As filed with the Securities and
Exchange Commission on April 26, 2000
Registration No. 33-82610
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. ( )
POST-EFFECTIVE AMENDMENT NO. 7 (X)
--
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
Amendment No. 21 (X)
--
(Check appropriate box or boxes)
MAXIM SERIES ACCOUNT
(Exact name of Registrant)
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
(Name of Depositor)
8515 East Orchard Road
Englewood, Colorado 80111
(Address of Depositor's Principal Executive Officers) (Zip Code)
Depositor's Telephone Number, including Area Code:
(800) 537-2033
William T. McCallum
President and Chief Executive Officer
Great-West Life & Annuity Insurance Company
8515 East Orchard Road
Englewood, Colorado 80111
(Name and Address of Agent for Service)
Copy to:
James F. Jorden, Esq.
Jorden Burt Boros Cicchetti Berenson & Johnson, LLP
1025 Thomas Jefferson Street, N.W., Suite 400 East
Washington, D.C. 20007-0805
It is proposed that this filing will become effective (check appropriate space):
Immediately upon filing pursuant to paragraph (b) of Rule 485 X
On May 1, 2000, pursuant to paragraph (b) of Rule 485. 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.
Title of securities being registered: flexible premium deferred variable annuity
contracts
<PAGE>
Maximum Value Plan
An Individual Flexible Premium Deferred Variable Annuity
Distributed by
BenefitsCorp Equities, Inc.
Issued by
Great-West Life & Annuity Insurance Company
Overview
This prospectus describes the Maximum Value Plan--an individual flexible premium
deferred annuity contract issued by Great-West Life & Annuity Insurance Company
(we, us, Great-West or GWL&A). The Maximum Value Plan provides an annuity
insurance contract whose value is based on the investment performance of the
Investment Divisions that you select. When you participate in the Maximum Value
Plan you are issued a contract, to which we will refer throughout this
prospectus as the "Contract."
Who Should Invest
The Contract is designed for investors who are seeking long-term, tax-deferred
asset accumulation with a wide range of investment options. The Contract can be
used to provide an Individual Retirement Annuity (IRA) or for other long-term
investment purposes.
Allocating Your Money
You can allocate your money among 22 Investment Divisions of Maxim Series
Account. Each Investment Division invests all of its assets in one of 22
corresponding mutual funds (Eligible Funds). Each Eligible Fund is offered by
one of the following fund families: Maxim Series Fund, Inc. or Fidelity Variable
Insurance Products Contrafund(R). You can also select a fixed option, in which
case your money will be allocated to a Guaranteed Sub-Account. Your interest in
a fixed option is not considered a security and is not subject to review by the
Securities and Exchange Commission.
Payment Options
The Contract offers a variety of annuity payment options. The annuity payment
options you select may be payable on a fixed, variable or a combination basis.
Under a variable annuity payment option, annuity payments will continue to
reflect the investment performance of the Investment Divisions you select.
Payments can be guaranteed for your lifetime, your spouse's and/or
beneficiaries' lifetime or for a specified period of time, depending on your
needs and circumstances.
For more information, please contact:
Great-West Life & Annuity Insurance Company
8515 East Orchard Road
Englewood, Colorado 80111
800-228-8706
This Prospectus presents important information you should read before purchasing
the Contract. Please read it carefully and retain it for future reference. You
can find more detailed information about the Contract in the Statement of
Additional Information (SAI) dated May 1, 2000, which has been filed with the
Securities and Exchange Commission. The SAI is incorporated by reference into
this prospectus, which means that it is legally a part of this prospectus. The
SAI may be obtained without charge by contacting Great-West at the above address
or phone number, or, by visiting the Securities and Exchange Commission's web
site at www.sec.gov.
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy or adequacy of the prospectus. Any
representation to the contrary is a criminal offense.
The date of this prospectus is May 1, 2000.
<PAGE>
Table of Contents
Definitions...........................................................3
Key Features of the Contract..........................................5
Fee Table.............................................................6
Eligible Fund Annual Expenses.................................7
Examples......................................................8
Condensed Financial Information.......................................9
Great-West Life & Annuity Insurance Company and the Series Account....9
The Eligible Funds...................................................10
Application and Initial Contributions................................13
Ongoing Contributions................................................13
Annuity Account Value................................................13
Transfers............................................................14
Automatic Custom Transfers...................................14
Telephone/Internet Transactions..............................16
Cash Withdrawals.....................................................16
Death Benefit........................................................17
Charges and Deductions...............................................18
Payment Options......................................................20
Periodic Payment Options.....................................20
Annuity Payments.....................................................21
Annuity Commencement Date....................................21
Annuity Options..............................................21
Annuity Payment Options......................................22
Variable Annuity Payment Provisions..........................22
Federal Tax Matters..................................................23
Assignments or Pledges...............................................26
Performance Data.....................................................26
Distribution of the Contracts........................................29
Voting Rights........................................................29
Rights Reserved by Great-West........................................29
Adding and Discontinuing Investment Options..........................30
Substitution of Investments..........................................30
Legal Matters........................................................30
Available Information................................................30
Appendix A: Condensed Financial Information.........................32
Appendix B: Net Investment Factor Calculation.......................35
This prospectus does not constitute an offering in any jurisdiction in which
such offering may not lawfully be made. No dealer, salesperson or other person
is authorized to give any information or make any representations in connection
with this offering other than those contained in this prospectus, and if given
or made, such other information or representations must not be relied upon.
The Contract is not available in all states.
2
<PAGE>
Definitions
Accumulation Period
The period between the Effective Date and the Annuity Commencement Date. During
this period, you are contributing money to the Contract.
Accumulation Unit
An accounting measure used to determine your Variable Account Value during the
Accumulation Period.
Administrative Offices
The administrative offices of Great-West located at 8515 East Orchard Road,
Englewood, Colorado 80111.
Annuitant
The person named in the application upon whose life the payment of an annuity is
based and who will receive annuity payments. Unless you elect otherwise the
Owner will be the Annuitant.
Annuity Commencement Date
The date payments begin under an annuity payment option.
Annuity Account
An account established by us in your name that reflects all account activity
under the Contract.
Annuity Account Value
The sum of the Variable and Guaranteed Sub-Accounts less any withdrawals,
amounts applied to an annuity option, periodic payments, charges deducted under
the Contract and any applicable Premium Tax.
Annuity Payment Period
The period beginning on the Annuity Commencement Date during which we make
annuity payments.
Annuity Unit
An accounting measure used to determine the amount of each variable annuity
payment after the first annuity payment is made.
Automatic Contribution Plan
A plan that allows you to make automatic scheduled Contributions to the
Contract. Contributions will be withdrawn from a designated pre-authorized
account and automatically credited to your Annuity Account.
Beneficiary
The person(s) designated by you to receive any death benefit which may become
payable under the Contract.
Contributions
Amounts you pay to purchase a Contract.
Contingent Owner
The person who becomes entitled to all rights and benefits under the Contract
when the Owner dies, if there is no Joint Owner, as long as the Annuitant is
living.
Effective Date
The date on which the initial Contribution is credited to your Annuity Account.
Eligible Fund
A mutual fund in which an Investment Division invests all of its assets.
Guaranteed Account Value
The sum of the values of the Guaranteed Sub-Accounts credited to the Owner under
the Annuity Account.
Guaranteed Sub-Account
The sub-division(s) of the Annuity Account to which your fixed account
allocations are credited. You receive a fixed rate of return on amounts
allocated to a Guaranteed Sub-Account. Your interest in a fixed option is not
considered a security and is not subject to review by the Securities and
Exchange Commission.
Individual Retirement Annuity
An annuity contract used in a retirement savings program that is intended to
satisfy the requirements of Section 408 of the Internal Revenue Code of 1986.
Investment Division
The Series Account is divided into Investment Divisions, one for each Eligible
Fund. You select one or more Investment Divisions to which you allocate Contract
value - your allocated Contract value will reflect the investment performance of
the corresponding Eligible Funds.
Owner (Joint Owner) or You
The person(s) named in the application who is entitled to exercise all rights
and privileges under the Contract. Joint Owners must be husband and wife on the
date the Contract is issued. The Annuitant will be the Owner unless otherwise
indicated in the application. If a Contract is purchased as an IRA, the Owner
and the Annuitant must be the same individual and no Joint Owner may be named.
Premium Tax
The amount of tax, if any, charged by a state or other governmental authority in
connection with your Contract.
Request
Any request either written, by telephone, or computerized which is in a form
satisfactory to Great-West and received at our Administrative Offices.
Series Account
The segregated investment account established by Great-West to provide the
funding options for the Contract. It is registered as a unit investment trust
under the Investment Company Act of 1940 and consists of the individual
Investment Divisions.
Surrender Charge
A charge you pay upon withdrawing all or a portion of your Annuity Account
Value. This charge is assessed as a percentage of the amount withdrawn based on
the number of years you have held the Contract.
Surrender Value
The Annuity Account Value less any applicable Surrender Charge, less any
applicable Premium Tax, on the effective date of the surrender.
Transaction Date
The date on which any Contribution or Request from you will be processed.
Contributions and Requests received after the close of the New York Stock
Exchange (generally 4:00 p.m. ET) will be deemed to have been received on the
next business day. Requests will be processed and the Variable Account Value
will be determined on each day that the New York Stock Exchange is open for
trading. On the day after Thanksgiving, however, you can only submit Requests
for transactions by automated voice response unit or by fully automated computer
link.
Transfer
When you move your Annuity Account Value between and among the Investment
Division(s) and/or the Guaranteed Sub-Account(s).
Valuation Date
A date on which we calculate the value of the Investment Divisions. This
Calculation is made as of the close of business of the New York Stock Exchange
(generally 4:00 p.m. ET). The day after Thanksgiving is a Valuation Date.
Variable Account Value
The total value of your Variable Sub-Accounts. This is based on the amounts you
have allocated to the Investment Divisions and will reflect the investment
performance of the Eligible Funds, less all applicable charges and taxes.
Variable Sub-Accounts
An account we maintain for you that reflects the value credited to you from an
Investment Division.
<PAGE>
Key features of the Contract
Following are some of the key features of the Contract. These topics are
discussed in more detail throughout the prospectus so please be sure to read
through it carefully.
How to Invest
You must complete an application and pay by check or through an Automatic
Contribution Plan.
The minimum initial Contribution is:
o $5,000
o $2,000 if an IRA
The minimum ongoing Contribution is:
o $500
o $50 if made via Automatic Contribution Plan
Allocation of Your Contributions
Your initial Contribution and any subsequent Contributions will be allocated to
the Investment Divisions based on the instructions you provide in the
application. You can change your allocation instructions at any time by Request.
Free Look Period
The Contract provides for a "free look" period which allows you to cancel your
Contract generally within 10 days (30 days for replacement policies) of your
receipt of the Contract. You can cancel the Contract during the free look period
by delivering or mailing the Contract to our Administrative Offices. The
cancellation is not effective unless we receive a notice that is postmarked
before the end of the free look period. If the Contract is returned, the
Contract will be void from the start and all Contributions, less surrenders, and
withdrawals, will be refunded to you.
A Wide Range of Investment Choices
The Contract gives you an opportunity to select among twenty-two different
Investment Divisions. Each Investment Division invests in shares of an Eligible
Fund. The Eligible Funds cover a wide range of investment objectives.
The distinct investment objectives and policies of each Eligible Fund are fully
described in the individual fund prospectuses. You can obtain the prospectus for
any Eligible Fund by contacting Great-West.
The portion of your Annuity Account Value allocated to an Investment Division
will vary with the investment performance of that Investment Division. You bear
the entire investment risk for all amounts invested in the Investment
Division(s). Your Annuity Account Value could be less than the total amount of
your Contributions.
Charges and Deductions Under the Contract You pay the following charges under
the Contract:
An annual contract maintenance charge
A mortality and expense risk charge You may also have to pay:
A Surrender Charge (if you withdraw Annuity Account Value within 7
years after purchasing the Contract)
A Premium Tax (depending on your state of residence)
In addition, you pay for management fees and other expenses relating to the
Eligible Funds.
Making Transfers
You may Transfer among the Investment Divisions and between the Investment
Divisions and the Guaranteed Sub-Account(s) as often as you like prior to the
Annuity Commencement Date. There are certain restrictions on Transferring from a
Guaranteed Sub-Account to the Investment Divisions.
Full and Partial Withdrawals
You may withdraw all or part of your Annuity Account Value before the earlier of
the Annuity Commencement Date or the Annuitant's or Owner's death.
Withdrawals may be taxable and if made prior to age 59 1/2 , may be subject to a
10% federal tax early withdrawal penalty.
There is no limit on the number of withdrawals you can make, however, the
withdrawals may be subject to a Surrender charge.
Payment Options
A wide range of annuity options are available to provide flexibility in choosing
an annuity payment schedule that meets your needs. Payments may be made on a
variable, fixed or combination basis. Under a variable payment arrangement, the
annuity payments you receive continue to reflect the performance of the
Investment Divisions you select.
Death Benefit
The amount of the death benefit, if payable before the Annuity Commencement
Date, and before age 75, will be the greater of: o the Annuity Account Value on
the date of death, less any applicable Premium Tax; or o the sum of
Contributions paid, less any withdrawals or periodic payments, and any
applicable Premium
Tax.
The amount of death benefit payable before the Annuity Commencement Date, and
after age 75 will be the amount of the Annuity Account Value on the date of
death, less any applicable Premium Taxes.
<PAGE>
Fee Table
The purpose of this table and the examples that follow is to assist you in
understanding the various costs and expenses that you will bear directly or
indirectly when investing in the Contract. The table and examples reflect
expenses related to the Investment Divisions and the Eligible Funds.
Contract Owner transaction expenses
Sales load None
Surrender Charge 7% maximum
Transfer fee None
Annual contract maintenance charge $27.00
Investment Division annual expenses
(as a percentage of average Variable Sub-Account assets)
Mortality and expense risk charge 1.25%
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Eligible Fund Annual Expenses
Eligible Fund Annual Expenses as of December 31, 1999 (as a
percentage of Eligible Fund net assets, before waivers and
reimbursements)
Portfolio Management Other Total Eligible Fund
fees expenses Annual Expenses
Maxim INVESCO ADR 1.00% .14% 1.14%
Maxim INVESCO Small-Cap Growth .95% .12% 1.07%
Maxim Index 600 .60% 0% 60%
Maxim Ariel Small-Cap Value 1.00% .23% 1.23%
Maxim T. Rowe Price MidCap Growth 1.00% .05% 1.05%
Maxim Ariel Mid-Cap Value .95% .09% 1.04%
American Century VP Capital Appreciation++ 1.00% 0% 1.00%
Maxim Founders Growth & Income 1.00% .11% 1.11%
Maxim Growth Index .60% 0% 60%
Maxim Stock Index .60% 0% .60%
Maxim T. Rowe Price Equity/Income .80% .08% 88%
Maxim Value Index .60% 0% 60%
Fidelity VIP Contrafund(R)1 .58% .09% 67%
Maxim INVESCO Balanced 1.00% .00% 1.00%
Maxim Loomis-Sayles Corporate Bond .90% 0% .90%
Maxim Bond .60% 0% .60%
Maxim U.S. Government Securities .60% 0% .60%
Maxim Money Market .46% 0% .46%
Aggressive Profile I+ .25% 0% .25%
Moderately Aggressive Profile I+ .25% 0% .25%
Moderate Profile I+ .25% 0% .25%
Moderately Conservative Profile I+ .25% 0% .25%
Maxim Conservative Profile I+ .25% 0% .25%
Minimum Total Maxim Series Maximum Total Maxim Series
Fund Annual Expenses* Fund Annual Expenses**
Aggressive Profile I 1.07% 1.43%
Moderately Aggressive Profile I 1.00% 1.38%
Moderate Profile I .97% 1.33%
Moderately Conservative Profile .97% 1.28%
I
Conservative Profile I .87% 1.21%
</TABLE>
++ Effective February 5, 1999 the American Century Capital Appreciation
Portfolio was closed to new Owners.
+ Each Profile I Portfolio (collectively, "Profile Portfolios") will invest in
shares of Underlying Portfolios. Therefore, each Profile Portfolio will, in
addition to its own expenses such as management fees, bear its pro rata share of
the fees and expenses incurred by the Underlying Portfolios and the investment
return of each Profile Portfolio will be reduced by the Underlying Portfolio's
expenses. As of the date of this prospectus, the range of expenses expected to
be incurred in connection with each Profile Portfolio's investments in
Underlying Portfolios is: Maxim Aggressive Profile I - 0.60% to 1.23%; Maxim
Moderately Aggressive Profile I - 0.60% to 1.14%; Maxim Moderate Profile I -
0.60% to 1.14%; Maxim Moderately Conservative Profile I - 0.60% to 1.14%; Maxim
Conservative Profile I - 0.60% to 0.60. This information is provided as a range
since the average assets of each Profile Portfolio invested in Underlying
Portfolios will fluctuate.
1 A portion of the brokerage commissions was used to reduce the Fund's expenses.
In addition the Fund has entered into arrangements with its custodian whereby
credits realized, as a result of uninvested cash balances were used to reduce
custodian expenses. Including these reductions, the Total Eligible Fund Annual
Expenses presented in the table would have been .65% for the Fidelity VIP
Contrafund(R).
<PAGE>
31
EXAMPLES
If you surrender your Contract at the end of the applicable time period,
you would pay the following expenses on a $1,000 investment, assuming a 5%
annual return:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------- ------------ ------------ ------------ ------------
Investment Divisions 1 Year 3 Year 5 Year 10 Year
Maxim Money Market $83 $108 $137 $257
Maxim Bond, Maxim Stock Index, Maxim U.S.
Government Securities, Maxim Value Index,
Maxim Growth Index and Maxim Index 600 $84 $112 $145 $276
Maxim Ariel MidCap Value $89 $126 $169 $335
Maxim INVESCO Small-Cap Growth $89 $127 $171 $339
American Century VP Capital Appreciation++ $88 $125 $167 $329
and
Maxim INVESCO Balanced $88 $125 $136 $329
Maxim Ariel Small-Cap Value $90 $132 $180 $359
Maxim INVESCO ADR $89 $139 $175 $348
Maxim T. Rowe Price Equity/Income $87 $121 $160 $314
Maxim Loomis-Sayles Corporate Bond $87 $121 $162 $316
Maxim Founders Growth & Income $89 $128 $173 $344
Maxim T.Rowe Price MidCap Growth $89 $126 $170 $336
Aggressive Profile I * $92 $138 $191 $384
Moderately Aggressive Profile I* $92 $136 $188 $378
Moderate Profile I* $91 $135 $185 $372
MaximModerately Conservative Profile I * $91 $133 $183 $365
MaximConservative Profile I* $90 $131 $179 $356
Fidelity VIP Contrafund(R) $85 $114 $149 $286
- --------------------------------------------- ------------ ------------ ------------ ------------
If you do not surrender your Contract, or if you elect to take annuity payments
at the end of the applicable time period, you would pay the following expenses
on a $1,000 investment, assuming a 5% annual return:
- --------------------------------------------- ------------ ------------ ------------ ------------
Investment Divisions 1 Year 3 Year 5 Year 10 Year
Maxim Money Market $18 $58 $105 $257
Maxim Bond, Maxim Stock Index, Maxim U.S.
Government Securities, Maxim Value Index,
Maxim Growth Index and Maxim Index 600 $19 $63 $113 $276
Maxim Ariel MidCap Value $24 $77 $139 $335
Maxim INVESCO Small-Cap Growth $24 $78 $140 $339
American Century VP Capital Appreciation++ $23 $76 $136 $329
Maxim INVESCO Balanced $23 $76 $136 $329
Maxim Ariel Small-Cap Value $26 $83 $149 $359
Maxim INVESCO ADR $25 $80 $144 $348
Maxim T. Rowe Price Equity/Income $22 $72 $129 $314
Maxim Loomis-Sayles Corporate Bond $22 $73 $131 $316
Maxim Founders Growth & Income $25 $79 $143 $344
Maxim T. Rowe Price MidCap Growth $24 $77 $139 $336
Aggressive Profile I* $28 $90 $161 $384
Moderately Aggressive Profile I* $27 $88 $158 $378
Moderate Profile I* $27 $87 $155 $372
Moderately Conservative Profile I* $26 $85 $152 $365
Conservative Profile I* $26 $83 $148 $356
Fidelity VIP Contrafund(R) $20 $65 $117 $286
- --------------------------------------------- ------------ ------------ ------------ ------------
</TABLE>
++ Effective February 5, 1999 the American Century Capital Appreciation
Portfolio was closed to new Owners.
*The average of the minimum and maximum total eligible fund expenses are used in
calculating these examples for the Maxim Profile Portfolios.
These examples, including the performance rate assumed, should not be considered
representations of past or future performance or expenses. Actual performance
achieved or expenses paid may be greater or less than that shown.
<PAGE>
Condensed Financial Information
Attached as Appendix A is a table showing selected information concerning
Accumulation Units for each Investment Division. The Accumulation Unit values do
not reflect the deduction of certain charges that are subtracted from your
Annuity Account Value, such as the Contract Maintenance Charge. The information
in the table is included in the Series Account's financial statements, which
have been audited by Deloitte & Touche LLP, independent auditors. To obtain a
fuller picture of each Investment Division's finances and performance, you
should also review the Series Account's financial statements, which are
contained in the SAI.
Great-West Life & Annuity Insurance Company and the Series Account
Great-West Life & Annuity Insurance Company
Great-West is a stock life insurance company originally organized under the laws
of the state of Kansas as the National Interment Association. Its name was
changed to Ranger National Life Insurance Company in 1963 and to Insuramerica
Corporation prior to changing to its current name in 1982. In September of 1990,
Great-West re-domesticated and is now organized under the laws of the state of
Colorado.
Great-West is authorized to engage in the sale of life insurance, accident and
health insurance and annuities. It is qualified to do business in the District
of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam and 49 states in the
United States.
Great-West is an indirect wholly-owned subsidiary of The Great-West Life
Assurance Company ("Great-West Life"). Great-West Life is a subsidiary of
Great-West Lifeco Inc., a holding company. Great-West Lifeco Inc. is in turn a
subsidiary of Power Financial Corporation, a financial services company. Power
Corporation of Canada, a holding and management company, has voting control of
Power Financial Corporation. Mr. Paul Desmarais, through a group of private
holding companies which he controls, has voting control of Power Corporation of
Canada.
The Series Account
Great-West originally established the Series Account under Kansas law on June
24, 1981. The Series Account now exists under Colorado law as a result of our
redomestication. The Series Account consists of the Investment Divisions and is
registered with the Securities and Exchange Commission as a unit investment
trust under the Investment Company Act of 1940. This registration does not
involve supervision of the management of the Series Account or Great-West by the
Securities and Exchange Commission.
We do not guarantee the investment performance of the Investment Divisions. The
portion of your Annuity Account Value allocated to the Investment Divisions and
the amount of variable annuity payments depend on the investment performance of
the Eligible Funds. Thus, the Owner bears the full investment risk for all
Contributions allocated to the Investment Divisions.
The Series Account and its Investment Divisions are administered and accounted
for as part of the general business of Great-West. However, the income, capital
gains, or capital losses of each Investment Division are credited to or charged
against the assets held in that Investment Division without regard to other
income, capital gains or capital losses of any other Investment Division and
without regard to any other business Great-West may conduct. Under Colorado law,
the assets of the Series Account are not chargeable with liabilities arising out
of any other business Great-West may conduct. Nevertheless, all obligations
arising under the Contracts are generally corporate obligations of Great-West.
The Series Account currently has 22 Investment Divisions available for
allocation of Contributions. Each Investment Division invests in shares of one
Eligible Fund. If we decide to make additional Investment Divisions available to
Owners of the Contracts, we may or may not make them available to you based on
our assessment of marketing needs and investment conditions.
The Eligible Funds
Each Eligible Fund is a separate mutual fund having its own investment
objectives and policies. The investment performance of one Eligible Fund has no
effect on the investment performance of any other Eligible Fund.
Each Eligible Fund is registered with the Securities and Exchange Commission as
an open-end management investment company or portfolio thereof. The Securities
and Exchange Commission does not supervise the management or the investment
practices and policies of any of the Eligible Funds.
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:
Maxim Series Fund, Inc.
Maxim Money Market Portfolio seeks as high a level of current income as is
consistent with the preservation of capital and liquidity. Investment in the
Maxim Money Market Portfolio is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the portfolio
seeks to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in this portfolio.
Maxim Bond Portfolio seeks maximum total return consistent with the preservation
of capital. This portfolio invests primarily in bonds issued by the U.S.
Government and its agencies and by domestic or foreign corporations.
Maxim Stock Index Portfolio seeks investment results that track the total return
of the common stocks that comprise Standard & Poor's (S&P) 500 Composite Stock
Price Index and the S&P Mid-Cap Index, weighted according to their respective
pro-rata shares of the market.1
Maxim U.S. Government Securities Portfolio seeks the highest level of return
consistent with preservation of capital and substantial credit protection. This
portfolio invests at least 65% of its total assets in securities issued or
guaranteed by the U.S. Government or one of its agencies or instrumentalities.
Maxim Index 600 Portfolio (formerly the Maxim Small-Cap Index Portfolio) seeks
investment results that track the total return of the common stocks that
comprise the S&P Small-Cap 600 Stock Index.1
Maxim Ariel Mid-Cap Value Portfolio seeks long-term capital appreciation. This
portfolio will invest primarily in equity securities of mid-cap companies which
are believed to be undervalued but demonstrate a strong potential for growth.
Maxim INVESCO Balanced Portfolio seeks high total return on investment through
capital appreciation and current income. This portfolio invests 50% to 70% in
common stocks and at least 25% in fixed income securities.
Maxim INVESCO Small-Cap Growth Portfolio seeks to achieve long-term capital
growth. This portfolio will invest primarily in a diversified group of equity
securities of emerging growth companies with market capitalizations of $1
billion or less at the time of initial purchase.
Maxim INVESCO ADR Portfolio seeks a high total return through capital
appreciation and current income, while reducing risk through diversification.
This portfolio invests primarily in foreign securities that are issued in the
form of American Depositary Receipts ("ADRs") or foreign stocks that are
registered with the Securities and Exchange Commission and traded in the U.S.
Maxim T. Rowe Price Equity/Income Portfolio seeks substantial dividend income
and also capital appreciation. This portfolio invests primarily in
dividend-paying common stocks of established companies.
Maxim Loomis-Sayles Corporate Bond Portfolio seeks high total investment return
through a combination of current income and capital preservation. This portfolio
will invest at least 65% of its total assets in corporate debt securities of any
maturity. It may also invest up to 20% of its total assets in preferred stocks
or foreign securities and up to 35% in below investment grade quality
securities.
Maxim Ariel Small-Cap Value Portfolio seeks long term capital appreciation, by
investing primarily in small-cap common stocks. This portfolio will emphasize
small companies that are believed to be undervalued.
Maxim Value Index Portfolio seeks investment results that track the total return
of the common stocks that comprise the Russell 1000 Value Index.2
Maxim Growth Index Portfolio seeks investment results that track the total
return of the common stocks that comprise the Russell 1000 Growth Index.2
Maxim Founders Growth & Income Portfolio seeks long-term growth of capital and
income. This portfolio invests primarily in common stocks of large, well
established, stable and mature companies, commonly known as "Blue Chip"
companies.
Maxim T. Rowe Price MidCap Growth Portfolio seeks long-term appreciation. This
portfolio will invest primarily in a diversified portfolio of mid-cap companies
emphasizing companies whose earnings are expected to grow at a faster rate than
the average mid-cap company.
Profile Portfolios
Each of the following five Profile Portfolios seeks to provide an asset
allocation program designed to meet certain investment goals based on an
investor's risk tolerance.
Aggressive Profile I Portfolio seeks long-term capital appreciation primarily
through investments in other portfolios of Maxim Series Fund that emphasize
equity investments.
Moderately Aggressive Profile I Portfolio seeks long-term capital appreciation
primarily through investments in other portfolios of Maxim Series Fund that
emphasize equity investments, though income is a secondary consideration.
Moderate Profile I Portfolio seeks long-term capital appreciation primarily
through investments in other portfolios of Maxim Series Fund with a relatively
equal emphasis on equity and fixed income investments.
Moderately Conservative Profile I Portfolio seeks capital appreciation primarily
through investments in other portfolios of Maxim Series Fund that emphasize
fixed income investments, and to a lesser degree equity investments
Conservative Profile I Portfolio seeks capital preservation primarily through
investments in other Maxim Series Fund, Inc. portfolios that emphasize fixed
income investments.
American Century Variable Portfolios, Inc.
American Century VP Capital Appreciation, seeks capital growth. The fund will
seek to achieve its investment objective by investing primarily in common stocks
that are considered by management to have better-than-average prospects for
appreciation. The American Century Capital Appreciation Portfolio is no longer
available as an Investment Division to Owners not currently invested in the
American Century Capital Appreciation Fund.
Fidelity Variable Insurance Products II Fund
Fidelity VIP Contrafund(R) seeks long-term capital appreciation by investing
primarily in common stocks. The fund invests its assets in securities of
companies whose value its investment advisor believes is not fully recognized by
the public.
Eligible Fund Investment Advisers
Maxim Series Fund, Inc. is advised by GW Capital Management, LLC. ("GW Capital")
8515 E. Orchard Road, Englewood, Colorado 80111, a wholly owned subsidiary of
Great-West.
American Century Variable Portfolios, Inc. is advised by American Century
Investment Management, Inc. American Century Tower, 4500 Main Street, Kansas
City, Missouri, 64111.
Fidelity Variable Insurance Products II Fund is advised by Fidelity Management &
Research Company, 2 Devonshire Street, Boston Massachusetts 02109.
Maxim Series Fund Sub-Advisers
GW Capital hires sub-advisers to manage the investment and reinvestment of the
assets of some of the portfolios of Maxim Series Fund. These sub-advisers are
subject to the review and supervision of G.W. Capital and the board of directors
of Maxim Series Fund.
Ariel Capital Corporation is the sub-adviser to the Maxim Ariel Mid-Cap
Portfolio and the Maxim Ariel Small-Cap Value Portfolio. Ariel is located at 307
N. Michigan Avenue, Chicago, Illinois 60601.
Founders Asset Management, LLC. is the sub-adviser of the Maxim Founders Growth
& Income Portfolio. Founders is located at 2930 East Third Avenue. Denver, CO
80206.
INVESCO Capital Management, Inc. is the sub-adviser to the Maxim INVESCO ADR
Portfolio. INVESCO Capital Management, Inc. is located at 1315 Peachtree Street,
Atlanta, Georgia 30309.
INVESCO Funds Group, Inc. is the sub-adviser of the Maxim INVESCO Small-Cap
Growth Portfolio and the Maxim INVESCO Balanced Portfolio. INVESCO Trust Company
is located at 7800 E. Union Avenue, Denver, Colorado 80237.
Loomis, Sayles & Company, LP ("Loomis Sayles") is the sub-adviser to the Maxim
Loomis Sayles Corporate Bond Portfolio. Loomis Sayles is located at One
Financial Center, Boston, Massachusetts 02111.
T. Rowe Price Associates, Inc. is the sub-adviser to the Maxim T. Rowe Price
Equity/Income Portfolio and the Maxim T. Rowe Price MidCap Growth Portfolio. T.
Rowe Price is located at 100 East Pratt Street, Baltimore, Maryland 21202.
Meeting Investment Objectives
Meeting investment objectives depends on various factors, including, but not
limited to, how well the Eligible Fund advisers anticipate changing economic and
market conditions. There is no guarantee that any of these Eligible Funds will
achieve their stated investment objectives.
Reinvestment
All dividend and capital gain distributions made by an Eligible Fund will be
automatically reinvested in shares of the Eligible Fund on the date of the
distribution.
Where to Find More Information About the Eligible Funds
Additional information about the Eligible Funds can be found in the current
prospectuses for the Eligible Funds, which can be obtained by calling Great-West
at 800-228-8706, or by writing to Great-West's Administrative Offices, 8515 East
Orchard Road, Englewood, Colorado 80111. The Eligible Funds' prospectuses should
be read carefully before you make a decision to invest in an Investment
Division.
Application and Contributions
The first step to purchasing the Contract is to fill out your application. When
you submit it, you must make your initial Contribution of:
o $5,000
o $2,000 if an IRA
All Contributions should be made by check (payable to Great-West) or via an
Automatic Contribution Plan.
An Automatic Contribution Plan allows you to make automatic scheduled
Contributions. Contributions will be withdrawn from a designated pre-authorized
bank account and automatically credited to your Annuity Account.
If your application is complete and your check for the initial Contribution is
included (or you have made your initial Contribution via the Automatic
Contribution Plan), your Contract will be issued. Your initial Contribution will
be credited within two business days after receipt at Great-West's
Administrative Offices. Acceptance is subject to our receiving sufficient
information in a form acceptable to us and we reserve the right to reject any
application or Contribution.
If your application is incomplete, Great-West will contact you by telephone to
obtain the required information. If your application remains incomplete for five
business days, we will return to you the application and the initial
Contribution unless you consent to our retaining the initial Contribution and
crediting it as soon as we have your completed application.
During the 10 day (or longer where required by law) free look period you may
cancel your Contract. During the free look period, all Contributions will be
allocated according to your written allocation instructions specified in the
application.
Any returned Contracts will be void from the start and all Contributions
received less any withdrawals, will be refunded to you.
If you exercise the free look privilege, you must return the Contract to
Great-West's Administrative Offices. We must receive it in person or postmarked
prior to the end of the free look period.
Ongoing Contributions
You can make additional Contributions at any time prior to the Annuity
Commencement Date, as long as the Annuitant is living. Additional Contributions
must be at least:
o $500 or
o $50 if made via an Automatic Contribution Plan.
You may make total Contributions in excess of $1,000,000 with our prior
approval.
Great-West reserves the right to modify the limitations set forth in this
section.
Annuity Account Value
Before the Annuity Commencement Date, your Annuity Account Value is the total
value of your Variable and Guaranteed Sub-Accounts.
Before the Annuity Commencement Date, the Variable Account Value is the total
dollar amount of all Accumulation Units credited to you. When you allocate
Contributions to an Investment Division we credit you with Accumulation Units.
We determine the number of Accumulation Units credited to you by dividing your
Contribution to an Investment Division by that Investment Division's
Accumulation Unit value. We determine the Accumulation Unit value on each
Valuation Date.
We calculate each Investment Division's Accumulation Unit value at the end of
each valuation period by multiplying the value of that unit at the end of the
prior valuation period by the Investment Division's Net Investment Factor for
the valuation period. The formula used to calculate the Net Investment Factor is
set forth in Appendix B. Your Variable Account Value reflects the value of the
Accumulation Units credited to you in each Investment Division.
The value of an Investment Division's assets is determined at the end of each
Valuation Date. A valuation period is the period between two successive
Valuation Dates. On the day after Thanksgiving, transactions submitted other
than by KeyTalk(R), or through the Internet will not be processed.
Your Variable Account Value will reflect the investment performance of the
selected Investment Division(s) which in turn reflect the investment performance
of the corresponding Eligible Funds, which we factor in by using the Net
Investment Factor referred to above.
Transfers
In General
Prior to the Annuity Commencement Date you may Transfer all or part of your
Annuity Account Value among and between the Variable and Guaranteed Sub-Accounts
by telephone, by sending a Request to Great-West's Administrative offices, by
calling KeyTalk(R) - the voice response unit at 1-800-701-8255, or through the
Internet at www.benefitscorp.com.
Your Request must specify:
o the amounts being Transferred,
o the Investment Division(s) or Guaranteed Sub-Account(s) from which the
Transfer is to be made, and o the Investment Division(s) or Guaranteed
Sub-Account(s) that will receive the Transfer. If a Transfer Request is received
by Great-West within 30 days of the Annuity Commencement Date, Great-West may
delay the Annuity Commencement Date by up to 30 days.
Currently, there is no limit on the number of Transfers you can make among the
Investment Divisions each calendar year. However, we reserve the right to limit
the number of Transfers you make. There is no charge for Transfers.
A Transfer will be effective on the Transaction Date.
A Transfer from the Guaranteed Sub-Account shall be subject to any limitations
or charges set forth in the Contract.
Possible Restrictions
We reserve the right without prior notice to modify, restrict, suspend or
eliminate the Transfer privileges (including telephone and Internet Transfers)
at any time. Transfer restrictions may be necessary to protect investors from
the negative effect large and/or numerous Transfers can have on portfolio
management. Moving large amounts of money may also cause a substantial increase
in Eligible Fund transaction costs which must be borne by you.
Although you are permitted to make Transfers by telephone, or via the Internet,
we reserve the right to require that each Transfer Request be made by a separate
communication to us. We also reserve the right to request that each Transfer
Request be submitted in writing and be signed by you. Transfer Requests by fax
will not be accepted. Transfers among the Investment Divisions may also be
subject to terms and conditions imposed by the Eligible Funds.
Automatic Custom Transfers
Dollar Cost Averaging
Dollar cost averaging allows you to make systematic Transfers from one
Investment Division to another Investment Division. It does not assure a greater
profit, or any profit, and will not prevent or necessarily alleviate losses in a
declining market. It does, however, allow you to buy more units when the price
is lower and fewer units when the price is higher. Over time, your average cost
per unit may be more or less than if you invested all your money at one time.
You can set up automatic dollar cost averaging on the following frequency
periods: monthly, quarterly, semi-annually or annually. Your Transfer will be
initiated on the Transaction Date you select, one frequency period following the
date of the Request. For example, if we receive a Request for quarterly
Transfers on January 9, your first Transfer will be made on April 9 (or the
following business day, as applicable) and every three months thereafter on the
9th. Transfers will continue on that same day each interval unless terminated by
you or for other reasons as set forth in the Contract. There will be no
additional cost for using dollar cost averaging.
If there are insufficient funds in the applicable Variable Sub-Account on the
date your Transfer is scheduled, your Transfer will not be made. However, your
dollar cost averaging Transfers will resume once there are sufficient funds in
the applicable Variable Sub-Account. Dollar cost averaging will terminate
automatically when you start taking payments from the annuity.
Dollar cost averaging Transfers must meet the following conditions:
o The minimum amount that can be Transferred out of an Investment Division is
$100 per month. o You must: (1) specify the dollar amount to be Transferred, (2)
designate the Investment Division(s) to which the Transfer will be made, and (3)
the percent of the dollar amount to be allocated to each Investment Division
into which you are Transferring money.
You may terminate dollar cost averaging at any time.
Great-West reserves the right to modify, suspend or terminate dollar cost
averaging at any time and for any reason.
Rebalancer
Because the value of your Variable Sub-Accounts will fluctuate with the
investment performance of the Investment Divisions, your asset allocation
percentages may become out of balance over time. Rebalancer allows you to
automatically reallocate your Variable Account Value to maintain your desired
asset allocation. Participation in Rebalancer does not assure a greater profit,
or any profit, nor will it prevent or necessarily alleviate losses in a
declining market.
You can set up Rebalancer as a one-time Transfer or on a quarterly, semi-annual
or annual basis. If you select to rebalance only once, the Transfer will take
place on the Transaction Date of the Request.
If you select to rebalance on a quarterly, semi-annual or annual basis, the
first Transfer will be initiated on the Transaction Date one frequency period
following the date of the Request. For example, if we receive a Request for
quarterly Transfers on January 9, your first Transfer will be made on April 9
(or the following business day, as applicable) and every three months thereafter
on the 9th. Transfers will continue on that same day each interval unless
terminated by you or for other reasons as set forth in the Contract. There will
be no additional cost for using Rebalancer.
On a Rebalancing Transaction Date your money will be automatically reallocated
among the Investment Divisions based on your allocation instructions. You can
change your allocation instructions at any time by Request. Rebalancer will
terminate automatically when you start taking payments from the annuity.
Rebalancer Transfers must meet the following conditions:
o Your entire Variable Account Value must be included.
o You must specify the percentage of your Variable Account Value you'd like
allocated to each Investment Division and the frequency of rebalancing. You
may modify the allocations or stop Rebalancer at any time, by Request.
You may not participate in dollar cost averaging and Rebalancer at the same
time. Great-West reserves the right to modify, suspend, or terminate the
Rebalancer option at any time and for any reason.
Telephone/Internet Transactions
You may make Transfer Requests by telephone by using KeyTalk(R), or via the
Internet at www.benefitscorp.com. We will use reasonable procedures in
monitoring and accepting Transfer Requests such as requiring certain identifying
information, tape recording telephone instructions, and providing written
confirmation of a transaction. Telephone instructions we reasonably believe to
be genuine will be your financial responsibility.
We reserve the right to suspend these privileges at any time, for some or all
Contracts, and for any reason. Withdrawals are not permitted by telephone.
Cash Withdrawals
You may withdraw all or part of your Annuity Account Value at any time during
the life of the Annuitant and prior to the Annuity Commencement Date by
submitting a withdrawal Request to Great-West's Administrative Offices.
Withdrawals are subject to the rules below; and federal and state tax laws may
also apply. The amount payable to you if you withdraw all of your Annuity
Account Value is your Annuity Account Value, less any applicable Surrender
Charge on the effective date of the withdrawal (and any applicable Premium Tax).
The following terms apply to withdrawals:
o No withdrawals may be made after the Annuity Commencement Date.
o If you Request a partial withdrawal, your Annuity Account Value will be
reduced by the dollar amount Requested (any applicable Surrender Charge
would be subtracted from the amount Requested).
o Partial withdrawals are unlimited. However, you must specify the
Sub-Account(s) from which the withdrawal is to be made, otherwise your
Request will not be processed.
o If your remaining Annuity Account Value, after any partial withdrawal, is
less than $2,000, then we may, at our discretion require you to withdraw the
entire amount.
o If a partial withdrawal is made within 30 days prior to the Annuity
Commencement Date, we may delay the Annuity Commencement Date by 30 days.
o Proceeds will generally be paid in one lump sum within 7 days of the
Transaction Date, though payment of proceeds may be delayed for a period in
excess of 7 days as permitted by the 1940 Act.
Withdrawal Requests must be in writing. If your instructions aren't clear, your
Request will be denied and your withdrawal will not be processed.
After a withdrawal of all of your total Annuity Account Value, or at any time
that your Annuity Account Value is zero, all your rights under the Contract will
terminate.
Tax Consequences of Withdrawals
Withdrawals made for any purpose may be taxable. If your Annuity Account Value
exceeds your investment in the Contract, then you may be subject to income tax
on withdrawals made from your Annuity Account. Additionally, the Internal
Revenue Code states that a 10% penalty tax may be imposed on the taxable
portions of certain early withdrawals.
The Internal Revenue Code generally requires us to withhold federal income tax
from withdrawals and report the withdrawals to the IRS. However, you will be
entitled to elect, in writing, not to have tax withholding apply unless
withholding is mandatory for your Contract. Withholding applies to the portion
of the withdrawal which is included in your income and subject to federal income
tax. The tax withholding rate is 10% of the taxable amount of the withdrawal.
Some states also require withholding for state income taxes.
If you are interested in this Contract as an IRA, please refer to Section 408 of
the Internal Revenue Code of 1986, as amended, for limitations and restrictions
on cash withdrawals.
Death Benefit
Death Benefit Payments--After Annuity Commencement Date
If the Annuitant dies after the Annuity Commencement Date and before the entire
interest has been distributed, payments will continue to the Beneficiary under
the payment option applicable to the Annuitant on the Annuitant's date of death.
The Beneficiary cannot change the method of distribution in effect on the date
of the Annuitant's death or elect a new payment option.
Death Benefit Payments--Before Annuity Commencement Date
If the Owner of the Contract or the named Annuitant dies before the Annuity
Commencement Date, a death benefit may be payable. The rules applicable in
various circumstances are described below.
Death of Owner-Annuitant Before the Annuity Commencement Date
If an Owner-Annuitant dies before the Annuity Commencement Date, and if the
surviving spouse of the Owner-Annuitant is the sole Beneficiary, then the
surviving spouse will become the new Owner and Annuitant and the Contract will
continue in force. If the Owner-Annuitant dies before the Annuity Commencement
Date and the surviving spouse of the Owner-Annuitant is not the sole
Beneficiary, then the Company will pay the death benefit under the Contract to
the Beneficiary.
Death of Non-Annuitant Owner Before the Annuity Commencement Date
If the Owner of the Contract who is not the Annuitant dies before the Annuity
Commencement Date, the Company will pay the death benefit described under the
Contract as follows:
(a) First, to the surviving Joint Owner.
(b) If there is no surviving Joint Owner, then to the Contingent Owner.
(c) If there is no Contingent Owner, then to the Annuitant.
If the Owner's surviving spouse is the person entitled to receive benefits upon
the Owner's death, the surviving spouse shall be treated as the Owner and will
be allowed to continue the Contract.
Death of Non-Owner Annuitant Before the Annuity Commencement Date
If a Non-Owner Annuitant dies before the Annuity Commencement Date, the Company
will pay the death benefit under the Contract to the Beneficiary.
Death Benefit Computation and Procedure
If the Owner-Annuitant, Non-Annuitant Owner, or Non-Owner Annuitant dies before
the Annuity Commencement Date and before reaching age 75, the death benefit will
be the greater of:
o the Annuity Account Value as of the date of death, less any applicable
Premium Tax; or o the sum of Contributions paid, less partial
withdrawals and periodic payments, less any applicable
Premium Tax.
If the Owner-Annuitant, Non-Annuitant Owner, or Non-Owner Annuitant dies before
the Annuity Commencement Date, but after reaching age 75, the death benefit will
be the Annuity Account Value as of the date of death, less any applicable
Premium Tax. No Surrender Charge will apply to the amounts payable to a
Beneficiary.
The death benefit proceeds payable to a Beneficiary will remain invested in
accordance with the allocation instruction given by the Owner until either:
o new allocation instructions are requested by the Beneficiary; or
o the death benefit is actually paid to the Beneficiary
The death benefit will become payable following receipt by the Company of the
Beneficiary's request. Unless otherwise specified by the Owner prior to the
Annuitant's death, the Beneficiary may elect, within 60 days after proceeds are
payable, to receive:
o payment in a single sum; or
o payment under any of the payment options provided under the Contract.
o Any payment of benefits under the Contract must satisfy the requirements of
the Internal Revenue Code and any other applicable federal or state laws, rules
or regulations. All distributions of death benefits upon a Contract Owner's
death before the Annuity Commencement Date (or upon the death of a Non-Owner
Annuitant if the Owner is a non-individual entity, such as a trust or estate)
must be made pursuant to IRCss.72(s). These requirement are met if the entire
amount is paid on or before December 31 of the year containing the fifth
anniversary of the Owner's death. This rule, called the 5-year rule, always
applies to payments due to non-individual entities. However, if the person
entitled to receive payments required under IRCss.72(s) is an individual, the
5-year rule will not apply if an election is made to begin taking substantially
equal periodic payments no later than one year after the Owner's death. Payments
may be paid over a period not exceeding the life or life expectancy of such
person.
Beneficiary
You may select one or more Beneficiaries. If more than one Beneficiary is
selected, unless you indicate otherwise, they will share equally in any death
benefit payable.
You may, at any time, while the Annuitant is living, change the Beneficiary by
Request. A change of Beneficiary will take effect as of the date the Request is
processed by Great-West's Administrative Offices, unless a certain date is
specified by the Owner. If the Owner dies before the Request is processed, the
change will take effect as of the date the Request was made, unless we have
already made a payment or otherwise taken action on a designation or change
before receipt or processing of such Request. A Beneficiary designated
irrevocably may not be changed without the written consent of that Beneficiary,
except as allowed by law.
The interest of any Beneficiary who dies before the Owner or the Annuitant will
terminate at the death of the Beneficiary. The interest of any Beneficiary who
dies at the time of, or within 30 days after, the death of an Owner or the
Annuitant will also terminate if no benefits have been paid to such Beneficiary,
unless the Owner otherwise indicates by Request. The benefits will then be paid
as though the Beneficiary had died before the deceased Owner or Annuitant. If no
Beneficiary survives the Owner or Annuitant, as applicable, we will pay the
death benefit proceeds to the Owner's estate.
Charges and Deductions
No amounts will be initially deducted from your Contributions except for any
applicable Premium Tax. As a result, the full amount of your Contributions (less
any applicable Premium Tax) is invested based on your allocation instructions.
You pay the following charges under the Contract:
o a Contract Maintenance Charge, and
o a mortality and expense risk charge.
You may also pay:
o as a Surrender Charge (only for withdrawals within the first 7 Contract
years), and o deductions for Premium Tax (only if applicable depending on your
state of residence).
You also bear the expenses of the Eligible Funds.
Contract Maintenance Charge
Prior to the Annuity Commencement Date, you will pay a $27 annual Contract
Maintenance Charge from your Annuity Account Value. This charge partially covers
our costs for administering the Contracts and the Series Account.
The Contract Maintenance Charge is deducted on a proportionate basis from all
your Variable and Guaranteed Sub-Accounts.
Mortality and Expense Risk Charge
We deduct a Mortality and Expense Risk Charge from your Variable Sub-Account(s)
for our assumption of certain mortality and expense risks under the Contract.
o The mortality risks assumed by us arise from our contractual obligations to
make annuity payments determined in accordance with the Contract.
o The expense risk assumed is the risk that our actual expenses in
administering the Contract and the Series Account will be greater than
anticipated.
This is a daily charge equal to an effective annual rate of 1.25% of the value
of your Variable Sub-Account(s). We guarantee that this charge will never
increase beyond 1.25%.
The Mortality and Expense Risk Charge is reflected in the unit values of the
Variable Sub-Accounts. This charge will continue to be applicable should you
choose a variable annuity payment option or a periodic payment option.
Premium Tax
We may be required to pay state Premium Taxes currently ranging from 0% to 3.5%
in connection with Contributions or values under the Contracts. Depending upon
applicable state law, we will deduct charges for the Premium Taxes we incur with
respect to your Contributions, from amounts withdrawn, or from amounts applied
on the Annuity Commencement Date.
The applicable Premium Tax rates that states and other governmental entities
impose on the purchase of an annuity are subject to change by the respective
state legislatures, by administrative interpretations or by judicial acts. Such
Premium Taxes will depend, among other things, on the state of residence of the
Contract Owner and the insurance laws, tax laws and status of Great-West in
these states when Premium Taxes are incurred.
Surrender Charge
We deduct a Surrender Charge for certain partial or total withdrawals. The
Surrender Charge will cause the amount received to be less than the amount
requested for withdrawal. A Surrender Charge "Free Amount" may be applied in
some circumstances.
o The Surrender Charge "Free Amount" is an amount against which the Surrender
Charge will not be assessed.
o The Free Amount is equal to 10% of the Annuity Account Value at December 31 of
the previous calendar year.
o Only one Free Amount is available in each calendar year.
o The Free Amount will be applied to the first withdrawal made in each year.
If the Free Amount is not exhausted with the first withdrawal any remainder
is lost for that year.
We will not deduct the Surrender Charge in the following instances: o you
Request an annuity option with a payment period of at least 36 months; or o you
Request a periodic payment option (in accordance with the applicable periodic
payment
restrictions); or
o the withdrawal is due to a medical condition requiring your confinement to
an eligible nursing home for 90 consecutive days.
The Surrender Charge is equal to the percentage of the amount distributed less
the Free Amount based on the table below:
Contract Years Completed Percentage of
Distribution
1 7%
2 6%
3 5%
4 4%
5 3%
6 2%
7 0%
Expenses of the Eligible Funds
The net asset value of the Eligible Funds reflect the deduction of the Eligible
Funds' fees and deductions. You bear these costs indirectly when you allocate to
an Investment Division.
Other Taxes
Under present laws, we will incur state or local taxes (in addition to the
Premium Tax described above) in several states. No charges are currently made
for taxes other than Premium Tax. However, we reserve the right to deduct
charges in the future for federal, state, and local taxes or the economic burden
resulting from the application of any tax laws that we determine to be
attributable to the Contracts.
Payment Options
Periodic Payments
You may request that all or part of the Annuity Account Value be applied to a
periodic payment option.
In requesting periodic payments, you must elect:
o The payment frequency of either 12-, 6-, 3- or 1-month intervals o A payment
amount--a minimum of $50 is required o The calendar day of the month on which
payments will be made o One payment option
o The allocation of payments from the Variable and/or Guaranteed
Sub-Account(s) as follows: 1) Prorate the amount to be paid across all
variable and Guaranteed Sub-Accounts in proportion to the assets in each
sub-account; or 2) Select the Investment Division(s)from which payments will
be made. Once the Investment Division(s) have been depleted, Great-West will
automatically prorate the remaining payments unless you Request the
selection of another Investment Division(s).
While periodic payments are being received:
o You may continue to exercise all contractual rights that are available prior
to electing a payment option, except that no Contributions may be made.
o You may keep the same investment options as were in force before periodic
payments began.
o Charges and fees under the Contract continue to apply.
o The Surrender Charge does not apply to the periodic payments. However, if a
partial surrender is made during the time you participate in periodic payments,
a Surrender Charge and other Contract charges, as applicable, will be deducted
and the Free Amount will not apply.
Periodic payments will cease on the earlier of:
o the date the amount elected to be paid under the option selected has been
reduced to zero.
o the Annuity Account Value is zero.
o You Request that withdrawals stop.
o You or the Annuitant die.
Periodic Payment Options
If you choose to receive payments from your Contract through periodic payments,
you must select from the following payment options.
Option 1--Income for a specified period (at least 36 months)
You elect the length of time over which payments will be made. The amount paid
will vary based on the duration you choose.
Option 2--Income of a specified amount (at least 36 months)
You elect the dollar amount of the payments. Based on the amount elected, the
duration may vary.
Option 3 -Interest Only
The payments will be based on the amount of the interest credited to the
Guaranteed Sub-Account(s) between each payment. Available only if 100% of the
account value is invested in the Guaranteed Sub-Account.
Option 4 --Minimum distribution
If you are using this Contract as an IRA, you may Request minimum distributions
as specified under Internal Revenue Code Section 401(a)(9).
Option 5 - Any Other Form (at least 36 months)
Any other form of periodic payment which is acceptable to Great-West.
If periodic payments cease, you may resume making Contributions, at which time
the Surrender Charge Free Amount will be in effect. However, we may limit the
number of times you may restart a periodic payment program.
Periodic payments made for any purpose may be taxable, subject to withholding
and to the 10% penalty tax. IRAs are subject to complex rules with respect to
restrictions on and taxation of distributions, including penalty taxes. A
competent tax adviser should be consulted before a periodic payment option is
Requested.
Annuity Payments
Annuity Commencement Date
You choose the date you'd like annuity payments to start when you purchase the
Contract. The Annuity Commencement Date and options available for IRAs may be
controlled by endorsements, or applicable law.
You may change your Annuity Commencement Date at any time prior to 30 days
before an Annuity Commencement Date you already selected. If you have not
elected a payment option within 30 days of the Annuity Commencement Date, the
portion of your Annuity Account Value held in the Guaranteed Sub-Account(s) will
be paid out as a fixed life annuity with a guarantee period of 20 years. The
Annuity Account Value held in the Variable Sub-Account(s) will be paid out as a
variable life annuity with a guarantee period of 20 years
Under the Internal Revenue Code, a Contract purchased and used in connection
with an Individual Retirement Account is subject to complex "minimum
distribution" requirements. Minimum distribution requirements require
distributions to begin under such a plan by a specific date, and that the entire
interest must be distributed within certain specified periods. The application
of the minimum distribution requirements vary according to your age and other
circumstances. If you're using this annuity as an IRA, you should consider
consulting a competent tax adviser regarding the application of the minimum
distribution requirements.
Annuity Options
You can choose your annuity payment option either when you purchase the Contract
or at a later date. You can change your selection at any time up to 30 days
before an Annuity Commencement Date you previously selected.
The amount to be paid out is the Annuity Account Value on the Annuity
Commencement Date. The minimum amount that may be withdrawn from the Annuity
Account Value to purchase an annuity payment option is $2,000. If your Annuity
Account Value is less than $2,000, we may pay the amount in a single sum subject
to the Contract provisions applicable to a cash withdrawal.
Payments to be made under the annuity payment option you select must be at least
$50. We reserve the right to make payments using the most frequent payment
interval that produces a payment of at least $50. The maximum amount that may be
applied under any payment option is $1,000,000, unless prior approval is
obtained from us.
For annuity options involving life income, the actual age and/or sex of the
Annuitant will affect the amount of each payment. We reserve the right to ask
for satisfactory proof of the Annuitant's age. We may delay annuity payments
until satisfactory proof is received. Since payments to older Annuitants are
expected to be fewer in number, the amount of each annuity payment under a
selected annuity form will be greater for older Annuitants than for younger
Annuitants.
If the age of the Annuitant has been misstated, the payments established will be
made on the basis of the correct age. If payments were too large because of
misstatement, the difference with interest may be deducted by us from the next
payment or payments. If payments were too small, the difference with interest
may be added by us to the next payment. This interest is at an annual effective
rate that will not be less than the Guaranteed Interest Rate.
Annuity Payment Options
Option 1--Income of specified amount
(Available as fixed payments only)
The amount applied under this option may be paid in equal annual, semi-annual,
quarterly or monthly installments in the dollar amount elected for not more than
240 months.
Option 2--Income for a specified period
(Available as fixed payments only)
Payments are paid annually, semi-annually, quarterly or monthly, as elected, for
a selected number of years not to exceed 240 months.
Option 3--Life annuity with guaranteed period
This option provides annual, semi-annual, quarterly or monthly payments during a
guaranteed period or for the lifetime of the Annuitant, whichever is longer. The
guaranteed period may be 5, 10, 15 or 20 years. This option is available on
either a variable or fixed dollar payment basis.
Option 4--Life annuity
This option provides for annual, semi-annual, quarterly or monthly payments
during the lifetime of the Annuitant. The annuity terminates with the last
payment due prior to the death of the Annuitant. Since no minimum number of
payments is guaranteed, this option may offer the maximum level of monthly
payments. It is possible that only one payment may be made if the Annuitant died
before the date on which the second payment is due. This option is available on
either a variable or fixed dollar payment basis.
Option 5 - Any other form
Any other form of fixed or variable annuity payment which is acceptable to
Great-West.
Variable Annuity Payment Provisions
Amount of first payment
The first payment under a variable annuity payment option will be based on the
value of the amounts held in each Variable Sub-Account on the 5th valuation date
preceding the Annuity Commencement Date. It will be determined by applying the
appropriate rate to the amount applied under the payment option.
Annuity units
The number of Annuity Units paid for each Variable Sub-Account is determined by
dividing the amount of the first monthly payment by its Annuity Unit Value on
the 5th valuation date preceding the date the first payment is due. The number
of Annuity Units used to calculate each payment for a Variable Sub-Account
remains fixed during the Annuity Payment Period.
Amount of payments after the first payment
After the first payment, future payments will vary depending upon the investment
experience of the Variable Sub-Accounts. The subsequent amount paid from each
sub-account is determined by multiplying (a) by (b) where (a) is the number of
sub-account Annuity Units to be paid and (b) is the sub-account Annuity Unit
value on the 5th valuation date preceding the date the annuity payment is due.
The total amount of each variable annuity payment will be the sum of the
variable annuity payments for each Variable Sub-Account. We guarantee that the
dollar amount of each payment after the first will not be affected by variations
in expenses or mortality experience.
Transfers after the Annuity Commencement Date
Once annuity payments have begun, no Transfers may be made from a fixed annuity
payment option to a variable annuity payment option, or vice versa. However, for
variable annuity payment options, Transfers may continue to be made among the
Investment Divisions. Transfers after the Annuity Commencement Date will be made
by converting the number of Annuity Units being Transferred to the number of
Annuity Units of the Variable Sub-Account to which the Transfer is made. The
result will be that the next annuity payment, if it were made at that time,
would be the same amount that it would have been without the Transfer.
Thereafter, annuity payments will reflect changes in the value of the new
Annuity Units.
Other restrictions
Once payments start under the annuity form you select:
o no changes can be made in the annuity form,
o no additional Contributions will be accepted under the Contract and
o no further withdrawals, other than withdrawals made to provide annuity
benefits, will be allowed.
A portion or the entire amount of the annuity payments may be taxable as
ordinary income. If, at the Annuity Commencement Date, we have not received a
proper written election not to have federal income taxes withheld, we must by
law withhold such taxes from the taxable portion of such annuity payments and
remit that amount to the federal government (an election not to have taxes
withheld is not permitted for certain Contracts). State income tax withholding
may also apply. Please see "Federal Tax Matters" for details.
Federal Tax Matters
Introduction
The following discussion is a general description of federal income tax
considerations relating to the Contract and is not intended as tax advice. This
discussion assumes that the Contract qualifies as an annuity contract for
federal income tax purposes. This discussion is not intended to address the tax
consequences resulting from all situations. If you are concerned about these tax
implications, you should consult a competent tax adviser before initiating any
transaction.
This discussion is based upon our understanding of the present federal income
tax laws as they are currently interpreted by the Internal Revenue Service. No
representation is made as to the likelihood of the continuation of the present
federal income tax laws or of the current interpretations by the Internal
Revenue Service. Moreover, no attempt has been made to consider any applicable
state or other tax laws.
The Contract may be purchased on a non-tax qualified basis ("Non-Qualified
Contract") or purchased and used in connection with IRAs. The ultimate effect of
federal income taxes on the amounts held under a Contract, on annuity payments,
and on the economic benefit to you, the Owner, or the Beneficiary, may depend on
the type of Contract, and on the tax status of the individual concerned. In
addition, certain requirements must be satisfied in purchasing an IRA and
receiving distributions from an IRA in order to continue receiving favorable tax
treatment. As a result, purchasers of IRAs should seek competent legal and tax
advice regarding the suitability of the Contract for their situation, the
applicable requirements, and the tax treatment of the rights and benefits of the
Contract. The following discussion assumes that an IRA is purchased with
proceeds and/or Contributions that qualify for the intended special federal
income tax treatment.
Taxation of Annuities
In General
Section 72 of the Internal Revenue Code governs taxation of annuities in
general. You, as a "natural person" will not generally be taxed on increases (if
any) in the value of your Annuity Account Value until a distribution occurs by
withdrawing all or part of the Annuity Account Value (for example, withdrawals
or annuity payments under the annuity payment form elected). However, under
certain circumstances, you may be subject to taxation currently. In addition, an
assignment, pledge, or agreement to assign or pledge any portion of the Annuity
Account Value generally will be treated as a distribution. The taxable portion
of a distribution (in the form of a single sum payment or an annuity) is taxable
as ordinary income. An IRA Contract may not be assigned as collateral.
If you are not a natural person (e.g. a corporation), you generally must include
in income any increase in the excess of the Annuity Account Value over the
"investment in the contract" (discussed below) during each taxable year. The
rule does not apply where the non-natural person is the nominal owner of a
Contract and the beneficial owner is a natural person.
The rule also does not apply in the following circumstances:
o Where the annuity Contract is acquired by the estate of a decedent. o Where
the Contract is held under an IRA. o Where the Contract is a qualified funding
asset for a structured settlement.
o Where the Contract is purchased on behalf of an employee upon termination of a
qualified plan.
If you are a non-natural person, you may wish to discuss these matters with a
competent tax adviser.
The following discussion generally applies to a Contract owned by a natural
person.
Withdrawals
In the case of a withdrawal under an IRA, including withdrawals under the
periodic payment option, a portion of the amount received may be non-taxable.
The amount of the non-taxable portion is generally determined by the ratio of
the "investment in the contract" to the individual's total accrued benefit under
the plan. The "investment in the contract" generally equals the amount of any
nondeductible Contributions paid by or on behalf of any individual. Special tax
rules may be available for certain distributions from an IRA.
With respect to Non-Qualified Contracts; partial withdrawals, including periodic
payment, are generally treated as taxable income to the extent the Annuity
Account Value immediately before the withdrawal exceeds the "investment in the
contract" at that time. Full surrenders are treated as taxable income to the
extent that the amount received exceeds the "investment in the contract." The
taxable portion of any annuity payment is taxed at ordinary income tax rates.
Annuity payments
Although the tax consequences may vary depending on the annuity form elected
under the Contract, in general, only the portion of the annuity payment that
represents the amount by which the Annuity Account Value exceeds the "investment
in the contract" will be taxed. After the investment in the contract is
recovered, the full amount of any additional annuity payments is taxable. For
fixed annuity payments, in general there is no tax on the portion of each
payment which represents the same ratio that the "investment in the contract"
bears to the total expected value of the annuity payments for the term of the
payments. However, the remainder of each annuity payment is taxable. Once the
"investment in the contract" has been fully recovered, the full amount of any
additional annuity payments is taxable. If the annuity payments stop as a result
of an Annuitant's death before full recovery of the "investment in the
contract," you should consult a competent tax adviser regarding the
deductibility of the unrecovered amount.
Penalty tax
For distributions from a Non-Qualified Contract, there may be a federal income
tax penalty imposed equal to 10% of the amount treated as taxable income. In
general, however, there is no penalty tax on distributions:
o Made on or after the date on which the recipient of payments under the
Contract attains age 59 1/2, o Made as a result of death of the Owner or
disability of the recipient of payments under the Contract, o Received in
substantially equal periodic payments (at least annually) for your life
expectancy or the
joint life expectancies of you and the Beneficiary,
o Received under an immediate annuity
Other exemptions or tax penalties may apply to distributions from a
Non-Qualified Contract or certain distributions from an IRA. For more details
regarding these exemptions or penalties consult a competent tax adviser.
Taxation of death benefit proceeds
Amounts may be distributed from the Contract because of the death of an Owner or
the Annuitant. Generally such amounts are included in the income of the
recipient as follows:
o If distributed in a lump sum, they are taxed in the same manner as a full
surrender, as described above, however, the Surrender Charge will not apply.
o If distributed under an annuity form, they are taxed in the same manner as
annuity payments, as described above.
Distribution at death
In order to be treated as an annuity contract, the terms of the Contract must
provide the following two distribution rules:
1. If you die on or after the date annuity payments start, and before the
entire interest in the Contract has been distributed, the remainder of your
interest will be distributed on the same or on a more rapid schedule than
that provided for in the method in effect on the date of your death.
2. If you die before the Annuity Commencement Date starts, your entire interest
must generally be distributed within five years after the date of your
death. If payable to a designated Beneficiary, the distributions may be paid
over the life of that designated Beneficiary or over a period not extending
beyond the life expectancy of that Beneficiary, so long as payments start
within one year of your death. If the sole designated Beneficiary is your
spouse, the Contract may be continued in force in the name of your spouse.
If the Owner is not an individual, then for purposes of the distribution at
death rules, the Primary Annuitant is considered the Owner. In addition, when
the Owner is not an individual, a change in the Primary Annuitant is treated as
the death of the Owner.
Distributions made to a Beneficiary upon the Owner's death from an IRA must be
made pursuant to the rules in Section 401(a)(9) of the Internal Revenue Code.
Transfers, assignments or exchanges
A transfer of ownership of a Contract, the designation of an Annuitant or other
Beneficiary who is not also the Owner, or the exchange of a Contract may result
in adverse tax consequences that are not discussed in this prospectus. If you
are contemplating any these types of changes, you should contact a competent tax
adviser with respect to the potential tax effects of such a transaction.
Multiple Contracts
All deferred, non-qualified annuity contracts that are issued by Great-West (or
our affiliates) to the same Owner during any calendar year will be treated as
one annuity contract for purposes of determining the taxable amount of any
distribution. You should consult a tax adviser before purchasing more than one
Contract.
Withholding
Annuity distributions generally are subject to withholding at rates that vary
according to the type of distribution and the recipient's tax status.
Recipients, however, generally are provided the opportunity to elect not to have
tax withheld from distributions. Certain distributions from IRAs are subject to
mandatory federal income tax withholding.
Section 1035 exchanges
Internal Revenue Code Section 1035 provides that no gain or loss shall be
recognized on the exchange of one annuity contract for another. Generally,
contracts issued in an exchange for another annuity contract are treated as new
contracts for purposes of the penalty and distribution at death rules.
Prospective Owners wishing to take advantage of a Section 1035 exchange should
consult their tax adviser.
Individual Retirement Annuities
The Contract may be used with IRAs as described in Section 408 of the Internal
Revenue Code. Section 408 of the Internal Revenue Code permits eligible
individuals to contribute to an individual retirement program known as an
Individual Retirement Annuity. Also, certain kinds of distributions from certain
types of qualified and non-qualified retirement plans may be "rolled over" to an
Individual Retirement Annuity following the rules set out in the Internal
Revenue Code. If you purchase this Contract for use with an IRA, you will be
provided with supplemental information and you have the right to revoke your
purchase within seven days of purchasing the IRA Contract.
If a Contract is purchased to fund an IRA you must be the Annuitant and the
Owner. In addition, if a Contract is purchased to fund an IRA, minimum
distributions must commence not later than April 1st of the calendar year
following the calendar year in which you attain age 70 1/2. You should consult
your tax adviser concerning these matters.
Various tax penalties may apply to Contributions in excess of specified limits,
distributions that do not satisfy specified requirements, and certain other
transactions. The Contract will be amended as necessary to conform to the
requirements of the Internal Revenue Code if there is a change in the law.
Purchasers should seek competent advice as to the suitability of the Contract
for use with IRAs.
When you make your initial Contribution, you must specify whether you are
purchasing a Non-Qualified Contract or an IRA. If the initial Contribution is
made as a result of an exchange or surrender of another annuity contract, we may
require that you provide information with regard to the federal income tax
status of the previous annuity contract.
We will require that you purchase separate Contracts if you want to invest
monies qualifying for different annuity tax treatment under the Internal Revenue
Code. For each separate Contract you will need to make the required minimum
initial Contribution. Additional Contributions under the Contract must qualify
for the same federal income tax treatment as the initial Contribution. We will
not accept an additional Contribution under a Contract if the federal income tax
treatment of the Contribution would be different from the initial Contribution.
Seek Tax Advice
The above discussion of the federal income tax consequences is only a brief
summary and is not intended as tax advice. The federal income tax consequences
discussed here reflect our understanding of current law and the law may change.
Federal estate tax consequences and state and local estate, inheritance, and
other tax consequences of ownership or receipt of distributions under a Contract
depend on your individual circumstances or the circumstances of the recipient of
the distribution. A competent tax adviser should be consulted for further
information.
Assignments or Pledges
Generally, rights in the Contract may be assigned or pledged for loans at any
time during the life of the Annuitant, however, if the Contract is an IRA, you
may not assign the Contract as collateral.
If a non-IRA Contract is assigned, the interest of the assignee has priority
over you and the interest of the Beneficiary. Any amount payable to the assignee
will be paid in a single sum.
A copy of any assignment must be submitted to our Administrative Offices. Any
assignment is subject to any action taken or payment made by Great-West before
the assignment was processed. We are not responsible for the validity or
sufficiency of any assignment.
If any portion of the Annuity Account Value is assigned or pledged for a loan,
it may be treated as a distribution. Please consult a competent tax adviser for
further information.
Performance Data
From time to time, we may advertise yields and average annual total returns for
the Investment Divisions. In addition, we may advertise the effective yield of
the Maxim Money Market Investment Division. We may advertise both standardized
and non-standardized performance data for the Investment Divisions. All
performance information will be based on historical information and is not
intended to indicate future performance.
The yield of the Maxim Money Market Investment Division refers to the annualized
income generated by an investment in that Investment Division over a specified
7-day period. It is calculated by assuming that the income generated for that
seven-day period is generated each 7-day period over a period of 52 weeks and is
shown as a percentage of the investment.
The effective yield is calculated similarly but, when annualized, the income
earned by an investment in that Investment Division is assumed to be reinvested.
The effective yield will be slightly higher than the yield because of the
compounding effect of the assumed reinvestment.
The yield calculations do not reflect the effect of any Surrender Charge or any
Premium Tax that may be applicable to a particular Contract. To the extent that
any Surrender Charge or Premium Taxes are applicable to a particular Contract,
the yield of that Investment Division will be reduced. For a description of the
methods used to determine yield and total returns, see the Statement of
Additional Information. For the 7-Day period ending December 31, 1999, the Yield
and Effective Yield was:
Investment Division Yield Effective
Yield
Maxim Money Market 3.99% 4.07%
The following table illustrates standardized and non-standardized average annual
total return for one, five and ten-year periods (or since inception, as
appropriate) ended December 31, 1999. Average annual total return quotations
represent the average annual compounded rate of return that would equate an
initial investment of $1,000 to the redemption value of that investment
(excluding Premium Taxes, if any) as of the last day of each of the periods for
which total return quotations are provided.
Both the standardized and non-standardized data reflect the deduction of all
fees and charges under the Contract including the applicable Surrender Charge.
The standardized data is calculated from the inception date of an Investment
Division. The non-standardized data is calculated from the inception of the
Eligible Fund and includes periods preceding the inception date of the
corresponding Investment Division
Performance information and calculations for any Investment Division are based
only on the performance of a hypothetical Contract under which the Annuity
Account Value is allocated to an Investment Division during a particular time
period. Performance information should be considered in light of the investment
objectives, policies and characteristics of the Eligible Funds invests and the
market conditions during the given time period. It should not be considered as a
representation of future investment performance.
We may from time to time also advertise cumulative (non-annualized) total
returns, yield and standardized and nonstandardized total returns for the
Investment Divisions.
Reports and promotional literature may also contain other information including
(1) the ranking of any Investment Division derived from rankings of variable
annuity separate accounts or their investment products tracked by Lipper
Analytical Services, Inc., VARDS, Morningstar, Value Line, IBC/Donoghue's Money
Fund Report, Financial Planning Magazine, Money Magazine, Bank Rate Monitor,
Standard & Poor's Indices, Dow Jones Industrial Average, and other rating
services, companies, publications or other people who rank separate accounts or
other investment products on overall performance or other criteria, and (2) the
effect of tax-deferred compounding on investment returns, or returns in general,
which may be illustrated by graphs, charts, or otherwise, and which may include
a comparison, at various points in time, of the return from an investment in a
Contract (or returns in general) on a tax-deferred basis (assuming one or more
tax rates) with the return on a currently taxable basis. Other ranking services
and indices may be used.
<PAGE>
Average Annual Total Return for the period ended December 31, 1999
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Eligible Investment One Year Five Ten Years Ten Years
Investment Division Fund Division Years or if or if less,
Inception Inception in less, Life of
Separate Life of Underlying
Account Investment Eligible
Division Fund
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Maxim Bond 7/1/82 10/14/82 -1.51% 5.15% 5.39% 5.39%
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Maxim Stock Index 7/1/82 2/24/83 18.25% 25.52% 15.40% 15.40%
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Maxim U.S. Government 4/8/85 4/12/85 -.94% 5.76% 6.06% 6.06%
Securities
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Maxim Index 600 12/1/93 9/1/94 10.64% 12.74% 11.40% 9.50%
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Maxim Ariel MidCap Value 12/31/93 9/1/94 -.99% 13.79% 14.50% 13.09%
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Maxim Loomis-Sayles Corporate 11/1/94 11/1/94 -3.57% 10.54% 9.82% 9.82%
Bond
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Maxim INVESCO Balanced 11/1/96 11/1/96 15.29% N/A 18.20% 18.21%
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Maxim Ariel Small-Cap Value 12/1/93 11/1/94 -6.97% 10.80% 10.78% 8.68%
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Maxim INVESCO Small-Cap 11/1/94 11/1/94 78.54% 31.70% 30.69% 30.69%
Growth
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Maxim T. Rowe Price 11/1/94 11/1/94 2.10% 16.78% 15.85% 15.85%
Equity/Income
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Maxim INVESCO ADR 11/1/94 11/1/94 21.15% 14.87 14.05% 14.05%
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Maxim Value Index 12/1/93 1/15/98 10.01% 21.52% 13.62% 16.88%
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Maxim Growth Index 12/1/93 1/15/98 25.30% 28.43% 31.94% 23.10%
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Maxim Founders Growth & 7/1/97 1/15/98 13.59% N/A 15.80% 12.91%
Income
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Maxim T. Rowe Price MidCap 7/1/97 1/15/98 23.06% N/A 24.15% 21.73%
Growth
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Maxim Aggressive Profile I 9/8/97 1/15/98 20.28% N/A 17.20% 15.50%
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Maxim Moderately Aggressive 9/8/97 1/15/98 20.53% N/A 16.02% 14.46%
Profile I
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Maxim Moderate Profile I 9/8/97 1/15/98 14.98% N/A 12.63% 11.48%
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Maxim Moderately Conservative 9/8/97 1/15/98 6.99% N/A 7.59% 7.58%
Profile I
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Maxim Conservative Profile I 9/8/97 1/15/98 3.55% N/A 5.02% 5.89%
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
Fidelity VIP II Contrafund 1/3/95 11/13/98 22.72% N/A 37.47% 26.15%
------------------------------- ----------- -------------- --------- --------- ------------ -------------
------------------------------- ----------- -------------- --------- --------- ------------ -------------
American Century VP Capital 11/20/87 12/1/91 62.50% 12.91% 7.79% 10.04%
Appreciation
------------------------------- ----------- -------------- --------- --------- ------------ -------------
</TABLE>
<PAGE>
Distribution of the Contracts
BenefitsCorp Equities, Inc. (BCE) is the principal underwriter and distributor
of the Contracts. BCE is a wholly owned subsidiary of Great-West and is
registered with the Securities and Exchange Commission as a broker/dealer and is
a member of the National Association of Securities Dealers, Inc. (NASD). Its
principal offices are located at 8515 East Orchard Road, Englewood, Colorado
80111, telephone 800-228-8706.
The maximum commission as a percentage of the Purchase Payment(s) made under a
Contract payable to BCE representatives is 4.0%.
Voting Rights
To the extent required by applicable law, all Eligible Fund shares held in the
Series Account will be voted by Great-West at regular and special shareholder
meetings of the respective Eligible Funds in accordance with instructions
received from Owners who have allocated Contract value to the corresponding
Investment Division(s). If, however, the 1940 Act or any regulation should be
amended, or if the present interpretation thereof should change, or if we
determine that we are allowed to vote all Eligible Fund 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 that are available to you will be calculated separately for each of
your Investment Divisions. That number will be determined by applying your
percentage interest, if any, in a particular Investment Division to the total
number of votes attributable to that Investment Division. You hold a voting
interest in each Investment Division to which your Annuity Account Value is
allocated. If you select a variable annuity option, the votes attributable to
your Contract will decrease as annuity payments are made.
Voting instructions will be solicited by written communication prior to such
meeting in accordance with procedures established by the respective Eligible
Funds. Shares for which we do not receive timely instructions and shares held by
us as to which Owners have no beneficial interest will be voted in proportion to
the voting instructions which are received with respect to all Contracts
participating in the Investment Division. Voting instructions to abstain on any
item to be voted upon will be applied on a pro rata basis to reduce the votes
eligible to be cast.
Contract Owners have no voting rights in Great-West.
Rights Reserved by Great-West
We reserve the right to make certain changes if, in our judgment, they would
best serve the interests of Owners and Annuitants or would be appropriate in
carrying out the purposes of the Contracts. Any changes will be made only as
permitted by applicable laws. Also, when required by law, we will obtain your
approval of the changes and approval from any appropriate regulatory authority.
Approval may not be required in all cases, however. Examples of the changes we
may make include:
o To operate the Series Account in any form permitted under the Investment
Company Act of 1940 or in any other form permitted by law.
o To Transfer any assets in any Investment Division to another Investment
Division, or to one or more separate accounts, or to add, combine or remove
Investment Divisions of the Series Account.
o To substitute, for the Eligible Fund shares in any Investment Division, the
shares of another Eligible Fund or any other investment permitted by law.
o To make any changes required by the Internal Revenue Code or by any other
applicable law in order to continue treatment of the Contract as an annuity.
o To change the time or time of day at which a valuation date is deemed to have
ended. o To make any other necessary technical changes in the Contract in order
to conform with any action the
above provisions permit us to take, including to change the way we assess
charges, but without increasing as to any then outstanding Contract the
aggregate amount of the types of charges which we have guaranteed.
o To reject any application for any reason.
Since some of the Eligible Funds are available to registered separate accounts
of other insurance companies offering variable annuity and variable life
products, there is a possibility that a material conflict may arise between the
interests of the Series Account and one or more other separate accounts
investing in the Eligible Funds. If a material conflict arises, the affected
insurance companies are required to take any necessary steps to resolve the
matter, including stopping their separate accounts from investing in the
Eligible Funds. See the Eligible Funds' prospectuses for more details.
Adding and Discontinuing Investment Options
We may, upon 30 days written notice to you, direct that you may not make any
future Contributions or Transfers to a particular Investment Division or
Guaranteed Sub-Account.
When we inform you that we are discontinuing an Investment Division or
Guaranteed Sub-Account to which you are allocating money, we will ask that you
promptly submit alternative allocation instructions. If we do not receive your
changed allocation instructions, we may return all affected Contributions or
allocate those Contributions as indicated in the written notice provided to you.
Contributions and Transfers you make to a discontinued Investment Division or
Guaranteed Sub-Account before the effective date of the notice may be kept in
those Investment Divisions or Guaranteed Sub-Accounts.
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.
Available Information
We have filed a registration statement ("Registration Statement") with the
Securities and Exchange Commission ("SEC") under the 1933 Act relating to the
Contracts offered by this Prospectus. This Prospectus has been filed as a part
of the Registration Statement and does not contain all of the information set
forth in the Registration Statement and exhibits thereto. Reference is made to
the Registration Statement and exhibits for further information relating to us
and the Contracts. Statements contained in this Prospectus, regarding the
content of the Contracts and other legal instruments, are summaries. For a
complete statement of the terms thereof, reference is made to the instruments as
filed as exhibits to the Registration Statement. The Registration Statement and
its exhibits may be inspected and copied at the offices of the SEC located at
450 Fifth Street, N.W., Washington, D.C.
The Statement of Additional Information contains more specific information
relating to the Series Account and Great-West, such as:
o discussion about the Series Account's Custodian and Independent Auditors o
discussion about the Series Account's Underwriter o discussion about the
calculation of performance data o the financial statements for the Series
Account and Great-West
<PAGE>
APPENDIX A
CONDENSED FINANCIAL INFORMATION
Selected Data for Accumulation Units
Outstanding Throughout Each Period
For the Periods Ended December 31, 1999
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------- ------------- ----------- ------------ ----------- ----------
Investment Division 1999 1998 1997 1996 1995
----------- ----------
- ----------------------------------------- ------------- ----------- ------------
MAXIM BOND a
Value at beginning of period $ 12.73 $ $ 11.43 $ $ 9.76
12.09 11.10
Value at end of period $ 12.54 $ $ 12.09 $ $ 11.10
12.73 11.43
Increase (decrease) in value of $ (0.19) $ $ $ $ 1.34
accumulation units 0.64 0.66 0.33
Number of accumulation units 64,052.670 7,412.56 1,675.75
outstanding at end of period 58,959.10 5,196.46
- ----------------------------------------- ------------- ----------- ------------ ----------- ----------
- ----------------------------------------- ------------- ----------- ------------ ----------- ----------
MAXIM STOCK INDEX a
Value at beginning of period $ 25.67 $ $ $ $ 9.74
20.50 15.70 13.05
Value at end of period $ 30.35 $ $ $ $ 13.05
25.67 20.50 15.70
Increase (decrease) in value of $ 4.68 $ $ $ $ 3.31
accumulation units 5.17 4.80 2.65
Number of accumulation units 1234,499.25 154,519.05 169,289.23 130,996.47 17,200.32
outstanding at end of period
- ----------------------------------------- ------------- ----------- ------------ ----------- ----------
MAXIM ARIEL MIDCAP VALUEajk
Value at beginning of period $ 20.80 $ $ $ $ 10.80
15.75 14.12 13.49
Value at end of period $ 20.60 $ $ $ $ 13.49
20.80 15.75 14.12
Increase (decrease) in value of $ (0.20) $ $ $ $ 2.69
accumulation units 5.05 1.63 0.63
Number of accumulation units 51,894.51 52,202.19 49,565.38 83,398.90 24,467.21
outstanding at end of period
- ----------------------------------------- ------------- ----------- ------------ ----------- ----------
MAXIM INDEX 600 a
Value at beginning of period $ 16.10 $ $ 13.87 $ $ 9.77
16.57 12.18
Value at end of period $ 17.79 $ $ 16.57 $ $ 12.18
16.10 13.87
Increase (decrease) in value of $ 1.69 $ $ $ $ 2.41
accumulation units (0.47) 2.70 1.69
Number of accumulation units 20,516.87 19,020.51 14,918.01 10,975.88 2,705.63
outstanding at end of period
- ----------------------------------------- ------------- ----------- ------------ ----------- ----------
AMERICAN CENTURY VP BALANCED a
Value at beginning of period $ 17.070 $ $ 13.06 $ $ 9.85
14.94 11.79
Value at end of period $ 18.55 $ $ 14.94 $ $ 11.79
17.07 13.06
Increase (decrease) in value of $ 1.48 $ $ $ $ 1.94
accumulation units 2.13 1.88 1.27
Number of accumulation units 0 20,447.27 19,490.47 7,745.10
outstanding at end of period 309.20
- ----------------------------------------- ------------- ----------- ------------ ----------- ----------
MAXIM LOOMIS-SAYLES CORPORATE BOND fj
Value at beginning of period $ 14.91 $ $ 13.12 $ $
14.60 12.03 10.00
Value at end of period $ 15.45 $ $ 14.60 $ $
14.91 13.12 12.03
Increase (decrease) in value of $ 0.54 $ $ $ $
accumulation units 0.31 1.48 1.09 2.03
Number of accumulation units 60,769.470 77,918.20 23,403.30 12,487.29
outstanding at end of period 799.35
- ----------------------------------------- ------------- ----------- ------------ ----------- ----------
MAXIM INVESCO ADR b
Value at beginning of period $ 16.28 $ $ 13.46 $ $
14.90 11.25 10.00
Value at end of period $ 19.72 $ $ 14.90 $ $
16.28 13.46 11.25
Increase (decrease) in value of $ 3.44 $ $ $ $
accumulation units 1.38 1.44 2.21 1.25
Number of accumulation units 27,043.80 35,311.40 31,948.04 15,132.95
outstanding at end of period 2,623.01
- ----------------------------------------- ------------- ----------- ------------ ----------- ----------
MAXIM INVESCO SMALL-CAP GROWTH b
Value at beginning of period $ 22.31 $ $ 16.39 $ $
19.21 13.09 10.00
Value at end of period $ 39.84 $ $ 19.21 $ $
22.31 16.39 13.09
Increase (decrease) in value of $ 17.53 $ $ $ $
accumulation units 3.10 2.82 3.30 3.09
Number of accumulation units 34,724.35 44,665.98 44,396.72 33,993.67
outstanding at end of period 4,511.19
- ----------------------------------------- ------------- ----------- ------------ ----------- ----------
MAXIM MONEY MARKET e
Value at beginning of period $ 11.40 $ $ 10.55 $ $
10.97 10.17 10.00
Value at end of period $ 11.80 $ $ 10.97 $ $
11.40 10.55 10.17
Increase (decrease) in value of $ 0.40 $ $ $ $
accumulation units 0.43 0.42 0.38 0.17
Number of accumulation units 278,852.75 72,949.61 55,509.88 30,070.95
outstanding at end of period 15,499.45
- ----------------------------------------- ------------- ----------- ------------ ----------- ----------
</TABLE>
<PAGE>
APPENDIX A
CONDENSED FINANCIAL INFORMATION
Selected Data for Accumulation Units
Outstanding Throughout Each Period
For the Periods Ended December 31, 1999
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------- ------------ ------------- ------------ ------------- -----------
Investment Division 1999 1998 1997 1996 1995
------------- -----------
- -------------------------------------------- ------------ ------------- ------------
MAXIM ARIEL SMALL-CAP VALUE dj
Value at beginning of period $ 18.25 $ 17.07 $ 13.51 $ 11.60 $
10.00
Value at end of period $ 16.98 $ 18.25 $ 17.07 $ 13.51 $
11.60
Increase (decrease) in value of $ (1.27) $ 1.18 $ $ 1.91 $
accumulation units 3.56 1.60
Number of accumulation units outstanding 5,404.95 5,611.10 3,045.87 1,551.40
at end of period 697.92
- -------------------------------------------- ------------ ------------- ------------ ------------- -----------
MAXIM T. ROWE PRICE EQUITY/INCOME b
Value at beginning of period $ 20.86 $ 19.39 $ 15.24 $ 12.92 $
10.00
Value at end of period $ 21.30 $ 20.86 $ 19.39 $ 15.24 $
12.92
Increase (decrease) in value of $ 0.44 $ 1.47 $ $ 2.32 $
accumulation units 4.15 2.92
Number of accumulation units outstanding 75,493.07 88,483.59 106,469.26 67,415.13 19,500.37
at end of period
- -------------------------------------------- ------------ ------------- ------------ ------------- -----------
- -------------------------------------------- ------------ ------------- ------------ ------------- -----------
MAXIM U.S. GOVERNMENT SECURITIES c
Value at beginning of period $ 12.95 $ 12.23 $ 11.41 $ 11.12 $
10.00
Value at end of period $ 12.83 $ 12.95 $ 12.23 $ 11.41 $
11.12
Increase (decrease) in value of $ (0.12) $ 0.72 $ $ 0.29 $
accumulation units 0.82 1.12
Number of accumulation units outstanding 22,422.35 28,452.60 12,345.78 15,784.10
at end of period 14,812.67
- -------------------------------------------- ------------ ------------- ------------ ------------- -----------
AMERICAN CENTURY VP CAPITAL APPRECIATION c
Value at beginning of period $ 11.29 $ 11.68 $ 12.23 $ 12.94 $
10.00
Value at end of period $ 18.34 $ 11.29 $ 11.68 $ 12.23 $
12.94
Increase (decrease) in value of $ 7.05 $ ( $ ( $ ( $
accumulation units 0.39) 0.55) 0.71) 2.94
Number of accumulation units outstanding 8,576.49 11,087.23 16,591.59 15,595.65
at end of period 6,110.86
-----------
- -------------------------------------------- ------------ ------------- ------------ -------------
MAXIM INVESCO BALANCED g
Value at beginning of period $ 14.73 $ 12.59 $ 10.13 $ 10.00
Value at end of period $ 16.98 $ 14.73 $ 12.59 $ 10.13
Increase (decrease) in value of $ 2.25 $ 2.14 $ 2.46 $ 0.13
accumulation units
Number of accumulation units outstanding 122,501.83 147,157.63 32,937.69 1,307.11
at end of period
- -------------------------------------------- ------------ ------------- ------------ -------------
</TABLE>
MAXIM FOUNDERS GROWTH & INCOMEhj
Value at beginning of period $ 11.74 $ 10.00
Value at end of period $ 13.34 $ 11.74
Increase (decrease) in value of $ 1.60 $ 1.74
accumulation units
Number of accumulation units outstanding 5,962.03 1,025.12
at end of period
- -------------------------------------------- ------------ -------------
MAXIM GROWTH INDEXh
Value at beginning of period $ 13.75 $ 10.00
Value at end of period $ 17.23 $ 13.75
Increase (decrease) in value of $ 3.48 $ 3.75
accumulation units
Number of accumulation units outstanding 26,777.65 45,895.99
at end of period
- -------------------------------------------- ------------ -------------
MAXIM VALUE INDEXh
Value at beginning of period $ 11.68 $ 10.00
Value at end of period $ 12.85 $ 11.68
Increase (decrease) in value of $ 1.17 $ 1.68
accumulation units
Number of accumulation units outstanding 2,991.88 1,678.41
at end of period
- -------------------------------------------- ------------ -------------
MAXIM T.ROWE PRICE MIDCAP GROWTHhj
Value at beginning of period $ 12.42 $ 10.00
Value at end of period $ 15.29 $ 12.42
Increase (decrease) in value of $ 2.87 $ 2.42
accumulation units
Number of accumulation units outstanding 10,284.80 10,160,99
at end of period
- -------------------------------------------- ------------ -------------
APPENDIX A
CONDENSED FINANCIAL INFORMATION
Selected Data for Accumulation Units
Outstanding Throughout Each Period
For the Periods Ended December 31, 1999
- -------------------------------------------- ------------ -------------
Investment Division 1999 1998
- -------------------------------------------- ------------ -------------
AGGRESSIVE PROFILE Ih
Value at beginning of period $ 11.35 $ 10.00
Value at end of period $ 13.65 $ 11.35
Increase (decrease) in value of $ 2.30 $ 1.35
accumulation units
Number of accumulation units outstanding 6,019.04 2,227.92
at end of period
- -------------------------------------------- ------------ -------------
MODERATELY AGGRESSIVE PROFILE Ih
Value at beginning of period $ 11.10 $ 10.00
Value at end of period $ 13.38 $ 11.10
Increase (decrease) in value of $ 2.28 $ 1.10
accumulation units
Number of accumulation units outstanding 32,079.80 13,300.61
at end of period
- -------------------------------------------- ------------ -------------
MODERATE PROFILE Ih
Value at beginning of period $ 10.98 $ 10.00
Value at end of period $ 12.63 $ 10.98
Increase (decrease) in value of $ 1.65 $ 0.98
accumulation units
Number of accumulation units outstanding 29,199.60 21,309.48
at end of period
- -------------------------------------------- ------------ -------------
MODERATELY CONSERVATIVE PROFILE Ih
Value at beginning of period $ 10.79 $ 10.00
Value at end of period $ 11.54 $ 10.79
Increase (decrease) in value of $ 0.91 $ 0.79
accumulation units
Number of accumulation units outstanding 5,941.97 6,875.97
at end of period
- -------------------------------------------- ------------ -------------
CONSERVATIVE PROFILE Ih
Value at beginning of period $ 10.63 $ 10.00
Value at end of period $ 11.01 $ 10.63
Increase (decrease) in value of $ 0.22 $ 0.63
accumulation units
Number of accumulation units outstanding 17,410.97 15,432.21
at end of period
- -------------------------------------------- ------------ -------------
FIDELITY VIP CONTRAFUND i
Value at beginning of period $ 11.69 $ 10.00
Value at end of period $ 14.35 $ 11.69
Increase (decrease) in value of
accumulation units $ 2.66 $ 1.69
Number of accumulation units outstanding
at end of period 11,336.44 0
- -------------------------------------------- ------------ -------------
KEY
Current Accumulation Unit Values can be obtained by calling GWL&A toll-free at
1-800-523-4106 a The Investment Division commenced operations under this
contract on September 19, 1994, at a unit value of $10.00 b The Investment
Division commenced operations under this contract on January 6, 1995, at a unit
value of $10.00.
c The Investment Division first commenced operations under this contract on
January 18, 1995, at a unit value of $10.00. d The Investment Division commenced
operations under this contract on March 9, 1995, at a unit value of $10.00.
e The Investment Division commenced operations under this contract on August 4,
1995, at a unit value of $10.00. f The Investment Division commenced operations
under this contract on August 8, 1995, at a unit value of $10.00.
g The Investment Division commenced operations under this contract on October 1,
1996, at a unit value of $10.00. h The Investment Division commenced operations
under this contract on January 5, 1998, at a unit value of $10.00.
i The Investment Division commenced operations under this contract on November
5, 1998, at a unit value of $10.00. j On April 7, 1999 the Maxim Series Fund
Board of Directors authorized the name changes of the indicated portfolios to
indicate the name of the sub-adviser managing these funds. The portfolio names
that existed prior to this time were Maxim MidCap Value, Maxim Corporate Bond,
Maxim Small-Cap Value, Maxim Blue Chip and Maxim MidCap Growth, respectively.
k On February 5, 1999 the Maxim MidCap (Growth Fund1) changed sub-advisers and
its name and objective.
<PAGE>
APPENDIX B - CALCULATION OF THE NET INVESTMENT FACTOR
The Net Investment Factor for each Variable Sub-Account for any Valuation
Period is determined by dividing (a) by (b), and subtracting (c) from the result
where:
(a) is the net result of:
(i) the net asset value per share of the Eligible Fund shares determined as of
the end of the current Valuation Period, plus
(ii)the per share amount of any dividend (or, if applicable, capital gain
distributions) made by the Eligible Fund on shares if the "ex-dividend"
date occurs during the current Valuation Period, minus or plus
(iii) a per unit charge or credit for any taxes incurred by or provided for
in the Variable Sub-Account, which is determined by GWL&A to have
resulted from the investment operations of the Variable Sub-Account; and
(b) is the net asset value per share of the Eligible Fund shares determined as
of the end of the immediately preceding Valuation Period, minus or plus
(c) is an amount representing the Mortality and Expense Risk Charge deducted
from each Variable Sub-Account on a daily basis. Such amount is equal to
1.25%.
The Net Investment Factor may be greater than, less than, or equal to
one. Therefore, the Accumulation Unit Value may increase, decrease or remain
unchanged.
The net asset value per share referred to in paragraphs (a) (i) and (b)
above, reflect the investment performance of the Eligible Fund as well as the
payment of Eligible Fund expenses.
<PAGE>
B-
MAXIM SERIES ACCOUNT
Individual Flexible Premium Variable Annuity Contracts
issued by
Great-West Life & Annuity Insurance Company
8515 E. Orchard Road
Englewood, Colorado 80111
Telephone: (800) 468-8661 (Outside Colorado)
(800) 547-4957 (Colorado)
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information is not a Prospectus and should
be read in conjunction with the Prospectus, dated May 1, 2000, which is
available without charge by contacting Great-West Life & Annuity Insurance
Company ("GWL&A") at the above address or at the above telephone number.
May 1, 2000
<PAGE>
TABLE OF CONTENTS
Page
CUSTODIAN AND INDEPENDENT AUDITORS...................................B-3
UNDERWRITER..........................................................B-3
CALCULATION OF PERFORMANCE DATA......................................B-4
FINANCIAL STATEMENTS.................................................B-5
<PAGE>
CUSTODIAN AND INDEPENDENT AUDITORS
A. Custodian
The assets of Maxim Series Account (the "Series Account") are
held by GWL&A. The assets of the Series Account are kept physically segregated
and held separate and apart from the general account of GWL&A. GWL&A maintains
records of all purchases and redemptions of shares of the Eligible Funds.
Additional protection for the assets of the Series Account is afforded by
blanket fidelity bonds issued to The Great-West Life Assurance Company
("Great-West") in the amount of $50 million (Canadian), per occurrence, which
covers all officers and employees of GWL&A.
B. Independent Auditors
The accounting firm of Deloitte & Touche LLP performs certain
accounting and auditing services for GWL&A and the Series Account. The principal
business address of Deloitte & Touche LLP is 555 Seventeenth Street, Suite 3600,
Denver, Colorado 80202-3942.
The consolidated balance sheets of GWL&A as of December 31, 1999
and 1998, and the related consolidated statements of income, stockholder's
equity, and cash flows and each of the three years in the period ended December
31, 1999, as well as the financial statements of the Series Account for the
years ended December 31, 1999 and 1998, which are included in this Statement of
Additional Information have been audited by Deloitte & Touche LLP, independent
auditors, as set forth in their reports appearing herein and are included in
reliance upon such reports given upon such firm as experts in accounting and
auditing.
UNDERWRITER
The offering of the Contracts is made on a continuous basis by
BenefitsCorp Equities, Inc. ("BCE"), a wholly owned subsidiary of GWL&A. Prior
to 1996, the Contracts were offered through Great-West an affiliate of GWL&A.
BCE received commissions paid by GWL&A in the amount of $35,538.51 for 1999,
$26,417.09 for 1998, and $26,005.73 for1997.
<PAGE>
CALCULATION OF PERFORMANCE DATA
A. Yield and Effective Yield Quotations for the Money Market Investment Division
- -----------------------------------------------------------------------------
The yield quotation for the Money Market Investment Division set forth
in the Prospectus is for the seven-day period ended December 31, 1999 and is
computed by determining the net change, exclusive of capital changes, in the
value of a hypothetical pre-existing account having a balance of one
Accumulation Unit in the Money Market Investment Division at the beginning of
the period, subtracting a hypothetical charge reflecting deductions from
Participant accounts, and dividing the difference by the value of the account at
the beginning of the base period to obtain the base period return, and then
multiplying the base period return by (365/7) with the resulting yield figure
carried to the nearest hundredth of one percent.
The effective yield quotation for the Money Market Investment Division
set forth in the Prospectus is for the seven-day period ended December 31, 1998
and is carried to the nearest hundredth of one percent, computed by determining
the net change, exclusive of capital changes, in the value of a hypothetical
pre-existing account having a balance of one Accumulation Unit in the Money
Market Investment Division at the beginning of the period, subtracting a
hypothetical charge reflecting deductions from Participant accounts, and
dividing the difference by the value of the account at the beginning of the base
period to obtain the base period return, and then compounding the base period
return by adding 1, raising the sum to a power equal to 365 divided by 7, and
subtracting 1 from the result, according to the following formula:
EFFECTIVE YIELD = [(BASE PERIOD RETURN +1) 365/7]-1.
For purposes of the yield and effective yield computations, the
hypothetical charge reflects all deductions that are charged to all Participant
accounts in proportion to the length of the base period, and for any fees that
vary with the size of the account, the account size is assumed to be the Money
Market Investment Division's mean account size. The specific percentage
applicable to a particular withdrawal would depend on a number of factors
including the length of time the Contract Owner has participated under the
Contracts. (See "Administrative Charges, Risk Charges and Premium Taxes" in the
prospectus.) No deductions or sales loads are assessed upon annuitization under
the Contracts. Realized gains and losses from the sale of securities and
unrealized appreciation and depreciation of the Money Market Investment Division
and the Fund are excluded from the calculation of yield.
<PAGE>
B. Total Return Quotations for All Investment Divisions (Other than Money
Market)
- ------------------------------------------------------------------------------
The total return quotations set forth in the Prospectus are average
annual total return quotations for the one, five and ten year periods (or since
inception) ended December 31, 1999. The quotations are computed by finding the
average annual compounded rates of return over the relevant periods that would
equate the initial amount invested to the ending redeemable value, according to
the following formula:
P(1+T)n = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the particular period at the end of the particular period
For purposes of the total return quotations, the calculations take into effect
all fees that are charged to the Contract Value, and for any fees that vary with
the size of the account, the account size is assumed to be the respective
Investment Divisions' mean account size. The calculations also assume a complete
redemption as of the end of the particular period.
FINANCIAL STATEMENTS
The consolidated financial statements of GWL&A as contained herein
should be considered only as bearing upon GWL&A's ability to meet its
obligations under the Contracts, and they should not be considered as bearing on
the investment performance of the Series Account. The variable interest of
Contract Owners under the Contracts are affected solely by the investment
results of the Series Account.
<PAGE>
MAXIM SERIES ACCOUNT
OF
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
- -------------------------------------------------------------------------------
FINANCIAL STATEMENTS FOR THE YEARS
ENDED DECEMBER 31, 1999 AND 1998
AND INDEPENDENT AUDITORS' REPORT
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Contract Owners of
Maxim Series Account of
Great-West Life & Annuity Insurance Company
We have audited the accompanying statement of assets and liabilities of Maxim
Series I, Maxim Series II and Maxim Series III of Maxim Series Account of
Great-West Life & Annuity Insurance Company (the "Series Account") as of
December 31, 1999, and the related statements of operations for the year then
ended, by investment division, and the statements of changes in net assets for
each of the two years in the period then ended, by investment division. These
financial statements are the responsibility of the Series Account's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1999, by correspondence with
the custodian. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Maxim Series I, Maxim Series II
and Maxim Series III of Maxim Series Account of Great-West Life & Annuity
Insurance Company as of December 31, 1999, the results of its operations for the
year then ended, by investment division, and the changes in its net assets for
each of the two years in the period then ended, by investment division, in
conformity with generally accepted accounting principles.
February 22, 2000
<PAGE>
MAXIM SERIES ACCOUNT OF
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
MAXIM SERIES I
ASSETS
Shares Cost Value
Investments in underlying affiliated funds:
Maxim Series Fund, Inc. Bond Portfolio / Qualified $ $
5,025 6,005 5,739
Maxim Series Fund, Inc. Bond Portfolio/ Non-Qualified
121,647 144,596 138,930
Maxim Series Fund, Inc. Money Market Portfolio /
Non-Qualified 33,864 33,911 33,881
Maxim Series Fund, Inc. Stock Index Portfolio / Qualified
4,393 22,533 17,767
------- ------
Total Investments $
==
207,045 196,317
========
Other assets and liabilities:
Investment Income Due and Accrued
4
Due from Great-West Life & Annuity Insurance Company
280
NET ASSETS APPLICABLE TO OUTSTANDING UNITS OF CAPITAL (Note 5) $
==
196,601
See notes to financial statements.
</TABLE>
<PAGE>
MAXIM SERIES ACCOUNT OF
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
MAXIM SERIES II
ASSETS
Shares Cost Value
Investments in underlying affiliated funds:
Maxim Series Fund, Inc. Bond Portfolio / Qualified $ $
976,621 1,186,976 1,115,368
Maxim Series Fund, Inc. Bond Portfolio / Non-Qualified
932,015 1,132,911 1,064,424
Maxim Series Fund, Inc. Money Market Portfolio / Qualified
1,049,120 1,054,787 1,049,653
Maxim Series Fund, Inc. Money Market Portfolio / Non-Qualified
1,303,941 1,304,217 1,304,603
Maxim Series Fund, Inc. Stock Index Portfolio / Qualified
3,986,667 9,822,798 16,123,731
Maxim Series Fund, Inc. Stock Index Portfolio / Non-Qualified
2,807,321 6,419,295 11,353,970
Maxim Series Fund, Inc. U.S. Government Securities Portfolio /
Qualified 2,338,461 2,571,803 2,445,824
Maxim Series Fund, Inc. U.S. Government Securities Portfolio /
Non-Qualified 3,791,987 4,146,104 3,966,083
Investments in underlying funds:
American Century VP Funds VP Capital Appreciation Fund / Qualified
36,101 385,300 535,741
-------- -------
Total Investments
$28,024,191 38,959,397
============
Other assets and liabilities:
Investment Income Due and Accrued
299
Due to Great-West Life & Annuity Insurance Company
(22,893)
NET ASSETS APPLICABLE TO OUTSTANDING UNITS OF CAPITAL (Note 5)
$38,936,803
See notes to financial statements.
</TABLE>
<PAGE>
MAXIM SERIES ACCOUNT OF
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
MAXIM SERIES III
ASSETS
Shares Cost Value
Investments in underlying affiliated funds:
Maxim Series Fund, Inc. Aggressive Profile Portfolio $ $
66,641 77,204 82,218
Maxim Series Fund, Inc. Ariel MidCap Value Portfolio
693,994 1,073,815 1,069,619
Maxim Series Fund, Inc. Ariel Small-Cap Value Portfolio
117,115 106,506 91,819
Maxim Series Fund, Inc. Bond Portfolio
703,640 848,610 803,605
Maxim Series Fund, Inc. Conservative Profile Portoflio
189,619 195,312 191,780
Maxim Series Fund, Inc. Founders Growth and Income Portfolio
64,073 71,252 79,552
Maxim Series Fund, Inc. Growth Index Portfolio
285,326 736,279 817,002
Maxim Series Fund, Inc. Index 600 Portfolio
456,567 448,630 365,197
Maxim Series Fund, Inc. INVESCO Balanced Portfolio
1,711,675 2,426,016 2,423,323
Maxim Series Fund, Inc. INVESCO International Growth Portfolio (ADR)
269,922 408,387 533,597
Maxim Series Fund, Inc. INVESCO Small-Cap Growth Portfolio
488,341 907,726 1,384,198
Maxim Series Fund, Inc. Loomis Sayles Corporate Bond Portfolio
882,569 1,037,857 939,279
Maxim Series Fund, Inc. Moderate Profile Portfolio
327,908 340,063 368,928
Maxim Series Fund, Inc. Moderately Aggressive Profile Portfolio
352,661 384,908 429,614
Maxim Series Fund, Inc. Moderately Conservative Profile Portfolio
64,757 66,797 68,628
Maxim Series Fund, Inc. Money Market Portfolio
3,333,602 3,335,349 3,335,295
Maxim Series Fund, Inc. Stock Index Portfolio
934,881 2,955,623 3,781,045
Maxim Series Fund, Inc. T Rowe Price Equity/Income Portfolio
1,094,487 1,905,876 1,811,831
Maxim Series Fund, Inc. T Rowe Price MidCap Growth Portfolio
99,365 122,861 157,307
Maxim Series Fund, Inc. U.S. Government Securities Portfolio
275,137 301,800 287,768
Maxim Series Fund, Inc. Value Index Portfolio
21,314 41,431 38,456
Investments in underlying funds:
American Century VP Funds VP Capital Appreciation Fund
10,607 91,859 157,412
Dreyfus Family of Funds Stock Index
11,085 393,670 426,211
Fidelity Investments VIP II Contrafund Portfolio
5,583 140,444 162,744
Janus Aspen Funds Flexible Income Fund
11,785 140,284 134,579
Neuberger & Berman AMT Partners Portfolio
Management 10,237 192,324 201,051
Templeton International Class I Fund
6,065 116,814 134,957
-------- -------
Total Investments $
=
18,867,697 20,277,015
===========
Other assets and
liabilities:
Investment Income Due and Accrued
423
Due to Great-West Life & Annuity Insurance Company
(11,572)
NET ASSETS APPLICABLE TO OUTSTANDING UNITS OF CAPITAL (Note 5) $
==
20,265,866
See notes to financial statements.
</TABLE>
<PAGE>
MAXIM SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Maxim Bond Maxim Bond Maxim Money Maxim Stock
Portfolio Portfolio Market Index Portfolio
Portfolio
Investment Investment Investment Investment Total Maxim
Division Division Division Division Series I
Account
------------------------------------------------------------------------------
Qualified Non-Qualified Non-Qualified Qualified
MAXIM SERIES I
INVESTMENT INCOME $ $ $ $
346 5,486 1,569 977 8,378
EXPENSES - mortality and expense risks
73 1,085 417 203 1,778
--- ------ ---- ---- -----
NET INVESTMENT INCOME (LOSS)
273 4,401 1,152 774 6,600
---- ------ ------ ---- -----
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments
(1) (3,939) (1) (150) (4,091)
Net change in unrealized appreciation (depreciation) on
investments 361) (2,584) 1 2,117 (827)
---- ------- -- ------ -----
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
362) (6,523) - 1,967 (4,918)
---- ------- -- ------ -------
NET INCREASE (DECREASE) IN ASSETS RESULTING FROM $ $ $ $
===== ============ ============= ============= ==
OPERATIONS (89) (2,122) 1,152 2,741 1,682
==== ======= ====== ====== =====
See notes to financial statements.
</TABLE>
<PAGE>
MAXIM SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Maxim Bond Maxim Bond Maxim Money Maxim Money Maxim Stock
Portfolio Portfolio Market Market Index Portfolio
Portfolio Portfolio
Investment Investment Investment Investment Investment
Division Division Division Division Division
---------------------------------------------------------------------------------
Qualified Non-Qualified Qualified Non-Qualified Qualified
MAXIM SERIES II
INVESTMENT INCOME $ 71,004 71,043 $ 50,092 $ 47,982 901,422
EXPENSES - mortality and expense risks 16,726 16,928 14,898 14,142 222,398
------------- --------- -------------- ------------- ----------
NET INVESTMENT INCOME (LOSS) 54,278 54,115 35,194 33,840 679,024
------------- --------- -------------- ------------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments (6,788)
(8,981) (5,063) 360 2,515,922
Net change in unrealized appreciation (depreciation) on (67,529) (66,442) 5,064 (360) (574,663)
------------- --------- -------------- -------------- -----------
investments
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: (74,317) (75,423) - 1,941,259
------------- --------- --------------- ---------------- ----------
1
NET INCREASE (DECREASE) IN ASSETS RESULTING FROM $ (20,039) (21,308) $ 35,195 $ 33,840 2,620,283
============ ========= ============= ============ ==========
OPERATIONS
See notes to financial statements. (Continued)
</TABLE>
<PAGE>
MAXIM SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
American
Maxim U.S. Maxim U.S. Century VP
Government Government Capital
Maxim Stock Securities Securities Appreciation
Index Portfolio Portfolio Portfolio Fund
Investment Investment Investment Investment Total Maxim
Division Division Division Division Series II
Account
--------------------------------------------------------------------------
Non-Qualified Qualified Non-Qualified Qualified
MAXIM SERIES II
INVESTMENT INCOME $ 631,150 149,751 $ 253,207 2,175,651
-
EXPENSES - mortality and expense risks 152,304 37,275 63,999 5,320 543,990
--------------- ------------ --------------- ------------ ----------
NET INVESTMENT INCOME (LOSS) 478,846 112,476 189,208 (5,320) 1,631,661
--------------- ------------ -------------- ------------ ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments 1,499,935 3,946,605
(18,248) (25,440) (5,092)
Net change in unrealized appreciation (depreciation) on (171,710) (124,092) (224,971) 221,099 (1,003,604)
--------------- ------------ -------------- ------------ -----------
investments
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: 1,328,225 (142,340) (250,411) 216,007 2,943,001
-------------- ------------ -------------- ------------ ----------
NET INCREASE (DECREASE) IN ASSETS RESULTING FROM $ 1,807,071 (29,864) $ (61,203) $ 210,687 4,574,662
============= ============ ============== ============ ==========
OPERATIONS
See notes to financial statements. (Concluded)
</TABLE>
<PAGE>
MAXIM SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS
YEAR ENDED TO DECEMBER 31, 1999
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
Maxim Maxim Maxim Maxim
Aggressive Ariel Ariel Conservative
Profile MidCap Small-Cap Maxim Bond Profile
Portfolio Value Value Portfolio Portfolio
Portfolio Portfolio
Investment Investment Investment Investment Investment
Division Division Division Division Division
------------------------------------------------------------------
MAXIM SERIES III
INVESTMENT INCOME $ 5,036 $ 190,234 $ 11,290 $ 47,367 $ 11,251
EXPENSES - mortality and expense risks 1,995
--------- ------ ------- ------- ------------
610 14,247 1,184 9,675
---- ------- ------ ------
NET INVESTMENT INCOME (LOSS) 4,426 175,987 10,106 37,692 9,256
------------ ------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments
2,159 13,013 (9,248) (549) 363
Net change in unrealized appreciation
(depreciation) on investments 3,547 (206,561) (7,860) (47,437) (3,091)
------------ ------------ ----------- ----------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS: 5,706 (193,548) (17,108) (47,986) (2,728)
------------ ------------ ---------- ----------- ----------
NET INCREASE (DECREASE) IN ASSETS RESULTING $ 10,132 $ (17,561) $ (7,002) $ (10,294) $ 6,528
=========== =========== ========== ========== ==========
FROM OPERATIONS
See notes to financial statements.
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------
Maxim
Founders Maxim
Growth and Growth
Income Index Maxim
Portfolio Portfolio Index 600
Portfolio
Investment
Investment Division Investment
Division Division
-------------------------------------
MAXIM SERIES III
INVESTMENT INCOME $ 2,354 $ 54,416 $ 32,829
EXPENSES - mortality and expense risks 504 4,177
----------- ------- ----------
7,278
-----
NET INVESTMENT INCOME (LOSS) 1,850 47,138 28,652
---------- ------------ ---------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments
(256) 69,416 (24,892)
Net change in unrealized appreciation
(depreciation) on investments 8,339 30,416 31,487
---------- ----------- ---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS: 8,083 99,832 6,595
---------- ----------- ----------
NET INCREASE (DECREASE) IN ASSETS RESULTING $ 9,933 $ 146,970 $ 35,247
========= ========== ========
FROM OPERATIONS
See notes to financial statements. (Continued)
</TABLE>
<PAGE>
MAXIM SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
Maxim
INVESCO Maxim Maxim
Maxim International INVESCO Loomis Maxim
INVESCO Growth Small-Cap Sayles Moderate
Balanced Portfolio Growth Corporate Profile
Portfolio (ADR) Portfolio Bond Portfolio
Portfolio
Investment Investment Investment Investment Investment
Division Division Division Division Division
-----------------------------------------------------------------
MAXIM SERIES III
INVESTMENT INCOME $ 408,462 $ 4,260 $ 187,814 $ 86,748 $ 28,577
EXPENSES - mortality and expense risks 12,764 3,392
------- ------- ------ ----------- -----------
26,919 6,553 11,595
------- ------ ------
NET INVESTMENT INCOME (LOSS) (2,293) 176,219 73,984 25,185
----- ------------------------ ------------ ----------
381,543
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments
91,713 45,334 71,816 (22,659) 609
Net change in unrealized appreciation
(depreciation) on investments (144,086) 54,567 337,914 (10,200) 19,032
----------- ----------------------- ------------ ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS: (52,373) 99,901 409,730 (32,859) 19,641
------------ ----------------------- ----------- ----------
NET INCREASE (DECREASE) IN ASSETS RESULTING
FROM OPERATIONS $ 329,170 $ 97,608 $ 585,949 $ 41,125 $ 44,826
========== ========== =========== ========== =========
See notes to financial statements.
- ------------------------------------------------------------------------------------
Maxim Maxim
Moderately Moderately Maxim
Aggressive Conservative Money
Profile Profile Market
Portfolio Portfolio Portfolio
Investment Investment
Division Division Investment
Division
--------------------------------------
MAXIM SERIES III
INVESTMENT INCOME $ 27,175 $ 4,650 $ 120,394
EXPENSES - mortality and expense risks 4,121 891 30,496
---------- ----------- ----------
NET INVESTMENT INCOME (LOSS) 23,054 3,759 89,898
--------- ---------- ----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments
7,036 (342) (49)
Net change in unrealized appreciation
(depreciation) on investments 38,837 985
---------- ----------
49
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS: 45,873 643 -
---------- ----------- -
NET INCREASE (DECREASE) IN ASSETS RESULTING
FROM OPERATIONS $ 68,927 $ 4,402 $ 89,898
========= ======== =========
See notes to financial statements. (Continued)
</TABLE>
<PAGE>
<TABLE>
MAXIM SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
Maxim T.
Maxim T. Rowe Price Maxim U.S.
Maxim Rowe Price Mid-Cap Government Maxim
Stock Index Equity/Income Growth Securities Value Index
Portfolio Portfolio Portfolio Portfolio Portfolio
Investment Investment Investment Investment Investment
Division Division Division Division Division
-----------------------------------------------------------------
MAXIM SERIES III
INVESTMENT INCOME $ 211,195 $ 186,913 $ $ 18,219 $ 5,192
9,112
EXPENSES - mortality and expense risks 46,849 22,794
----------- ------------------- ------- ---------
1,762 4,084 375
------ ------ ---
NET INVESTMENT INCOME (LOSS) 164,346 164,119 14,135 4,817
---------- ------------------ ------------ ------------
7,350
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments
512,630 98,828 2,495 (1,520) (150)
Net change in unrealized appreciation
(depreciation) on investments (45,249) (223,726) 19,868 (15,288) (2,586)
----------- ----------------------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON 467,381 (124,898) 22,363 (16,808) (2,736)
----------- ------------------------ ----------- -----------
INVESTMENTS:
NET INCREASE (DECREASE) IN ASSETS RESULTING $ 631,727 $ 39,221 $ 29,713 $ (2,673) $ 2,081
=========== ============ =========== =========== ==========
FROM OPERATIONS
See notes to financial statements.
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------
American
American Century VP Dreyfus
Century VP Capital Family of
Balanced Appreciation Funds
Fund Fund Stock
Index Fund
Investment Investment
Division Division Investment
Division
--------------------------------------
MAXIM SERIES III
INVESTMENT INCOME $ 732 $ 5,043
$
-
EXPENSES - mortality and expense risks 22 1,413 1,094
----------- ------------ ----------
NET INVESTMENT INCOME (LOSS) 710 (1,413) 3,949
----------- ------------ ----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments
(202) (10,977) 3,307
Net change in unrealized appreciation
(depreciation) on investments (432) 73,729 32,541
---------- ----------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON (634) 62,752 35,848
---------- ------------ ----------
INVESTMENTS:
NET INCREASE (DECREASE) IN ASSETS RESULTING $ 76 $ 61,339 $ 39,797
========== =========== ==========
FROM OPERATIONS
See notes to financial statements. (Continued)
<PAGE>
</TABLE>
<PAGE>
MAXIM SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Neuberger
Fidelity & Berman
Investments Management
VIP II Janus AMT Templeton Total
Contrafund Aspen Funds Partners International Maxim
Portfolio Flexible Portfolio Class I Series III
Income Fund Account
Investment Investment Investment Investment
Division Division Division Division
-----------------------------------------------------------------
MAXIM SERIES III
INVESTMENT INCOME $ 2,875 $ 7,715 $ 741 $ 1,511 $
1,672,105
EXPENSES - mortality and expense risks 1,697 345 584 314
---------- ----------- ------------ -----------
217,734
NET INVESTMENT INCOME (LOSS) 1,178 7,370 157 1,197
---------- ---------- ------------ ---------
1,454,371
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments
7,430 (267) 28 (45) 855,021
Net change in unrealized appreciation 22,300 (5,705) 8,727 18,143
---------- ---------- ----------- ----------
(depreciation) on investments
(11,740)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON 29,730 (5,972) 8,755 18,098
---------- ----------- ---------- ----------
INVESTMENTS: 843,281
-------
NET INCREASE (DECREASE) IN ASSETS RESULTING $ 30,908 $ 1,398 $ 8,912 $ 19,295 $
========== ========== ========== =========== ==
FROM OPERATIONS 2,297,652
=========
</TABLE>
See notes to financial statements. (Concluded)
<PAGE>
MAXIM SERIES ACCOUNT GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Maxim Bond Maxim Bond Maxim Money Market Maxim Stock Index
Portfolio Portfolio Portfolio Portfolio
Investment Division Investment Division Investment Division Investment Division
Qualified Non-Qualified Non-Qualified Qualified
1999 1998 1999 1998 1999 1998 1999 1998
----- ----- ----- ----- ----- ----- ----- ----
MAXIM SERIES I
FROM OPERATIONS:
Net investment income (loss) $ 273 $ 277 $ 4,401 $ 4,656 $ 1,152 $ 1,284 774 432
Net realized gain (loss) on investments (1)
3 (3,939) 194 (1) - (150) 43
Net change in unrealized appreciation
(depreciation) in investments (361) 2,117 2,480
----------- ---------- ----- ---------- ------------ ----------- ---------------
23 (2,584) 284 1 (5)
--- ------- ---- -- ---
Increase (decrease) in net assets
resulting from operations (2,122) 5,134 1,152 1,279 2,741 2,955
-------- -------- ----------------------- ----------- ----------- ---------------
(89) 303
FROM UNIT TRANSACTIONS (by category):
Purchases: - - - -
- 48,536 - -
Redemptions: - (9,980)
(9) (33) (57) (67) (21) (75)
Net transfers:
- - - - - - - -
-- -- -- -- -- -- -- -
Increase (decrease) in net assets
resulting from unit transactions (9,980) (67) (75)
---------- --------- ----- ------------- ----------- ------------------- ------
(9) (33) 48,536 (57) (21)
--- ---- ------- ---- ----
INCREASE (DECREASE) IN NET ASSETS 46,414 1,212
(98) 270 (4,846) 1,095 2,720 2,880
Contributions from (Distributions to) -
GWLA - (435) - 35 63 - 627
NET ASSETS:
Beginning of period 5,960 6,125 97,241 32,842 31,567 15,238 11,731
---------- ----------- ------ ------------ ------------ ---------- ---------------
92,430
End of period $ 5,862 $ 5,960 $ $ 92,430 $ 33,937 $ 32,842 17,958 15,238
========== =========== ==== =========== =========== ========== ===============
138,844
See notes to financial statements. (Continued)
</TABLE>
<PAGE>
MAXIM SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
Maxim Total Return Portfolio
Investment Division Total Maxim Series I Account
Non-Qualified
1999 1998 1999 1998
----- ----- ----- ----
MAXIM SERIES I (1)
- --------------
FROM OPERATIONS:
Net investment income (loss) $ $
$ $ 6,600 6,638
- (11)
Net realized gain (loss) on investments
- 13,948 (4,091) 14,188
Net change in unrealized appreciation (11,009)
-------------------------- ----------- ---------------
(depreciation) in investments - (13,791) (827)
-- -------- -----
Increase (decrease) in net assets
resulting from operations - 146 1,682 9,817
-- ---- ------ -----
FROM UNIT TRANSACTIONS (by category):
Purchases: - -
48,536 -
Redemptions:
- (55,089) (87) (65,244)
Net transfers:
- - - -
-- -- -- -
Increase (decrease) in net assets (65,244)
-------------------------- -------- ---------------
resulting from unit transactions - (55,089) 48,449
-- -------- ------
INCREASE (DECREASE) IN NET ASSETS
(54,943) 50,131 (55,427)
-
Contributions from (Distributions to)
GWLA
- - - 290
NET ASSETS:
Beginning of period 201,607
--------------------------- ------ --------------
- 54,943 146,470
-- ------- -------
End of period $ 196,601 $ 146,470
= = ============ =============
$ $
================= =
- -
== =
(1) The Investment Division ceased operations on June 22, 1998
See notes to financial statements. (Concluded)
</TABLE>
<PAGE>
MAXIM SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Maxim Bond Maxim Bond Maxim Money Market Maxim Money Market
----------
Portfolio Portfolio Portfolio Portfolio Investment
Investment Division Investment Division Investment Division Division
Qualified Non-Qualified Qualified Non-Qualified
1999 1998 1999 1998 1999 1998 1999 1998
----- ----- ----- ----- ----- ----- ----- ----
MAXIM SERIES II
FROM OPERATIONS:
Net investment income (loss) $ $ $ $ 28,995
54,278 64,098 54,115 60,927 35,194 31,850 33,840
Net realized gain (loss) on investments
(6,788) 3,799 (8,981) 741 (5,063) (6) 360 (8)
Net change in unrealized appreciation
(depreciation) in investments
(67,529) 3,726 (66,442) 3,001 5,064 (129) (360) (122)
-------- ------ -------- ------ ------ ----- ----- -----
Increase (decrease) in net assets
resulting from operations 28,865
----- ----- ------- ------ -------- ------ -------- ----------
(20,039) 71,623 (21,308) 64,669 35,195 31,715 33,840
-------- ------- -------- ------- ------- ------- ------
FROM UNIT TRANSACTIONS (by category):
Purchase Payments:
3,284 3,750 1,814 1,816 257 1,024 217 2,061
Redemptions:
(157,538) (227,425) (171,463) (161,547) (169,651) (166,012) (107,909) (257,080)
Net transfers: 207,155
----- ------ ------- ------- ------ ---- ------ ---------
(30,255) (3,641) (88,096) 98,509 105,666 229,028 532,421
-------- ------- -------- ------- -------- -------- -------
Increase (decrease) in net assets
resulting from unit transactions (47,864)
--- -- ----- ----- ------- ------ ------ ----------
(184,509) (227,316) (257,745) (61,222) (63,728) 64,040 424,729
--------- --------- --------- -------- -------- ------- -------
INCREASE (DECREASE) IN NET ASSETS
(204,548) (155,693) (279,053) 3,447 (28,533) 95,755 458,569 (18,999)
Contributions from (Distributions to) 16,119
GWLA - 25,193 - (22,355) - 33,913
NET ASSETS:
Beginning of period 1,361,214 830,386
-- --- ----------- --- --- ------ -------
1,318,968 1,449,468 1,342,306 1,077,606 965,732 845,300
-------------------- ---------- ---------- -------- -------
End of period $ $ 1,342,306 $ 1,049,073 1,077,606 $ 845,300
= = == ============ ============ ========== == =======
1,114,420 1,318,968 1,063,253 1,303,869
========= =========== ========== =========
</TABLE>
(1) The Investment Division ceased operations on June 22, 1998.
(2) The Investment Division is no longer a Series Account option effective May
1, 1998 and funds were transferred to other Divisions.
See notes to financial statements. (Continued)
MAXIM SERIES ACCOUNT GREAT-WEST
LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Maxim Stock Index Maxim Stock Index Maxim Total Return Maxim U.S. Government
Portfolio Portfolio Portfolio Securities Portfolio
Investment Division Investment Division Investment Division Investment Division
Qualified Non-Qualified Qualified Qualified
1999 1998 1999 1998 1999 1998 1999 1998
----- ----- ----- ----- ----- ----- ----- ----
MAXIM SERIES II (1)
FROM OPERATIONS:
Net investment income (loss) $ $ $ $ $ 123,628
679,024 445,022 478,846 298,105 - 47,580 112,476
Net realized gain (loss) on investments 2,515,922 132,674 (18,248)
1,499,935 145,928 - 1,419,068 11,453
Net change in unrealized appreciation
(depreciation) in investments
(574,663) 2,234,146 (171,710) 1,612,872 - (1,122,822) (124,092) 33,395
--------- ---------- --------- ----------------------- --------- ------
Increase (decrease) in net assets
resulting from operations
2,620,283 2,811,842 1,807,071 2,056,905 - 343,826 (29,864) 168,476
---------- ---------- ---------- ------------ -------- -------- -------
FROM UNIT TRANSACTIONS (by category):
Purchases:
237,892 96,181 20,678 138,826 - 27,755 8,290 15,587
Redemptions: (709,393)
(2,639,500)(1,244,333) (1,335,042)(1,124,432)- (151,462) (446,024)
Net transfers: (5,466,093) (151,888)
-------- --- ----------- --- ------------- ------ --------------
(71,793) 3,829,682 19,545 1,572,751 - (50,433)
-------- ---------- ------- ------------ --------
Increase (decrease) in net assets
resulting from unit transactions (845,694)
--- --- ---- ------ ------- ---- --------------
(2,473,401) 2,681,530 (1,294,819) 587,145 - (5,589,800) (488,167)
----------- ---------- ----------- ------- ------------- ---------
INCREASE (DECREASE) IN NET ASSETS 5,493,372 512,252 2,644,050 (518,031)
146,882 - (5,245,974) (677,218)
Contributions from (Distributions to) - -
GWLA 56,918 (112,890)- 84,837 - 55,803
NET ASSETS:
Beginning of period 10,836,737 3,582,781
--- - ------------------ ----- --- ------------
15,969,031 10,418,741 8,305,577 - 5,161,137 2,961,366
---------------------- ------------ ---------- ---------
End of period $ 16,115,913 $ 11,348,989 $ $ $ 2,961,366
====================== ============== ============= == ===========
15,969,031 10,836,737 - 2,443,335
=========== ============= ===========
(1) The Investment Division cased operations on June 22, 1998
(2) The Investment Division is no
longer a Series Account option
effective May 1, 1998 and funds were
transferred to other Divisions
See notes to financial statements. (Continued)
</TABLE>
<PAGE>
MAXIM SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Maxim U.S. Government American Century VP American Century VP
Securities Portfolio Balanced Fund Capital Appreciation Fund
Investment Division Investment Division Investment Division Total Maxim
Series II
Account
Non-Qualified Qualified Qualified
1999 1998 1999 1998 1999 1998 1999 1998
----- ----- ----- ----- ----- ----- ----- ----
MAXIM SERIES II (2)
FROM OPERATIONS:
Net investment income (loss) $ $ $ $ $ 1,631,661
189,208 218,828 - 54,640 (5,320) 11,941 1,385,614
Net realized gain (loss) on investments (5,092) 3,946,605 1,768,675
(25,440) 4,071 - 51,239 (284)
Net change in unrealized appreciation
(depreciation) in investments
(224,971) 66,945 - (67,581) 221,099 (21,564) (1,003,604) 2,741,867
--------- ------- -- -------- -------- -------- ----------- ---------
Increase (decrease) in net assets
resulting from operations 5,896,156
---- ------- ------------------ ----- ---- ---- ----------
(61,203) 289,844 - 38,298 210,687 (9,907) 4,574,662
-------- -------- -- ------- -------- ------- ---------
FROM UNIT TRANSACTIONS (by category):
Purchase Payments: 274,932 441,925
2,500 105,797 23,910 - 25,218
Redemptions: (942,158) (1,182,060) (46,039) (14,611) (13,701) (5,983,896)(5,283,484)
-
Net transfers:
(454,423) 94,599 - (439,193) (21,656) 32,817 (59,024) 3,726
--------- ------- -- --------- -------- ------- -------- -----
Increase (decrease) in net assets
resulting from unit transactions (1,394,081)
-----------
(981,664) - (461,322) (36,267) 44,334 (5,767,988 (4,837,833)
--------- -- --------- -------- ------- ---------- ---------
INCREASE (DECREASE) IN NET ASSETS (1,455,284) (691,820) (423,024) (1,193,326 1,058,323
- 174,420 34,427
Contributions from (Distributions to) - (136) - 111,542
GWLA - (25,894) 34
NET ASSETS:
Beginning of period 423,160 326,531
--- --- ----------------------- ------- --------
5,417,823 6,135,537 - 360,992 40,130,129 38,960,264
---------- ---------- -- -------- ---------- ----------
End of period $ 5,417,823 $ $ $ 360,992 $ 38,936,803 40,130,129
== ========================================== ========= =======================
3,962,539 - - 535,412
========== == == =======
</TABLE>
(1) The Investment Division ceased operations on June 22, 1998. (2) The
Investment Division is no longer a Series Account option effective May 1, 1998
and funds were transferred to other Divisions.
See notes to financial statements. (Concluded)
<PAGE>
MAXIM SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Maxim Aggressive Maxim Ariel MidCap Value Maxim Ariel Small-Cap
Profile Portfolio Portfolio Value Portfolio Maxim Bond Portfolio
Investment Division Investment Division Investment Division Investment Division
------------------- ------------------- ------------------- -------------
1999 1998 1999 1998 1999 1998 1999 1998
----- ----- ----- ----- ----- ----- ----- ----
MAXIM SERIES III
- ----------------
FROM OPERATIONS:
Net investment income (loss) $ 4,426 44 $ $ $ 10,106 $ 2,172 37,692
175,987 98,828 20,206
Net realized gain (loss) on investments 2,159 (9,248) (360) (549)
111 13,013 4,339 445
Net change in unrealized appreciation
(depreciation) in investments 1,467 (7,860) 2,136 (47,437)
------ -------- ----- ------ ------------ ------------ ---------
3,547 (206,561) 152,701 1,560
------ --------- -------- -----
Increase (decrease) in net assets
resulting from operations 10,132 1,622 (7,002) (10,294)
----------- -------- ------- ------ ----------- ------- ---------
(17,561) 255,868 3,948 22,211
-------- -------- ------ ------
FROM UNIT TRANSACTIONS (by category):
Purchase payments: 4,160
6,057 44,766 130,512 20,357 11,541 47,730 77,766
Redemptions: (4,277) (1,698) (53,709) (35,069) (378) (371) (23,043)(11,347)
Net transfers:
46,869 19,305 (23,619) 35,306 38,159 572,340
----------- -------- ----------- ------ ----------- ----------- ----------------
9,458 (45,874)
------ --------
Increase (decrease) in net assets
resulting from unit transactions 46,752 23,664 (3,640) 46,476 62,846 638,759
----------- -------- -------------------- ------------ ------------ ----------------
515 49,569
INCREASE (DECREASE) IN NET ASSETS 56,884 (17,046) (10,642)
25,286 305,437 50,424 52,552 660,970
NET ASSETS:
Beginning of period 25,286 102,406 51,982 750,556 89,586
----------- -------------- ------ ---------- ------------ ----------------
- 1,086,031 780,594
-- ---------- -------
End of period $ 82,170 25,286 $ 1,068,985 $ 1,086,031 $ 91,764 $ 102,406 803,108 750,556
========== ======== ======================== ========== ========== ================
</TABLE>
(1) The Investment Division commenced operations on December 31, 1998. (2) The
Investment Division ceased operations on June 22, 1998. See notes to financial
statements. (Continued)
<PAGE>
MAXIM SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------
Maxim Conservative Maxim Founders Growth and Maxim Growth Index Maxim Index 600
Profile Portfolio Income Fund Portfolio Portoflio
Investment Division Investment Division Investment Division Investment Division
---------------- ------------------- ------------------- ------------------
1999 1998 1999 1998 1999 1998 1999 1998
----- ----- ----- ----- ----- ----- ----- ----
MAXIM SERIES III
- ----------------
FROM OPERATIONS:
Net investment income (loss) $ 1,850 $ 480 $ 47,138 $ $ 28,652 $ 101,674
9,256 6,858 22,708
Net realized gain (loss) on investments
363 134 (256) (1) 69,416 38 (24,892) (1,405)
Net change in unrealized appreciation
(depreciation) in investments (39) 30,416 31,487 (112,425)
--- ------- -------- ------------- ------------ ------ ------------- ----------
(3,091) (441) 8,339 50,307
------- ----- ------ ------
Increase (decrease) in net assets
resulting from operations 440 146,970 35,247 (12,156)
------ ------ -------- ------------- ----------- ------ ---------------------
6,528 6,551 9,933 73,053
------ ------ ------ ------
FROM UNIT TRANSACTIONS (by category):
Purchase payments: 26,509
- 60,805 5,915 214,823 30,996 45,382 53,076
Redemptions: (1,000)
(3,000) - - (604) - (21,144) (15,915)
Net transfers: 5,679 (175,471) 526,871 34,099
---- --- ------ ------------ ---------- ----------- ---------- ---------
(4,425) 160,499 (3,268) (821)
------- -------- ------- -----
Increase (decrease) in net assets
resulting from unit transactions 11,594 38,748 557,867 23,417 71,260
---- --- ------ ----------- ------------ ----------- ------------- -------
21,084 157,499 57,537
------- -------- ------
INCREASE (DECREASE) IN NET ASSETS 27,612
164,050 67,470 12,034 185,718 630,920 58,664 59,104
NET ASSETS:
Beginning of period 12,034 630,920 306,319 247,215
-- ----------------------- ------------- ----------- -------------- ----------- ------
164,050 - - -
-------- -- -- -
End of period 191,662 164,050 $ 79,504 $ 12,034 $ 816,638 $ 630,920 $ 364,983 $306,319
=================== ========== ========== ========== ========== ======= =========
</TABLE>
(1) The Investment Division commenced operations on December 31, 1998. (2) The
Investment Division ceased operations on June 22, 1998. See notes to financial
statements. (Continued)
<PAGE>
MAXIM SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
Maxim INVESCO
Maxim INVESCO Balanced International Growth Maxim INVESCO Small-Cap Maxim Loomis Sayles
Portfolio Portfolio (ADR) Growth Portfolio Corporate Bond Portfolio
Investment Division Investment Division Investment Division Investment Division
------------------- ------------------- ------------------- -------------------
1999 1998 1999 1998 1999 1998 1999 1998
----- ----- ----- ---- ----- ----- ----- ----
MAXIM SERIES III
- ----------------
FROM OPERATIONS:
Net investment income (loss) $ $ $ (2,353) $ $ 2,035 73,984
381,543 23,194 (2,293) 176,219 91,016
Net realized gain (loss) on investments 91,713 (2,280) (22,659)
26,913 45,334 7,832 71,816 2,053
Net change in unrealized appreciation
(depreciation) in investments 54,567 34,889 128,782 (10,200)
--- ------ ------------ -------- ------ ----------- ---------
(144,086) 133,497 337,914 (90,736)
--------- -------- -------- --------
Increase (decrease) in net assets
resulting from operations 97,608 40,368 128,537 41,125
----- ------ ------------ -------- ------ ----------- --------
329,170 183,604 585,949 2,333
-------- -------- -------- -----
FROM UNIT TRANSACTIONS (by category):
Purchase payments: 155,234
642,416 12,514 16,837 13,530 111,432 8,269 242,753
Redemptions: (166,788) (57,445) (62,192) (27,775) (50,218) (29,370) (47,607) (10,147)
Net transfers: (89,396) 69,405 (66,759) (225,173)
---- ------ ------------ -------- ---- ------------ ---------
(62,967) 983,988 (162,552) 585,461
-------- -------- --------- -------
Increase (decrease) in net assets
resulting from unit transactions (139,074) 58,467 15,303 (264,511)
--- --- ----------- -------- ---- ------------ ---------
(74,521) 1,568,959 (199,240) 818,067
-------- ---------- --------- -------
INCREASE (DECREASE) IN NET ASSETS 254,649 (41,466) (223,386)
1,752,563 98,835 386,709 143,840 820,400
NET ASSETS:
Beginning of period 574,753 475,918 852,860 1,162,089
-- ------ ----------- -------- ------ ----------- --------
2,167,323 414,760 996,700 341,689
---------- -------- -------- -------
End of period $ $ 2,167,323 $ 533,287 574,753 $ 1,383,409 $ 996,700 938,703 $ 1,162,089
== ============ ========== ======== ============ ========== ==== ===========
2,421,972
</TABLE>
(1) The Investment Division commenced operations on December 31, 1998. (2) The
Investment Division ceased operations on June 22, 1998. See notes to financial
statements. (Continued)
<PAGE>
MAXIM SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Maxim INVESCO
Maxim INVESCO Balanced International Growth Maxim INVESCO Small-Cap
Portfolio Portfolio (ADR) Growth Portfolio
Investment Division Investment Division Investment Division
------------------- ------------------- -------------------
1999 1998 1999 1998 1999 1998
----- ----- ----- ----- ----- -----
MAXIM SERIES III
- ----------------
FROM OPERATIONS:
Net investment income (loss) $ $ $ $ (2,353) $ $
381,543 23,194 (2,293) 176,219 2,035
Net realized gain (loss) on investments 91,713 (2,280)
26,913 45,334 7,832 71,816
Net change in unrealized appreciation
(depreciation) in investments (144,086) 34,889 128,782
----------- ------- ------ ------------- ------ ------------ -
133,497 54,567 337,914
-------- ------- --------
Increase (decrease) in net assets
resulting from operations 40,368 128,537
----- ------- ------ ------------- ------ ------------ -
329,170 183,604 97,608 585,949
-------- -------- ------- --------
FROM UNIT TRANSACTIONS (by category):
Purchase payments: 155,234 111,432
642,416 12,514 16,837 13,530
Redemptions: (166,788) (57,445) (62,192) (27,775) (50,218) (29,370)
Net transfers: (89,396) 69,405 (66,759)
---- ------- ------------ ------------- ----- ------------
(62,967) 983,988 (162,552)
-------- -------- ---------
Increase (decrease) in net assets
resulting from unit transactions (74,521) (139,074) 58,467
----------- ---- ----------- ------------- ----- ------
1,568,959 (199,240) 15,303
---------- --------- -------
INCREASE (DECREASE) IN NET ASSETS 254,649 (41,466)
1,752,563 98,835 386,709 143,840
NET ASSETS:
Beginning of period 574,753 475,918 852,860
--- ------ ------------ ----------- ----- ------------
2,167,323 414,760 996,700
---------- -------- --------
End of period $ 2,421,972 $ 2,167,323 $ 533,287 $ 574,753 $ 1,383,409 $ 996,700
=========== ============ =========== ========== ============ ===========
(1) The Investment Division commenced operations on December 31, 1998.
(2) The Investment Division ceased operations on June 22, 1998
See notes to financial statements.
</TABLE>
- -------------------------------------------------------------------
Maxim Loomis Sayles
Corporate Bond Portfolio
Investment Division
MAXIM SERIES III -------------------
- ---------------- 1999 1998
FROM OPERATIONS: ----- ----
Net investment income (loss)
Net realized gain (loss) on investments
$ 73,984 $
Net change in unrealized appreciation 91,016
(depreciation) in investments (22,659)
2,053
(10,200)
------------
Increase (decrease) in net assets (90,736)
resulting from operations --------
41,125
-----------
FROM UNIT TRANSACTIONS (by category): 2,333
Purchase payments: -----
Redemptions:
8,269 242,753
Net transfers:
(47,607) (10,147)
(225,173)
Increase (decrease) in net assets -----------
resulting from unit transactions 585,461
-------
(264,511)
-----------
INCREASE (DECREASE) IN NET ASSETS 818,067
-------
NET ASSETS: (223,386)
Beginning of period 820,400
1,162,089
End of period ----------
341,689
-------
$ 938,703 $ 1,162,089
=========== ===========
See notes to financial statements.
(Continued)
<PAGE>
MAXIM SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Maxim Loomis Sayles Maxim Moderate Profile Maxim Moderately
Small-Cap Value Portfolio Aggressive Profile
Portfolio Portfolio
Investment Division Investment Division Investment Division
------------------- ------------------- -------------------
1999 1998 1999 1998 1999 1998
----- ----- ----- ----- ----- -----
MAXIM SERIES III
- ----------------
FROM OPERATIONS:
Net investment income (loss) $ $ $ 25,185 $ $ 23,054 $
- - 3,157 1,778
Net realized gain (loss) on investments
- - 609 (192) 7,036 (20)
Net change in unrealized appreciation
(depreciation) in investments 19,032
------------------------------------- --------- ------ ------- -
- - 9,833 38,837 5,869
-- -- ------ ------- -----
Increase (decrease) in net assets
resulting from operations 44,826
------------------------------------- ------- ------ -------
- - 12,798 68,927 7,627
-- -- ------- ------- -----
FROM UNIT TRANSACTIONS (by category):
Purchase payments:
- - 110,069 148,271 212,153 125,733
Redemptions:
- - (20,201) (3,653) (11,861) -
Net transfers: 12,451 14,329
--------------------------------------------- ------------ -----------
- - - 76,598
-- -- -- -------
Increase (decrease) in net assets
resulting from unit transactions 89,868 221,216 212,743 140,062
------------------------------------- ------------- ------------ -----------
- -
-- -
INCREASE (DECREASE) IN NET ASSETS
- - 134,694 234,014 281,670 147,689
NET ASSETS:
Beginning of period 234,014 147,689
------------------------------------- -------------------------- --------------
- - - -
-- -- -- --
End of period $ $ $ 368,708 $ 234,014 $ 429,359 $ 147,689
========================= ========== =========== ========== ==========
- -
== =
</TABLE>
- ------------------------------------------------------------------------
Maxim Moderately
Conservative Profile
Portfolio
Investment Division
-------------------
1999 1998
----- ----
MAXIM SERIES III
- ----------------
FROM OPERATIONS:
Net investment income (loss) $ 3,759 $ 1,485
Net realized gain (loss) on investment
(342) (387)
Net change in unrealized appreciation
(depreciation) in investments 985 846
----------- -----------
Increase (decrease) in net assets
resulting from operations 4,402 1,944
----------- ----------
FROM UNIT TRANSACTIONS (by category):
Purchase payments:
- 82,240
Redemptions:
(10,000) (10,000)
Net transfers:
- -
-- -
Increase (decrease) in net assets
resulting from unit transactions (10,000) 72,240
---------- ----------
INCREASE (DECREASE) IN NET ASSETS
(5,598) 74,184
NET ASSETS:
Beginning of period 74,184
----------
-
-
End of period $ 68,586 $ 74,184
========== =========
See notes to financial statements.
(1) The Investment Division commenced operations on December 31, 1998. (2) The
Investment Division ceased operations on June22, 1998
See notes to financial statements. (Continued)
<PAGE>
MAXIM SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Maxim Money Market Maxim Stock
Portfolio Index Portfolio
Investment Division Investment Division
------------------- -------------------
1999 1998 1999 1998
----- ----- ----- -----
MAXIM SERIES III
- ----------------
FROM OPERATIONS:
Net investment income (loss) $ $ 29,146 $ $ $
89,898 164,346 114,966
Net realized gain (loss) on investments (49) (25)
512,630 542,988
Net change in unrealized appreciation
(depreciation) in investments
--------------------- ------ ------ -
49 (103) (45,249) 247,706
--- ----- -------- --------
Increase (decrease) in net assets
resulting from operations 29,018
-------- -----------
89,898 631,727 905,660
------- -------- --------
FROM UNIT TRANSACTIONS (by category):
Purchase payments: 1,780,853 492,646
245,958 831,152
Redemptions: (144,418) (65,361) (200,982) (164,873)
Net transfers: (233,974) (1,075,988)
------ ----------- ----- ------------ --
775,955 (863,974)
-------- ---------
Increase (decrease) in net assets
resulting from unit transactions 193,311
--- ----------- ---- ---- --
2,412,390 (818,998) (409,709)
---------- --------- ---------
INCREASE (DECREASE) IN NET ASSETS 2,502,288 222,329 (187,271)
495,951
NET ASSETS:
Beginning of period 609,060
----- ----------- --- --- -
831,389 3,966,038 3,470,087
-------- ---------- ----------
End of period $ 3,333,677 $ 831,389 $ $ 3,966,038
============ =========== == ============
3,778,767
- -----------------------------------------------------------------------------------------------
Maxim T. Rowe Price Maxim T. Rowe Price
Equity/Income Portfolio MidCap Growth Portfolio
Investment Division Investment Division
------------------- -------------------
1999 1998 1999 1998
----- ----- ----- ----
MAXIM SERIES III
- ----------------
FROM OPERATIONS:
Net investment income (loss) $ $ $
164,119 114,201 7,350 (782)
Net realized gain (loss) on investment (2,060)
98,828 229,770 2,495
Net change in unrealized appreciatio
(depreciation) in investments (223,726) (203,409)
-------------------------
19,868 14,578
------- ------
Increase (decrease) in net assets
resulting from operations
39,221 140,562 29,713 11,736
------- -------- ------- ------
FROM UNIT TRANSACTIONS (by category)
Purchase payments:
118,498 375,498 21,484 99,391
Redemptions: (162,684) (46,819) (16,279)
-
Net transfers: (688,015)
---- -------------
(29,774) (3,919) 15,086
-------- ------- ------
Increase (decrease) in net assets
resulting from unit transactions (359,336)
---- -------------
(73,960) 1,286 114,477
-------- ------ -------
INCREASE (DECREASE) IN NET ASSETS (34,739) (218,774)
30,999 126,213
NET ASSETS:
Beginning of period 1,845,535 2,064,309 126,213
------------------------- -----------
-
-
End of period $ 1,810,796 $ 1,845,535 $ 157,212 $ 126,213
======================== ====================
</TABLE>
See notes to financial statements.
(1) The Investment Division commenced operations on December 31, 1998. (2) The
Investment Division ceased operations on June 22, 1998 See notes to financial
statements. (Continued)
<PAGE>
MAXIM SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Maxim Total Return Maxim U.S. Government Maxim Value Index American Century VP
Portfolio Securities Portfolio Portfolio Balanced Fund
Investment Division Investment Division Investment Division Investment Division
------------------- ------------------- --------------- ---------------
1999 1998 1999 1998 1999 1998 1999 1998
----- ----- ----- ----- ----- ----- ----- ----
MAXIM SERIES III (2)
- ----------------
FROM OPERATIONS:
Net investment income (loss) $ $ $ $ 15,792 $
- 5,779 14,135 4,817 1,455 710 39,351
Net realized gain (loss) on investments
- 94,172 (1,520) 3,269 (150) (6) (202) 23,681
Net change in unrealized appreciation
(depreciation) in investments (36,793)
------------------- ----- ------- ------ ------ ----- ---------
- (62,690) (15,288) (1,176) (2,586) (389) (432)
-- -------- -------- ------- ------- ----- -----
Increase (decrease) in net assets
resulting from operations 17,885 26,239
-------------------- ------ ------------- ------- ---- -------- ---------
- 37,261 (2,673) 2,081 1,060 76
-- ------- ------- ------ ------ --
FROM UNIT TRANSACTIONS (by category):
Purchase payments: 183,518
- 5,714 2,516 6,945 18,356 - -
Redemptions:
- (5,902) (30,558) (23,809) - - - (4,490)
Net transfers: (50,110) 39,881 (5,355) (322,005)
----------------- ------------------------- ------- ------- -------- ---------
- (615,844) 9,808 182
-- --------- ------ ---
Increase (decrease) in net assets
resulting from unit transactions (78,152) 199,590 16,753 18,538 (5,355) (326,495)
----------------- ------------------------ --------------------- -------- ---------
- (616,032)
INCREASE (DECREASE) IN NET ASSETS
- (578,771) (80,825) 217,475 18,834 19,598 (5,279) (300,256)
NET ASSETS:
Beginning of period 578,771 368,413 150,938 19,598 5,279 305,535
------------------------ ----------- ----------- ----------------------------- --------
- -
-- -
End of period $ $ $ 287,588 $ 368,413 $ 38,432 19,598 $ 5,279
======================== ========== ========== =================== ======== =========
- - -
== == = =
</TABLE>
(1) The Investment Division commenced operations on December 31, 1998. (2) The
Investment Division ceased operations on June 22, 1998. See notes to financial
statements. (Continued)
<PAGE>
MAXIM SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
American Century VP Dreyfus Family of Funds Fidelity Investments VIP Janus Aspen Funds
Capital Appreciation Stock Index Fund II Contrafund Portfolio Flexible Income
Fund fund
Investment Division Investment Division Investment Division Investment Division
------------------- ------------------- ------------------- -------------------
1999 1998 1999 1998 1999 1998 1999 1998
----- ----- ----- ----- ----- ----- ----- ----
MAXIM SERIES III (1) (1) (1)
- ----------------
FROM OPERATIONS:
Net investment income (loss) $ $ $ $ 7,370
(1,413) 5,494 3,949 $ 1,178 $ $
-
Net realized gain (loss) on investments (10,977) (7,989) (267)
3,307 7,430 -
Net change in unrealized appreciation
(depreciation) in investments (5,705)
----- -------- ------ -------------- --------------------------
73,729 1,041 32,541 22,300 -
------- ------ ------- ------- --
Increase (decrease) in net assets
resulting from operations 39,797 1,398
----- ------ -------------------------- -------------------------
61,339 (1,454) 30,908 -
------- ------- ------- --
FROM UNIT TRANSACTIONS (by category):
Purchase payments: 803
28,719 19,446 35,547 - 18,372
Redemptions: (16,641) (1,156) (607) (96,270)
- -
Net transfers:
(13,334) (94,807) 367,474 192,460 114,778
----------- ----------- --------------------------------------------------------
-
--
Increase (decrease) in net assets
resulting from unit transactions (29,172) (67,244) 386,313 131,737 133,150
----------- ----------- --------------------------------------------------------
-
--
INCREASE (DECREASE) IN NET ASSETS 32,167 (68,698)
426,110 162,645 - 134,548
NET ASSETS:
Beginning of period 125,156 193,854
----------- ----------
- - - -
-- -- -- --
End of period $ 157,323 $ 125,156 $ 426,110 $ $ 162,645 $ $ 134,548 $
========== ========== ============================================= ========== =
-
== ==
(1) The Investment Division commenced operations on
December 31, 1998.
(2) The Investment Division ceased operations on June 22, 1998.
See notes to financial statements. (Continued)
</TABLE>
<PAGE>
MAXIM SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Neuberger & Berman
Management AMT Partners Templeton International Total Maxim Series III
Portfolio Class I Account
Investment Division Investment Division
1999 1998 1999 1998 1999 1998
----- ----- ----- ----- ----- ----
MAXIM SERIES III (1) (1)
- ----------------
FROM OPERATIONS:
Net investment income (loss) $ $ $ $
157 $ 1,197 $ 1,454,371 698,684
- -
Net realized gain (loss) on investments 28 (45) 855,021 921,020
- -
Net change in unrealized appreciation
(depreciation) in investments
8,727 - 18,143 - (11,740) 277,011
------ -- ------- -- -------- -------
Increase (decrease) in net assets
resulting from operations
8,912 - 19,295 - 2,297,652 1,896,715
------ -- ------- -- ---------- ---------
FROM UNIT TRANSACTIONS (by category):
Purchase payments: 30,389 3,271,590 3,720,539
- 14,478 -
Redemptions: (606) (604) (1,142,671) (518,200)
- -
Net transfers: 162,309
-----------
- 101,757 - 117,320 (4,237)
-- -------- -- -------- -------
Increase (decrease) in net assets
resulting from unit transactions 192,092
-----------
- 115,631 - 2,246,239 3,198,102
-- -------- -- ---------- ---------
INCREASE (DECREASE) IN NET ASSETS 201,004 4,543,891 5,094,817
- 134,926 -
NET ASSETS:
Beginning of period 10,627,158
------------------------------------------------------- -----------
- - - - 15,721,975
-- -- -- -- ----------
End of period $ $ $ 134,926 $ $ 20,265,866 $
====== ==================================================== =
201,004 - - 15,721,975
======== == == ==========
</TABLE>
(1) The Investment Division commenced operations on December 31, 1998. (2) The
Investment Division ceased operations on June 22, 1998 See notes to financial
statements. (Concluded)
<PAGE>
MAXIM SERIES ACCOUNT OF
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998
- ------------------------------------------------------------------------------
1. HISTORY OF THE SERIES ACCOUNT
The Maxim Series Account of Great-West Life & Annuity Insurance Company
(the Series Account) is a separate account of Great-West Life & Annuity
Insurance Company (the Company) and was established under Kansas law on
June 24, 1981. In 1990, the Series Account was amended to conform to and
comply with Colorado law in connection with the Company's redomestication
to the State of Colorado. The Series Account is registered with the
Securities and Exchange Commission as a unit investment trust under the
provisions of the Investment Company Act of 1940, as amended.
As of September 24, 1984, the administrative charges of the Series Account
were changed by a vote of the Board of Directors. Contracts purchased
through September 24, 1984 (Maxim I Series) were and will remain subject to
the previous charges while the contracts purchased after September 24, 1984
(Maxim II Series) are charged with the new amounts (see Note 3). As a
result of changes in the administrative charges, the contracts purchased
after September 24, 1984 are being accounted for separately.
As of September 19, 1994 the Company began offering a new contract in the
Series Account (Maxim III Series or MVP contracts). The administrative
charges for these contracts differ from the administrative charges for the
contracts in the Maxim I Series and Maxim II Series (see Note 3) and are
therefore accounted for separately.
In conjunction with a system conversion process during 1998, a balancing
adjustment from (to) GWLA was required to properly reflect contributions
and corresponding unit values by investment division.
2. Significant Accounting Policies
The following is a summary of significant accounting policies of the Series
Account, which are in accordance with the accounting principles generally
accepted in the investment company industry.
Security Transactions - Security transactions are recorded on the trade
date. Cost of investments sold is determined on the basis of identified
cost.
Dividend income is accrued as of the ex-dividend date and expenses are
accrued on a daily basis.
Security Valuation - The investments in shares of the underlying funds are
valued at the closing net asset value per share as determined by the
appropriate fund/portfolio at the end of each day.
The cost of investments represents shares of the underlying funds that were
purchased by the Series Account. Purchases are made at the net asset value
from net purchase payments or through reinvestment of all distributions
from the underlying fund.
Federal Income Taxes - The Series Account income is automatically applied
to increase contract reserves. Under the existing federal income tax law,
this income is not taxed to the extent that it is applied to increase
reserves under a contract. The Company reserves the right to charge the
Series Account for federal income taxes attributable to the Series Account
if such taxes are imposed in the future.
<PAGE>
Net Transfers - Net transfers include transfers between investment
divisions of the Series Account as well as transfers between other
investment options of the Company.
3. CHARGES UNDER THE CONTRACT
Contract Maintenance Charge - On the last valuation date of each contract
year before the retirement date, the Company deducts from each participant
account a maintenance charge of $30 for contracts issued before September
24, 1984 and $35 for contracts issued after September 24, 1984, as
compensation for the administrative services provided to contract owners.
To compensate the Company for administrative services for contracts issued
after September 19, 1994, a contract charge of $27 is deducted from each
participant account on the first day of each calendar year. If the account
is established after the beginning of the year, the charge is deducted on
the first day of the next calendar quarter and prorated for the portion of
the year remaining.
Charges Incurred for Total or Partial Surrenders - Certain contracts
contain provisions relating to a contingent deferred sales charge. In such
contracts, charges will be made for total or partial surrender of a
participant annuity account in excess of the "free amount" before the
retirement date by a deduction from a participant's account. The "free
amount" for contracts purchased after September 19, 1994 is an amount equal
to 10% of the participant account value at December 31 of the calendar year
prior to the partial or total surrender.
Deductions for Assumption of Mortality and Expense Risks - The Company
deducts an amount, computed daily, from the net asset value of the Series
Account investments, equal to an annual rate of 1.25% (1.00% allocable to
mortality risk and .25% allocable to expense risk) for the contracts
purchased before September 24, 1984. For contracts purchased after
September 24, 1984 and through September 19, 1994, the annual rate is 1.40%
(1.00% allocable to mortality risk and .40% allocable to expense risk). For
contracts purchased after September 19, 1994 the annual rate is 1.25% (.85%
allocable to mortality risk and .40% allocable to expense risk). This
charge is designated to compensate the Company for its assumption of
certain mortality, death benefit, and expense risks. The level of the
charge is guaranteed and will not change.
Premium Taxes - The Company currently will pay any applicable premium tax
or other tax, levied by the government, when due. If the contract value is
used to purchase an annuity under the annuity options, the dollar amount of
any premium tax previously paid or payable upon annuitization by the
Company will be charged against the contract value.
4. RELATED PARTY SERVICES
A wholly owned subsidiary of the Company, GW Capital Management, Inc.,
serves as investment advisor to Maxim Series Fund, Inc. Fees are assessed
against the average daily net asset value of the affiliated funds to
compensate GW Capital Management, Inc. for investment advisory services.
<PAGE>
5. SELECTED DATA
The following is a summary of selected data
for a unit of capital and net assets for the Series Account.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Maxim Money Market Maxim Stock Index Maxim Total Return
Maxim Bond Portfolio Maxim Bond Portfolio Portfolio Portfolio Portfolio
Qualified Non-Qualified Non-Qualified Qualified Non-Qualified
---------------------------------------------------------------------------------------------------
MAXIM SERIES ACCOUNT I
1999
Beginning Unit Value 34.10 $ 37.55 $ 23.48 $ 83.56 $ -
====================================================================================================
Ending Unit Value 33.59 $ 36.98 $ 24.31 $ 98.60 $ -
====================================================================================================
Number of Units Outstanding
174.53 3,754.08 1,396.22 182.12 -
====================================================================================================
====================================================================================================
Net Assets (000's) $ 6 $ 139 $ 34 $ 18 $ -
====================================================================================================
1998
Beginning Unit Value 32.41 $ 35.65 $ 22.57 $ 66.97 $ 23.89
====================================================================================================
Ending Unit Value 34.10 $ 37.55 $ 23.48 $ 83.56 $ -
====================================================================================================
Number of Units Outstanding
174.80 2,461.64 1,398.72 182.36 -
====================================================================================================
Net Assets (000's) $ 6 $ 92 $ 33 $ 15 $ -
====================================================================================================
1997
Beginning Unit Value 30.69 $ 33.71 $ 21.71 $ 51.56 $ 19.59
====================================================================================================
Ending Unit Value 32.41 $ 35.65 $ 22.57 $ 66.97 $ 23.89
====================================================================================================
Number of Units Outstanding 188.97 2,727.87 1,398.91 175.18 2,299.93
====================================================================================================
Net Assets (000's) $ 6 $ 97 $ 32 $ 12 $ 55
====================================================================================================
1996
Beginning Unit Value 29.81 $ 32.74 $ 20.92 $ 43.05 $ 17.75
====================================================================================================
Ending Unit Value 30.69 $ 33.71 $ 21.71 $ 51.56 $ 19.59
====================================================================================================
Number of Units Outstanding
521.33 2,729.57 1,402.43 175.85 2,301.42
====================================================================================================
Net Assets (000's) $ 16 $ 92 $ 30 $ 9 $ 45
====================================================================================================
1995
Beginning Unit Value 26.21 $ 28.77 $ 20.04 $ 32.29 $ 14.65
====================================================================================================
Ending Unit Value 29.81 $ 32.74 $ 20.92 $ 43.05 $ 17.75
====================================================================================================
Number of Units Outstanding
523.12 2,732.24 2,022.86 176.42 2,301.96
====================================================================================================
Net Assets (000's) $ 16 $ 89 $ 42 $ 8 $ 41
====================================================================================================
====================================================================================================
</TABLE>
(Continued)
<PAGE>
5. SELECTED DATA
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Maxim Money Maxim Money Maxim Total
Maxim Bond Maxim Bond Market Market Maxim Stock Maxim Stock Return
Portfolio Portfolio Portfolio Portfolio Index Portfolio Index Portfolio Portfolio
Qualified Non-Qualified Qualified Non-Qualified Qualified Non-Qualified Non-Qualified
---------------------------------------------------------------------------------------------------
MAXIM SERIES ACCOUNT II
1999
Beginning Unit Value $ 27.95 $ 27.73 $ 18.26 $ 18.49 $ 68.64 $ 67.64 $ -
======================================================================================================
Ending Unit Value $ 27.49 $ 27.27 $ 18.88 $ 19.12 $ 81.05 $ 79.86
$
-
======================================================================================================
Number of Units Outstanding
40,546.31 38,993.56 55,579.07 68,210.22 198,847.96 142,113.72
======================================================================================================
Net Assets (000's) $ 1,114 $ 1,063 $ 1,049 $ 1,304 $ 16,116 $ 11,349 $ -
======================================================================================================
1998
Beginning Unit Value $ 26.57 $ 26.36 $ 17.61 $ 17.83 $ 54.89 $ 54.09 $ 24.42
======================================================================================================
Ending Unit Value $ 27.95 $ 27.73 $ 18.26 $ 18.49 $ 68.64 $ 67.64
$
-
======================================================================================================
Number of Units Outstanding
47,194.27 48,412.72 59,011.96 45,708.85 232,642.21 160,220.19
======================================================================================================
Net Assets (000's) $ 1,319 $ 1,342 $ 1,078 $ 845 $ 15,969 $ 10,837 $ -
======================================================================================================
1997
Beginning Unit Value $ 25.17 $ 24.97 $ 16.96 $ 17.18 $ 42.10 $ 41.48 $ 20.05
======================================================================================================
Ending Unit Value $ 26.57 $ 26.36 $ 17.61 $ 17.83 $ 54.89 $ 54.09 $ 24.42
======================================================================================================
Number of Units Outstanding 54,547.88 51,635.74 54,854.40 46,577.91 189,804.06 153,561.61 211,352.14
======================================================================================================
Net Assets (000's) $ 1,449 $ 1,361 $ 966 $ 830 $ 10,419 $ 8,306 $ 5,161
======================================================================================================
1996
Beginning Unit Value $ 24.48 $ 24.29 $ 16.37 $ 16.58 $ 35.04 $ 34.53 $ 18.20
======================================================================================================
Ending Unit Value $ 25.17 $ 24.97 $ 16.96 $ 17.18 $ 42.10 $ 41.48 $ 20.05
======================================================================================================
Number of Units Outstanding
88,677.28 64,147.08 61,373.56 64,049.31 202,398.63 159,266.26 219,989.41
=======================================================================================================
Net Assets (000's) $ 2,232 $ 1,602 $ 1,041 $ 1,100 $ 8,520 $ 6,606 $ 4,411
=======================================================================================================
1995
Beginning Unit Value $ 21.54 $ 21.37 $ 15.71 $ 15.90 $ 26.19 $ 25.81 $ 15.04
========================================================================================================
Ending Unit Value $ 24.48 $ 24.29 $ 16.37 $ 16.58 $ 35.04 $ 34.53 $ 18.20
========================================================================================================
Number of Units Outstanding
106,047.41 79,442.17 104,679.99 97,581.56 224,763.46 171,678.12 239,974.08
===========================================================================================================
Net Assets (000's) $ 2,596 $ 1,929 $ 1,714 $ 1,617 $ 7,876 $ 5,927 $ 4,368
============================================================================================================
(Continued)
</TABLE>
<PAGE>
5. SELECTED DATA
<TABLE>
American Century VP
<S> <C> <C> <C> <C> <C> <C>
Maxim U.S. Maxim U.S. Capital
Government Government American Century VP Appreciation Fund
Securities Portfolio Securities Portfolio Balanced Fund
Qualified Non-Qualified Qualified Non-Qualified
--------------------------------------------------------------------------------------
MAXIM SERIES ACCOUNT II
1999
Beginning Unit Value $ 26.14 $ 26.41 $ - $ 12.06
======================================================================================
Ending Unit Value $ 25.86 $ 26.12 $ - $ 19.75
======================================================================================
Number of Units Outstanding
94,489.07 151,710.54 27,111.64
======================================================================================
Net Assets (000's) $ 2,443 $ 3,963 $ - $ 535
======================================================================================
1998
Beginning Unit Value $ 24.83 $ 25.08 $ 16.04 $ 12.58
======================================================================================
Ending Unit Value $ 26.14 $ 26.41 $ - $ 12.06
======================================================================================
Number of Units Outstanding
113,270.37 205,160.13 29,929.91
======================================================================================
Net Assets (000's) $ 2,961 $ 5,418 $ - $ 361
======================================================================================
1997
Beginning Unit Value $ 23.20 $ 23.44 $ 14.04 $ 13.19
======================================================================================
Ending Unit Value $ 24.83 $ 25.08 $ 16.04 $ 12.58
======================================================================================
Number of Units Outstanding 144,275.86 244,602.79 26,379.49 25,957.24
======================================================================================
Net Assets (000's) $ 3,583 $ 6,136 $ 423 $ 327
======================================================================================
1996
Beginning Unit Value $ 22.65 $ 22.88 $ 12.69 $ 14.00
======================================================================================
Ending Unit Value $ 23.20 $ 23.44 $ 14.04 $ 13.19
======================================================================================
Number of Units Outstanding
183,063.52 272,571.17 24,745.20 26,567.31
======================================================================================
Net Assets (000's) $ 4,248 $ 6,389 $ 348 $ 350
======================================================================================
1995
Beginning Unit Value $ 19.78 $ 19.98 $ 10.62 $ 10.82
======================================================================================
Ending Unit Value $ 22.65 $ 22.88 $ 12.69 $ 14.00
======================================================================================
Number of Units Outstanding
228,062.15 325,518.95 24,517.40 25,359.37
======================================================================================
Net Assets (000's) $ 5,165 $ 7,446 $ 311 $ 355
======================================================================================
</TABLE>
<PAGE>
5. SELECTED DATA
The following is a summary of selected data for a
unit of capital and net assets for the Series Account.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Maxim
Founders
Maxim Maxim Ariel Maxim Ariel Maxim Growth &
Aggressiv MidCap Value Small-Cap Maxim Bond Conservative Income Chip Maxim Growth Maxim Growth
Profile Portfolio Value Portfolio Profile Portfolio Index Index
Portfolio Portfolio Portfolio Portfolio Portfolio
--------------------------------------------------------------------------------------------------------
1.25 1.25 1.25 1.25 1.25 1.25 1.25 0.50
MAXIM SERIES ACCOUNT III
Date Commenced Operations 01/05/98 09/19/94 03/09/95 09/19/94 01/05/98 01/15/98 01/15/98 12/31/98
1999
Beginning Unit Value $
$ $ $ $ $ $ $ 10.00
11.35 20.80 18.25 12.73 10.63 11.74 13.75
========================================================================================================
Ending Unit Value $
$ $ $ $ $ $ $ 12.62
13.65 20.60 16.98 12.54 11.01 13.34 17.23
========================================================================================================
Number of Units Outstanding
6,019.04 51,894.51 5,404.94 64,052.67 17,410.97 5,962.03 26,777.65 28,151.03
=========================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
82 1,069 92 803 192 80 461 355
=========================================================================================================
1998
Beginning Unit Value
$ $ $ $ $ $ $
10.00 15.75 17.07 12.09 10.00 10.00 10.00
=================================================================================================
Ending Unit Value
$ $ $ $ $ $ $
11.35 20.80 18.25 12.73 10.63 11.74 13.75
=============================================================================================
Number of Units Outstanding
2,227.92 52,202.19 5,611.10 58,959.10 15,432.21 1,025.12 45,895.99
=================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $
25 1,086 102 751 164 12 631
=================================================================================================
1997
Beginning Unit Value
$ $ $
14.12 13.51 11.43
=======================================
Ending Unit Value
$ $ $
15.75 17.07 12.09
=======================================
Number of Units Outstanding
49,565.38 3,045.87 7,412.56
=======================================
Net Assets (000's)
$ $ $
781 52 90
=======================================
1996
Beginning Unit Value
$ $ $
13.49 11.60 11.10
=======================================
Ending Unit Value
$ $ $
14.12 13.51 11.43
=======================================
Number of Units Outstanding
83,389.90 1,551.40 5,196.46
=======================================
Net Assets (000's)
$ $ $
1,177 21 59
=======================================
1995
Beginning Unit Value
$ $ $
10.80 10.00 9.76
=======================================
Ending Unit Value
$ $ $
13.49 11.60 11.10
=======================================
Number of Units Outstanding
24,467.21 697.92 1,675.00
=======================================
Net Assets (000's) (Continued)
$ $ $
330 8 19
=======================================
</TABLE>
5. SELECTED DATA
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Maxim INVESCO Maxim INVESCO
Maxim INVESCO Maxim International Small-Cap Maxim Loomis Maxim Loomis
Balanced INVESCO Growth Growth Sayles Sayles Maxim
Maxim Index Portfolio Balanced Portfolio Portfolio Corporate Small-Cap Moderate
600 Portfolio Portfolio (ADR) Bond Value Profile
Portfolio Portfolio Portfolio
----------------------------------------------------------------------------------------------------------------
1.25 1.25 0.50 1.25 1.25 1.25 1.25 1.25
MAXIM SERIES ACCOUNT III
Date Commenced Operations 09/19/94 10/31/96 12/31/98 01/06/95 01/06/95 08/08/95 01/15/98 01/05/98
1999
Beginning Unit Value $
$ $ $ $ $ $ $ 10.98
16.10 14.73 10.00 16.28 22.31 14.91 10.00
==========================================================================================================
Ending Unit Value $
$ $ $ $ $ $ $ 12.63
17.79 16.98 11.62 19.72 39.84 15.45 9.84
==========================================================================================================
Number of Units Outstanding
20,516.87 122,501.82 29,428.25 27,043.80 34,724.35 60,769.47 29,199.60
============================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
365 2,080 342 533 1,383 939 - 369
===========================================================================================================
1998
Beginning Unit Value $
$ $ $ $ $ $ 10.00
16.57 12.59 14.90 19.21 14.60 10.00
============================== ===============================================================
Ending Unit Value $
$ $ $ $ $ $ 10.98
16.10 14.73 16.28 22.31 14.91 10.00
============================== ================================================================
Number of Units Outstanding
19,020.51 147,157.63 35,311.40 44,665.98 77,918.20 - 21,309.48
============================== ===========================================================
Net Assets (000's)
$ $ $ $ $ $ $
306 2,167 575 997 1,162 - 234
============================== =============================================================
1997
Beginning Unit Value
$ $ $ $ $
13.87 10.13 13.46 16.39 13.12
============================== ===========================================
Ending Unit Value
$ $ $ $ $
16.57 12.59 14.90 19.21 14.60
============================== ===========================================
Number of Units Outstanding
14,918.01 32,937.69 31,948.04 44,396.72 23,403.30
============================== ===========================================
Net Assets (000's)
$ $ $ $ $
247 415 476 853 342
============================== ============================================
1996
Beginning Unit Value
$ $ $ $ $
12.18 10.00 11.25 13.09 12.03
============================== ============================================
Ending Unit Value
$ $ $ $ $
13.87 10.13 13.46 16.39 13.12
============================== ============================================
Number of Units Outstanding
10,975.88 1,307.11 15,132.95 33,993.67 12,487.29
============================== ============================================
Net Assets (000's)
$ $ $ $ $
152 13 204 557 164
============================== ============================================
1995
Beginning Unit Value
$ $ $ $
9.77 10.00 10.00 10.00
============================== ============================================
Ending Unit Value
$ $ $ $
12.18 11.25 13.09 12.03
============================== ============================================
Number of Units Outstanding
2,705.63 2,623.01 4,511.19 799.35
============================== ============================================
Net Assets (000's)
$ $ $ $
33 29 59 10
============================== ============================================
(Continued)
</TABLE>
5. SELECTED DATA
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Maxim Maxim Maxim T. Maxim T. Rowe Maxim T Rowe
Moderately Moderately Maxim Money Maxim Money Rowe Price Price Price MidCap
Aggressive Conservative Market Market Maxim Stock Equity/Income Equity/Income Growth
Profile Profile Portfolio Portfolio Index Portfolio Portfolio Portfolio
Portfolio Portfolio Portfolio
-----------------------------------------------------------------------------------------------------------
1.25 1.25 1.25 0.50 1.25 1.25 0.50 1.25
MAXIM SERIES ACCOUNT III
Date Commenced Operations 01/05/98 01/05/98 08/04/95 12/31/98 09/19/94 01/06/95 12/31/98 01/15/98
1999
Beginning Unit Value $ 11.10 $ 10.79 $ 11.40 10.00 $ 25.67 $ 20.86 $ 10.00 $
12.42
==========================================================================================================
Ending Unit Value $ 13.38 $ 11.54 $ 11.80 $ 10.43 $ 30.35 $ 21.30 $ 10.29 $15.29
=========================================================================================================
Number of Units Outstanding
32,079.80 5,941.97 278,852.75 4,193.76 124,499.25 75,493.06 19,743.60 10,284.80
=============================================================================================================
Net Assets (000's) $ 429 $ 69 $ 3,290 $ 44 $ 3,779 $ 1,608 $ 203 $
157
============================================================================================================
1998
Beginning Unit Value $ 10.00 $ 10.00 $ 10.97 $ 20.50 $ 19.39 $
10.00
=========================================== ============================= ===========
Ending Unit Value $ 11.10 $ 10.79 $ 11.40 $ 25.67 $ 20.86 $
12.42
=========================================== ============================= ===========
Number of Units Outstanding
13,300.61 6,875.97 72,949.61 154,519.05 88,483.59 10,160.99
========================================= ============================= ==========
Net Assets (000's) $ 148 $ 74 $ 831 $ 3,966 $ 1,846 $ 126
========================================= ============================= ==========
1997
Beginning Unit Value $ 10.55 $ 15.70 $ 15.24
============== =============================
Ending Unit Value $ 10.97 $ 20.50 $ 19.39
============== =============================
Number of Units Outstanding 55,509.88 169,289.23 106,469.26
============== =============================
Net Assets (000's) $ 609 $ 3,470 $ 2,064
============== =============================
1996
Beginning Unit Value
$ $ $
10.17 13.05 12.92
============== =============================
Ending Unit Value $ 15.24
$ $
10.55 15.70
============== =============================
Number of Units Outstanding
30,070.95 130,996.47 67,415.13
============== =============================
Net Assets (000's) $ $ 2,057 $ 1,027
317
============== =============================
1995
Beginning Unit Value
$ $ $
10.00 9.74 10.00
============== =============================
Ending Unit Value $ 13.05 $ 12.92
$
10.17
============== =============================
Number of Units Outstanding
15,499.45 17,200.32 19,500.37
============== =============================
Net Assets (000's) $ $ 224 $
158 252
============== =============================
(Continued)
</TABLE>
<PAGE>
5. SELECTED DATA
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
American Fidelity
Maxim U.S. Century VP Investments
Maxim Total Government American Capital VIP II Janus Aspen
Return Securities Maxim Value Century VP Appreciaiton Dreyfus Contrafund Flexible
Portfolio Portfolio Index Balanced Fund Fund Stock Index Portfolio Income Fund
Portfolio
--------------------------------------------------------------------------------------------------------
1.25 1.25 1.25 1.25 1.25 0.50 1.25 0.50
MAXIM SERIES ACCOUNT III
Date Commenced Operations 09/19/94 01/18/95 01/15/98 09/19/94 01/18/95 12/31/98 11/12/98 12/31/98
1999
Beginning Unit Value $
$ $ $ $ $ $ 10.00
12.95 11.68 17.07 11.29 10.00 11.69
========================================================================================================
Ending Unit Value $
$ $ $ $ $ $ 10.11
12.83 12.85 18.55 18.34 12.00 14.35
========================================================================================================
Number of Units Outstanding
22,422.35 2,991.88 - 8,576.49 35,509.76 11,336.44 13,308.63
====================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $
288 38 - 157 426 163 135
========================================================================================================
1998
Beginning Unit Value
$ $ $ $ $
15.78 12.23 10.00 14.94 11.68 10.00
======================================================================= ===============
Ending Unit Value
$ $ $ $ $
12.95 11.68 17.07 11.29 11.69
======================================================================= ===============
Number of Units Outstanding
28,452.60 1,678.41 309.20 11,087.23 -
===============
=======================================================================
Net Assets (000's)
$ $ $ $ $
368 20 5 125 -
======================================================================= ===============
1997
Beginning Unit Value
$ $ $
12.94 11.41 13.06 12.23
==========================================================================
Ending Unit Value
$ $ $ $
15.78 12.23 14.94 11.68
==========================================================================
Number of Units Outstanding
36,689.11 12,345.78 20,447.27 16,591.59
==========================================================================
Net Assets (000's)
$ $ $ $
579 151 306 194
==========================================================================
1996
Beginning Unit Value
$ $ $ $
11.72 11.12 11.79 12.94
==========================================================================
Ending Unit Value
$ $ $ $
12.94 11.41 13.06 12.23
==========================================================================
Number of Units Outstanding
30,202.42 15,784.10 19,490.47 15,595.65
==========================================================================
Net Assets (000's)
$ $ $ $
391 180 255 191
==========================================================================
1995
Beginning Unit Value
$ $ $ $
9.67 10.00 9.85 10.00
==========================================================================
Ending Unit Value
$ $ $ $
11.72 11.12 11.79 12.94
==========================================================================
Number of Units Outstanding
9,694.71 14,812.67 7,745.10 6,110.86
==========================================================================
Net Assets (000's)
$ $ $ $
114 165 91 79
==========================================================================
(Continued)
</TABLE>
5. SELECTED DATA
Neubergar &
Berman AMT Templeton
Partners International
Portfolio Class I Fund
-------------------------------
0.50 0.50
MAXIM SERIES ACCOUNT III
Date Commenced Operations 12/31/98 12/31/98
1999
Beginning Unit Value $ 10.00 $ 10.00
===============================
Ending Unit Value $ 10.68 $ 12.29
===============================
Number of Units Outstanding
18,814.54 10,980.69
===============================
Net Assets (000's) $ 201 $ 135
===============================
1998
Beginning Unit Value
Ending Unit Value
Number of Units Outstanding
Net Assets (000's)
1997
Beginning Unit Value
Ending Unit Value
Number of Units Outstanding
Net Assets (000's)
1996
Beginning Unit Value
Ending Unit Value
Number of Units Outstanding
Net Assets (000's)
1995
Beginning Unit Value
Ending Unit Value
Number of Units Outstanding
Net Assets (000's)
<PAGE>
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
-------------------------------------------------------------------------
CONSOLIDATED FINANCIAL STATEMENTS FOR THE
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
AND INDEPENDENT AUDITORS' STATEMENT
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholder of
Great-West Life & Annuity Insurance Company:
We have audited the accompanying consolidated balance sheets of Great-West
Life & Annuity Insurance Company (an indirect wholly-owned subsidiary of
The Great-West Life Assurance Company) and subsidiaries as of December 31,
1999 and 1998, and the related consolidated statements of income,
stockholder's equity, and cash flows for each of the three years in the
period ended December 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Great-West Life & Annuity
Insurance Company and subsidiaries as of December 31, 1999 and 1998, and
the results of their operations and their cash flows for each of the three
years in the period ended December 31, 1999 in conformity with generally
accepted accounting principles.
As discussed in Note 1 to the consolidated financial statements, effective
January 1, 1999, the Company adopted Statement of Position No. 98-1,
"Accounting for the Cost of Computer Software Developed or Obtained for
Internal Use" and, accordingly, changed its method of accounting for
software development costs.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Denver, Colorado
January 31, 2000
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
(Dollars in Thousands)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
===================================================================================================================================
1999 1998
---------------------- -----------------------
ASSETS
INVESTMENTS:
Fixed Maturities:
Held-to-maturity, at amortized cost (fair value
$2,238,581 and $2,298,936) $ 2,260,581 $ 2,199,818
Available-for-sale, at fair value (amortized cost
$6,953,383 and $6,752,532) 6,727,922 6,936,726
Common stock, at fair value (cost $43,978 and 69,240 48,640
$41,932)
Mortgage loans on real estate, net 974,645 1,133,468
Real estate, net 103,731 73,042
Policy loans 2,681,132 2,858,673
Short-term investments, available-for-sale (cost
approximates fair value) 240,804 420,169
---------------------- -----------------------
Total Investments 13,058,055 13,670,536
Cash 257,840 176,119
Reinsurance receivable
Related party 5,015 5,006
Other 168,307 187,952
Deferred policy acquisition costs 282,295 238,901
Investment income due and accrued 137,810 157,587
Other assets 308,419 311,078
Premiums in course of collection 142,199 84,940
Deferred income taxes 253,323 191,483
Separate account assets 12,780,016 10,099,543
---------------------- -----------------------
TOTAL ASSETS $ 27,393,279 $ 25,123,145
====================== =======================
</TABLE>
See notes to consolidated financial statements.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
1999 1998
----------------- -----------------
LIABILITIES AND STOCKHOLDER'S EQUITY
POLICY BENEFIT LIABILITIES:
Policy reserves
Related party $ 555,783 $ 555,300
Other 11,181,900 11,347,548
Policy and contract claims 391,968 428,798
Policyholders' funds 185,623 181,779
Provision for policyholders' dividends 70,726 69,530
GENERAL LIABILITIES:
Due to Parent Corporation 35,979 52,877
Due to GWL&A Financial 175,035
Repurchase agreements 80,579 244,258
Commercial paper 39,731
Other liabilities 638,469 761,505
Undistributed earnings on participating business 130,638 143,717
Separate account liabilities 12,780,016 10,099,543
----------------- -----------------
Total Liabilities 26,226,716 23,924,586
----------------- -----------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S EQUITY:
Preferred stock, $1 par value, 50,000,000 shares authorized,
0 shares issued and outstanding
Common stock, $1 par value; 50,000,000 shares
authorized; 7,032,000 shares issued and outstanding 7,032 7,032
Additional paid-in capital 700,316 699,556
Accumulated other comprehensive income (loss) (84,861) 61,560
Retained earnings 544,076 430,411
----------------- -----------------
Total Stockholder's Equity 1,166,563 1,198,559
----------------- -----------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 27,393,279 $ 25,123,145
================= =================
</TABLE>
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
(Dollars in Thousands)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
===================================================================================================================================
1999 1998 1997
---------------- ---------------- ----------------
REVENUES:
Premiums
Related party (including premiums
recaptured totaling $0,
$0, and $155,798) $ $ 46,191 $ 155,798
Other (net of premiums ceded totaling
$85,803, $86,511 and $61,194) 1,163,183 948,672 677,381
Fee income 635,147 516,052 420,730
Net investment income
Related party (10,923) (9,416) (8,957)
Other 886,869 906,776 890,630
Net realized gains on investments 1,084 38,173 9,800
---------------- ---------------- ----------------
2,675,360 2,446,448 2,145,382
---------------- ---------------- ----------------
BENEFITS AND EXPENSES:
Life and other policy benefits (net of
reinsurance recoveries totaling $80,681,
$81,205, and $44,871) 970,250 768,474 543,903
Increase in reserves
Related party 46,191 155,798
Other 33,631 78,851 90,013
Interest paid or credited to contractholders 494,081 491,616 527,784
Provision for policyholders' share of earnings
on participating business 13,716 5,908 3,753
Dividends to policyholders 70,161 71,429 63,799
---------------- ---------------- ----------------
1,581,839 1,462,469 1,385,050
Commissions 173,405 144,246 102,150
Operating expenses (income):
Related party (768) (5,094) (6,292)
Other 593,575 518,228 431,714
Premium taxes 38,329 30,848 24,153
---------------- ---------------- ----------------
2,386,380 2,150,697 1,936,775
INCOME BEFORE INCOME TAXES 288,980 295,751 208,607
---------------- ---------------- ----------------
PROVISION FOR INCOME TAXES:
Current 72,039 81,770 61,644
Deferred 11,223 17,066 (11,797)
---------------- ---------------- ----------------
83,262 98,836 49,847
---------------- ---------------- ----------------
NET INCOME $ 205,718 $ 196,915 $ 158,760
================ ================ ================
</TABLE>
See notes to consolidated financial statements.
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
(Dollars in Thousands)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
Accumulated
Additional Other
Preferred Stock Common Stock Paid-in Comprehensive Retained
------------------------ --------------------
Shares Amount Shares Amount Capital Income (Loss) Earnings Total
------------------------ -------------------- --------- ------------------------ ------------
BALANCE, JANUARY 1, 1997 2,000,800 121,800 7,032,000 7,032 $ 664,265 14,951 226,166 $ 1,034,214
Net income 158,760 158,760
Other comprehensive income 37,856 37,856
------------
Total comprehensive income 196,616
------------
Capital contributions 26,483 26,483
Dividends (71,394) (71,394)
------------------------ -------------------- --------- ------------------------ ------------
BALANCE, DECEMBER 31, 1997 2,000,800 121,800 7,032,000 7,032 690,748 52,807 313,532 1,185,919
Net income 196,915 196,915
Other comprehensive income 8,753 8,753
------------
Total comprehensive income 205,668
------------
Capital contributions 8,808 8,808
Dividends (80,036) (80,036)
Purchase of preferred shares (2,000,800) (121,800) (121,800)
------------------------ -------------------- --------- ------------------------ ------------
BALANCE, DECEMBER 31, 1998 0 0 7,032,000 7,032 $ 699,556 61,560 430,411 $ 1,198,559
Net income 205,718 205,718
Other comprehensive loss (146,421) (146,421)
------------
Total comprehensive loss 59,297
------------
Capital contributions
Dividends (92,053) (92,053)
Income tax benefit on stock
Compensation 760 760
------------------------ -------------------- --------- ------------------------ ------------
BALANCE, DECEMBER 31, 1999 0 0 7,032,000 7,032 $ 700,316 (84,861) 544,076 $ 1,166,563
======================== ==================== ========= ======================== ============
</TABLE>
See notes to consolidated financial statements.
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
(Dollars in Thousands)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
===================================================================================================================================
1999 1998 1997
---------------- ---------------- ----------------
OPERATING ACTIVITIES:
Net income $ 205,718 $ 196,915 $ 158,760
Adjustments to reconcile net income to net
cash provided by operating activities:
Gain allocated to participating
policyholders 13,716 5,908 3,753
Amortization of investments (22,514) (15,068) 409
Net realized gains on investments (1,084) (38,173) (9,800)
Depreciation and amortization 47,339 55,550 46,929
Deferred income taxes 11,223 17,066 (11,824)
Changes in assets and liabilities:
Policy benefit liabilities 650,959 938,444 498,114
Reinsurance receivable 19,636 (43,643) 112,594
Accrued interest and other receivables (37,482) 28,467 30,299
Other, net (146,150) (184,536) 64,465
---------------- ---------------- ----------------
Net cash provided by operating activities 741,361 960,930 893,699
---------------- ---------------- ----------------
INVESTING ACTIVITIES:
Proceeds from sales, maturities, and
redemptions of investments:
Fixed maturities
Held-to maturity
Sales 9,920
Maturities and redemptions 520,511 471,432 359,021
Available-for-sale
Sales 3,176,802 6,169,678 3,174,246
Maturities and redemptions 822,606 1,268,323 771,737
Mortgage loans 165,104 211,026 248,170
Real estate 5,098 16,456 36,624
Common stock 18,116 3,814 17,211
Purchases of investments:
Fixed maturities
Held-to-maturity (563,285) (584,092) (439,269)
Available-for-sale (4,019,465) (7,410,485) (4,314,722)
Mortgage loans (2,720) (100,240) (2,532)
Real estate (41,482) (4,581) (64,205)
Common stock (19,698) (10,020) (29,608)
---------------- ---------------- ----------------
Net cash provided by (used in)
investing activities $ 61,587 $ 41,231 $ (243,327)
================ ================ ================
</TABLE>
(Continued)
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
(Dollars in Thousands)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
==================================================================================================================================
1999 1998 1997
---------------- ---------------- ----------------
FINANCING ACTIVITIES:
Contract withdrawals, net of deposits $ (583,900) $ (507,237) $ (577,538)
Due to Parent Corporation (16,898) (73,779) (19,522)
Due to GWL&A Financial 175,035
Dividends paid (92,053) (80,036) (71,394)
Net commercial paper repayments (39,731) (14,327) (30,624)
Net repurchase agreements (repayments)
borrowings (163,680) (81,280) 38,802
Capital contributions 8,808 11,000
Purchase of preferred shares (121,800)
Acquisition of subsidiary (82,669)
---------------- ---------------- ----------------
---------------- ---------------- ----------------
Net cash used in financing activities (721,227) (952,320) (649,276)
---------------- ---------------- ----------------
NET INCREASE IN CASH 81,721 49,841 1,096
CASH, BEGINNING OF YEAR 176,119 126,278 125,182
---------------- ---------------- ----------------
CASH, END OF YEAR $ 257,840 $ 176,119 $ 126,278
================ ================ ================
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
Cash paid during the year for:
Income taxes $ 76,150 $ 111,493 $ 86,829
Interest 14,125 13,849 15,124
</TABLE>
See notes to consolidated financial statements. (Concluded)
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
(Amounts in Thousands, except Share Amounts)
===============================================================================
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization - Great-West Life & Annuity Insurance Company (the Company) is
a wholly-owned subsidiary of GWL&A Financial Inc., a holding company formed
in 1998 (GWL&A Financial) and an indirect wholly-owned subsidiary of The
Great-West Life Assurance Company (the Parent Corporation). The Company is
an insurance company domiciled in the State of Colorado. The Company offers
a wide range of life insurance, health insurance, and retirement and
investment products to individuals, businesses, and other private and
public organizations throughout the United States.
Basis of Presentation - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates. The consolidated financial
statements include the accounts of the Company and its subsidiaries. All
material inter-company transactions and balances have been eliminated in
consolidation.
Certain reclassifications have been made to the 1998 and 1997 financial
statements to conform to the 1999 presentation.
Investments - Investments are reported as follows:
1. Management determines the classification of fixed maturities at the time
of purchase. Fixed maturities are classified as held-to-maturity when the
Company has the positive intent and ability to hold the securities to
maturity. Held-to-maturity securities are stated at amortized cost unless
fair value is less than cost and the decline is deemed to be other than
temporary, in which case they are written down to fair value and a new cost
basis is established.
Fixed maturities not classified as held-to-maturity are classified as
available-for-sale. Available-for-sale securities are carried at fair
value, with the net unrealized gains and losses reported as accumulated
other comprehensive income (loss) in stockholder's equity. The net
unrealized gains and losses on derivative financial instruments used to
hedge available-for-sale securities are also included in other
comprehensive income (loss).
The amortized cost of fixed maturities classified as held-to-maturity or
available-for-sale is adjusted for amortization of premiums and accretion
of discounts using the effective interest method over the estimated life of
the related bonds. Such amortization is included in net investment income.
Realized gains and losses, and declines in value judged to be
other-than-temporary are included in net realized gains (losses) on
investments.
2. Mortgage loans on real estate are carried at their unpaid balances
adjusted for any unamortized premiums or discounts and any valuation
reserves. Interest income is accrued on the unpaid principal balance.
Discounts and premiums are amortized to net investment income using the
effective interest method. Accrual of interest is discontinued on any
impaired loans where collection of interest is doubtful.
The Company maintains an allowance for credit losses at a level that, in
management's opinion, is sufficient to absorb credit losses on its impaired
loans. Management's judgement is based on past loss experience, current and
projected economic conditions, and extensive situational analysis of each
individual loan. The measurement of impaired loans is based on the fair
value of the collateral.
3. Real estate is carried at cost. The carrying value of real estate is
subject to periodic evaluation of recoverability.
4. Investments in common stock are carried at fair value.
5. Policy loans are carried at their unpaid balances.
6. Short-term investments include securities purchased with initial
maturities of one year or less and are carried at amortized cost. The
Company considers short-term investments to be available-for-sale and
amortized cost approximates fair value.
7. Gains and losses realized on disposal of investments are determined on a
specific identification basis.
Cash - Cash includes only amounts in demand deposit accounts.
Internal Use Software - Effective January 1, 1999, the Company adopted
Statement of Position (SOP) No. 98-1, "Accounting for the Cost of Computer
Software Developed or Obtained for Internal Use". SOP 98-1 provides
guidance on accounting for costs associated with computer software
developed or obtained for internal use. As a result of the adoption of SOP
98-1, the Company capitalized $18,373 in internal use software development
costs for the year ended December 31, 1999.
Deferred Policy Acquisition Costs - Policy acquisition costs, which
primarily consist of sales commissions related to the production of new and
renewal business, have been deferred to the extent recoverable. Other costs
capitalized include expenses associated with the Company's group sales
representatives. These costs are variable in nature and are dependent upon
sales volume. Deferred costs associated with the annuity products are being
amortized over the life of the contracts in proportion to the emergence of
gross profits. Retrospective adjustments of these amounts are made when the
Company revises its estimates of current or future gross profits. Deferred
costs associated with traditional life insurance are amortized over the
premium paying period of the related policies in proportion to premium
revenues recognized. Amortization of deferred policy acquisition costs
totaled $43,512, $51,724, and $44,298 in 1999, 1998, and 1997,
respectively.
Separate Accounts - Separate account assets and related liabilities are
carried at fair value. The Company's separate accounts invest in shares of
Maxim Series Fund, Inc. and Orchard Series Fund, Inc., both diversified,
open-end management investment companies which are affiliates of the
Company, shares of other external mutual funds, or government or corporate
bonds. Investment income and realized capital gains and losses of the
separate accounts accrue directly to the contractholders and, therefore,
are not included in the Company's statements of income. Revenues to the
Company from the separate accounts consist of contract maintenance fees,
administrative fees, and mortality and expense risk charges.
Life Insurance and Annuity Reserves - Life insurance and annuity policy
reserves with life contingencies of $7,169,885 and $6,866,478 at December
31, 1999 and 1998, respectively, are computed on the basis of estimated
mortality, investment yield, withdrawals, future maintenance and settlement
expenses, and retrospective experience rating premium refunds. Annuity
contract reserves without life contingencies of $4,468,685 and $4,908,964
at December 31, 1999 and 1998, respectively, are established at the
contractholder's account value.
Reinsurance - Policy reserves ceded to other insurance companies are
carried as a reinsurance receivable on the balance sheet (see Note 3). The
cost of reinsurance related to long-duration contracts is accounted for
over the life of the underlying reinsured policies using assumptions
consistent with those used to account for the underlying policies.
Policy and Contract Claims - Policy and contract claims include provisions
for reported life and health claims in process of settlement, valued in
accordance with the terms of the related policies and contracts, as well as
provisions for claims incurred and unreported based primarily on prior
experience of the Company.
Participating Fund Account - Participating life and annuity policy reserves
are $4,297,823 and $4,108,314 at December 31, 1999 and 1998, respectively.
Participating business approximates 31.0%, 32.7%, and 50.5% of the
Company's ordinary life insurance in force and 94.0%, 71.9% and 91.1% of
ordinary life insurance premium income for the years ended December 31,
1999, 1998 and 1997, respectively.
The amount of dividends to be paid from undistributed earnings on
participating business is determined annually by the Board of Directors.
Amounts allocable to participating policyholders are consistent with
established Company practice.
The Company has established a Participating Policyholder Experience Account
(PPEA) for the benefit of all participating policyholders which is included
in the accompanying consolidated balance sheet. Earnings associated with
the operation of the PPEA are credited to the benefit of all participating
policyholders. In the event that the assets of the PPEA are insufficient to
provide contractually guaranteed benefits, the Company must provide such
benefits from its general assets.
The Company has also established a Participation Fund Account (PFA) for the
benefit of the participating policyholders previously transferred to the
Company from the Parent under an assumption reinsurance transaction. The
PFA is part of the PPEA. Earnings derived from the operation of the PFA net
of a management fee paid to the Company accrue solely for the benefit of
the participating policyholders.
Recognition of Premium and Fee Income and Benefits and Expenses - Life
insurance premiums are recognized when due. Annuity premiums with life
contingencies are recognized as received. Accident and health premiums are
earned on a monthly pro rata basis. Revenues for annuity and other
contracts without significant life contingencies consist of contract
charges for the cost of insurance, contract administration, and surrender
fees that have been assessed against the contract account balance during
the period. Fee income is derived primarily from contracts for claim
processing or other administrative services and from assets under
management. Fees from contracts for claim processing or other
administrative services are recorded as the services are provided. Fees
from assets under management, which consist of contract maintenance fees,
administration fees and mortality and expense risk charges, are recognized
when due. Benefits and expenses on policies with life contingencies impact
income by means of the provision for future policy benefit reserves,
resulting in recognition of profits over the life of the contracts. The
average crediting rate on annuity products was approximately 6.2%, 6.3%,
and 6.6% in 1999, 1998, and 1997.
Income Taxes - Income taxes are recorded using the asset and liability
approach, which requires, among other provisions, the recognition of
deferred tax assets and liabilities for expected future tax consequences of
events that have been recognized in the Company's financial statements or
tax returns. In estimating future tax consequences, all expected future
events (other than the enactments or changes in the tax laws or rules) are
considered. Although realization is not assured, management believes it is
more likely than not that the deferred tax asset, net of a valuation
allowance, will be realized.
Repurchase Agreements and Securities Lending - The Company enters into
repurchase agreements with third-party broker/dealers in which the Company
sells securities and agrees to repurchase substantially similar securities
at a specified date and price. Such agreements are accounted for as
collateralized borrowings. Interest expense on repurchase agreements is
recorded at the coupon interest rate on the underlying securities. The
repurchase fee received or paid is amortized over the term of the related
agreement and recognized as an adjustment to investment income.
The Company requires collateral in an amount greater than or equal to 102%
of the borrowing for all securities lending transactions.
Derivatives - The Company makes limited use of derivative financial
instruments to manage interest rate, market, and foreign exchange risk.
Such hedging activity consists primarily of interest rate swap agreements,
interest rate floors and caps, foreign currency exchange contracts, options
and equity swaps. The differential paid or received under the terms of
these contracts is recognized as an adjustment to net investment income on
the accrual method. Gains and losses on foreign exchange contracts are
deferred and recognized in net investment income when the hedged
transactions are realized.
Interest rate swap agreements are used to convert the interest rate on
certain fixed maturities from a floating rate to a fixed rate. Interest
rate swap transactions generally involve the exchange of fixed and floating
rate interest payment obligations without the exchange of the underlying
principal amount. Interest rate floors and caps are interest rate
protection instruments that require the payment by a counter-party to the
Company of an interest rate differential. The differential represents the
difference between current interest rates and an agreed-upon rate, the
strike rate, applied to a notional principal amount. Foreign currency
exchange contracts are used to hedge the foreign exchange rate risk
associated with bonds denominated in other than U.S. dollars. Written call
options are stock conversion protection agreements that require the
counter-party to automatically call the bond for cash when the issuer
elects to convert the bond to common stock. Equity swap transactions
generally involve the exchange of variable market performance of a basket
of securities for a fixed interest rate.
Although derivative financial instruments taken alone may expose the
Company to varying degrees of market and credit risk when used solely for
hedging purposes, these instruments typically reduce overall market and
interest rate risk. The Company controls the credit risk of its financial
contracts through credit approvals, limits, and monitoring procedures. As
the Company generally enters into transactions only with high quality
institutions, no losses associated with non-performance on derivative
financial instruments have occurred or are expected to occur.
The Financial Accounting Standards Board has issued Statement No. 133,
"Accounting for Derivative Instruments and for Hedging Activities", which,
as amended, is required to be adopted in years beginning after June 15,
2000. This Statement provides a comprehensive and consistent standard for
the recognition and measurement of derivatives and hedging activities.
Although management has not completed its analysis of the impact of this
Statement, management does not anticipate that the adoption of the new
Statement will have a significant effect on earnings or the financial
position of the Company because of the Company's minimal use of
derivatives.
Stock Options - The Company applies the intrinsic value measurement
approach under APB Opinion No. 25 to stock-based compensation awards to
employees.
2. ACQUISITION
On July 8, 1998, the Company paid $82,669 in cash to acquire all of the
outstanding shares of Alta Health & Life Insurance Company (Alta), formerly
known as Anthem Health & Life Insurance Company. The purchase price was
based on Alta's adjusted book value, and was subject to further minor
adjustments. The results of Alta's operations, which had an insignificant
effect on net income in 1998, have been combined with those of the Company
since the date of acquisition.
The acquisition was accounted for using the purchase method of accounting
and, accordingly, the purchase price was allocated to the net assets
acquired based on their estimated fair values. The fair value of tangible
assets acquired and liabilities assumed was $379,934 and $317,440,
respectively. The goodwill representing the purchase price in excess of
fair value of net assets acquired is included in other assets and is being
amortized over 30 years on a straight-line basis.
3. RELATED-PARTY TRANSACTIONS
On December 31, 1998, the Company and the Parent Corporation entered into
an Indemnity Reinsurance Agreement pursuant to which the Company reinsured
by coinsurance certain Parent Corporation individual non-participating life
insurance policies. The Company recorded $859 in premium income and
increase in reserves, associated with certain policies, as a result of this
transaction. Of the $137,638 in reserves that was recorded as a result of
this transaction, $136,779 was recorded under SFAS No. 97, "Accounting and
Reporting by Insurance Enterprises for Certain Long-Duration Contracts and
for Realized Gains and Losses from the Sale of Investments" ("SFAS No.
97"), accounting principles. The Company recorded, at the Parent
Corporation's carrying amount, which approximates estimated fair value, the
following at December 31, 1998 as a result of this transaction:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Assets Liabilities and Stockholder's Equity
Cash $ 24,600 Policy reserves $ 137,638
Deferred income taxes 3,816
Policy loans 82,649
Due from Parent Corporation 19,753
Other 6,820
------------ ------------
$ 137,638 $ 137,638
============ ============
</TABLE>
===========================================================================
In connection with this transaction, the Parent Corporation made a capital
contribution of $5,608 to the Company.
On September 30, 1998, the Company and the Parent Corporation entered into
an Indemnity Reinsurance Agreement pursuant to which the Company reinsured
by coinsurance certain Parent Corporation individual non-participating life
insurance policies. The Company recorded $45,332 in premium income and
increase in reserves as a result of this transaction. Of the $428,152 in
reserves that was recorded as a result of this transaction, $382,820 was
recorded under SFAS No. 97 accounting principles. The Company recorded, at
the Parent Corporation's carrying amount, which approximates estimated fair
value, the following at September 30, 1998 as a result of this transaction:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Assets Liabilities and Stockholder's Equity
===========================================
===========================================
Bonds $ 147,475 Policy reserves $ 428,152
===========================================
Mortgages 82,637 Due to Parent Corporation 20,820
===========================================
Cash 134,900
===========================================
Deferred policy acquisition costs 9,724
===========================================
Deferred income taxes 15,762
===========================================
Policy loans 56,209
===========================================
Other 2,265
===========================================
------------ ------------
$ 448,972 $ 448,972
=========================================== ============ ============
</TABLE>
In connection with this transaction, the Parent Corporation made a capital
contribution of $3,200 to the Company.
On September 30, 1998, the Company purchased furniture, fixtures and
equipment from the Parent Corporation for $25,184. In February 1997, the
Company purchased its corporate headquarters properties from the Parent
Corporation for $63,700.
On June 30, 1997, the Company recaptured all remaining pieces of an
individual participating insurance block of business previously reinsured
to the Parent Corporation on December 31, 1992. The Company recorded
$155,798 in premium income and increase in reserves as a result of this
transaction. The Company recorded, at the Parent Corporation's carrying
amount, which approximates estimated fair value, the following at June 30,
1997 as a result of this transaction:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Assets Liabilities and Stockholder's Equity
====================================
====================================
Cash $ 160,000 Policy reserves $ 155,798
====================================
Bonds 17,975 Due to Parent Corporation 20,373
====================================
Other 60 Deferred income taxes 2,719
====================================
Undistributed earnings on
====================================
participating business (855)
====================================
---------------- ----------------
$ 178,035 $ 178,035
==================================== ================ ================
</TABLE>
In connection with this transaction, the Parent Corporation made a capital
contribution of $11,000 to the Company.
Effective January 1, 1997, all employees of the U.S. operations of the
Parent Corporation and the related benefit plans were transferred to the
Company. All related employee benefit plan assets and liabilities were also
transferred to the Company (see Note 9). The transfer did not have a
material effect on the Company's operating expenses as the actual costs
associated with the employees and the benefit plans were charged previously
to the Company under administrative service agreements between the Company
and the Parent Corporation.
The Company performs administrative services for the U.S. operations of the
Parent Corporation. The following represents revenue from the Parent
Corporation for services provided pursuant to these service agreements. The
amounts recorded are based upon management's best estimate of actual costs
incurred and resources expended based upon number of policies and/or
certificates in force.
<TABLE>
<S> <C>
Years Ended December 31,
---------------------------------------------------
1999 1998 1997
--------------- --------------- ---------------
Investment management revenue $ 130 $ 475 $ 801
Administrative and underwriting revenue 768 5,094 6,292
</TABLE>
At December 31, 1999 and 1998, due to Parent Corporation includes $10,641
and $17,930 due on demand and $25,338 and $34,947 of notes payable which
bear interest and mature on October 1, 2006. These notes may be prepaid in
whole or in part at any time without penalty; the issuer may not demand
payment before the maturity date. The amounts due on demand to the Parent
Corporation bear interest at the public bond rate (6.7% and 6.1% at
December 31, 1999 and 1998, respectively) while the note payable bears
interest at 5.4%.
On May 4, 1999, the Company issued a $175,000 subordinated note to GWL&A
Financial, the proceeds of which were used for general corporate purposes.
The subordinated note bears interest at 7.25% and is due June 30, 2048.
Payments of principal and interest under this subordinated note shall be
made only with prior written approval of the Commissioner of Insurance of
the State of Colorado. Payments of principal and interest on this
subordinated note are payable only out of surplus funds of the Company and
only at such time as the financial condition of the Company is such that at
the time of payment of principal or interest, its surplus after the making
of any such payment would exceed the greater of $1,500 or 1.25 times the
company action level amount as required by the most recent risk based
capital calculations.
Interest expense attributable to these related party obligations was
$11,053, $9,891, and $9,758 for the years ended December 31, 1999, 1998 and
1997, respectively.
4. REINSURANCE
In the normal course of business, the Company seeks to limit its exposure
to loss on any single insured and to recover a portion of benefits paid by
ceding risks to other insurance enterprises under excess coverage and
co-insurance contracts. The Company retains a maximum of $1.5 million of
coverage per individual life.
Reinsurance contracts do not relieve the Company from its obligations to
policyholders. Failure of reinsurers to honor their obligations could
result in losses to the Company. The Company evaluates the financial
condition of its reinsurers and monitors concentrations of credit risk
arising from similar geographic regions, activities, or economic
characteristics of the reinsurers to minimize its exposure to significant
losses from reinsurer insolvencies. At December 31, 1999 and 1998, the
reinsurance receivable had a carrying value of $173,322 and $192,958,
respectively.
The following schedule details life insurance in force and life and
accident/health premiums:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Ceded Assumed Percentage
Primarily to Primarily of Amount
Gross the Parent from Other Net Assumed
Amount Corporation Companies Amount to Net
--------------- ---------------- ---------------- --------------- -------------
December 31, 1999:
Life insurance in force:
Individual $ 35,362,934 $ 5,195,961 $ 8,467,877 $ 38,634,850 21.9%
Group 80,717,198 2,212,741 82,929,939 2.7%
--------------- ---------------- ---------------- ----------------
Total $ 116,080,132 $ 5,195,961 $ 10,680,618 $ 121,564,789
=============== ================ ================ ================
Premium Income:
Life insurance $ 306,101 $ 27,399 $ 46,715 $ 325,417 14.4%
Accident/health 801,755 58,247 79,753 823,261 9.7%
--------------- ---------------- ---------------- ----------------
Total $ 1,107,856 $ 85,646 $ 126,468 $ 1,148,678
=============== ================ ================ ================
December 31, 1998:
Life insurance in force:
Individual $ 34,017,379 $ 4,785,079 $ 8,948,442 $ 38,180,742 23.4%
Group 81,907,539 2,213,372 84,120,911 2.6%
--------------- ---------------- ---------------- ----------------
Total $ 115,924,918 $ 4,785,079 $ 11,161,814 $ 122,301,653
=============== ================ ================ ================
Premium Income:
Life insurance $ 352,710 $ 24,720 $ 65,452 $ 393,442 16.6%
Accident/health 571,992 61,689 74,284 584,587 12.7%
--------------- ---------------- ---------------- ----------------
Total $ 924,702 $ 86,409 $ 139,736 $ 978,029
=============== ================ ================ ================
December 31, 1997:
Life insurance in force:
Individual $ 24,598,679 $ 4,040,398 $ 3,667,235 $ 24,225,516 15.1%
Group 51,179,343 2,031,477 53,210,820 3.8%
--------------- ---------------- ---------------- ----------------
Total $ 75,778,022 $ 4,040,398 $ 5,698,712 $ 77,436,336
=============== ================ ================ ================
Premium Income:
Life insurance $ 320,456 $ (127,388) $ 19,923 $ 467,767 4.3%
Accident/health 341,837 32,645 34,994 344,186 10.2%
--------------- ---------------- ---------------- ----------------
Total $ 662,293 $ (94,743) $ 54,917 $ 811,953
=============== ================ ================ ================
</TABLE>
5. NET INVESTMENT INCOME AND NET REALIZED GAINS (LOSSES) ON INVESTMENTS
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Net investment income is summarized as follows:
Years Ended December 31,
---------------------------------------------------
1999 1998 1997
--------------- --------------- ---------------
Investment income:
Fixed maturities and short-term investments $ 636,946 $ 638,079 $ 633,975
Mortgage loans on real estate 88,033 110,170 118,274
Real estate 19,618 20,019 20,990
Policy loans 167,109 180,933 194,826
Other 138 285 18
--------------- --------------- ---------------
911,844 949,486 968,083
Investment expenses, including interest on
amounts charged by the related parties
of $11,053, $9,891, and $9,758 35,898 52,126 86,410
--------------- --------------- ---------------
Net investment income $ 875,946 $ 897,360 $ 881,673
=============== =============== ===============
Net realized gains (losses) on investments are as follows:
Years Ended December 31,
---------------------------------------------------
1999 1998 1997
--------------- --------------- ---------------
Realized gains (losses):
Fixed maturities $ (7,858) $ 38,391 $ 15,966
Mortgage loans on real estate 1,429 424 1,081
Real estate 513 363
Provisions 7,000 (642) (7,610)
--------------- --------------- ---------------
Net realized gains on investments $ 1,084 $ 38,173 $ 9,800
=============== =============== ===============
6. SUMMARY OF INVESTMENTS
Fixed maturities owned at December 31, 1999 are summarized as follows:
Gross Gross Estimated
Amortized Unrealized Unrealized Fair Carrying
Cost Gains Losses Value Value
------------ -------------- ------------- ------------ ------------
Held-to-Maturity:
U.S. Treasury Securities
and obligations of U.S.
Government Agencies $ 63,444 $ 448 $ 687 $ 63,205 $ 63,444
Collateralized mortgage
obligations 115,357 9,360 105,997 115,357
Public utilities 223,705 2,773 3,011 223,467 223,705
Corporate bonds 1,724,915 19,179 30,753 1,713,341 1,724,915
Foreign governments 10,000 213 10,213 10,000
State and municipalities 123,160 738 1,540 122,358 123,160
------------ -------------- ------------- ------------ ------------
$ 2,260,581 $ 23,351 $ 45,351 $ 2,238,581 $ 2,260,581
============ ============== ============= ============ ============
Gross Gross Estimated
Amortized Unrealized Unrealized Fair Carrying
Cost Gains Losses Value Value
------------ -------------- ------------- ------------ ------------
Available-for-Sale:
U.S. Treasury Securities
and obligations of U.S.
Government Agencies:
Collateralized mortgage
obligations $ 752,130 $ 2,342 $ 21,459 $ 733,013 $ 733,013
Direct mortgage pass-
through certificates 304,099 1,419 11,704 293,814 293,814
Other 178,142 77 1,431 176,788 176,788
Collateralized mortgage
obligations 909,105 1,183 39,980 870,308 870,308
Public utilities 468,087 1,106 14,242 454,951 454,951
Corporate bonds 3,929,160 24,287 148,923 3,804,524 3,804,524
Foreign governments 41,224 654 1,256 40,622 40,622
State and municipalities 371,436 108 17,642 353,902 353,902
------------ -------------- ------------- ------------ ------------
$ 6,953,383 $ 31,176 $ 256,637 $ 6,727,922 $ 6,727,922
============ ============== ============= ============ ============
Fixed maturities owned at December 31, 1998 are summarized as follows:
Gross Gross Estimated
Amortized Unrealized Unrealized Fair Carrying
Cost Gains Losses Value Value
------------ -------------- ------------- ------------ ------------
Held-to-Maturity:
U.S. Treasury Securities
and obligations of U.S.
Government Agencies $ 34,374 $ 1,822 $ $ 36,196 $ 34,374
Collateralized mortgage
obligations 10,135 194 9,941 10,135
Public utilities 213,256 12,999 460 225,795 213,256
Corporate bonds 1,809,957 78,854 3,983 1,884,828 1,809,957
Foreign governments 10,133 782 10,915 10,133
State and municipalities 121,963 9,298 131,261 121,963
------------ -------------- ------------- ------------ ------------
$ 2,199,818 $ 103,755 $ 4,637 $ 2,298,936 $ 2,199,818
============ ============== ============= ============ ============
Gross Gross Estimated
Amortized Unrealized Unrealized Fair Carrying
Cost Gains Losses Value Value
------------ -------------- ------------- ------------ ------------
Available-for-Sale:
U.S. Treasury Securities
and obligations of U.S.
Government Agencies:
Collateralized mortgage
obligations $ 863,479 $ 39,855 $ 1,704 $ 901,630 $ 901,630
Direct mortgage pass-
through certificates 467,100 4,344 692 470,752 470,752
Other 191,138 1,765 788 192,115 192,115
Collateralized mortgage
obligations 926,797 16,260 1,949 941,108 941,108
Public utilities 464,096 14,929 36 478,989 478,989
Corporate bonds 3,557,209 123,318 17,420 3,663,107 3,663,107
Foreign governments 56,505 2,732 59,237 59,237
State and municipalities 226,208 4,588 1,008 229,788 229,788
------------ -------------- ------------- ------------ ------------
$ 6,752,532 $ 207,791 $ 23,597 $ 6,936,726 $ 6,936,726
============ ============== ============= ============ ============
</TABLE>
The collateralized mortgage obligations consist primarily of sequential and
planned amortization classes with final stated maturities of two to thirty
years and average lives of less than one to fifteen years. Prepayments on
all mortgage-backed securities are monitored monthly and amortization of
the premium and/or the accretion of the discount associated with the
purchase of such securities is adjusted by such prepayments.
See Note 8 for additional information on policies regarding estimated fair
value of fixed maturities.
The amortized cost and estimated fair value of fixed maturity investments
at December 31, 1999, by projected maturity, are shown below. Actual
maturities will likely differ from these projections because borrowers may
have the right to call or prepay obligations with or without call or
prepayment penalties.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Held-to-Maturity Available-for-Sale
------------------------------------- ------------------------------------
Amortized Estimated Amortized Estimated
Cost Fair Value Cost Fair Value
----------------- ----------------- ----------------- ----------------
Due in one year or less $ 221,172 $ 220,644 $ 323,466 $ 334,701
Due after one year
through five years 945,199 941,685 1,286,402 1,251,690
Due after five years
through ten years 684,729 677,531 716,353 684,513
Due after ten years 118,170 121,921 690,073 650,432
Mortgage-backed
securities 115,357 105,997 1,965,334 1,897,135
Asset-backed securities 175,954 170,803 1,971,755 1,909,451
----------------- ----------------- ----------------- ----------------
$ 2,260,581 $ 2,238,581 $ 6,953,383 $ 6,727,922
================= ================= ================= ================
</TABLE>
Proceeds from sales of securities available-for-sale were $3,176,802,
$6,169,678, and $3,174,246 during 1999, 1998, and 1997, respectively. The
realized gains on such sales totaled $10,080, $41,136, and $20,543 for
1999, 1998, and 1997, respectively. The realized losses totaled $19,720,
$8,643, and $10,643 for 1999, 1998, and 1997, respectively. During the
years 1999, 1998, and 1997, held-to-maturity securities with and amortized
cost of $0, $9,920 and $0 were sold due to deterioration with insignificant
gains and losses.
At December 31, 1999 and 1998, pursuant to fully collateralized securities
lending arrangements, the Company had loaned $0 and $115,168 of fixed
maturities, respectively.
The Company engages in hedging activities to manage interest rate, market
and foreign exchange risk. The following table summarizes the 1999
financial hedge instruments:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Notional Strike/Swap
December 31, 1999 Amount Rate Maturity
----------------------------- --------------- ------------------------------ -------------------------
Interest Rate Caps $ 1,362,000 7.64% - 11.82% (CMT) 6/00 - 12/04
Interest Rate Swaps 217,528 4.94%-6.8% 02/00 - 12/06
Foreign Currency
Exchange Contracts 19,478 N/A 03/00 - 07/06
Equity Swap 104,152 5.15% - 5.93% 01/01
Options 54,100 Various 01/02 - 12/02
The following table summarizes the 1998 financial hedge instruments:
Notional Strike/Swap
December 31, 1998 Amount Rate Maturity
----------------------------- ---------------- ------------------------------ -------------------------
Interest Rate Floor $ 100,000 4.50% (LIBOR) 11/99
Interest Rate Caps 1,070,000 6.75% - 11.82% (CMT) 12/99 - 10/03
Interest Rate Swaps 242,451 4.95% - 9.35% 08/99 - 02/03
Foreign Currency
Exchange Contracts 34,123 N/A 05/99 - 07/06
Equity Swap 95,652 4.00% 12/99
LIBOR - London Interbank Offered Rate
CMT - Constant Maturity Treasury Rate
</TABLE>
The Company has established specific investment guidelines designed to
emphasize a diversified and geographically dispersed portfolio of mortgages
collateralized by commercial and industrial properties located in the
United States. The Company's policy is to obtain collateral sufficient to
provide loan-to-value ratios of not greater than 75% at the inception of
the mortgages. At December 31, 1999, approximately 34% of the Company's
mortgage loans were collateralized by real estate located in California.
The following represents impairments and other information with respect to
impaired mortgage loans:
<TABLE>
<S> <C> <C>
1999 1998
====================================================================== ---------------- ----------------
======================================================================
Loans with related allowance for credit losses of
======================================================================
$14,727 and $2,492 $ 25,877 $ 13,192
======================================================================
Loans with no related allowance for credit losses 17,880 10,420
======================================================================
Average balance of impaired loans during the year 43,866 31,193
======================================================================
Interest income recognized (while impaired) 1,877 2,308
======================================================================
Interest income received and recorded (while impaired)
======================================================================
using the cash basis method of recognition 1,911 2,309
======================================================================
</TABLE>
As part of an active loan management policy and in the interest of
maximizing the future return of each individual loan, the Company may from
time to time modify the original terms of certain loans. These restructured
loans, all performing in accordance with their modified terms, aggregated
$75,691 and $52,913 at December 31, 1999 and 1998, respectively.
The following table presents changes in allowance for credit losses:
<TABLE>
<S> <C> <C> <C>
1999 1998 1997
--------------- --------------- ---------------
Balance, beginning of year $ 67,242 $ 67,242 $ 65,242
Provision for loan losses (7,000) 642 4,521
Chargeoffs - (787) (2,521)
Recoveries 1,000 145
--------------- --------------- ---------------
Balance, end of year $ 61,242 $ 67,242 $ 67,242
=============== =============== ===============
</TABLE>
7. COMMERCIAL PAPER
The Company has a commercial paper program that is partially supported by a
$50,000 standby letter-of-credit. At December 31, 1999, no commercial paper
was outstanding. At December 31, 1998, commercial paper outstanding had
maturities ranging from 69 to 118 days and interest rates ranging from
5.10% to 5.22%.
8. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
<TABLE>
<S> <C>
December 31,
---------------------------------------------------------------------
1999 1998
--------------------------------- --------------------------------
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
--------------- -------------- -------------- --------------
ASSETS:
Fixed maturities and
short-term investments $ 9,229,307 $ 9,207,307 $ 9,556,713 $ 9,655,831
Mortgage loans on real
Estate 974,645 968,964 1,133,468 1,160,568
Policy loans 2,681,132 2,681,132 2,858,673 2,858,673
Common stock 69,240 69,240 48,640 48,640
LIABILITIES:
Annuity contract reserves
without life contingencies 4,468,685 4,451,465 4,908,964 4,928,800
Policyholders' funds 185,623 185,623 181,779 181,779
Due to Parent Corporation 35,979 33,590 52,877 52,877
Due to GWL&A Financial 175,035 137,445 - - - -
Repurchase agreements 80,579 80,579 244,258 244,258
Commercial paper - - - - 39,731 39,731
</TABLE>
<TABLE>
<S> <C>
December 31,
---------------------------------------------------------------------
1999 1998
--------------------------------- --------------------------------
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
--------------- -------------- -------------- --------------
HEDGE CONTRACTS:
Interest rate floor - - - - 17 17
Interest rate caps 4,140 4,140 971 971
Interest rate swaps (1,494) (1,494) 6,125 6,125
Foreign currency exchange
contracts (10) (10) 689 689
Equity swap (7,686) (7,686) (8,150) (8,150)
Options (6,220) (6,220) - - - -
</TABLE>
The estimated fair values of financial instruments have been determined
using available information and appropriate valuation methodologies.
However, considerable judgement is required to interpret market data to
develop estimates of fair value. Accordingly, the estimates presented are
not necessarily indicative of the amounts the Company could realize in a
current market exchange. The use of different market assumptions and/or
estimation methodologies may have a material effect on the estimated fair
value amounts.
The estimated fair value of fixed maturities that are publicly traded are
obtained from an independent pricing service. To determine fair value for
fixed maturities not actively traded, the Company utilized discounted cash
flows calculated at current market rates on investments of similar quality
and term.
Mortgage loans fair value estimates generally are based on discounted cash
flows. A discount rate "matrix" is incorporated whereby the discount rate
used in valuing a specific mortgage generally corresponds to that
mortgage's remaining term. The rates selected for inclusion in the discount
rate "matrix" reflect rates that the Company would quote if placing loans
representative in size and quality to those currently in the portfolio.
Policy loans accrue interest generally at variable rates with no fixed
maturity dates and, therefore, estimated fair value approximates carrying
value.
The fair value of annuity contract reserves without life contingencies is
estimated by discounting the cash flows to maturity of the contracts,
utilizing current crediting rates for similar products.
The estimated fair value of policyholders' funds is the same as the
carrying amount as the Company can change the crediting rates with 30 days
notice.
The estimated fair value of due to Parent Corporation is based on
discounted cash flows at current market rates on high quality investments.
The fair value of due to GWL&A Financial reflects the price determined in
the public market at December 31, 1999.
The carrying value of repurchase agreements and commercial paper is a
reasonable estimate of fair value due to the short-term nature of the
liabilities.
The estimated fair value of financial hedge instruments, all of which are
held for other than trading purposes, is the estimated amount the Company
would receive or pay to terminate the agreement at each year-end, taking
into consideration current interest rates and other relevant factors.
Included in the net loss position for interest rates swaps are $772 and $0
of unrealized losses in 1999 and 1998, respectively. Included in the net
gain position for foreign currency exchange contracts are $518 and $932 of
loss exposures in 1999 and 1998, respectively.
The carrying amounts for receivables and liabilities reported in the
balance sheet approximate fair value due to their short term nature.
<PAGE>
C-11
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
The consolidated financial statements of GWL&A as of December
31, 1999 and 1998 and each of the three years in the period
ended December 31, 1999, as well as the financial statements
of the Series Account for the years ended December 31, 1999
and 1998, are included in Part B.
(b) Exhibits
Items (1), (2), and (8) are incorporated by reference to
Registrant's Form S-6 Registration Statement filed February
21, 1984 and Pre-Effective Amendment No. 1 thereto filed June
29, 1984.
(3) The Underwriting Agreement is incorporated by reference to Registrant's
Post Effective Amendment No. 3 filed April 24, 1997.
(4) Form of variable annuity contracts no longer being offered by are
incorporated by reference to Registrant's Pre-Effective Amendment No. 2 to
its Form S-6 Registration Statement filed March 10, 1982. Copy of variable
annuity contract currently being offered by Registrant is incorporated by
reference to Registrant's Post-Effective Amendment No. 9.
(5) Form of application used with variable annuity contracts no longer being
offered by Registrant are incorporated by reference to Registrant's
Pre-Effective Amendment No. 2 to its Form S-6 Registration Statement filed
March 10, 1982. Copy of application used with variable annuity contract
currently is incorporated by reference to Registrant's Post-Effective
Amendment No. 9.
(6) Copy of Articles of Redomestication and Bylaws of Depositor is incorporated
by reference to Registrant's Post-Effective Amendment No. 9.
(7) Not Applicable
(9) Copy of opinion of counsel for contracts no longer being offered by
Registrant are incorporated by reference to Registrant's Post-Effective
Amendment No. 14 to its Registration Statement filed April 30, 1987. Copy
of opinion of counsel for contracts currently being offered by Registrant
is incorporated by reference to Registrant's Post-Effective Amendment No.
9.
(10) (a) Written Consent of Jorden Burt Boros Cicchetti Berenson & Johnson, LLP
attached hereto as Exhibit 10(a).
(b) Written Consent of Deloitte & Touche LLP attached hereto as Exhibit 10(b).
.
(11) Not Applicable
(12) Not Applicable
(13) Item (13) is incorporated by reference to registrant's Post-Effective
Amendment No. 3 to Form N-4 registration statement filed on April 25, 1997.
(14) Not Applicable
<PAGE>
<TABLE>
Item 25. Directors and Officers of the Depositor
<S> <C> <C> <C> <C> <C> <C>
Position and Offices
Name Principal Business Address with Depositor
James Balog 2205 North Southwinds Boulevard Director
Vero Beach, Florida 39263
James W. Burns, O.C. (4) Director
Orest T. Dackow (3) Director
Andre Desmarais (4) Director
Paul Desmarais, Jr. (4) Director
Robert G. Graham 574 Spoonbill Drive Director
Sarasota, FL 34236
Robert Gratton (5) Chairman
N. Berne Hart 2552 East Alameda Avenue Director
Denver, Colorado 80209
Kevin P. Kavanagh (1) Director
William Mackness 61 Waterloo Street Director
Winnipeg, Manitoba R3N 0S3
William T. McCallum (3) Director, President and
Chief Executive Officer
Jerry E.A. Nickerson H.B. Nickerson & Sons Limited Director
P.O. Box 130
275 Commercial Street
North Sydney, Nova Scotia B2A 3M2
P. Michael Pitfield, P.C., Q.C. (4) Director
Michel Plessis-Belair, F.C.A. (4) Director
Brian E. Walsh Veritas Capital Management LLC Director
115 Putnam Ave.
Greenwich, Connecticut
Michael R. Bracco (2) Senior Vice-President
Employee Benefits
John A. Brown (3) Senior Vice-President,
Financial Services, Sales
Donna A. Goldin (2) Executive Vice-President,
and Chief Operating Officer,
One Corporation
Position and Offices
Name Principal Business Address with Depositor
Mitchell T.G. Graye (3) Executive Vice-President,
Chief Financial Officer
Mark S. Hollen (3) Senior Vice-President,
FASCorp
John T. Hughes (3) Senior Vice-President,
Chief Investment Officer
D. Craig Lennox 8525 East Orchard Road Senior Vice-President,
Englewood, Colorado, 80111 General Counsel and
Secretary
Steven H. Miller (2) Senior Vice-President,
Employee Benefits, Sales
James D. Motz (2) Executive Vice-President,
Employee Benefits
Charles P. Nelson (3) Senior Vice President,
Financial Services
Public Non-Profit Markets
Martin Rosenbaum (2) Senior Vice-President,
Employee Benefits
Gregg E. Seller (3) Senior Vice President,
Government Markets
Robert K. Shaw (3) Senior Vice-President,
Individual Markets
George D. Webb (3) Senior Vice-President,
Public/Non-Profit Operations
Douglas L. Wooden (3) Executive Vice-President,
Financial Services
--------------------------------------
</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.
<PAGE>
Item 26. Persons controlled by or under common control with the Depositor or
Registrant
- ------------------------------------------------------------------------------
ORGANIZATIONAL CHART
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Power Corporation of Canada
100% - 2795957 Canada Inc.
100% - 171263 Canada Inc.
67.5% - Power Financial Corporation
81.1% - Great-West Lifeco Inc.
100% - The Great-West Life Assurance Company
100% - GWL&A Financial (Nova Scotia) Co.
100% GWL&A Financial, Inc.
100% - Great-West Life & Annuity Insurance Capital I
100% - Great-West Life & Annuity Insurance Company
100% - Alta Health & Life Insurance Company
100% - Alta Agency, Inc.
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 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 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, Inc.
100% - One Health Plan of Alaska, Inc.
100% - One Health Plan of Arizona, Inc.
100% - One of Arizona, Inc.
100% - One Health Plan of Maine, Inc.
100% - One Health Plan of Nevada, Inc.
100% - One Health Plan of New Hampshire, Inc.
100% - One Health Plan of New Jersey, Inc.
100% - One Health Plan of South Carolina, Inc.
100% - One Health Plan of Wisconsin, Inc.
100% - One Health Plan of Wyoming, Inc.
100% - One Orchard Equities, Inc.
100% - Great-West Benefit Services, Inc.
100% - Benefits Communication Corporation
100% - BenefitsCorp Equities, Inc.
100% - Benefits Advisors, Inc.
100% - Greenwood Property Corporation
95% - Maxim Series Fund, Inc.*
100% - GWL Properties Inc.
100% - Great-West Realty Investments, Inc.
50% - Westkin Properties Ltd.
92% - Orchard Series Fund**
100% - Orchard Trust Company
100% - National Plan Coordinators of Delaware, Inc.
100% - NPC Securities, Inc.
100% - NPC Administrative Services Corporation
100% - Deferred Comp of Michigan, Inc.
100% - National Plan Coordinators of Washington,
Inc.
100% - National Plan Coordinators of Ohio, Inc.
100% - Renco, Inc.
100% - P.C. Enrollment Services & Insurance
Brokerage, Inc.
* 5% New England Life Insurance Company
** 8% New England Life Insurance Company
</TABLE>
Item 27. Number of Contract Owners
As of March 31, 2000, there were 534 Contract Owners.
Item 28. Indemnification
Provisions exist under the Colorado General Corporation Code and the
Bylaws of GWL&A whereby GWL&A may indemnify a director, officer, or
controlling person of GWL&A against liabilities arising under the
Securities Act of 1933. The following excerpts contain the substance
of these provisions:
Colorado Business Corporation Act
Article 109 - INDEMNIFICATION
Section 7-109-101. Definitions.
As used in this Article:
(1) "Corporation" includes any domestic or foreign entity that is a
predecessor of the corporation by reason of a merger, consolidation,
or other transaction in which the predecessor's existence ceased upon
consummation of the transaction.
(2) "Director" means an individual who is or was a director of a
corporation or an individual who, while a director of a corporation,
is or was serving at the corporation's request as a director,
officer, partner, trustee, employee, fiduciary or agent of another
domestic or foreign corporation or other person or employee benefit
plan. A director is considered to be serving an employee benefit plan
at the corporation's request if his or her duties to the corporation
also impose duties on or otherwise involve services by, the director
to the plan or to participants in or beneficiaries of the plan.
"Director" includes, unless the context requires otherwise, the
estate or personal representative of a director.
(3) "Expenses" includes counsel fees.
(4) "Liability" means the obligation incurred with respect to a
proceeding to pay a judgment, settlement, penalty, fine, including an
excise tax assessed with respect to an employee benefit plan, or
reasonable expenses.
(5) "Official capacity" means, when used with respect to a director,
the office of director in the corporation and, when used with respect
to a person other than a director as contemplated in Section
7-109-107, means the office in the corporation held by the officer or
the employment, fiduciary, or agency relationship undertaken by the
employee, fiduciary, or agent on behalf of the corporation. "Official
capacity" does not include service for any other domestic or foreign
corporation or other person or employee benefit plan.
(6) "Party" includes a person who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
(7) "Proceeding" means any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal.
Section 7-109-102. Authority to indemnify directors.
(1) Except as provided in subsection (4) of this section, a
corporation may indemnify a person made a party to the proceeding
because the person is or was a director against liability incurred in
any proceeding if:
(a) The person conducted himself or herself in good faith;
(b) The person reasonably believed:
(I) In the case of conduct in an official capacity with
the corporation, that his or her conduct was in the
corporation's best interests; or
(II) In all other cases, that his or her conduct was at least not opposed to the
corporation's best interests; and
(c) In the case of any criminal proceeding, the person had no
reasonable cause to believe his or her conduct was unlawful.
(2) A director's conduct with respect to an employee benefit plan for
a purpose the director reasonably believed to be in the interests of
the participants in or beneficiaries of the plan is conduct that
satisfies the requirements of subparagraph (II) of paragraph (b) of
subsection (1) of this section. A director's conduct with respect to
an employee benefit plan for a purpose that the director did not
reasonably believe to be in the interests of the participants in or
beneficiaries of the plan shall be deemed not to satisfy the
requirements of subparagraph (a) of subsection (1) of this section.
(3) The termination of any proceeding by judgment, order, settlement,
or conviction, or upon a plea of nolo contendere or its equivalent,
is not, of itself, determinative that the director did not meet the
standard of conduct described in this section.
(4) A corporation may not indemnify a director under this section:
(a) In connection with a proceeding by or in the right of the corporation in
which the director was adjudged liable to the corporation; or
(b) In connection with any proceeding charging that the
director derived an improper personal benefit, whether or not
involving action in his official capacity, in which proceeding
the director was adjudged liable on the basis that he or she
derived an improper personal benefit.
(5) Indemnification permitted under this section in connection with a
proceeding by or in the right of a corporation is limited to
reasonable expenses incurred in connection with the proceeding.
Section 7-109-103. Mandatory Indemnification of Directors.
Unless limited by the articles of incorporation, a corporation
shall be required to indemnify a person who is or was a director of
the corporation and who was wholly successful, on the merits or
otherwise, in defense of any proceeding to which he was a party,
against reasonable expenses incurred by him in connection with the
proceeding.
Section 7-109-104. Advance of Expenses to Directors.
(1) A corporation may pay for or reimburse the reasonable expenses
incurred by a director who is a party to a proceeding in advance of
the final disposition of the proceeding if:
(a) The director furnishes the corporation a written
affirmation of his good-faith belief that he has met the
standard of conduct described in Section 7-109-102;
(b) The director furnishes the corporation a written
undertaking, executed personally or on the director's behalf,
to repay the advance if it is ultimately determined that he or
she did not meet such standard of conduct; and
(c) A determination is made that the facts then know to those
making the determination would not preclude indemnification
under this article.
(2) The undertaking required by paragraph (b) of subsection (1) of
this section shall be an unlimited general obligation of the
director, but need not be secured and may be accepted without
reference to financial ability to make repayment.
(3) Determinations and authorizations of payments under this section
shall be made in the manner specified in Section 7-109-106.
Section 7-109-105. Court-Ordered Indemnification of Directors.
(1) Unless otherwise provided in the articles of incorporation, a
director who is or was a party to a proceeding may apply for
indemnification to the court conducting the proceeding or to another
court of competent jurisdiction. On receipt of an application, the
court, after giving any notice the court considers necessary, may
order indemnification in the following manner:
(a) If it determines the director is entitled to mandatory
indemnification under section 7-109-103, the court shall order
indemnification, in which case the court shall also order the
corporation to pay the director's reasonable expenses incurred
to obtain court-ordered indemnification.
(b) If it determines that the director is fairly and
reasonably entitled to indemnification in view of all the
relevant circumstances, whether or not the director met the
standard of conduct set forth in section 7-109-102 (1) or was
adjudged liable in the circumstances described in Section
7-109-102 (4), the court may order such indemnification as the
court deems proper; except that the indemnification with
respect to any proceeding in which liability shall have been
adjudged in the circumstances described Section 7-109-102 (4)
is limited to reasonable expenses incurred in connection with
the proceeding and reasonable expenses incurred to obtain
court-ordered indemnification.
Section 7-109-106. Determination and Authorization of Indemnification of
Directors.
(1) A corporation may not indemnify a director under Section
7-109-102 unless authorized in the specific case after a
determination has been made that indemnification of the director is
permissible in the circumstances because he has met the standard of
conduct set forth in Section 7-109-102. A corporation shall not
advance expenses to a director under Section 7-109-104 unless
authorized in the specific case after the written affirmation and
undertaking required by Section 7-109-104(1)(a) and (1)(b) are
received and the determination required by Section 7-109-104(1)(c)
has been made.
(2) The determinations required to be made subsection (1) of this section shall
be made:
(a) By the board of directors by a majority vote of those
present at a meeting at which a quorum is present, and only
those directors not parties to the proceeding shall be counted
in satisfying the quorum.
(b) If a quorum cannot be obtained, by a majority vote of a
committee of the board of directors designated by the board of
directors, which committee shall consist of two or more
directors not parties to the proceeding; except that directors
who are parties to the proceeding may participate in the
designation of directors for the committee.
(3) If a quorum cannot be obtained as contemplated in paragraph (a)
of subsection (2) of this section, and the committee cannot be
established under paragraph (b) of subsection (2) of this section, or
even if a quorum is obtained or a committee designated, if a majority
of the directors constituting such quorum or such committee so
directs, the determination required to be made by subsection (1) of
this section shall be made:
(a) By independent legal counsel selected by a vote of the
board of directors or the committee in the manner specified in
paragraph (a) or (b) of subsection (2) of this section or, if
a quorum of the full board cannot be obtained and a committee
cannot be established, by independent legal counsel selected
by a majority vote of the full board of directors; or
(b) By the shareholders.
(4) Authorization of indemnification and evaluation as to
reasonableness of expenses shall be made in the same manner as the
determination that indemnification is permissible; except that, if
the determination that indemnification is permissible is made by
independent legal counsel, authorization of indemnification and
advance of expenses shall be made by the body that selected such
counsel.
Section 7-109-107. Indemnification of Officers, Employees, Fiduciaries, and
Agents.
(1) Unless otherwise provided in the articles of incorporation:
(a) An officer is entitled to mandatory indemnification under
section 7-109-103, and is entitled to apply for court-ordered
indemnification under section 7-109-105, in each case to the
same extent as a director;
(b) A corporation may indemnify and advance expenses to an officer, employee,
fiduciary, or agent of the corporation to the same extent as a director;
and
(c) A corporation may indemnify and advance expenses to an
officer, employee, fiduciary, or agent who is not a director
to a greater extent, if not inconsistent with public policy,
and if provided for by its bylaws, general or specific action
of its board of directors or shareholders, or contract.
Section 7-109-108. Insurance.
A corporation may purchase and maintain insurance on behalf of
a person who is or was a director, officer, employee, fiduciary, or
agent of the corporation and who, while a director, officer,
employee, fiduciary, or agent of the corporation, is or was serving
at the request of the corporation as a director, officer, partner,
trustee, employee, fiduciary, or agent of any other domestic or
foreign corporation or other person or of an employee benefit plan
against any liability asserted against or incurred by the person in
that capacity or arising out of his or her status as a director,
officer, employee, fiduciary, or agent whether or not the corporation
would have the power to indemnify the person against such liability
under the Section 7-109-102, 7-109-103 or 7-109-107. Any such
insurance may be procured from any insurance company designated by
the board of directors, whether such insurance company is formed
under the laws of this state or any other jurisdiction of the United
States or elsewhere, including any insurance company in which the
corporation has an equity or any other interest through stock
ownership or otherwise.
Section 7-109-109. Limitation of Indemnification of Directors.
(1) A provision concerning a corporation's indemnification of, or
advance of expenses to, directors that is contained in its articles
of incorporation or bylaws, in a resolution of its shareholders or
board of directors, or in a contract, except for an insurance policy
or otherwise, is valid only to the extent the provision is not
inconsistent with Sections 7-109-101 to 7-109-108. If the articles of
incorporation limit indemnification or advance of expenses,
indemnification or advance of expenses are valid only to the extent
not inconsistent with the articles of incorporation.
(2) Sections 7-109-101 to 7-109-108 do not limit a corporation's
power to pay or reimburse expenses incurred by a director in
connection with an appearance as a witness in a proceeding at a time
when he or she has not been made a named defendant or respondent in
the proceeding.
Section 7-109-110. Notice to Shareholders of Indemnification of Director.
If a corporation indemnifies or advances expenses to a
director under this article in connection with a proceeding by or in
the right of the corporation, the corporation shall give written
notice of the indemnification or advance to the shareholders with or
before the notice of the next shareholders' meeting. If the next
shareholder action is taken without a meeting at the instigation of
the board of directors, such notice shall be given to the
shareholders at or before the time the first shareholder signs a
writing consenting to such action.
Bylaws of GWL&A
Article II, Section 11. Indemnification of Directors.
----------------------------
The Company may, by resolution of the Board of Directors,
indemnify and save harmless out of the funds of the Company to the
extent permitted by applicable law, any director, officer, or
employee of the Company or any member or officer of any committee,
and his heirs, executors and administrators, from and against all
claims, liabilities, costs, charges and expenses whatsoever that any
such director, officer, employee or any such member or officer
sustains or incurs in or about any action, suit, or proceeding that
is brought, commenced, or prosecuted against him for or in respect of
any act, deed, matter or thing whatsoever made, done, or permitted by
him in or about the execution of his duties of his office or
employment with the Company, in or about the execution of his duties
as a director or officer of another company which he so serves at the
request and on behalf of the Company, or in or about the execution of
his duties as a member or officer of any such Committee, and all
other claims, liabilities, costs, charges and expenses that he
sustains or incurs, in or about or in relation to any such duties or
the affairs of the Company, the affairs of such Committee, except
such claims, liabilities, costs, charges or expenses as are
occasioned by his own willful neglect or default. The Company may, by
resolution of the Board of Directors, indemnify and save harmless out
of the funds of the Company to the extent permitted by applicable
law, any director, officer, or employee of any subsidiary corporation
of the Company on the same basis, and within the same constraints as,
described in the preceding sentence.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
Item 29. Principal Underwriter
(a) BenefitsCorp Equities, Inc. ("BCE") currently distributes securities
of Great-West Variable Annuity Account A, FutureFunds Series Account,
and Pinnacle Series Account in addition to those of the Registrant.
(b) Directors and Officers of BCE
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Position and Offices
Name Principal Business Address with Underwriter
Charles P. Nelson (1) Director and President
Robert K. Shaw (1) Director
Dennis Low (1) Director
John Brown (1) Director
Gregg E. Seller 18101 Von Karman Ave. Vice President
Suite 1460 Major Accounts
Irvine, CA 92715
Jack Baker (1) Vice President, Licensing
and Contracts
Glen R. Derback (1) Treasurer
Beverly A. Byrne 8525 East Orchard Road Secretary
Englewood, CO 80111
Teresa Buckley (1) Compliance Officer
- ------------
(1) 8515 E. Orchard Road, Englewood, Colorado 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
</TABLE>
All accounts, books, or other documents required to be maintained by
Section 31(a) of the 1940 Act and the rules promulgated thereunder
are maintained by the Registrant through GWL&A, 8515 E. Orchard Road,
Englewood, Colorado 80111.
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
(a) Registrant undertakes to file a post-effective amendment to
this Registration Statement as frequently as is necessary to
ensure that the audited financial statements in the
Registration Statement are never more than 16 months old for
so long as payments under the variable annuity contracts may
be accepted.
(b) Registrant undertakes to include either (1) as part of any
application to purchase a contract offered by the Prospectus,
a space that an applicant can check to request a Statement of
Additional Information, or (2) a postcard or similar written
communication affixed to or included in the Prospectus that
the applicant can remove to send for a Statement of Additional
Information.
(c) Registrant undertakes to deliver any Statement of Additional
Information and any financial statements required to be made
available under this form promptly upon written or oral
request.
(d) GWL&A represents that the fees and charges deducted under the
Contracts, in the aggregate, are reasonable in relation to the
services rendered, the expenses expected to be incurred, and
the risks assumed by GWL&A.
<PAGE>
S-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant hereby certifies that it meets
the requirements for effectiveness under Rule 485(b) and 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 April, 2000.
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:
Signature and Title Date
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
/s/ Robert Gratton* April 26, 2000
- ---------------------------------------------- --------------
Director and Chairman of the Board
(Robert Gratton)
/s/ William T. McCallum April 26, 2000
- -------------------------------------------- --------------
Director, President and Chief Executive
Officer (William T. McCallum)
/s/ Mitchell T.G. Graye April 26, 2000
- -------------------------------------------- --------------
Executive Vice President and
Chief Financial Officer
(Mitchell T.G. Graye)
/s/ James Balog* April 26, 2000
- ------------------------------------------------- --------------
Director, (James Balog)
<PAGE>
Signature and Title Date
/s/ James W. Burns* April 26, 2000
- ----------------------------------------------- --------------
Director, (James W. Burns)
/s/ Orest T. Dackow* April 26, 2000
- ----------------------------------------------- --------------
Director (Orest T. Dackow)
/s/Andre Desmarais* April 26, 2000
- ------------------------------------------------- --------------
Director Andre Desmarais
/s/ Paul Desmarais, Jr.* April 26, 2000
- ----------------------------------------------- --------------
Director (Paul Desmarais, Jr.)
/s/ Robert G. Graham* April 26, 2000
- --------------------------------------------- --------------
Director (Robert G. Graham)
/s/ N. Berne Hart* April 26, 2000
- ------------------------------------------------ --------------
Director (N. Berne Hart)
/s/ Kevin P. Kavanagh* April 26, 2000
- -------------------------------------------- --------------
Director (Kevin P. Kavanagh)
/s/ William Mackness* April 26, 2000
- -------------------------------------------- --------------
Director (William Mackness)
/s/ Jerry E.A. Nicherson* April 26, 2000
- --------------------------------------------- --------------
Director (Jerry E.A. Nickerson)
/s/ P.Michael Pitfield* April 26, 2000
- ------------------------------------------------ --------------
Director (P. Michael Pitfield)
/s/ Michel Plessis-Belair* April 26, 2000
- ---------------------------------------------- --------------
Director (Michel Plessis-Belair)
/s/ Brian E. Walsh* April 26, 2000
- ------------------------------------------------ --------------
Director (Brian E. Walsh)
*By: /s/ D.C. Lennox April 26, 2000
------------------------------------- --------------
D. C. Lennox, Attorney-in-fact pursuant to Powers of Attorney filed under initial registration
</TABLE>
statement on Form N-4; Post-Effective Amendment No. 14 under the Investment
Company Act of 1940, as amended filed on January 23, 1998, and Post Effective
Amendment No. 15 under the Investment Company Act of 1940, as amended filed on
April 6, 1998.
<PAGE>
EXHIBIT 10 (a)
WRITTEN CONSENT OF JORDEN BURT BOROS CICCHETTI BERENSON & JOHNSON, LLP
<PAGE>
April 25, 2000
Great-West Life & Annuity Insurance Company
8515 East Orchard Road
Englewood, Colorado 80111
Re: Maxim Series Account
Post-Effective Amendment No. 7 to the Registration Statement on Form N-4
File No. 33-82610
Ladies and Gentlemen:
We have acted as counsel to Great-West Life & Annuity Insurance Company, a
Colorado corporation, regarding the federal securities laws applicable to the
issuance and sale of the Contracts described in the above-referenced
registration statement. We hereby consent to the reference to us under the
caption "Legal Matters" in the Prospectus filed today with the Securities and
Exchange Commission. In giving this consent, we do not admit that we are in the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933.
Very truly yours,
Jorden Burt Boros Cicchetti Berenson &
Johnson LLP
WDC #71618v1
<PAGE>
EXHIBIT 10 (b)
WRITTEN CONSENT OF DELOITTE & TOUCHE LLP
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Post-Effective Amendment No. 7 to Registration
Statement No. 33-82610 of Maxim Series Account of Great-West Life & Annuity
Insurance Company of our report dated February 22, 2000 on the financial
statements of Maxim Series Account and our report dated January 31, 2000 on the
financial statements of Great-West Life & Annuity Insurance Company and to the
reference to us under the heading "Condensed Financial Information" in such
Prospectus and under the heading "Independent Auditors" in the Statement of
Additional Information, which are part of such Registration Statement.
Deloitte & Touche LLP
Denver, Colorado
April 21, 2000
1Standard & Poor's, S&P 500 Composite Index, S&P Mid-Cap Index and S&P Small-Cap
600 Stock Index are trademarks of The McGraw-Hill Companies, Inc. and have been
licensed for use by Maxim Series Fund, Inc. and Great-West Life & Annuity
Insurance Company. The Portfoflios are not sponsored, endorsed, sold or promoted
by Standard & Poor's and Standard & Poor's makes no representation regarding the
advisability of using any index.
2 The Frank Russell Company is not a sponsor of, or in any other way affiliated
with, the Growth Index and Value Index Portfolios or the Maxim Series Fund, Inc.
