant to
Section 72(s) of the Internal Revenue Code. These requirements 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 Section 72(s) of the Internal
Revenue Code 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, they will share equally in any death benefit payable unless you
indicate otherwise. You may change the Beneficiary any time before the
Annuitant's death.
You may, 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 the Annuity Service Center, 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.
Contingent Annuitant
While the Annuitant is living, the Owner(s) may, by Request, designate or change
a Contingent Annuitant from time to time. A change of Contingent Annuitant will
take effect as of the date the Request is processed at the Annuity Service
Center, unless a certain date is specified by the Owner(s).
CHARGES AND DEDUCTIONS
You will not pay any charges at the time you make a Contribution except for any
applicable Premium Tax. As a result, the full amount of your Contributions (less
any applicable Premium Tax) are invested in the Contract.
You pay the following charges under your Contract:
o charges for our assumption of mortality and expense risks
o a Certificate Maintenance Charge
You may also pay the following:
o deductions for Premium Tax, if applicable (depending on your state of
residence), and o deductions for Transfers (only if you exceed 24 in a calendar
year).
Mortality and Expense Risk Charge
We deduct a Mortality and Expense Risk Charge from your Variable Sub-Account(s)
at the end of each Valuation Period to compensate us for bearing certain
mortality and expense risks under the Contract. This is a daily charge equal to
an effective annual rate of 0.50% of the value of the net assets in your
Variable Sub-Account(s). We guarantee that this charge will never increase.
The Mortality and Expense Risk Charge is reflected in the unit values for each
of your Variable Sub-Accounts.
Certificate Maintenance Charge
We currently deduct a $30 annual Certificate Maintenance Charge from the Annuity
Account Value on each Contract Anniversary Date. This charge partially covers
our costs for administering the Contracts and the Series Account. This charge
will cease to apply after the Annuity Commencement Date.
The Certificate Maintenance Charge is deducted from the portion of your Annuity
Account Value allocated to the Money Market Investment Division. If you do not
have sufficient Annuity Account Value allocated to the Money Market Investment
Division to cover the Certificate Maintenance Charge, then the charge or any
portion of it will be deducted on a pro rata basis from all your Variable
Sub-Accounts.
The Certificate Maintenance Charge is currently waived for Contracts with an
Annuity Account Value of at least $25,000 on your Contract Anniversary Date. If
your Annuity Account Value falls below $25,000 due to withdrawals or charges,
the Certificate Maintenance Charge will be reinstated until such time as your
Annuity Account Value is equal to or greater than $25,000.
Premium Tax
We may be required to pay state Premium Taxes currently ranging from 0% to 3.50%
in connection with Contributions or values under the Contracts. Depending upon
applicable state law, we will deduct charges for the Premium Taxes we incur at
the time you make a Contribution, from amounts withdrawn, or from amounts
applied on the Annuity Commencement Date.
Transfer Fee
There will be a $10 charge for each Transfer in excess of twenty-four Transfers
in any calendar year.
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 Contract.
Expenses of the Eligible Funds
The net asset value of the Eligible Funds reflect the deduction of the Eligible
Fund's fees and deductions. You bear these costs indirectly when you allocate to
an Investment Division.
PERIODIC WITHDRAWALS
You may request that all or part of the Annuity Account Value be applied to a
periodic withdrawal option.
In requesting periodic withdrawals, you must elect:
o The withdrawal frequency of either 12-, 6-, 3- or 1-month intervals o A
withdrawal amount--a minimum of $100 is required o The calendar day of the month
on which withdrawals will be made o One withdrawal option o To allocate your
withdrawals from your Variable Sub-Account(s) by
a) prorating the amount to be paid across all Variable Sub-Accounts in
proportion to the assets in each sub-account or b) selecting the Variable
Sub-Account(s) from which withdrawals will be made. Once the Variable
Sub-Accounts have been depleted, we will automatically prorate the remaining
withdrawals against all remaining available Variable Sub-Accounts unless you
request the selection of another Variable Sub-Account.
You may change the withdrawal option and/or the frequency once each calendar
year.
While periodic withdrawals are being received:
o You may continue to exercise all contractual rights that are available prior
to electing an annuity option, except that no Contributions may be made.
o You may keep the same investment options as were in force before periodic
withdrawals began.
o Charges and fees under the Contract continue to apply.
Periodic withdrawals will cease on the earlier of the date:
o 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 dies.
Periodic Withdrawal Payment Options
If you choose to receive payments from your annuity through periodic
withdrawals, you may select from the following payment options:
Income for a specified period (at least 36 months)
You elect the length of time over which withdrawals will be made. The amount
paid will vary based on the duration you choose.
Income of a specified amount (at least 36 months)
You elect the dollar amount of the withdrawals. Based on the amount elected, the
duration may vary.
Any other form for a period of at least 36 months Any other form of periodic
withdrawal acceptable to Great-West.
If periodic withdrawals stop, you may resume making Contributions. However, we
may limit the number of times you may restart a periodic withdrawal program.
Periodic withdrawals made for any purpose may be taxable, subject to withholding
and to the 10% penalty for early withdrawal. A competent tax adviser should be
consulted before a periodic withdrawal option is requested.
ANNUITY PAYMENT OPTIONS
Annuity Commencement Date
You can choose the date you would like annuity payments to start either when you
purchase the Contract or at a later date. The date you choose must be at least
one year after your initial Contribution. If you do not select an annuity start
date, payments will begin on the first day of the month of the Annuitant's 91st
birthday.
If you have not elected a payment option within 30 days of the Annuity
Commencement Date, your 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.
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 the Annuity Commencement Date you 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.
Under an annuity payment option, you can receive payments monthly, quarterly,
semi-annually or annually. 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 gender 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 minimum interest rate allowed by law.
If you elect to receive a single sum payment, the amount paid is the Surrender
Value.
If you elect a variable annuity, then the amount to be paid out is the Annuity
Account Value held in the Variable Sub-Account(s), as of the Annuity
Commencement Date, less any applicable Premium Tax.
Variable Annuity Payment Options
Variable life annuity with guaranteed period
This option provides for 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. Upon the death of the Annuitant, the amounts payable under
this payment option will be paid to the Beneficiary until the guaranteed period
has expired.
Variable life annuity
This option provides for 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. Upon the death of the Annuitant, all payments stop and no
amounts are payable to the Beneficiary.
Any Other Form
Any other form of variable annuity which is acceptable to us.
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 to the Annuitant 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
Payments after the first will vary depending upon the investment experience of
the Investment Divisions. 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, Transfers may be made within the variable
annuity payment option 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 payment option you select:
o no changes can be made in the payment option,
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 time the annuity payments begin, 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. State income tax
withholding may also apply. Please see "Federal Tax-Matters" below for details.
FEDERAL TAX MATTERS
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 tax
implications relating to the ownership or use of the Contracts 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") only. 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
Annuitant, or the Beneficiary may depend on the type of Contract, and on the tax
status of the individual concerned.
- -------------------------------------------------------------------------------
Because tax laws, rules and regulations are constantly changing, we do not make
any guarantees about the Contract's tax status.
- -------------------------------------------------------------------------------
Taxation of Annuities
In General
Section 72 of the Internal Revenue Code governs taxation of annuities. 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 option 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.
If you are not a natural person (for example, a corporation), you generally must
include in income any increase in the excess of the Annuity Account Value over
the "investment in the Contract" during each taxable year. The rule does not
apply where the non-natural person is the stated owner of a Contract and the
beneficial owner is a natural person.
The rule also does not apply where:
o The annuity Contract is acquired by the estate of a decedent.
o The Contract is a qualified funding asset for a structured settlement.
o 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
With respect to Non-Qualified Contracts, partial withdrawals, including periodic
withdrawals, are generally treated as taxable income to the extent that 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. 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.
Other exemptions or tax penalties may apply to distributions from a
Non-Qualified Contract. 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.
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: o If the Owner dies 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 death.
o If the Owner dies before the date annuity payments start, 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 the name of
your spouse as Owner.
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.
Transfers, Assignments or Exchanges
A Transfer of ownership of a Contract, the designation of an Annuitant, Payee 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 considering any of 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.
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
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.
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 person who
receives 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.
If a Contract is assigned, the interest of the assignee has priority over your
interest 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 the Annuity Service Center. All
assignments are 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 Money Market Investment Division. These figures will be based on historical
information and are not intended to indicate future performance.
The yield of the 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 of a non-Money Market Investment Division refers to the annualized
income generated by an investment in that Investment Division over a specified
thirty-day period. The yield is calculated by assuming that the income generated
by the investment during that thirty-day period is generated each 30-day period
over a period of 12 months and is shown as a percentage of the investment.
The yield calculations do not reflect the effect of any Premium Tax that may be
applicable to a particular Contract. To the extent that Premium Taxes are
applicable to a particular Contract, the yield of that Contract will be reduced.
Investment Yield Effective
Division Yield
Maxim Money Market x.xx% x.xx%
The table on the following page illustrates standardized and non-standardized
average annual total return for one-, three-, 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. The standardized data is calculated from
the inception date of the Investment Division and the non-standardized data is
calculated from the inception of the Eligible Fund and includes periods
preceding the inception date of the Investment Division. Certain Investment
Divisions currently have no annualized standardized performance data. Such data
will be provided when it becomes available. For additional information regarding
yields and total returns calculated using the standard formats briefly described
herein, please refer to the Statement of Additional Information.
<PAGE>
<TABLE>
- --------------------------------------- -------- -------- --------- ------------------- ---------------- -------------- ------------
Investment Division 1 5 10 Since Inception Date Since Inception
year years years Inception of of Investment Inception of Date of
Investment Division Underlying Underlying
Division Fund Fund
- --------------------------------------- -------- -------- --------- ------------------- ---------------- -------------- ------------
- --------------------------------------- -------- -------- --------- ------------------- ---------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Janus Aspen Flexible Income Portfolio
- --------------------------------------- -------- -------- --------- ------------------- ---------------- -------------- ------------
- --------------------------------------- -------- -------- --------- ------------------- ---------------- -------------- ------------
Maxim T. Rowe Price Equity/Income
- --------------------------------------- -------- -------- --------- ------------------- ---------------- -------------- ------------
- --------------------------------------- -------- -------- --------- ------------------- ---------------- -------------- ------------
Maxim INVESCO Balanced
- --------------------------------------- -------- -------- --------- ------------------- ---------------- -------------- ------------
- --------------------------------------- -------- -------- --------- ------------------- ---------------- -------------- ------------
Dreyfus Stock Index Fund
- --------------------------------------- -------- -------- --------- ------------------- ---------------- -------------- ------------
- --------------------------------------- -------- -------- --------- ------------------- ---------------- -------------- ------------
Maxim Growth Index
- --------------------------------------- -------- -------- --------- ------------------- ---------------- -------------- ------------
- --------------------------------------- -------- -------- --------- ------------------- ---------------- -------------- ------------
Neuberger & Berman AMT Partners
Investments
- --------------------------------------- -------- -------- --------- ------------------- ---------------- -------------- ------------
- --------------------------------------- -------- -------- --------- ------------------- ---------------- -------------- ------------
Templeton International Fund (Class 1)
- --------------------------------------- -------- -------- --------- ------------------- ---------------- -------------- ------------
</TABLE>
<PAGE>
The Contracts have been offered to the public only since September 1, 1998. The
results for any period prior to the Contracts being offered is calculated as if
the Contracts had been offered during that period (which they were not),
deducting all recurring charges assessed under the Contracts, including the
annual Certificate Maintenance Charge, and the daily mortality and expense risk
charge of 0.50%.
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 in which the
Investment Division invests and the market conditions during the given time
period. It should not be considered as a representation of what may be achieved
in the future.
Reports and promotional literature may also contain other information including:
o 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
o 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
o 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.
We may from time to time also disclose cumulative (non-annualized) total
returns, yield and standardized and non-standardized total returns for the
Investment Divisions.
We may also advertise performance figures for the Investment Divisions based on
the performance of an Eligible Fund prior to the time the Series Account
commenced operations.
For additional information regarding the calculation of performance data, please
refer to the Statement of Additional Information.
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. BCE is an
indirect wholly owned subsidiary of GWL&A. There are no commissions paid to
dealers.
VOTING RIGHTS
In general, you do not have a direct right to vote the Eligible Fund shares held
in the Series Account. However, under current law, you are entitled to give us
instructions on how to vote the shares of an Eligible Fund to which you have
allocated Annuity Account Value. We will vote the shares according to those
instructions at regular and special shareholder meetings. If the law changes and
we can vote the shares in our own right, we may elect to do so.
Before the Annuity Commencement Date, you have the voting interest. The number
of votes 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 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 by us in proportion to the voting
instructions received for all Contracts participating in the Investment
Division. If you indicate in your instructions that you do not wish to vote an
item, we will apply your instructions on a pro rata basis to reduce the votes
eligible to be cast.
Owners have no voting rights in Great-West.
RIGHTS RESERVED BY GREAT-WEST
We reserve the right to make certain changes we feel 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 to the extent and in
the manner 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 shares of another investment company 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
changing the way we assess charges, without increasing them for any
outstanding Contract beyond the aggregate amount guaranteed.
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.
When we inform you that we are discontinuing an Investment Division 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 before the
effective date of the notice may be kept in those Investment Divisions, unless
we substitute shares of one mutual fund for shares of the corresponding Eligible
Fund.
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 GWL&A, GWL&A'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 GWL&A.
AVAILABLE INFORMATION
We have filed a registration statement ("Registration Statement") with the
Commission 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 contained in the
Registration Statement and its exhibits. Additionally, statements in this
Prospectus about the content of the Contract and other legal instruments are
summaries. Please refer to the Registration Statement and its exhibits for
further information. You can review the Registration Statement and its exhibits
at the offices of the Commission located at 450 Fifth Street, N.W., Washington,
D.C.
The Statement of Additional Information is incorporated in this prospectus in
its entirety, which means that it is legally part of this prospectus.
<PAGE>
APPENDIX A
The following formula is what we use to calculate the value of an Accumulation
Unit. The Net Investment Factor 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; and
(c) is an amount representing the Risk Charge deducted from each Variable
Sub-Account on a daily basis. The effective annual rate of this charge is 0.50%.
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)
(i) above, reflect the investment performance of the Eligible Fund as well as
the payment of Eligible Fund expenses.
<PAGE>
[Back Cover]
The Securities and Exchange Commission maintains an Internet web site
(http://www.sec.gov) that contains additional information about Great-West Life
& Annuity Insurance Company, the Contract and the Series Account which may be of
interest to you. The web site also contains additional information about the
Eligible Funds.
<PAGE>
PART B
PART B
INFORMATION REQUIRED IN A
STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
PART B
MAXIM SERIES ACCOUNT
Contracts Under
Flexible Premium Deferred
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 _______, ____, _________,
which is available without charge by contacting the Annuity Service Center, P.O.
Box 1700, Denver Colorado 80201 or at 800-355-1608.
, xxxx
<PAGE>
PART B
TABLE OF CONTENTS
Page
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
GENERAL INFORMATION......................................................................B-III
CALCULATION OF ANNUITY PAYMENTS..........................................................B-III
POSTPONEMENT OF PAYMENTS..................................................................B-IV
SERVICES..................................................................................B-IV
- Safekeeping of Series Account Assets............................................B-IV
- Experts.........................................................................B-IV
- Principal Underwriter............................................................B-V
WITHHOLDING................................................................................B-V
CALCULATION OF PERFORMANCE DATA............................................................B-V
FINANCIAL STATEMENTS.....................................................................B-VII
</TABLE>
<PAGE>
VII
PART B
GENERAL INFORMATION
In order to supplement the description in the Prospectus, the following provides
additional information about the Contracts and other matters which may be of
interest to you. Terms used in this Statement of Additional Information have the
same meanings as are defined in the Prospectus under the heading "Definitions."
CALCULATION OF ANNUITY PAYMENTS
The Company converts the Accumulation Units for each of the
Owner's Variable Sub-Accounts into Annuity Units for each Variable Sub-Account
at their values determined as of the end of the Valuation Period which contains
the Payment Commencement Date. The number of Annuity Units paid for each
Variable Sub-Account is determined by dividing the amount of the first monthly
payment by the sub-account's Annuity Unit Value on the fifth 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.
The first payment under a variable annuity payment option will be
based on the value of each Variable Sub-Account on the fifth Valuation Date
preceding the Payment Commencement Date. It will be determined by applying the
appropriate rate to the amount applied under the Payment Option. Payments after
the first 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 fifth 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.
POSTPONEMENT OF PAYMENTS
With respect to amounts allocated to the Series Account, payment
of any amount due upon a total or partial surrender, death or under an annuity
option will ordinarily be made within seven days after all documents required
for such payment are received by the Annuity Service Center. However, the
determination, application or payment of any death benefit, Transfer, full
surrender, partial withdrawal or annuity payment may be deferred to the extent
dependent on Accumulation or Annuity Unit Values, for any period during which
the New York Stock Exchange is closed (other than customary weekend and holiday
closings) or trading on the New York Stock Exchange is restricted as determined
by the Securities and Exchange Commission, for any period during which any
emergency exists as a result of which it is not reasonably practicable for the
Company to determine the investment experience, of such Accumulation or Annuity
Units or for such other periods as the Securities and Exchange Commission may by
order permit for the protection of investors.
SERVICES
A. Safekeeping of Series Account Assets
The assets of Maxim Series Account (the "Series Account") are
held by Great-West Life & Annuity Insurance Company ("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 underlying funds. Additional protection for the
assets of the Series Account is afforded by blanket fidelity bonds issued to The
Great-West Life Assurance Company in the amount of $50 million (Canadian), which
covers all officers and employees of GWL&A.
B. Experts
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.
The consolidated financial statements of GWL&A at December 31,
1998 and 1997 and for each of the three years in the period ended December 31,
1998, and the statement of assets and liabilities of Maxim Series Account as of
December 31, 1998 and the related statement of operations for the year then
ended and statements of changes in net assets for each of the two years in the
period ended December 31, 1998 included in this SAI have been audited by
Deloitte & Touche LLP, independent auditors, as set forth in their report
appearing therein and are included in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
C. Principal Underwriter
The offering of the Contracts is made on a continuous basis by
BenefitsCorp Equities, Inc. ("BCE"). BCE is a Delaware corporation and is a
member of the National Association of Securities Dealers ("NASD"). The Company
does not anticipate discontinuing the offering of the Contract, although it
reserves the right to do so. The Contract generally will be issued for
Annuitants from birth to age ninety.
WITHHOLDING
Annuity payments and other amounts received under the Contract
are subject to income tax withholding unless the recipient elects not to have
taxes withheld. The amounts withheld will vary among recipients depending on the
tax status of the individual and the type of payments from which taxes are
withheld.
Notwithstanding the recipient's election, withholding may be
required with respect to certain payments to be delivered outside the United
States and, with respect to certain distributions from certain types of
qualified retirement plans, unless the proceeds are transferred directly to
another qualified retirement plan. Moreover, special "backup withholding" rules
may require the Company to disregard the recipient's election if the recipient
fails to supply the Company with a "TIN" or taxpayer identification number
(social security number for individuals), or if the Internal Revenue Service
notifies the Company that the TIN provided by the recipient is incorrect.
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 will be for
the seven-day period 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
will be for the seven-day period 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 "Charges and Deductions" 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.
B. Total Return and Yield Quotations for All Investment Divisions (Other than
Money Market)
The total return quotations for all Investment Divisions, other than the
Money Market, will be average annual total return quotations for the one-year
period. 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 for these Investment Divisions, 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.
The yield quotations for these Investment Divisions set forth in the
Prospectus are based on the thirty-day period ended on December 31, 1998, and
are computed by dividing the net investment income per Accumulation Unit earned
during the period by the maximum offering price per unit on the last day of the
period, according to the following formula:
<TABLE>
YIELD = 2[((a-b)cd +1)6 -1]
<S> <C> <C> <C> <C> <C> <C>
Where: a = net investment income earned during the period by the
corresponding portfolio of the Fund attributable to shares
owned by the Investment Division.
b = expenses accrued for the period (net of
reimbursements).
c = the average daily number of Accumulation Units
outstanding during the period.
d = the maximum offering price per Accumulation Unit
on the last day of the period.
</TABLE>
For purposes of the yield quotations for these Investment Divisions, 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.
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 interest of Contract Owners under the
Contracts are affected solely by the investment results of the Series Account.
<PAGE>
MAXIM SERIES ACCOUNT
Financial Statements
<PAGE>
MAXIM SERIES ACCOUNT
OF
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS FOR THE YEARS
ENDED DECEMBER 31, 1998 AND 1997
AND INDEPENDENT AUDITOR'S REPORT
<PAGE>
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Financial Statements
<PAGE>
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
- -------------------------------------------------------------------------------
CONSOLIDATED FINANCIAL STATEMENTS FOR THE
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
AND INDEPENDENT AUDITOR'S STATEMENT
<PAGE>
C-12
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
The financial statements for Great-West Life & Annuity Insurance Company
for the years ended December 31, 1998, 1997 and 1996 and the financial
statements for Maxim Series Account for the years ended December 31, 1998 and
1997 are attached to the statement of additional information filed herewith.
(b) Exhibits
(1) Certified copy of resolution of Board of Directors or
Depositor establishing Registrant is incorporated by reference to
Registrant's Registration Statement.
(2) Not applicable.
(3) Exhibit 3 is incorporated by reference to Registrant's
Registration Statement filed on August 14, 1998.
(4) Exhibit 4 is incorporated by reference to Registrant's
Registration Statement filed on August 14, 1998.
(5) Exhibit 5 is incorporated by reference to Registrant's
Registration Statement filed on August 14, 1998.
(6) Copy of Articles of Incorporation and Bylaws of Depositor are
incorporated by reference to Amendment No. 2 to the
Registration Statement filed by Depositor on Form N-4 on
October 29, 1996, Registration No. 333-01153.
(7) Not applicable.
(8) Exhibit 8 is incorporated by reference to Registrant's
Registration Statement filed on August 14, 1998.
(9) Exhibit 9 is incorporated by reference to Registrant's
Registration Statement filed on August 14, 1998.
(10)(a)Consent of Jorden Burt Boros Cicchetti Berenson & Johnson
LLP is attached as Exhibit 10a (to be filed by amendment).
(b) Written Consent of Deloitte & Touche LLP is attached as
Exhibit 10b (to be filed by amendment).
(c) Written Consent of Ruth B. Lurie is attached as Exhibit 10c
(to be filed by amendment).
(11) Not Applicable.
(12) Not Applicable.
(13) Exhibit 13 is incorporated by reference to Registrant's
Registration Statement filed on August 24, 1998.
<TABLE>
Item 25. Directors and Officers of the Depositor
Position and Offices
<S> <C> <C> <C> <C> <C> <C>
Name Principal Business Address with
Depositor
James Balog 2205 North Southwinds Boulevard Director
Vero Beach, Florida 32963
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, Florida 34236
Robert Gratton (5) Chairman
N. Berne Hart 2552 East Alameda Avenue, #99 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 East Putnam Avenue
Greenwich, Connecticut 06830
John A. Brown (3) Senior
Vice-President,
Sales, Financial Services
Donna A. Goldin (2) Executive
Vice President,
Chief Operating Officer,
One Corporation
Mitchell T. 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
Dennis Low (3) Executive
Vice-President,
Financial Services
Alan D. MacLennan (2) Executive
Vice-President,
Employee Benefits
Steven H. Miller (2) Senior Vice
President,
Employee Benefits,
Sales
Position and Offices
James D. Motz (2) Executive
Vice-President,
Employee Benefits
Charles P. Nelson (3) Senior
Vice-President
Public Non-Profit
Markets
Martin L. Rosenbaum (2) Senior
Vice-President,
Employee Benefits
Operations
Douglas L. Wooden (3) Executive
Vice-President,
Financial Services
Greg E. Seller (3) Senior Vice
President, Major
Accounts
Robert K. Shaw (3) Senior Vice-President
Individual Markets
- --------------------------------------
</TABLE>
(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.
<TABLE>
Item 26. Persons controlled by or under common control with the Depositor or Registrant
<S> <C> <C> <C> <C> <C> <C>
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**
</TABLE>
* New England Life Insurance Company - 5%
** New England Life Insurance Company - 8%
Item 27. Number of Contract Owners
As of February 26, 1999, there were ________ Contract Owners.
Item 28. Indemnification
Provisions exist under the Colorado Business Corporation Act 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 known 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 under 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 wilful 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.
Item 29. Principal Underwriter
<TABLE>
(a) BenefitsCorp Equities, Inc. ("BCE") is the distributor of securities of the
Registrant. (b) Directors and Officers of BCE Position and Offices Name
Principal Business Address with Underwriter
<S> <C>
Charles P. Nelson (1) Director and
President
John A. Brown (1) Director
Dennis Low (1) Director
Gregory E. Seller 18101 Von Karman Ave., Suite 1460 Director and
Vice-President,
Irvine, CA 92612 Major Accounts
Robert K. Shaw (1) Director
Douglas L. Wooden (1) Director
Jack Baker (1) Vice President,
Licensing and
Contracts
Glen R. Derback (1) Treasurer
Beverly A. Byrne (1) Secretary and Compliance
Officer
</TABLE>
(1) 8515 East Orchard Road, Englewood, CO 80111
(c) Commissions and other compensation received by Principal Underwriter
during registrant's last fiscal year:
Net
Name of Underwriting Compensation
Principal Discounts and on Brokerage
Underwriter Commissions Redemption Commissions
Compensation
BCE -0- -0- -0-
-0-
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) 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.
(e) 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 to be incurred, and the risks
assumed by GWL&A.
<PAGE>
<PAGE>
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement on Form N-4 to be signed on its behalf, in the City of Englewood,
State of Colorado, on this 26th 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 26th, 1999
Director and Chairman of the
Board (Robert Gratton)
/s/ William T. McCallum February 26th, 1999
- ----------------------- -------------
Director, President and Chief Executive
Officer (William T. McCallum)
Signature and Title Date
/s/ Mitchell T.G. Graye February 26th, 1999
- ----------------------- -------------
Executive Vice President, Chief
Financial Officer
(Mitchell T.G. Graye)
/s/ James Balog* February 26th, 1999
Director, (James Balog)
/s/ James W. Burns* February 26th, 1999
Director, (James W. Burns)
/s/ Orest T. Dackow* February 26th, 1999
Director (Orest T. Dackow)
/s/ Andre Desmarais* February 26th, 1999
Director (Andre Desmarais)
/s/ Paul Desmarais, Jr.* February 26th, 1999
Director (Paul Desmarais, Jr.)
/s/ Robert G. Graham* February 26th, 1999
Director (Robert G. Graham)
/s/ N. Berne Hart* February 26th, 1999
Director (N. Berne Hart)
Signature and Title Date
/s/ Kevin P. Kavanagh* February 26th, 1999
Director (Kevin P. Kavanagh)
/s/ William Mackness* February 26th, 1999
Director (William Mackness)
/s/ Jerry E.A. Nickerson* February 26th, 1999
Director (Jerry E.A. Nickerson)
/s/ P. Michael Pitfield* February 26th, 1999
Director (P. Michael Pitfield)
/s/ Michel Plessis-Belair* February 26th, 1999
Director (Michel Plessis-Belair)
/s/ Brian E. Walsh* February 26th, 1999
Director (Brian E. Walsh)
By: /s/ D.C. Lennox February 26th, 1999
D. C. Lennox
</TABLE>
* Attorney-in-fact pursuant to Powers of Attorney filed with Pre-Effective
Amendment No. 1 to this Registration Statement.
