<PAGE>
As filed with the Securities and Exchange Registration No. 33-76004*
Commission on February 16, 1996 Registration No. 811-4536
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- --------------------------------------------------------------------------------
POST-EFFECTIVE AMENDMENT NO. 2 TO FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
- --------------------------------------------------------------------------------
Variable Life Account B of Aetna Life Insurance and Annuity Company
(EXACT NAME OF TRUST)
Aetna Life Insurance and Annuity Company
(NAME OF DEPOSITOR)
151 Farmington Avenue, RE4C, Hartford, Connecticut 06l56
(COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES)
I.R.S. EMPLOYER IDENTIFICATION NO.: 71-0294708
Depositor's Telephone Number, including Area Code: (860)273-7834
- --------------------------------------------------------------------------------
Susan E. Bryant, Counsel
Aetna Life Insurance and Annuity Company
151 Farmington Avenue, RE4C, Hartford, Connecticut 06l56
(NAME AND COMPLETE ADDRESS OF AGENT FO SERVICE)
- --------------------------------------------------------------------------------
It is proposed that this filing will become effective:
X on May 1, 1996 pursuant to paragraph (a)(1) of Rule (485)
- -----
- --------------------------------------------------------------------------------
*Pursuant to Rule 429(a) under the Securities Act of 1933, Registrant has
included a combined prospectus under this Registration Statement which
includes all the information which would currently be required in a
prospectus relating to the securities covered by Registration Statement
No. 33-02339.
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant has
registered an indefinite number of securities under the Securities Act of 1933.
Registrant expects to file a Rule 24f-2 Notice for the fiscal year ended
December 31, 1995 on or before February 29, 1996.
<PAGE>
VARIABLE LIFE ACCOUNT B
OF
AETNA LIFE INSURANCE AND ANNUITY COMPANY
POST-EFFECTIVE AMENDMENT NO. 1 TO
REGISTRATION STATEMENT ON FORM S-6
CROSS REFERENCE SHEET
FORM N-8B-2
ITEM NO. PART I (PROSPECTUS)
- ----------- -------------------
1 Cover Page; Description of the Company and the Separate Accounts
2 Cover Page; Description of the Company and the Separate Accounts
3 Not Applicable
4 Not Applicable
5 Description of the Company and the Separate Accounts
6 Description of the Company and the Separate Accounts
7 Not Applicable
8 Financial Statements
9 Legal Matters
10 "What Choices Do You Make When You Buy a Policy?"; "What Charges
or Deductions Are Made Under the Policy?"; "Right to Instruct
Voting of Fund Shares"; "How Might Your Policy Lapse?"; "How is
the Value of Your Policy Computed?"; "What is an Accumulation
Unit, and How is it Calculated?"; "What is the Maturity Value of
Your Policy?"; "Can You Borrow on Your Policy?"; "What is the
"Free-Look Period"?"; "How will the Death Benefit be Paid?";
"Settlement Options"; "Additional Information"; "Miscellaneous
Contract Provisions"
11 "What Choices Do You Make When You Buy a Policy?"
12 Not Applicable
13 "What Choices Do You Make When You Buy a Policy?"
14 Miscellaneous Contract Provisions
<PAGE>
FORM N-8B-2
ITEM NO. PART I (PROSPECTUS)
- ----------- -------------------
15 "What Choices Do You Make When You Buy a Policy?"
16 "How is the Value of Your Policy Computed?"
17 "What is the Cash Surrender Value of Your Policy?"; "When Does
the Surrender Charge Apply?"
18 "What Choices Do You Make When You Buy a Policy?"; "What is the
Maturity Value of Your Policy?"; "What is the Cash Surrender
Value of Your Policy?"; "Can You Borrow on Your Policy?"; "What
is the "Free-Look Period"?"
19 Reports to Policy Owners; Right to Instruct Voting of Fund
Shares
20 Not Applicable
21 "Can You Borrow on Your Policy?"
22 Not Applicable
23 Additional Information
24 Miscellaneous Contract Provisions
25 The Company
26 Not Applicable
27 The Company
28 The Company; Directors and Officers of the Company
29 The Company
30 Not Applicable
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
<PAGE>
FORM N-8B-2
ITEM NO. PART I (PROSPECTUS)
- ----------- -------------------
35 Additional Information
36 Not Applicable
37 Not Applicable
38 Additional Information
39 Not Applicable
40 Not Applicable
41 Not Applicable
42 Not Applicable
43 Not Applicable
44 "How is the Value of Your Policy Computed?"; "What is an
Accumulation Unit, and How is it Calculated?"
45 Not Applicable
46 Illustrations of Death Benefits, Total Account Values and Cash
Surrender Values for AetnaVest Policies; Illustrations of Death
Benefits, Total Account Values and Cash Surrender Values for
AetnaVest II Policies
47 "What Choices Do You Make When You Buy a Policy?"; "How is the
Value of Your Policy Computed?"
48 Not Applicable
49 Not Applicable
50 Not Applicable
51 Not Applicable
52 The Separate Account
53 Tax Matters
54 Not Applicable
<PAGE>
FORM N-8B-2
ITEM NO. PART I (PROSPECTUS)
- ----------- -------------------
55 Not Applicable
56 Not Applicable
57 Not Applicable
58 Not Applicable
59 Financial Statements
<PAGE>
[LOGO]
AETNAVEST & AETNAVEST II
Aetna Life Insurance and
Annuity Company
VARIABLE LIFE ACCOUNT B
151 Farmington Avenue
PROSPECTUS
Hartford, Connecticut 06156
DATED: MAY 1, 1996
Telephone: 203-275-4995
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICIES
- --------------------------------------------------------------------------------
This Prospectus describes two types of variable life insurance
policies issued by Aetna Life Insurance and Annuity Company ("the
Company" or "we"): AetnaVest and AetnaVest II. These policies are
intended to provide life insurance benefits, and are designed to allow
flexible premium payments, a choice of underlying funding options, and a
choice of two death benefit options. Your policy value will vary with
the investment performance of the underlying funding options you choose.
The amount of death benefit payable by the Company upon the death of the
Insured may also increase or decrease depending on the investment
performance of the underlying funding options. Policy values may be used
to continue your policy in force, may be borrowed with certain limits,
and may be fully or partially surrendered (subject to a surrender
charge).
You may also choose to select one of the annuity settlement options
upon maturity of the Policy, or, prior to maturity of the Policy, you
may apply the value of your Policy (minus any applicable surrender
charges and the amount necessary to repay any loans in full) to one of
the annuity settlement options. Upon death of the Insured, the
beneficiary will be paid the value of the Death Benefit Option (a) in
one lump sum, or (b) under one of the annuity settlement options.
The Policies have a Free-Look Period during which you may return
them to our Home Office for a refund. The refund may be more or less
than the premiums paid. (See "What Is the Free-Look Period?")
The following funding options are available under the Policies:
Under the variable portion of the Policies, the Company offers seventeen
open-end management investment companies (commonly called mutual funds),
each with a different investment objective: Aetna Variable Fund; Aetna
Income Shares; Aetna Variable Encore Fund; Aetna Investment Advisers
Fund, Inc.; Aetna Ascent Variable Portfolio; Aetna Crossroads Variable
Portfolio; Aetna Legacy Variable Portfolio; Alger American Fund--Alger
American Small Capitalization Portfolio; Fidelity's Variable Insurance
Products Fund II--Contrafund Portfolio; Fidelity's Variable Insurance
Products Fund--Equity-Income Portfolio; Janus Aspen Series--Growth
Portfolio, Aggressive Growth Portfolio, Worldwide Growth Portfolio,
Balanced Portfolio and Short-Term Bond Portfolio; Scudder Variable Life
Investment Fund--International Portfolio; and TCI Portfolios, Inc.--TCI
Growth (collectively, the "Funds"). The fixed interest option offered
under these Policies is the Fixed Account. Amounts held in the Fixed
Account are guaranteed and will earn a minimum interest rate of 4.5%.
Unless specifically mentioned, this Prospectus only describes the
variable investment options.
It may not be advantageous to replace existing insurance or
supplement an existing flexible premium variable life insurance policy
with these Policies. The Policies are not available for use in a pension
or profit-sharing plan.
This entire Prospectus, and those of the Funds, should be read
carefully to understand the Policies being offered.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT
PROSPECTUSES FOR THE FUNDS. ALL PROSPECTUSES SHOULD BE READ AND RETAINED
FOR FUTURE REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION,
NOR HAS THE COMMISSION, OR ANY STATE SECURITIES COMMISSION, PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Definitions....................... 3
Summary of Charges and Fees for
AetnaVest and AetnaVest II....... 5
What Choices Do You Make When You
Buy a Policy?.................... 6
Death Benefit Options........... 6
Premiums........................ 6
Premium Allocation.............. 7
Mixed and Shared Funding.......... 9
What Happens When Your Premium
Payment is Made?................. 9
How Is the Value of Your Policy
Computed?........................ 9
What Is an Accumulation Unit, and
How Is It Calculated?............ 10
Can You Make Transfers Among the
Funding Options?................. 10
Automated Transfers............. 11
What Is the Maturity Value of Your
Policy?.......................... 11
What Is the Cash Surrender Value
of Your Policy?.................. 11
What Charges or Deductions Are
Made Under the Policy?........... 11
When Does the Surrender Charge
Apply?........................... 15
Full Surrenders................. 15
Partial Surrenders.............. 15
How Might Your Policy Lapse? What
Effect Does a Lapse Have?........ 15
If the Policy Has Lapsed, Can You
Reinstate the Policy?............ 16
Can You Borrow on Your Policy?.... 16
Can You Change the Amount of Your
Insurance Coverage?.............. 17
What Is the "Free-Look Period"?... 17
Can You Exchange Your Policy?..... 17
How Will the Death Benefit Be
Paid?............................ 18
Settlement Options
When Do Payments Under a
Settlement Option Occur?....... 18
What Are the Settlement
Options?....................... 18
How Will Your Variable
Settlement Option Payments Be
Calculated?.................... 19
<CAPTION>
PAGE
----
<S> <C>
Description of the Company and the
Separate Accounts
The Company..................... 20
The Separate Account............ 20
Directors and Officers of the
Company.......................... 22
Reports to Policy Owners.......... 24
Right to Instruct Voting of Fund
Shares........................... 24
Disregard of Voting
Instructions................... 25
State Regulation.................. 25
Legal Matters..................... 25
Additional Information
The Registration Statement...... 25
Distribution of the Policies.... 25
Records and Accounts............ 26
Experts......................... 26
Tax Matters
General......................... 26
Federal Tax Status of the
Company........................ 26
Life Insurance Qualification.... 26
General Rules................... 27
Modified Endowment Contracts.... 27
Diversification Standards....... 28
Investor Control................ 28
Other Tax Considerations........ 28
Miscellaneous Contract Provisions
The Contract.................... 29
Payment of Benefits............. 29
Age and Sex..................... 29
Incontestability................ 29
Suicide......................... 29
Protection of Proceeds.......... 29
Non-Participation............... 29
Coverage Beyond Maturity........ 29
Appendix A--Illustrations of Death
Benefits, Total Account Values
and Cash Surrender Values for
AetnaVest Policies............... 30
Appendix B--Illustrations of Death
Benefits, Total Account Values,
and Cash Surrender Values for
AetnaVest II Policies............ 35
Appendix C--Mutual Fund Annual
Expenses......................... 44
Financial Statements..............
</TABLE>
2
<PAGE>
DEFINITIONS
ACCUMULATION UNIT: A unit used to measure the value of a Policyowner's interest
in each applicable funding option used to calculate the value of the variable
portion of the Policy before election of a Settlement Option.
ADDITIONAL PREMIUMS: Any premium paid in addition to Planned Premiums.
AETNAVEST: Flexible premium variable life insurance policy with Policy Form
number 38899 (with suffix variations).
AETNAVEST II: Flexible premium variable life insurance policy with Policy Form
number 38899-90 (with suffix variations).
AMOUNT AT RISK: The Death Benefit before subtraction of outstanding loans, if
any, divided by 1.0036748, minus the Total Account Value.
ANNUITANT: A person on whose life annuity payments are based and who may be
entitled to receive such payment.
ANNUITY: A series of payments for life or for a definite period.
BASIC PREMIUM: The amount of premium which must be paid to assure that the
Policy remains in force for at least two years after issue, assuming there have
been no loans or surrenders.
CASH SURRENDER VALUE: The amount a Policy Owner can receive in cash by
surrendering the Policy. This equals the Total Account Value minus the
applicable surrender charge and the amount necessary to repay any loans in full.
COST OF INSURANCE: The portion of the Monthly Deduction attributable to the
basic insurance coverage, not including riders, supplemental benefits or monthly
expense charges. The Cost of Insurance Rate is stated per $1,000 of Amount at
Risk.
DEATH BENEFIT: The amount payable to the beneficiary upon the death of the
Insured, in accordance with the Death Benefit Option elected, after deduction of
the amount necessary to repay any loans in full, and overdue deductions.
DEATH BENEFIT OPTION: Either of two methods for determining the Death Benefit.
FIXED ACCOUNT: The fixed interest option offered under the Policy that
guarantees principal and a minimum interest rate of 4.5%.
FIXED ACCOUNT VALUE: The portion of the Total Account Value, other than the Loan
Account Value, held in the Company's General Account.
FUND(S): One or more of the underlying funding options available under the
Policy (as described in this Prospectus). Each of the Funds is an open-end,
management investment company whose shares are available to fund the benefits
provided by the Policy.
GENERAL ACCOUNT: The Company's general asset account, in which assets
attributable to the non-variable portion of Policies are held.
GRACE PERIOD: The 61-day period following the notification that the Policy's
cash surrender value is insufficient to cover the current Monthly Deduction. The
Policy will lapse without value at the end of the 61-day period unless a
sufficient payment (described in the notification letter) is received by the
Company.
HOME OFFICE: The Company's principal executive office located at 151 Farmington
Avenue, Hartford, Connecticut 06156.
INSURED: The person on whose life the Policy is issued.
ISSUE AGE: The age of the Insured on the nearest birthday on or prior to the
Issue Date.
ISSUE DATE: The date on which the Policy, the benefits and provisions of the
Policy become effective.
LOAN ACCOUNT VALUE: The sum of all unpaid loans. The amount necessary to repay
all loans in full is the Loan Account Value plus any accrued interest. Such
interest is payable in order to discharge any policy indebtedness.
MATURITY DATE: The Issue Date anniversary after the insured reaches age 95 (for
AetnaVest Policies) or 100 (for AetnaVest II Policies) and the Policy is
considered matured.
MATURITY VALUE: The Total Account Value on the Maturity Date, less the amount
necessary to repay any loans in full.
MONTHLY DEDUCTION: The monthly deduction from the Total Account Value which
includes the Cost of
3
<PAGE>
Insurance, charges for supplemental riders or benefits, and an adminstrative
expense charge, if applicable.
PLANNED PREMIUMS: The amount of premium the Policy Owner chooses to pay the
Company on a scheduled basis. This is the amount for which the Company sends a
bill.
POLICY: The AetnaVest and AetnaVest II life insurance contracts described in
this Prospectus, under which flexible premium payments are permitted and the
death benefit and contract values may vary with the investment performance of
the funding option(s) selected. The term Policy, whenever used in this
Prospectus, includes the individual Certificates issued under group multiple
employer trust plans. These Certificates contain all of the provisions of the
individual variable life insurance policies as described in this Prospectus.
POLICY OWNER: The owner of the Policy, referred to as "you."
POLICY YEAR: Each twelve-month period, beginning on the Issue Date, during which
the Policy is in effect.
SEPARATE ACCOUNT: Variable Life Account B is a Separate Account of the Company
established for the purpose of segregating assets attributable to the variable
portion of life insurance contracts from other assets of the Company. It is
organized as a unit investment trust ("Separate Account" also includes Variable
Annuity Account B when referring to a Settlement Option).
SEPARATE ACCOUNT VALUE: The portion of the Total Account Value attributable to
Variable Life Account B.
SETTLEMENT OPTION(S): Several ways in which a beneficiary may receive Annuity
payments due from a Death Benefit, or which the Insured may choose to receive
Annuity payments from the Cash Surrender Value of the Policy.
SETTLEMENT OPTION UNITS: A measure of the net investment results of the
available investment options that are used to calculate the amount of the
Settlement Option payments.
SPECIFIED AMOUNT: The amount (at least $100,000) originally chosen by the Policy
Owner, used in determining the Death Benefit. It is initially equal to the Death
Benefit. The Specified Amount may be increased or decreased as described in this
Prospectus.
SURRENDER CHARGE: The amount retained by the Company, upon the full or partial
surrender of the Policy.
TOTAL ACCOUNT VALUE: The sum of the Fixed Account Value, Separate Account Value
and the Loan Account Value.
VALUATION DATE: The period of time for which a Fund determines its net asset
value, usually from the close of business each day the New York Stock Exchange
is open until the close of business the next such business day.
VALUATION RESERVE: A reserve established pursuant to the insurance laws of
Connecticut to measure voting rights during the settlement option period and the
value of a commutation right if available under the "Payments for a Specified
Period" nonlifetime Settlement Option when elected on a variable basis under the
Policy.
4
<PAGE>
SUMMARY OF CHARGES AND FEES
FOR AETNAVEST AND AETNAVEST II*
PREMIUM LOAD
AetnaVest: A deduction of 2.50% of premiums paid (2.35% for California
residents) will be made to cover applicable premium taxes.
AetnaVest II: A deduction of not more than 6% of premiums paid (currently
3.5%) will be made to cover average applicable premium taxes and other expenses.
CHARGES AND FEES ASSESSED AGAINST THE TOTAL ACCOUNT VALUE
A Monthly Deduction is made from the Total Account Value. The Monthly
Deduction includes the Cost of Insurance and any charges for supplemental riders
or benefits. The Cost of Insurance depends on the attained age, premium class of
the Insured, and in most states, sex, as well as the Specified Amount.
The Monthly Deduction also includes a monthly administrative expense charge.
For AetnaVest Policies, this charge ranges from $0 to $5 per month. For
AetnaVest II Policies, this monthly charge is $20 during the first Policy Year
and $5 during subsequent Policy Years.
CHARGES AND FEES ASSOCIATED WITH THE SEPARATE ACCOUNT
We deduct a daily charge from the assets of the Separate Account for
mortality and expense risks assumed by us. This charge is currently equal to an
annual rate of 0.70% of average daily net assets of the Separate Account. The
mortality and expense risk charge is assessed to compensate the Company for
assuming certain mortality and expense risks under the Policies. The Company
reserves the right to increase the mortality and expense risk charge if it
believes that circumstances have changed so that current charges are no longer
adequate. In no event will the charge exceed 0.90% of average daily net assets
on an annual basis.
The mortality risk assumed is that insureds, as a group, may live for a
shorter period of time than estimated and, therefore, the cost of insurance
charges specified in the Policies will be insufficient to meet actual claims.
The expense risk assumed is that other expenses incurred in issuing and
administrating the Policies and operating the Separate Account will be greater
than the charges assessed for such expenses.
We deduct a daily administrative charge equal to an annual rate of 0.30% of
the average daily net assets of the Separate Account (guaranteed not to exceed
0.30% for AetnaVest and 0.50% for AetnaVest II). The administrative charge is
assessed to reimburse us for the expenses associated with administration and
maintenance of the Policies.
Other Fund Expenses may apply. Please refer to Appendix C for a chart
illustrating each Fund's Expenses.
SURRENDER CHARGE
If you surrender all or a portion of your Policy values during the first 10
years (15 years for AetnaVest II), a surrender charge will be made. This charge
is imposed in part as a deferred sales charge and in part to enable the Company
to recover certain first-year administrative costs. The Surrender Charge is
based on the Specified Amount, and also depends on the Insured's Issue Age and
sex. (For AetnaVest II Policies issued in some states, the Surrender Charge will
not be based on sex.) Once determined, the Surrender Charge will remain the same
for 5 years following the Issue Date. Thereafter, it declines monthly so that 10
years for AetnaVest (15 years for AetnaVest II) after the Issue Date (assuming
no increases in the Specified Amount) the Surrender Charge will be zero.
If a partial surrender is made, there will be an additional transaction
charge of $25 or 2% of the amount of the net surrender payment, whichever is
less. The charge will be made against the Total Account Value.
- --------------
* For a complete explanation of the charges, see "What Charges or Deductions Are
Made Under the Policy?"
5
<PAGE>
WHAT CHOICES DO YOU MAKE WHEN YOU BUY A POLICY?
When you buy a Policy, you make three important choices:
1. Which one of the two Death Benefit Options you would like;
2. The amount of premium you intend to pay; and
3. The way your premiums will be allocated to the Funds and/or Fixed Account.
Each of these choices is described in detail below.
DEATH BENEFIT OPTIONS
At the time of purchase, you must choose between the two available Death
Benefit Options. The amount payable under either option will be determined as of
the date of the Insured's death.
Option 1 generally provides a level Death Benefit. Under Option 1, the Death
Benefit will be the higher of the Specified Amount (a minimum of $100,000), or
the applicable percentage of the Total Account Value. The percentage is 250%
through age 40 and decreases yearly to 100% at age 95 for AetnaVest Policies
(100 for AetnaVest II Policies).
Option 2 provides a varying Death Benefit which increases or decreases over
time, depending on the amount of premium paid and the investment performance of
the underlying funding options selected. Under Option 2, the Death Benefit will
be the higher of either the Specified Amount plus the Total Account Value; or
the applicable percentage (described above) of the Total Account Value.
Under both Option 1 and Option 2, the Death Benefit may be affected by
partial surrenders. The Death Benefit for both Options will be reduced by the
amount necessary to repay any loans in full.
PREMIUMS
At the time you purchase a Policy, you also choose the amount of premium you
will pay. You may vary premium payments to some extent and still keep your
Policy in force. To understand how this works, there are three terms you should
be familiar with. These are: Basic Premium, Planned Premiums, and Additional
Premiums.
During the first two Policy years, payment of the Basic Premium assures that
the Policy will remain in force as long as there are no surrenders or loans (if
available under the Policy) during that time. The Basic Premium is stated in the
Policy. If Basic Premiums are not paid, or if there are surrenders or loans
taken during the first two Policy Years, the Policy will lapse if the Cash
Surrender Value is less than the Monthly Deduction.
Your Basic Premiums are not current if your actual premiums paid, minus
loans and minus partial surrenders, are less than the Basic Premium (expressed
as a monthly amount) times the number of months the Policy has been in force.
After the first two Policy Years, as long as the Policy's Cash Surrender
Value is greater than the Monthly Deduction, your Policy will not lapse.
Planned Premiums are those premiums you choose to pay on a scheduled basis.
These are usually equal to or greater than the Basic Premium. We will bill you
annually, semiannually, or quarterly, or at any other agreed-upon frequency.
Pre-authorized monthly check payments may also be arranged.
Additional Premiums are any premiums you pay in addition to Planned
Premiums.
Payment of Basic Premiums, Planned Premiums or Additional Premiums in any
amount will not, except as noted above, guarantee that your Policy will remain
in force. Conversely, failure to pay Planned Premiums or Additional Premiums
will not necessarily cause your Policy to lapse. (See "How Might Your Policy
Lapse? What Effect Does a Lapse Have?")
You may increase your Planned Premium at any time by submitting a written
notice to us or by paying Additional Premiums, except that:
1. We may require evidence of insurability if the Additional Premium or the new
Planned Premium during the current Policy Year would increase the difference
between the Death Benefit and the Total Account Value. If satisfactory
evidence of insurability is requested and not provided, we will refund the
increase in premium without interest and without participation of such
amounts in the underlying funding options;
6
<PAGE>
2. No premiums can be accepted if they would disqualify the Policy as a "life
insurance policy" under federal tax laws;
3. When there is an outstanding loan, all premiums paid in excess of the Basic
Premium will be considered repayment of the Loan Account Value (this is true
in all states for AetnaVest Policies and in most states for AetnaVest II
Policies).
Under limited circumstances, we may backdate a Policy, upon request, by
assigning an Issue Date earlier than the date the application is signed but no
earlier than six months prior to state approval of the Policy. Backdating may be
desirable, for example, so that you can purchase a particular Policy Specified
Amount for lower cost of insurance rates, based on a younger insurance age. For
a backdated Policy, you must pay the minimum premium payable for the period
between the Issue Date and the date the initial premium is credited to the
Separate Account. Backdating your Policy will not affect the date on which your
premium payments are credited to the Separate Account and your policy is
credited with Accumulation Units. Your Policy cannot be credited with
Accumulation Units until your net premium is actually deposited in the Separate
Account. See "How is the Value of Your Policy Computed?" in this Prospectus.
PREMIUM ALLOCATION
The third choice you make when you purchase a Policy is deciding how your
premiums will be allocated to the variable investment options. Allocations must
be in whole percentages.
You may allocate all or a part of your premiums to the Fixed Account, which
will be credited with interest at a rate determined by us from time to time, but
guaranteed to be at least 4.5%. The interest rate credited to each premium
payment will depend on the date the payment is received at our Home Office.
Credited interest rates reflect the Company's return on the Fixed Account
invested assets and the amortization of any realized gains and/or losses which
the Company may incur on these assets.
You may also allocate all or a portion of your premiums to the Separate
Account and direct that they be invested in one or more of the Funds. The
investment results of the Funds, whose objectives are described below, are
likely to differ significantly. You should consider carefully and on a
continuing basis which Fund or combination of Funds is best suited to your
long-term investment objectives. Except where otherwise noted, all of the Funds
are diversified, as defined in the Investment Company Act of 1940, as amended.
- AETNA VARIABLE FUND seeks to maximize total return through investments in a
diversified portfolio of common stocks and securities convertible into common
stock.
- AETNA INCOME SHARES seeks to maximize total return, consistent with
reasonable risk, through investments in a diversified portfolio consisting
primarily of debt securities.
- AETNA VARIABLE ENCORE FUND seeks to provide high current return consistent
with pre-
servation of capital and liquidity through
investment in high-quality money market instruments. An investment in the
Fund is neither insured nor guaranteed by the U.S. Government.
- AETNA INVESTMENT ADVISERS FUND, INC. is a managed mutual fund which seeks to
maximize investment return consistent with reasonable safety of principal by
investing in one or more of the following asset classes: stocks, bonds and
cash equivalents based on the adviser's judgment of which of those sectors or
mix thereof offers the best investment prospects.
- AETNA GENERATION PORTFOLIOS, INC.--AETNA ASCENT VARIABLE PORTFOLIO seeks to
provide capital appreciation by allocating its investments among equities and
fixed income securities. Aetna Ascent Variable Portfolio is managed for
investors who generally have an investment horizon exceeding 15 years, and
who have a high level of risk tolerance. See the Fund's prospectus for a
discussion of the risks involved.
- AETNA GENERATION PORTFOLIOS, INC.--AETNA CROSSROADS VARIABLE PORTFOLIO seeks
to provide total return (i.e., income and capital appreciation, both realized
and unrealized) by allocating its investments among equities and fixed income
securities. Aetna Crossroads Variable Portfolio is managed for investors who
7
<PAGE>
generally have an investment horizon exceeding 10 years and who have a
moderate level of risk tolerance.
- AETNA GENERATION PORTFOLIOS, INC.--AETNA LEGACY VARIABLE PORTFOLIO seeks to
provide total return consistent with preservation of capital by allocating
its investments among equities and fixed income securities. Aetna Legacy
Variable Portfolio is managed for investors who generally have an investment
horizon exceeding five years and who have a low level of risk tolerance.
- ALGER AMERICAN FUND--ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO seeks
capital return through investment in the common stock of smaller companies
offering the potential for significant price gain. It invests at least 85% of
its net assets in equity securities and at least 65% of its net assets in
equity securities of companies that, at the time of purchase, have "total
market capitalization" (present market value per share multiplied by the
total number of shares outstanding) of less than $1 billion. Investing in
smaller companies may present risks not present in investments in larger
companies. See the Fund's prospectus for a discussion of these risks.
- FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND II--CONTRAFUND
PORTFOLIO seeks maximum total return over the long term by investing its
assets mainly in equity securities of companies that are undervalued or
out-of-favor.
- FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND--EQUITY-INCOME
PORTFOLIO seeks reasonable income by investing primarily in income-producing
equity securities. In choosing these securities, the Fund will also consider
the potential for capital appreciation.
- JANUS ASPEN SERIES--GROWTH PORTFOLIO seeks long-term growth of capital by
investing primarily in a diversified portfolio of common stocks of a large
number of issuers of any size. The Portfolio generally emphasizes issuers
with large market capitalizations.
- JANUS ASPEN SERIES--AGGRESSIVE GROWTH PORTFOLIO is a NONDIVERSIFIED
portfolio that seeks long-term growth of capital in a manner consistent with
the preservation of capital. The Portfolio pursues its investment objective
by normally investing at least 50% of its equity assets in securities issued
by medium-sized companies. Medium-sized companies are those whose market
capitalizations fall within the range of companies in the S&P MidCap 400
Index, which as of
---------------- included companies with capitalizations between
approximately
--------- and
---------, but which is expected to change on a regular basis.
- JANUS ASPEN SERIES--WORLDWIDE GROWTH PORTFOLIO seeks long-term growth of
capital by investing primarily in common stocks of companies of foreign and
domestic issuers of any size. The Portfolio normally invests in issuers from
at least five different countries, including the United States. International
investments involve risks not present in U.S. securities. See the Portfolio's
prospectus for a discussion of these risks.
- JANUS ASPEN SERIES--BALANCED PORTFOLIO seeks long-term growth of capital
consistent with preservation of capital and balanced by current income. The
Portfolio is designed for investors who want to participate in the equity
markets through a more moderate investment than a pure growth fund.
Investments in income-producing securities are intended to result in a
portfolio that provides a more consistent total return than may be attainable
through investing solely in growth stocks. The Portfolio is not designed for
investors who desire a consistent level of income.
- JANUS ASPEN SERIES--SHORT-TERM BOND PORTFOLIO seeks as high a level of
current income as is consistent with preservation of capital by investing
primarily in short- and intermediate-term fixed income securities. The
Portfolio will normally maintain a dollar-weighted average portfolio maturity
of less than three years, but not to exceed five years depending upon its
portfolio manager's opinion of prevailing market, financial and economic
conditions.
- SCUDDER VARIABLE LIFE INVESTMENT FUND--INTERNATIONAL PORTFOLIO seeks
long-term growth of capital primarily through diversified holdings of
marketable foreign equity investments. Investing in foreign securities may
involve a
8
<PAGE>
greater degree of risk than investing in domestic securities. See the Fund's
prospectus for a discussion of these risks.
- TCI PORTFOLIOS, INC.--TCI GROWTH (a Twentieth Century fund) seeks capital
growth by investing in common stocks (including securities convertible into
common stocks) and other securities that meet certain fundamental and
technical standards of selection, and, in the opinion of TCI Growth's
management, have better than average potential for appreciation. The
Portfolio tries to stay fully invested in such securities, regardless of the
movement of prices generally. The Portfolio may invest in foreign securities.
Foreign investing involves risks that differ from those involved in domestic
investing. See the Portfolio's prospectus for a discussion of these risks.
Some of the above Funds may use instruments known as derivatives as part of
their investment strategies, as described in their respective prospectuses. The
use of certain derivatives such as inverse floaters and principal only debt
instruments may involve higher risk of volatility to a Fund. The use of leverage
in connection with derivatives can also increase risk of losses. See the
prospectuses for the Funds for a discussion of the risks associated with an
investment in those funds.
You should refer to the accompanying prospectuses of the Funds for more
complete information about their investment policies and restrictions. A
substitution of any other variable investment option would require approval of
the Securities and Exchange Commission ("SEC"), and would be effected only if
deemed necessary to accomplish the purposes of the Separate Account. If a
substitution were deemed necessary, we would seek to substitute a fund or funds
with investment objectives reasonably similar to those of the Fund(s) for which
the substitution was made. The Company reserves the right to add additional
funding options from time to time.
MIXED AND SHARED FUNDING
Shares of the Funds are available to insurance company separate accounts
which fund variable annuity contracts and variable life insurance policies,
including the Policies described in this Prospectus. Because Fund shares are
offered to separate accounts of both affiliated and unaffiliated insurance
companies, it is conceivable that, in the future, it may not be advantageous for
variable life insurance separate accounts and variable annuity separate accounts
to invest in these Funds simultaneously, since the interests of such Policy
Owners or contractholders may differ. Although neither the Company nor the Funds
currently foresees any such disadvantages either to variable life insurance or
to variable annuity Policyholders, each Fund's Board of Trustees/Directors has
agreed to monitor events in order to identify any material irreconcilable
conflicts which may possibly arise and to determine what action, if any, should
be taken in response thereto. If such a conflict were to occur, one of the
separate accounts might withdraw its investment in a Fund. This might force that
Fund to sell portfolio securities at disadvantageous prices.
WHAT HAPPENS WHEN YOUR PREMIUM PAYMENT IS MADE?
If you make a sufficient premium payment when you apply for a Policy, and
have answered favorably certain questions relating to the Insured's health, a
"temporary insurance agreement" in the amount applied for (subject to stated
maximums) will be provided.
After the first premium payment, all premiums must be sent directly to our
Home Office and will be deemed received when actually received at the Home
Office. Your premium payments will be allocated, as you have directed, as of the
Valuation Date on which each payment is received in the Home Office.
You may reallocate your future premium payments at any time, up to four
times per year, free of charge. After four times, a $10 charge is imposed on
each subsequent change in order to reimburse us for costs associated with
allocation changes. Any reallocation will apply to premium payments made after
you have received written verification from us.
HOW IS THE VALUE OF YOUR POLICY COMPUTED?
Once your Policy has been issued, each premium payment allocated to a
variable funding option of the Separate Account will be credited to your Policy
in the form of Accumulation Units of the funding option based on that funding
option's Accumulation Unit Value. Each premium payment will be credited to your
Policy as of the Valuation
9
<PAGE>
Date it is received by us at our Home Office. The number of Accumulation Units
credited is determined by dividing the net premium (the premium less the Premium
Load) by the value of an Accumulation Unit next computed after we receive the
premium. Shares of the Funds are purchased by the Separate Account at the net
asset value next determined by the Fund following receipt of the Net Premium
Payment by the Separate Account, which will be no later than one business day
following the purchase of the Accumulation Units attributable to the Funds.
Since each Fund has a unique Accumulation Unit Value, a Policy Owner who has
elected a combination of funding options will have Accumulation Units credited
to each funding option.
The value of your Policy is determined by: (a) multiplying the total number
of Accumulation Units credited to the Policy for each funding option,
respectively, by the appropriate current Accumulation Unit Value; and (b) if you
have elected a combination of funding options, totalling the resulting values
for each portion of the Policy; and (c) adding any Fixed Account or Loan Account
Value.
The number of Accumulation Units credited to a Policy will not be impacted
by any subsequent change in the value of an Accumulation Unit. The number of
units is increased by subsequent contributions to or transfers into that funding
option, and decreased by charges and withdrawals from that funding option.
Fixed Account Values will reflect amounts allocated to the General Account
through either payment of premiums or transfers from the Separate Account. There
is no assurance that the Separate Account Value of the Policy will equal or
exceed the premiums paid and allocated to the Separate Account. You will be
advised at least annually as to the number of Accumulation Units which remain
credited to the Policy, the current Accumulation Unit Values, and your Total
Account Value.
WHAT IS AN ACCUMULATION UNIT, AND HOW IS IT CALCULATED?
An Accumulation Unit is the measure of the net investment result of each
variable funding option. The Accumulation Units are used to calculate the value
of the variable portion of your Policy (prior to the election of a Settlement
Option). Accumulation Units are valued at the end of each business day, whenever
the New York Stock Exchange is open. A Valuation Period is the period of time
from the end of one such business day to the end of the next. The value of an
Accumulation Unit for any Valuation Period is determined by multiplying the
value of an Accumulation Unit for the immediately preceding Valuation Period by
the net investment factor for the current period for the appropriate Fund. The
net investment factor equals the net investment rate plus 1.0000000. The net
investment rate is determined separately for each Fund as follows:
The net investment rate equals (a) the net assets of the Fund held in the
Separate Account at the end of a Valuation Period, minus (b) the net assets of
the Fund held in the Separate Account at the beginning of that Valuation Period,
plus or minus (c) taxes or provisions for taxes, if any, attributable to the
operation of the Separate Account divided by (d) the value of the Accumulation
Units held by the Separate Account at the beginning of the Valuation Period,
minus (e) a daily charge at an annual rate not to exceed 0.90% of the value of
the Fund shares held in the Separate Account for mortality and expense risks and
no more than 0.50% (0.30% for AetnaVest) of the value of the Fund shares held in
the Separate Account for the Company's administrative expenses attributable to
Policies funded through the Separate Account. The current charge for mortality
and expense risks is 0.70% per year, and the current administrative expense
charge is 0.30% per year.
CAN YOU MAKE TRANSFERS AMONG THE FUNDING OPTIONS?
You may elect to transfer your accumulated Separate Account Value among any
of the Funds, or from any of the Funds to the Fixed Account. Within the 45 days
after your Policy's anniversary, you may also transfer a portion of the Fixed
Account Value to one or more Funds. This type of transfer is allowed only once
in the 45-day period and will be effective on the Valuation Date that your
request is received in good order at our Home Office. The amount of such
transfer cannot exceed the greater of (1) 25% of the Fixed Account Value, or (2)
the total Fixed Account Value if such amount is less than or equal to $500. We
may increase this
10
<PAGE>
limit from time to time. The first four transfers in any one Policy Year are
made free of charge. Each additional transfer will be subject to a $10 charge.
Any transfer among the Funds or to the Fixed Account will result in the
crediting and cancellation of Accumulation Units based on the Accumulation Unit
values next determined after a written request is received by us at our Home
Office.
For AetnaVest II Policies, we will waive the $10 charge if you are changing
your allocation so that 100% of the existing Separate Account Value and all
future allocations are credited to the Fixed Account.
If you contemplate the transfer of assets, you should consider the risks
inherent in a shift from one funding option to another. In general, frequent
transfers based on short-term expectations will tend to accentuate the danger
that a transfer will be made at an inopportune time.
AUTOMATED TRANSFERS (DOLLAR COST AVERAGING)
Dollar Cost Averaging describes a system of investing a uniform sum of money
at regular intervals over an extended period of time. Dollar Cost Averaging is
based on the economic fact that buying a security with a constant sum of money
at fixed intervals results in acquiring more of the item when prices are low and
less of it when prices are high.
You may establish automated transfers of Account Values from the Funds on a
monthly or quarterly basis from the Aetna Variable Encore Fund to any other Fund
through written request or other method acceptable to the Company. You must have
a minimum of $5,000 allocated to the Aetna Variable Encore Fund in order to
enroll in the Dollar Cost Averaging program. The minimum automated transfer
amount is $50 per month. You may start or stop participation in the Dollar Cost
Averaging program at any time, but you must give the Company at least 30 days
notice to change any automated transfer instructions that are currently in
place. The Company reserves the right to suspend or modify automated transfer
privileges at any time.
Before participating in the Dollar Cost Averaging program, you should
consider the risks involved in switching between investments available under the
Policy. Dollar Cost Averaging requires regular investments regardless of
fluctuating price levels, and does not guarantee profits or prevent losses.
Therefore, you should carefully consider market conditions and each Fund's
investment policies and related risks before electing to participate in the
Dollar Cost Averaging Program.
WHAT IS THE MATURITY VALUE OF YOUR POLICY?
The Maturity Value of the Policy is the Total Account Value on the Maturity
Date, less the amount necessary to repay any loans in full.
WHAT IS THE CASH SURRENDER VALUE OF YOUR POLICY?
The Cash Surrender Value of your Policy is the amount you can receive in
cash by surrendering the policy. The Cash Surrender Value equals the Total
Account Value minus the applicable Surrender Charge, less the amount necessary
to repay any loans in full. As discussed earlier, your Policy's Total Account
Value is equal to the sum of the Fixed Account Value; Separate Account Value;
and Loan Account Value.
The Cash Surrender Value will never be less than zero. All or a part of the
Cash Surrender Value may be applied to one or more of the Settlement Options.
WHAT CHARGES OR DEDUCTIONS ARE MADE UNDER THE POLICY?
PREMIUM LOAD
This load represents average applicable state premium taxes (ranging up to
4%) as well as administrative expenses and federal income tax liabilities. For
AetnaVest Policies, a deduction of 2.50% of premiums paid (2.35% for California
issues) will be made. For AetnaVest II Policies, a deduction of 3.5% (guaranteed
to be no higher than 6%) will be made to cover such taxes and other expenses.
INSURANCE AND ADMINISTRATIVE CHARGES
Deductions are made from your Total Account Value on a periodic basis for
insurance and administrative costs. These insurance and administrative charges
and surrender charges are discussed below.
11
<PAGE>
The charges for insurance and administrative costs will vary from Policy to
Policy. They are broken down as follows:
(a) A Monthly Deduction is made from the Total Account Value. This deduction
includes charges for the Cost of Insurance, for any supplemental riders or
benefits, and for administrative expenses.
The Cost of Insurance is equal to the Amount at Risk (the Death Benefit
before deductions for loans, divided by 1.0036748, minus the Total Account
Value), multiplied by the Cost of Insurance Rate which will not exceed the
rate shown in the Policy. (Such rate varies according to the attained age,
premium class and, in most states, sex of the Insured, and is based on the
Commissioner's 1980 Standard Ordinary Mortality Tables (the "1980 CSO
Tables"), nonsmoker and smoker versions.)
Charges for any supplemental riders or benefits are described in the
applicable rider or benefit policy form.
For AetnaVest Policies, the monthly charge for administrative expenses
will not exceed $5, according to the table below:
AETNAVEST
ADMINISTRATIVE EXPENSES
<TABLE>
<CAPTION>
SPECIFIED AMOUNT
--------------------------
ATTAINED $100,000- $1,000,000 &
AGE 999,999 OVER
------------ ----------- -------------
<S> <C> <C> <C>
Up to 29 $ 5.00 $ 3.00
30-39 4.00 2.00
40-49 3.00 1.00
50-59 2.00 0.00
60-69 1.00 0.00
70 & Over 0.00 0.00
</TABLE>
For AetnaVest II Policies, the monthly charge for administrative
expenses in the first Policy Year is $20 and in all subsequent Policy Years,
the monthly charge is $5. The monthly administrative charge is for items
such as premium billing and collection, policy value calculation,
confirmations and periodic reports and will not exceed our costs.
The Monthly Deduction is deducted proportionately from each funding
option, if more than one is used. This is accomplished by cancelling
Accumulation Units and withdrawing the value of the cancelled Accumulation
Units from each funding option in the same proportion as their respective
values have to your Fixed Account and Separate Account Values. The Monthly
Deduction is made at the same time each month, beginning with the Issue
Date.
(b) A daily deduction at a rate not to exceed 0.90% per year (currently 0.70%)
is taken only from the Separate Account Value for mortality and expense
risks. This charge may be raised or lowered to reflect our expectations of
future mortality and expense experience.
(c) A daily deduction at a rate not to exceed 0.30% per year for AetnaVest, or
0.50% per year for AetnaVest II (currently 0.30% for both Policies), is also
taken from the Separate Account Value to pay for administrative expenses.
Once a Policy is issued, Monthly Deductions, including Cost of Insurance
charges, will be taken from your Policy Values as of the Issue Date, even if
the Issue Date is earlier than the date the application is signed (see
"Premiums"). If the Policy's issuance is delayed due to underwriting
requirements, the charges will not be assessed until the underwriting is
complete and the application for the policy is approved. Cost of Insurance
charges will be in amounts based on the Specified Amount of the Policy
issued, even if the temporary insurance coverage received during the
underwriting period is for a lesser amount. If we decline an application, we
will refund the full premium payment made.
SURRENDER CHARGE
There will also be a surrender charge if you surrender your Policy (in whole
or in part) before the end of ten years for AetnaVest Policies and fifteen years
for AetnaVest II Policies, from either the Policy Issue Date or from the
effective date of an increase in the Specified Amount under the Policy. The
Surrender Charge is imposed partially as a deferred sales charge, and also to
enable the Company to recover certain administrative costs.
The initial Surrender Charge is based on the Specified Amount. It also
depends on the Insured's Issue Age and, in most states, sex.
The dollar amount of the Surrender Charge will remain the same for five
years following the Issue Date. Thereafter, the charge will decline monthly for
the next five years so that, ten years after the Issue Date for AetnaVest
Policies and fifteen years after the Issue Date for AetnaVest II Policies
(assuming no increases in the Specified Amount), the Surrender Charge will be
zero.
12
<PAGE>
If you decrease the Specified Amount while the Surrender Charge applies, the
Surrender Charge will remain the same.
If you increase the Specified Amount (which you can do at any time after the
first Policy Year subject to satisfactory evidence of the Insured's
insurability), a new Surrender Charge will be applicable, in addition to the
then-existing Surrender Charge. This charge will be determined based on the
Insured's attained age, sex (in most states), and underwriting status at the
Issue Date. The Surrender Charge applicable to the increase will be 70% of the
Surrender Charge on a new policy whose Specified Amount equals the amount of the
increase, and will cover administrative expenses. The additional Surrender
Charge will also remain constant for five years from the start of the Policy
Year in which the increase occurs, and will decrease to zero at the end of ten
years for AetnaVest Policies and fifteen years for AetnaVest II Policies. See
the example in the box below.
The maximum portion of the Surrender Charge which is to be applied to
reimburse the Company for sales and promotional expenses will be 30% of the
first year's Basic Premium (if you surrender in full during that year). Full
surrenders after the first year will result in the imposition of the same dollar
Surrender Charge for the initial five years and, therefore, the sales expense
portion of the Surrender Charge (expressed as a percentage of Basic Premiums
paid) will decline after the first Policy Year.
AETNAVEST POLICIES: EXAMPLE OF IMPACT OF INCREASE IN
SPECIFIED AMOUNT ON THE SURRENDER CHARGE
This Example assumes that you bought a Policy with an initial Stated Amount
of $100,000 that had a Surrender Charge at the time of issue equal to $890. The
Example is intended to illustrate the impact of an increase in your Specified
Amount by $50,000 at the beginning of the third Policy Year. For any given year,
your Surrender Charge will be less than it would have been for someone who
simply purchased a brand new Policy with a Specified Amount of $150,000.
As noted above, for original Specified Amounts, the surrender charge is the
same for the first five Policy Years, and thereafter declines monthly until it
is $0 at the end of the tenth Policy Year. For any increase in Specified Amount,
the increase in Surrender Charge applies for five years from the date of
increase, and declines monthly thereafter until it is $0 at the end of the tenth
year following increase.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADDITIONAL
ORIGINAL SURRENDER CHARGE
SURRENDER CHARGE --
-- INCREASE IN
INITIAL SPECIFIED SPECIFIED AMOUNT TOTAL
BEGINNING OF AMOUNT AT THE BEGINNING SURRENDER
POLICY YEAR: OF $100,000 OF POLICY YEAR 3 CHARGES
1 $ 890.00 -- $ 890.00
2 890.00 -- 890.00
3 890.00 $ 489.50 1,379.50
4 890.00 489.50 1,379.50
5 890.00 489.50 1,379.50
6 890.00 489.50 1,379.50
7 712.00 489.50 1,201.50
8 534.00 489.50 1,023.50
9 356.00 391.60 747.60
10 178.00 293.70 471.70
11 0 195.80 195.80
12 0 97.90 97.90
13 0 0 0
</TABLE>
13
<PAGE>
AETNAVEST II POLICIES: EXAMPLE OF IMPACT OF INCREASE IN
SPECIFIED AMOUNT ON THE SURRENDER CHARGE
This Example assumes that you bought a Policy with an initial Stated Amount
of $100,000 that had a Surrender Charge at the time of issue equal to $890. The
Example is intended to illustrate the impact of an increase in your Specified
Amount by $50,000 at the beginning of the third Policy Year. For any given year,
your Surrender Charge will be less than it would have been for someone who
simply purchased a brand new Policy with a Specified Amount of $150,000.
As noted above, for original Specified Amounts, the surrender charge is the
same for the first five Policy Years, and thereafter declines monthly until it
is $0 at the end of the tenth Policy Year. For any increase in Specified Amount,
the increase in Surrender Charge applies for five years from the date of
increase, and declines monthly thereafter until it is $0 at the end of the tenth
year following increase.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ADDITIONAL
ORIGINAL SURRENDER CHARGE
SURRENDER CHARGE --
-- INCREASE IN
INITIAL SPECIFIED SPECIFIED AMOUNT TOTAL
BEGINNING OF AMOUNT AT THE BEGINNING SURRENDER
POLICY YEAR: OF $100,000 OF POLICY YEAR 3 CHARGES
1 $ 890.00 -- $ 890.00
2 890.00 -- 890.00
3 890.00 $ 489.50 1,379.50
4 890.00 489.50 1,379.50
5 890.00 489.50 1,379.50
6 890.00 489.50 1,379.50
7 801.00 489.50 1,290.50
8 712.00 489.50 1,201.50
9 623.00 440.55 1,063.55
10 534.00 391.60 925.60
11 445.00 342.65 787.65
12 356.00 293.70 649.70
13 267.00 244.75 511.75
14 178.00 195.80 373.80
15 89.00 146.85 235.85
16 0 97.90 97.90
17 0 48.95 48.95
18 0 0 0
</TABLE>
The Company may offer the Policy in a group arrangement in connection with a
multiple employer trust plan under which a trustee, employer or employers, or
other similar entity purchases a Policy which covers a group of individuals on a
group basis. Certificates replicating all the provisions of a Policy are issued
to individual employees. In such arrangements, an employer may permit group
solicitation of its employees for the pur-
chase of Policies on either a group or individual
basis.
The Company may reduce the Surrender Charge, the Monthly Deduction, or both,
in connection with Policies issued under such arrangements. Generally, sales and
administrative costs
per Policy vary with the size of the group or sponsored arrangement, its
stability as indicated by its term of existence and certain characteristics of
its members, the purposes for which Policies are purchased, and other factors.
The amount of reductions will be considered on a case-by-case basis and will
reflect the reduced sales effort and administrative costs expected as a result
of sales to a particular group or sponsored arrangement.
Based on its actuarial determination, the Company does not anticipate that
the Surrender Charge will cover all sales and administrative expenses which the
Company will incur in connection with the Policy. Any such shortfall, including
but not limited to, payment of sales and distribution
14
<PAGE>
expenses, would be charged to and paid by the Company.
WHEN DOES THE SURRENDER CHARGE APPLY?
A Surrender Charge applies when you make a full or partial surrender of the
Cash Surrender Value of the Policy, as described below.
FULL SURRENDERS
When you surrender your Policy for the full Cash Surrender Value, all
applicable Surrender Charges are imposed.
PARTIAL SURRENDERS
When you surrender part of your Policy, we will apply the same proportion of
the total applicable Surrender Charges as the amount to be paid bears to the
total Cash Surrender Value. Once you have made a partial surrender, or
surrenders, future applicable Surrender Charges will be reduced proportionately.
In addition, under Option 1, the Specified Amount will be reduced by the amount
surrendered.
Other rules apply to partial surrenders:
1. No partial surrender can be made until one year after the Issue Date;
2. The amount paid to you on a partial surrender must be at least $500;
3. If a partial surrender is made, there will be a transaction charge of $25 or
2% of the amount of the net surrender payment, whichever is less. The charge
will be made against the Total Account Value;
4. If, at the time of a partial surrender, your Total Account Value is
attributable to more than one funding option, both the Surrender Charge and
the amount paid to you upon the surrender will be taken proportionately from
the values accumulated in each funding option. You cannot select the funding
option to be used in the surrender;
5. A partial surrender will not be allowed if it would cause the Specified
Amount to drop below the minimum allowable Specified Amount; and
6. Partial surrenders may only be made prior to election of a settlement
option.
As mentioned previously, a partial surrender will also reduce the Death
Benefit (and the Specified Amount, if Option 1 is in effect), by the amount of
the reduction in your Total Account Value resulting from the surrender. If the
Specified Amount is reduced, the most recent increase in coverage is reduced
first, then the next most recent coverage, and so forth.
If the Death Benefit on an Option 1 Policy is calculated as a percentage of
the Total Account Value rather than as the Specified Amount, a partial surrender
will reduce the Specified Amount only if the partial surrender decreases the
difference between the Death Benefit and the Total Account Value. A partial
surrender will not reduce the Specified Amount of an Option 2 Policy.
Payment of any amount due from Separate Account Values on a full or partial
surrender will be made within seven calendar days after your written surrender
request is received at our Home Office, except that payment may be postponed
when the New York Stock Exchange has been closed and for such other periods as
the Securities and Exchange Commission may require. Payment of values from the
Fixed Account Value may be deferred for up to six months, except when used to
pay premiums to the Company.
If you surrender your Policy, in whole or in part, there may be tax
implications. Refer to "Tax Matters."
HOW MIGHT YOUR POLICY LAPSE?
WHAT EFFECT DOES A LAPSE HAVE?
A lapse occurs if your Monthly Deduction is greater than the Cash Surrender
Value and no payment to cover the deduction is made within 61 days of our
notifying you. This may happen after the first two Policy Years, or during the
first two Policy Years if your Basic Premiums are not current.
If the Cash Surrender Value of the Policy is insufficient to cover the
Monthly Deduction on the appropriate date, your insurance coverage will
terminate at the end of a 61-day Grace Period. The Grace Period begins with the
mailing of a notice to you, once we discover the insufficiency. We will require
the payment of the amount necessary to keep this Policy in force for the current
month, plus two additional months. During the Grace Period, a
15
<PAGE>
Policy has no Cash Surrender Value, so that if the Policy is terminated at the
end of the Grace Period, no money will be paid to you.
If your Policy's Cash Surrender Value is insufficient to cover the Monthly
Deduction on the appropriate date, an amount equal to the Monthly Deduction will
be removed from the Total Account Value and will not participate in investment
performance. If a premium payment is subsequently made and the Cash Surrender
Value exceeds the amount of the Monthly Deduction, or, within the first two
years the Basic Premiums are paid, the amount removed will be returned to the
Total Account Value and will resume participation in investment performance.
IF THE POLICY HAS LAPSED, CAN YOU
REINSTATE THE POLICY?
We will consider reinstatement within five years after the date of
termination (provided it is before the Maturity Date). We will require
satisfactory evidence of insurability. Regardless of when the Policy lapses, the
original and any additional tables of Surrender Charges that were issued on this
Policy will apply upon reinstatement. The Loan Account Value will be reinstated.
All values will be reinstated as of the date of the Policy's termination.
Under AetnaVest II Policies issued in most states, if the Policy lapses
during the first two Policy Years, the payment required at reinstatement will
equal the sum of Basic Premiums for each Monthly Deduction day to date, less
premiums previously paid. If the Policy lapses after the first two Policy Years,
you must make a premium payment that will cause the surrender value upon
reinstatement to equal three times the next monthly deduction.
For AetnaVest Policies, upon reinstatement, no Surrender Charge deduction
will apply to coverage which was in force for two or more years (one or more
years for multiple employer trust policies) prior to the date of termination.
For terminated coverage which was in force less than two years, future Surrender
Charges will not be reduced from the original schedule. If you request
reinstatement during the first two Policy Years, the premium required at
reinstatement will be the lesser of (a) a premium sufficient to pay for three
Monthly Deductions plus any applicable Surrender Charge; or (b) overdue Basic
Premiums.
CAN YOU BORROW ON YOUR POLICY?
If you purchase an AetnaVest Policy you may borrow against your Policy after
the end of the second Policy Year (in California and Texas, after the end of the
first Policy Year). AetnaVest II Policy Owners may borrow against their Policy
beginning in the first Policy Year. For all Policies, loans must be taken before
the election of a settlement option.
The most you can borrow is 90% (100% for AetnaVest II policies issued in
Texas) of the Fixed Account and Separate Account Values less the Surrender
Charge applicable at the time of the loan. Interest on the loan, including
preferred loans (as described below), will accrue at 8% per year, payable once a
year at each anniversary of the loan. Any interest not paid when due becomes
part of the loan and bears interest.
The Loan Account Value is credited with the amount of any loans you make on
your Policy, as collateral. The Loan Account Value is credited with interest at
a rate of at least 4.5% per year (6% in New York). Such credited interest is
transferred out of the Loan Account Value monthly and reallocated
proportionately to the applicable funding options.
Beginning in the eleventh Policy Year, up to 10% of the maximum loan amount
available, at the beginning of a Policy Year, can be taken as a preferred loan
during that Policy Year. Amounts borrowed in excess of the maximum loan amount
available for a preferred loan will not be considered a preferred loan. The
portion of the Loan Account Value equal to the preferred loan will be credited
at the policy loan interest rate of 8% per year. The portion of the Loan Account
Value not considered a preferred loan will be credited interest as described in
"What Is the Cash Surrender Value of Your Policy?" The preferred loan feature is
only available in approving states as stated in your Policy.
If you are using more than one underlying funding option, the amount of the
loan will be withdrawn in proportion to the value held in each funding option.
You cannot select the funding option to be used for the loan.
16
<PAGE>
The amount you receive as a result of the loan will, together with any
accrued but not paid interest, constitute the Loan Account Value. Repayments on
the loan will be allocated among the funding options in the same proportion the
loan was taken from the funding options. The Loan Account Value will be reduced
by the amount of any loan repayment.
CAN YOU CHANGE THE AMOUNT OF
YOUR INSURANCE COVERAGE?
Beginning one year after the Issue Date, you may increase or decrease the
Specified Amount of your Policy as follows:
1. For an increase, we will require satisfactory evidence of insurability
unless there is no increase in the Amount at Risk;
2. The Cash Surrender Value at the time of an increase must be at least three
times the sum of (a) the most recent Monthly Deduction from Total Account
Value and (b) the amount of the increase, divided by 1000, times the
applicable Cost of Insurance Rate;
3. An increase in the Specified Amount will increase the Surrender Charge
unless there is no increase in the Amount at Risk;
4. Increases are limited to four times the original Specified Amount;
5. Decreases in the Specified Amount will not decrease the Surrender Charge or
your Basic Premium. Decreases during the second year after the Issue Date
will usually not enable you to reduce your Planned Premium below the Basic
Premium without lapsing the Policy;
6. No decrease may reduce the Specified Amount to less than the then-current
minimum for this type of Policy;
7. The decrease will be applied first to the most recent coverage under the
Policy, then to the next most recent, and so forth.
You can also change from one Death Benefit Option to the other.
The Specified Amount will be changed when a change in Death Benefit Option
is made. If the change is from Option 1 to Option 2, the new Specified Amount
will equal the Amount at Risk as of the date of the change. If the change is
from Option 2 to Option 1, the new Specified Amount will equal the Death Benefit
as of the date of the change.
A change in Death Benefit Option will not be allowed if the new Specified
Amount would be less than the then-current minimum. We may require satisfactory
evidence of insurability before allowing the change. There will be no change in
the Surrender Charge (either increase or decrease) at the time of a change in
Death Benefit Option.
WHAT IS THE "FREE-LOOK PERIOD"?
The Policy has a "Free-Look Period" during which it may be returned to our
Home Office for a refund. You may return it to our Home Office within ten days
after you receive the Policy and the written notice of withdrawal right, or
within 45 days after you sign the application for the Policy, whichever occurs
latest.
The refund will be the sum of (1) the difference between payments made and
amounts allocated to the Separate Account, (2) the value of the amount allocated
to the Separate Account as of the date the returned Policy is received by us,
and (3) any fees imposed on the amounts allocated to the Separate Account. If
state law does not permit such a refund, then the refund will equal premiums
paid, without interest. Refunds will usually occur within seven days of notice
of cancellation, although a refund of premiums paid by check may be delayed
until the check clears your bank.
CAN YOU EXCHANGE YOUR POLICY?
You may exchange the AetnaVest Policy for a period of two years after the
Issue Date, for a new adjustable premium policy issued by the Company, under
which policy values and benefits do not vary with the investment performance of
a Separate Account. The new policy will have the same Issue Date as the old
Policy, and no evidence of insurability will be required. Since your Total
Account Value will be transferred from the old Policy to the new policy in its
entirety, the Cash Surrender Value under the new policy cannot exceed the Cash
Surrender Value under the old Policy at the time of exchange. We have the right
to adjust the Cash Surrender Value under the new policy to make sure this is the
case. You have the right to select whether the new policy has the same Death
Benefit or net amount at risk as the old Policy. There may be a
17
<PAGE>
charge due to the Company, or a refund due to the Policy Owner, equal to the
difference in cash value between the old Policy and the new policy.
For AetnaVest II Policies you may simply transfer the entire Separate
Account Value of your Policy to the Fixed Account. No charge will be made for
any such transfer.
HOW WILL THE DEATH BENEFIT BE PAID?
The Death Benefit under the Policy will be paid in a lump sum within seven
days after we receive due proof of death (a certified copy of the death
certificate), unless you or the beneficiary have elected that it be paid under
one or more of the Settlement Options described below.
Payment of the Death Benefit may be delayed if the Policy is being
contested. While the Insured is living, you may elect a Settlement Option for
the beneficiary and deem it irrevocable. You may revoke or change a prior
election. The beneficiary may make or change an election within 90 days of the
death of the Insured, unless you have made an irrevocable election. A
beneficiary who has elected Settlement Option 1 may elect another option within
two years after the Insured's death.
All or a part of the proceeds of the Death Benefit may be applied under one
or more of the following Settlement Options, or such options as we may choose to
make available in the future.
If the Policy is assigned as collateral security, we will pay any amount due
the assignee in one lump sum. Any excess Death Benefit proceeds due will be paid
as elected.
SETTLEMENT OPTIONS
WHEN DO PAYMENTS UNDER A
SETTLEMENT OPTION OCCUR?
Proceeds in the form of Settlement Options are payable by the Company upon
the Insured's death; upon Maturity of the Policy; or upon election of one of the
following Settlement Options or any we make available (after any applicable
surrender charges have been deducted).
A written request is required to elect, change, or revoke a Settlement
Option. This request will take effect upon receipt or recording of the written
request, in good order, at our Home Office.
The first variable Settlement Option payment will be as of the tenth
Valuation Period following the receipt of the properly completed election form.
WHAT ARE THE SETTLEMENT OPTIONS?
The Settlement Options are as follows:
Option 1--Payment of interest on the sum left with us;
Option 2--Payments for a stated number of years, at least three but no more
than thirty;
Option 3--Payments for the lifetime of the Annuitant. If also chosen, we
will guarantee payments for 60, 120, 180 or 240 months;
Option 4--Payments during the joint lifetimes of two Annuitants. At the
death of either, payments will continue to the survivor. When this option is
chosen, a choice must be made of:
(a) 100% of the payment to continue to the survivor;
(b) 66 2/3% of the payment to continue to the survivor;
(c) 50% of the payment to continue to the survivor;
(d) Payments for a minimum of 120 months, with 100% of the payment to
continue to the survivor;
(e) 100% of the payment to continue to the survivor if the survivor is the
Annuitant, and 50% of the payment to continue to the survivor if the
survivor is the Second Annuitant.
In most states, no election may be made that would result in a first payment
of less than $25 or that would result in total yearly payments of less than
$120. If the value of the Policy is insufficient to elect an option for the
minimum amount specified, a lump-sum payment must be elected.
Proceeds applied under Option 1 will be held by us in the General Account.
Proceeds in the General Account will be used to make payments on a fixed dollar
basis. We will add interest to such proceeds at an annual rate of not less than
3.5%. We may add interest daily at any higher rate.
Under Option 1, the Annuitant may later tell the Company to (a) pay to him
or her a portion or
18
<PAGE>
all of the sum held by the Company; or (b) apply a portion or all of the sum
held by the Company to another settlement option.
Proceeds applied under Options 2, 3 and 4 will be held (a) in the General
Account; or (b) in Variable Annuity Account B, invested in one or more of the
available investment options; or (c) a mix of (a) and (b). Proceeds in Variable
Annuity Account B will be used to make payments on a variable basis.
If payments are to be funded on a variable basis, the first and subsequent
payments will vary depending on the Assumed Net Investment Rate. This rate will
be 3.5% per annum, unless a 5% annual rate is chosen. The Assumed Net Investment
Rate is chosen by the payee.
Selection of a 5% rate causes a higher first payment, but subsequent
payments will increase only to the extent the actual net investment rate exceeds
5% on an annualized basis, and they will decline if the rate is less than 5%.
Use of the 3.5% Assumed Net Investment Rate causes a lower first payment, but
subsequent payments will increase more rapidly or decline more slowly as changes
occur in the actual net investment rate. The investment performance of the
underlying funding option(s) must equal such assumed rate, plus enough to cover
the mortality and expense risk and administrative fee charges, if future
payments on a variable basis are to remain level.
If payments on a variable basis are not to decrease, gross return on the
assets of the underlying funding option must be:
(a) 4.75% on an annual basis, plus an annual return of up to .25% needed to
offset the administrative charge in effect at the time Settlement Option
payments start, if an Assumed Net Investment Rate of 3.5% is chosen; or
(b) 6.25% on an annual basis, plus an annual return of up to .25% needed to
offset the administrative charge in effect at the time Settlement Option
payments start, if an Assumed Net Investment Rate of 5% is chosen.
Option 2, 3, or 4 may be chosen on a fixed dollar basis. However, if the
guaranteed payments are less than the payments which would be made from the
purchase of the Company's current single premium immediate annuity, the larger
payment will be made instead.
As to funds held under Option 1, the Annuitant may elect to make a
withdrawal or to change options. Under Option 2, if payments are made on a
variable basis, the current value may be withdrawn at any time. Amounts held in
the Fixed Account may not be withdrawn under Option 2. No withdrawals or changes
of option may be made under Options 3 and 4.
When an Annuitant dies while receiving payments under Option 2, 3 or 4, the
present value of any remaining guaranteed payments will either be paid in one
sum to the beneficiary, or upon election by the beneficiary, any remaining
guaranteed payments will continue to the beneficiary. If no beneficiary exists,
the present value of any remaining guaranteed payments will be paid in one sum
to the Annuitant's estate. If the Annuitant dies while receiving payments under
Option 1, the current value of the Option will be paid in one sum to the
beneficiary, or to the Annuitant's estate.
If a beneficiary dies (and there is no contingent beneficiary), while
receiving payments, the current value of the account (Option 1), or the present
value of any remaining guaranteed payments will be paid in one sum to the estate
of the beneficiary. The interest rate used to determine the first payment will
be used to calculate the present value.
Payments will be made upon receipt of a written request filed with us. If no
settlement election has been made by the Policy Owner when the beneficiary
becomes entitled to proceeds, the beneficiary may make the election.
HOW WILL YOUR VARIABLE SETTLEMENT OPTION PAYMENTS BE CALCULATED?
When you have chosen payment on a variable basis, the first payment is
calculated as follows:
(a) the portion of the proceeds applied to make payments on the variable
basis; divided by
(b) 1000; times
(c) the payment rate for the Option chosen.
Such amount, or portion, of the variable payment will be divided by the
Settlement Option Unit Value (described below), as of the tenth Valuation Period
before the due date of the first payment, to determine the number of Settlement
Option Units.
19
<PAGE>
Each future payment is equal to the number of Settlement Option Units, times the
Settlement Option Unit Value as of the tenth Valuation Period prior to the due
date of the payment.
For any Valuation Period, the Settlement Option Unit Value is equal to:
(a) The Settlement Option Unit value for the previous Valuation Period;
times
(b) The Net Return Factor (as defined below) for the Valuation Period; times
(c) A factor to reflect the Assumed Net Investment Rate. The factor for 3.5%
per year is .9999058; for 5% per year, it is .9998663.
The Net Return Factor equals:
(i) The net assets of the applicable fund held in Variable Annuity
Account B at the end of a Valuation Period, minus
(ii) The net assets of the applicable fund held in Variable Annuity
Account B at the beginning of that Valuation Period, plus or minus
(iii) Taxes or provision for taxes, if any, attributable to the
operations of Variable Annuity Account B, divided by
(iv) The value of Settlement Option Units and other accumulation units
held in Variable Annuity Account B at the beginning of the Valuation
Period, minus
(v) A daily charge at an annual rate of 1.25% for annuity mortality and
expense risk and a daily administrative expense charge that will not
exceed .25% on an annual basis.
The number of Settlement Option Units remains fixed. However, the dollar
value of the Settlement Option Unit Values and the payment may increase or
decrease due to investment gain or loss.
Payments will not be affected by changes in the mortality or expense results
or administrative charges.
DESCRIPTION OF THE COMPANY AND
THE SEPARATE ACCOUNTS
THE COMPANY
The Aetna Life Insurance and Annuity Company is a stock life insurance
company organized under the insurance laws of the State of Connecticut in 1976.
Through a merger, it succeeded to the business of Aetna Variable Annuity Life
Insurance Company (formerly Participating Annuity Life Insurance Company
organized in 1954). The Company is engaged in the business of issuing life
insurance policies and annuity contracts in all states of the United States. The
Company is a wholly owned subsidiary of Aetna Retirement Services, Inc., which
is in turn a wholly owned subsidiary of Aetna Life and Casualty Company.
The Company is registered as an investment adviser under the Investment
Advisers Act of 1940. It is also registered as a broker-dealer under the
Securities Exchange Act of 1934 and is a member of the National Association of
Securities Dealers, Inc.
THE SEPARATE ACCOUNT
The Separate Account established for the purpose of providing Variable
Options to fund the Policy is Variable Life Account B. Amounts allocated to the
Separate Account are invested in the Funds. Each of the Funds is an open-end
management investment company whose shares are purchased by the Separate Account
to fund the benefits provided by the Policy. The Funds currently available under
the Separate Account, including their investment objectives and their investment
advisers, are described in this Prospectus. Complete descriptions of the Funds'
investment objectives and restrictions and other material information relating
to an investment in the Funds are contained in the prospectuses for each of the
Funds which accompany this Prospectus.
Variable Life Account B was established pursuant to a June 18, 1986,
resolution of the Board of Directors of the Company. Under Connecticut Insurance
Law, the income, gains or losses of the Separate Account are credited without
regard to the other income, gains or losses of the Company. These assets are
held for the Company's variable life insurance policies. Any and all
distributions made by the Funds with respect to shares held by
20
<PAGE>
the Separate Account will be reinvested in additional shares at net asset value.
The assets maintained in the Separate Account will not be charged with any
liabilities arising out of any other business conducted by the Company. The
Company is, however, responsible for meeting the obligations of the Policy to
the Policy Owner.
No stock certificates are issued to the Separate Account for shares the
Funds held in the Separate Account. Ownership of Fund shares is documented on
the books and records of the Funds and of the Company for the Separate Account.
The Separate Account is registered with the SEC as a unit investment trust
under the Investment Company Act of 1940 and meets the definition of separate
account under the federal securities laws. Such registration does not involve
any approval or disapproval by the Commission of the Separate Account or the
Company's management or investment practices or policies. The Company does not
guarantee the Separate Account's investment performance.
21
<PAGE>
DIRECTORS AND OFFICERS OF THE COMPANY
<TABLE>
<CAPTION>
POSITIONS AND
OFFICES PRINCIPAL OCCUPATION
NAME AND ADDRESS* WITH THE COMPANY DURING PAST FIVE YEARS
<S> <C> <C>
--------------------------------------------------------------------------------
Daniel P. Kearney Director; Executive Vice President (since December
President and 1993), and Group Executive, Financial
Chairman; Division (February 1993 -- December
Executive 1993), Aetna Life and Casualty Company;
Committee; Director, Aetna Insurance Company of
Principal America (since February 1993); Director
Executive Officer and Chairman, Aetna Realty Investors,
Inc. (since January 3, 1992); Director
of MBIA, Inc. (since 1992); Director,
Margarettan Financial Corporation,
Edison, New Jersey (1992-1994)
David E. Bushong Acting Chief Vice President, Corporate Planning
Financial Officer Finance and Administration (November
1992 -- March 1994), Vice President,
Bond Investment, Portfolio Management
(March 1994 -- July 1994) for Aetna Life
Insurance Company, The Aetna Casualty
and Surety Company, The Standard Fire
Insurance Company, 151 Farmington
Avenue, Hartford, CT 06156.
Timothy A. Holt Vice President, Head of Business Strategy and Finance
ALIAC Investments (since February 1996), Aetna Retirement
Services; Vice President (since June
1991), ALIAC Investments; Treasurer
(February 1990 --July 1991) Aeltus
Investment Management, Inc.; Vice
President and Treasurer (August 1989 --
June 1991) Financial Division
Christopher J. Director (1991); Director, Aetna Financial Services, Inc.
Burns Senior Vice (since January 1996); Director (since
President, Life; July 1993) of Aetna Investment Services,
Member of Inc.; Director (February 1992 --
Executive December 1993) and Senior Vice President
Committee (December 1992 -- December 1993) of
Aetna Insurance Company of America;
Director (1992 -- April 1995) and Senior
Vice President, North American
Operations (1993 -- April 1995) of Aetna
International, Inc.; Director and member
of Investment Committee (1992 -- March
1995) of Aetna Life Insurance Company of
Canada; Director (1992 -- May 1995) of
Seguros Monterrey Aetna, S.A.; Director
(1992 -- May 1995) of Fianzas Monterrey
Aetna S.A.; Series "B" Director (1992 --
May 1995) of Valores Monterrey Aetna
S.A. de C.V.
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
POSITIONS AND
OFFICES PRINCIPAL OCCUPATION
NAME AND ADDRESS* WITH THE COMPANY DURING PAST FIVE YEARS
--------------------------------------------------------------------------------
<S> <C> <C>
Laura R. Estes Director and Director, Aetna Financial Services, Inc.
Senior Vice (since January 1996); Director and
President, ALIAC Senior Vice President, Aetna Insurance
Pension; Member of Company of America (since February
Executive 1993); Director, Aetna Investment
Committee Services, Inc. (since July 1993)
John Y. Kim Director and President, Chief Executive Officer and
Senior Vice Chief Investment Officer, Aeltus
President, ALIAC Investment Management, Inc. (since
Investments November 28, 1995); Chief Investment
Officer, Aetna Life and Casualty Company
(since May 1994); Managing Director,
Mitchell Hutchins Institutional
Investors, New York, NY (September 1993
-- April 1994)
Shaun P. Mathews Director and Director and Chief Operations Officer
Senior Vice (since July 1993), President (since
President, March 1994), and Chief Executive (since
Strategic Markets October 1995) of Aetna Investment
and Products Services, Inc.; Director and Senior Vice
President, Aetna Insurance Company of
America (since February 1993); Vice
President of Aetna Life Insurance
Company (since 1991)
Gail P. Johnson Director, Vice Vice President, Sales and Service (since
President, Annuity February 1996) Aetna Retirement
Services; Vice President, Defined
Benefit Services (September 1994 --
February 1996) ALIAC; Vice President,
Plan Services (December 1992 --
September 1994) ALIAC; Managing
Director, Business Strategy (July 1991
-- December 1992) ALIAC
Glen Salow Vice President, Vice President (since August 1992)
Information Information Tehnology; Senior Vice
Technology President (December 1986 -- August 1992)
Lehman Brothers
Creed Terry Vice President, Vice President (since August 1995)
Select & Manage Select and Manage Markets, Strategic
Markets, ALIAC Marketing; President (1991 -- 1995)
Strategic Chemical Bank; Senior Vice President
Marketing (1989 -- 1991) Chemical Bank
Zoe Baird Senior Vice Senior Vice President and General
President and Counsel of Aetna Life and Casualty
General Counsel Company (since April 1992); Director,
Zurn Industries, Inc., Erie,
Pennsylvania (since April 1993);
Director, Southern New England
Telecommunication Corp. and Southern New
England Telephone Company, New Haven, CT
(since November 1990)
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
POSITIONS AND
OFFICES PRINCIPAL OCCUPATION
NAME AND ADDRESS* WITH THE COMPANY DURING PAST FIVE YEARS
--------------------------------------------------------------------------------
<S> <C> <C>
Susan Schechter Counsel and Counsel, Aetna Life and Casualty Company
Corporate (since November 1993); Corporate
Secretary Secretary and Counsel, Aetna Life
Assignment Company (since June 1994)
Fred J. Franklin Vice President and Chief Compliance Officer, Aetna
Chief Compliance Investment Services, Inc. (since October
Officer 1995); Chief Operating Officer and
General Counsel, Barclay Investments,
Inc., Providence, RI (January 1991 --
November 1993)
Eugene M. Trovato Vice President, Vice President, Controller, (February
Chief Accounting 1995 -- Present), Assistant Vice
Officer and President Planning, Reporting, and
Corporate Analysis (October 1992 -- February
Controller 1995), Aetna Life Insurance and Annuity
Company
James C. Hamilton Treasurer Chief Financial Officer, Aetna
Investment Services, Inc. (since July
1993); Director, Vice President and
Treasurer, Aetna Insurance Company of
America (since February 1993); Director,
Aetna Private Capital, Inc. (since
November 1990); Vice President and
Actuary of Aetna Life Insurance Company
(since 1988)
</TABLE>
- --------------
* The address of all Directors and Officers listed is 151 Farmington Avenue,
Hartford, Connecticut.
These individuals may also be directors and/or officers of other affiliates of
the Company.
REPORTS TO POLICY OWNERS
Within 30 days after each Policy Anniversary and before proceeds are applied
to a settlement option, we will send you a report containing the following
information:
1. A statement of changes in Total Account Value and Cash Surrender Value since
the prior report or since the Issue Date, if there has been no prior report.
This includes a statement of monthly deductions and investment results and
any interest earnings for the report period;
2. Cash Surrender Value, Death Benefit, and any Loan Account Value, as of the
Policy Anniversary;
3. A projection of Total Account Value, Loan Account Value and Cash Surrender
Value as of the succeeding Policy Anniversary.
If you have Policy values funded in either Separate Account you will receive
such additional periodic reports as may be required by the SEC.
Some state laws require additional reports; these requirements vary from
state to state.
RIGHT TO INSTRUCT VOTING OF FUND SHARES
In accordance with our view of present applicable law, We will vote the
shares of each of the Funds held in the Separate Account in accordance with
instructions received from Policy Owners having a voting interest in the Funds.
Policy Owners having such an interest will receive periodic reports relating to
the Fund, proxy material and a form for giving voting instructions. The number
of shares which You have a right to vote will be determined as of a record date
established by the Fund. The number of votes that You are entitled to direct
with respect to a Fund will be determined by dividing the portion of Your Total
Account Value attributable to that Fund by the net asset value of one share in
the Fund. Voting instructions will be solicited by written communication at
least 14 days before such meeting.
24
<PAGE>
The votes will cast at meetings of the shareholders of the Fund and will be
based on instructions received from Policy Owners. However, if the Investment
Company Act of 1940 or any regulations thereunder should be amended or if the
present interpretation thereof should change, and as a result We determine that
We are permitted to vote the shares of the Fund in our own right, We may elect
to do so.
Fund shares for which no timely instructions are received, and Fund shares
which are not otherwise attributable to Policy Owners, will be voted by us in
the same proportion as the voting instructions which are received for all
Policies participating in each Fund through the Separate Account.
Policy Owners having a voting interest will receive periodic reports
relating to the Fund, proxy material and a form for giving voting instructions.
DISREGARD OF VOTING INSTRUCTIONS
We may, when required by state insurance regulatory authorities, disregard
voting instructions if the instructions require that the shares be voted so as
to cause a change in the sub-classification or investment objectives of a Fund
or to approve or disapprove an investment advisory contract for a Fund. In
addition, we may disregard voting instructions in favor of changes initiated by
a Policy Owner in the investment policy or the investment adviser of a Fund if
we reasonably disapprove of such changes.
A change would be disapproved only if the proposed change is contrary to
state law or prohibited by state regulatory authorities or we determined that
the change would have an adverse effect on the Separate Accounts in that the
proposed investment policy for a Fund may result in overly speculative or
unsound investments. In the event we do disregard voting instructions, a summary
of that action and the reasons for such action will be included in the next
annual report to Policy Owners.
STATE REGULATION
The Company is subject to regulation and supervision by the Insurance
Department of the State of Connecticut, which periodically examines its affairs.
It is also subject to the insurance laws and regulations of all jurisdictions
where we are authorized to do business. The Policies have been approved by the
Insurance Department of the State of Connecticut and in other jurisdictions.
We are required to submit annual statements of our operations, including
financial statements, to the insurance departments of the various jurisdictions
in which we do business, for the purposes of determining solvency and compliance
with local insurance laws and regulations.
The Policies are offered for sale in all jurisdictions where we are
authorized to do business except the District of Columbia, Guam, Puerto Rico,
and the Virgin Islands.
LEGAL MATTERS
The Company knows of no material legal proceedings pending to which either
Separate Account is a party or which would materially affect either Separate
Account.
The legal validity of the securities described in the Prospectus has been
passed on by Susan E. Bryant, Counsel.
ADDITIONAL INFORMATION
THE REGISTRATION STATEMENT
A Registration Statement under the Securities Act of 1933 has been filed
with the SEC relating to the offering described in this Prospectus. This
Prospectus does not include all the information set forth in the Registration
Statement, certain portions of which have been omitted pursuant to the rules and
regulations of the SEC. The omitted information may be obtained at the SEC's
principal office in Washington, D.C., upon payment of the SEC's prescribed fees.
DISTRIBUTION OF THE POLICIES
The Company will serve as underwriter of the securities offered hereunder as
defined by the federal securities laws. The Company is registered as a
broker-dealer with the SEC and is a member of the National Association of
Securities Dealers, Inc. The Company will contract with one or more registered
broker-dealers including broker-dealers affiliated with it ("Distributors") to
offer and sell the Policies. The Company may also offer and sell policies
directly. All persons selling the Policies will be registered representatives of
the Distributors, and will also be licensed as insurance agents to sell variable
life insurance.
25
<PAGE>
The maximum commission payable by the Company to salespersons and their
supervising broker-dealers for policy distribution is 55% of the initial Basic
Premium or, in the event of an increase in the Specified Amount, 55% of the
Basic Premium attributable to the increase. In particular circumstances, we may
also pay certain of these professionals for their administrative expenses.
The Company may also contract with independent third party broker-dealers
who will act as wholesalers by assisting the Company in finding broker-dealers
to offer and sell the Policies. These parties may also provide training,
marketing and other sales related functions for the Company and other
broker-dealers and may provide certain administrative services to the Company in
connection with the Policies. The Company may pay such parties compensation
based on premium payments for the Policies purchased through broker-dealers
selected by the wholesaler.
RECORDS AND ACCOUNTS
All records and accounts relating to the Separate Accounts and the Funds
will be maintained by the Company. All reports required to be made and
information required to be given will be provided by the Company.
EXPERTS
KPMG Peat Marwick, LLP, CityPlace II, Hartford, Connecticut, are the
independent auditors for the Separate Account and for the Company. The services
provided to the Separate Account include primarily the examination of the
Separate Accounts' financial statements and the review of filings made with the
SEC. The financial statements of the Company will be provided in a Pre-Effective
Amendment to the Registration Statement.
Actuarial matters in this prospectus have been examined by John Dinius, Vice
President & Actuary of the Company. His opinion is filed as an exhibit to the
registration statement filed by the Company with the SEC.
TAX MATTERS
GENERAL
The following is a discussion of the federal income tax considerations
relating to the Policies. This discussion is based on the Company's
understanding of federal income tax laws as they now exist and are currently
interpreted by the Internal Revenue Service ("IRS"). These laws are complex, and
tax results may vary among individuals. A person or persons contemplating the
purchase of or the exercise of elections under the Policy described in this
Prospectus should seek competent tax advice.
FEDERAL TAX STATUS OF THE COMPANY
The Company is taxed as a life insurance company in accordance with the
Internal Revenue Code of 1986, as amended ("Code"). For federal income tax
purposes, the operations of each Separate Account form a part of the Company's
total operations and are not taxed separately, although operations of each
Separate Account are treated separately for accounting and financial statement
purposes.
Both investment income and realized capital gains of the Separate Account
(i.e., income, capital gains and dividends distributed to the Separate Account
by the Funds) are reinvested without tax since the Code does not impose a tax on
the Separate Account for these amounts. The Company reserves the right, however,
to make a deduction for such taxes should they be imposed with respect to such
items in the future.
LIFE INSURANCE QUALIFICATION
Section 7702 of the Code includes a definition of life insurance for tax
purposes. The Secretary of the Treasury has been granted authority to prescribe
regulations to carry out the purposes of this section, and proposed regulations
governing mortality charges were issued in 1991. The Company believes that the
Policy meets the statutory definition of life insurance. As such, and assuming
the diversification standards of Section 817(h) (discussed below) are satisfied,
then except in limited circumstances (a) death benefits paid under the Policy
should generally be excluded from the gross income of the beneficiary for
federal income tax purposes under Section 101(a)(1) of the Code, and (b) a
Policy Owner should not generally be taxed on the cash value under a Policy,
including increments thereof, prior to actual receipt. The principal exceptions
to these rules are corporations that are subject to the alternative minimum tax,
and thus may be subject to tax on increments in the Policy's Total Account
Value, and Policy Owners who acquire a Policy in a "transfer for value" and thus
can
26
<PAGE>
become subject to tax on the portion of the Death Benefit which exceeds the
total of their cost of acquisition and subsequent premium payments.
The Company intends to comply with any future final regulations issued under
Sections 7702 and 817(h) of the Code, and therefore reserves the right to make
such changes as it deems necessary to ensure such compliance. Any such changes
will apply uniformly to affected Policy Owners and will be made only after
advance written notice.
GENERAL RULES
Upon the surrender or cancellation of any Policy, whether or not it is a
Modified Endowment Contract, the Policy Owner will be taxed on the Surrender
Value only to the extent that it exceeds the gross premiums paid less prior
untaxed withdrawals. The amount of any unpaid Policy Loans will, upon surrender,
be added to the Surrender Value and will be treated for this purpose as if it
had been received.
Assuming the Policy is not a Modified Endowment Contract, the proceeds of
any partial surrenders are generally not taxable unless the total amount
received due to such surrenders exceeds total premiums paid less prior untaxed
partial surrender amounts. However, partial surrenders made within the first 15
Policy Years may be taxable in certain limited instances where the Surrender
Value plus any unpaid Policy debt exceeds the total premiums paid less the
untaxed portion of any prior partial surrenders. This result may occur even if
the total amount of any partial surrenders does not exceed total premiums paid
to that date.
Loans received under the Policy will ordinarily be considered indebtedness
of the Policyowner, and assuming the Policy is not considered a Modified
Endowment Contract, Policy Loans will not be treated as current distributions
subject to tax. Generally, amounts of loan interest paid by individuals will be
considered nondeductible "personal interest."
MODIFIED ENDOWMENT CONTRACTS
A class of contracts known as "Modified Endowment Contracts" has been
created under Section 7702A of the Code. The tax rules applicable to loan
proceeds and proceeds of a partial surrender of any Policy that is considered to
be a Modified Endowment Contract will differ from the general rules noted above.
A contract will be considered a Modified Endowment Contract if it fails the
"7-pay test." A Policy fails the 7-pay test if, at any time in the first seven
Policy Years, the amount paid into the Policy exceeds the amount that would have
been paid had the Policy provided for the payment of seven (7) level annual
premiums. In the event of a distribution under the Policy, the Company will
notify the Policyowner if the Policy is a Modified Endowment Contract.
Each Policy is subject to retesting under the 7-pay test during the first
seven Policy Years and at any time a material change takes effect. A material
change, for these purposes, includes the exchange of a life insurance policy for
another life insurance policy or the conversion of a term life insurance policy
into a whole life or universal life insurance policy. In addition, an increase
in the future benefits provided constitutes a material change unless the
increase is attributable to (1) the payment of premiums necessary to fund the
lowest Death Benefit payable in the first seven Policy Years or (2) the
crediting of interest or other earnings with respect to such premiums. A
reduction in death benefits during the first seven Policy Years may also cause a
Policy to be considered a Modified Endowment Contract.
If the Policy is considered to be a Modified Endowment Contract, the
proceeds of any Partial Surrenders and any Policy Loans will be currently
taxable to the extent that the Policy's Total Account Value immediately before
payment exceeds gross premiums paid (increased by the amount of loans previously
taxed and reduced by untaxed amounts previously received). These rules may also
apply to Policy Loans or partial surrender proceeds received during the two-year
period prior to the time that a Policy becomes a Modified Endowment Contract. If
the Policy becomes a Modified Endowment Contract, it may be aggregated with
other Modified Endowment Contracts purchased by you from the Company (and its
affiliates) during any one calendar year for purposes of determining the taxable
portion of withdrawals from the Policy.
A penalty tax equal to 10% of the amount includable in income will apply to
the taxable portion of the proceeds of any policy surrender or Policy Loan
received by any Policyowner of a Modified Endowment Contract who is not an
individual. The penalty tax will also apply where taxable
27
<PAGE>
Policy Loans are received by an individual who has not reached the age of
59 1/2. Taxable policy distributions made to an individual who has not reached
the age of 59 1/2 will also be subject to the penalty tax unless those
distributions are attributable to the individual becoming disabled, or are part
of a series of equal periodic payments made not less frequently than annually
for the life or life expectancy of such individual (i.e., an annuity).
DIVERSIFICATION STANDARDS
Section 817(h) of the Code provides that separate account investments (or
the investments of a mutual fund, the shares of which are owned by separate
accounts of insurance companies) underlying the Policy must be "adequately
diversified" in accordance with Treasury regulations in order for the Policy to
qualify as life insurance. The Treasury Department has issued regulations
prescribing the diversification requirements in connection with variable
contracts. The Separate Account, through the Funds, intends to comply with these
requirements.
INVESTOR CONTROL
In certain circumstances, owners of variable contracts may be considered the
owners for federal income tax purposes of the assets of the separate account
used to support their contracts. In those circumstances, income and gains from
separate account assets would be includable in the variable contractowner's
gross income. In several rulings published prior to the enactment of Section
817(h), the IRS stated that a variable contractowner will be considered the
owner of separate account assets if the contractowner possesses incidents of
ownership in those assets, such as the ability to exercise investment control
over the assets. The Treasury Department has also announced, in connection with
the issuance of regulations under Section 817(h) concerning diversification,
that those regulations "do not provide guidance concerning the circumstances in
which investor control of the investments of a segregated asset account may
cause the investor (i.e., you), rather than the insurance company, to be treated
as the owner of the assets in the account." This announcement also stated that
guidance would be issued by way of regulations or rulings on the "extent to
which policyholders may direct their investments to particular Funds without
being treated as owners of the underlying assets." As of the date of this
Prospectus, no such guidance has been issued.
The ownership rights under the Policy are similar to, but different in
certain respects from those described by the IRS in pre-Section 817(h) rulings
in which it was determined that Policyowners were not owners of separate account
assets. For example, a Policyowner has additional flexibility in allocating
premium payments and account values. While the Company does not believe that
these differences would result in a Policyowner being treated as the owner of a
pro rata portion of the assets of the Separate Account, there is no regulation
or ruling of the IRS that confirms this conclusion. In addition, the Company
does not know what standards will be set forth, if any, in the regulations or
rulings which the Treasury Department has stated it expects to issue. The
Company therefore reserves the right to modify the Policy as necessary to
attempt to prevent a Policyowner from being considered the owner of a pro rata
share of the assets of the Separate Account.
OTHER TAX CONSIDERATIONS
Business-owned life insurance may be subject to certain additional rules.
Section 264(a)(1) of the Code generally prohibits employers from deducting
premiums on policies covering officers, employees or other financially
interested parties. Additions to the Policy's Total Account Value may also be
subject to tax under the corporation alternative minimum tax provisions. In
addition, Section 264(a)(4) of the Code limits the Policyowner's deduction for
interest on loans taken against life insurance covering the lives of officers,
employees, or others financially interested in the Policyowner's trade or
business. Under current tax law, interest may generally be deducted on an
aggregate total of $50,000 of loans per covered life with respect to all life
insurance policies covering each officer, employee or others who may have a
financial interest in the Policyowner's trade or business.
Depending on the circumstances, the exchange of a policy, a change in the
Policy's Death Benefit Option, a Policy Loan, a full or partial surrender, a
change in Ownership or an assignment of the Policy may have federal income tax
consequences. In addition, federal, state and local transfer, estate,
inheritance and other tax consequences
28
<PAGE>
of policy ownership, premium payments and receipt of policy proceeds depend on
the circumstances of each Policyowner or beneficiary.
MISCELLANEOUS CONTRACT PROVISIONS
THE CONTRACT
The Policy which you receive and the application you make when you purchase
the Policy are the whole contract. A copy of the application is attached to the
Policy when it is issued to you. Any application for changes, once approved by
us, will become part of the Policy.
Application forms are completed by the applicant and forwarded to the
Company for acceptance. Upon acceptance, the Policy is prepared, executed by
duly authorized officers of the Company, and forwarded to the Policy Owner.
PAYMENT OF BENEFITS
All benefits are payable at our Home Office. We may require submission of
the Policy before we grant loans, make changes or pay benefits.
AGE AND SEX
If age or sex is misstated on the application, the amount payable on death
will be that which would have been purchased by the most recent monthly
deduction at the correct age and sex. (If the application is taken in a state
where unisex rates are used, the Insured's sex is inapplicable.)
INCONTESTABILITY
We will not contest coverage under the Policy (other than any waiver of
premium rider) after it has been in force during the lifetime of the Insured
more than two years from the Issue Date.
For coverage which takes effect on a later date (i.e., an increase or
reinstatement of insurance), we will not contest such coverage after it has been
in force during the lifetime of the Insured more than two years from its
effective date. Any contest of such later coverage will be based on the
supplemental application.
SUICIDE
In most states, if the Insured commits suicide within two years from the
Issue Date, the only benefit paid will be the sum of (a) plus (b) minus (c),
where:
(a) equals premiums paid less amounts allocated to the Separate Account; and
(b) equals the Separate Account Value on the date of suicide, plus the portion
of the Monthly Deductions deducted from the Separate Account Value; and
(c) equals the amount necessary to repay any loans in full and any interest
earned on the Loan Account Value transferred to the Separate Account Value,
and any surrenders from the Fixed Account.
If the Insured commits suicide within two years from the effective date of
any increase in coverage, we will pay as a benefit only the Monthly Deductions
for the increase, in lieu of the face amount of the increase.
All amounts will be calculated as of the date of death.
PROTECTION OF PROCEEDS
To the extent provided by law, the proceeds of the Policy are subject
neither to claims by a beneficiary's creditors nor to any legal process against
any beneficiary.
NON-PARTICIPATION
Neither Policy is entitled to share in the divisible surplus of the Company.
No dividends are payable.
COVERAGE BEYOND MATURITY (AETNAVEST II ONLY)
As an AetnaVest II Policy Owner, you may, by written request in the 30 days
before the Maturity Date of this Policy, elect to continue coverage beyond the
Maturity Date. At Age 100, the Separate Account Value will be transferred to the
Fixed Account. If coverage beyond maturity is elected, we will continue to
credit interest to the Total Account Value of this Policy. Monthly Deductions
will be calculated with a Cost of Insurance rate equal to zero.
At this time, uncertainties exist regarding the tax treatment of the Policy
should the Policy continue beyond the Maturity Date. You should therefore
consult with your tax advisor prior to making this election. (See Tax Matters.)
The coverage beyond maturity provision is only available in approving states.
(This provision is not available in New York.)
29
<PAGE>
APPENDIX A
AETNAVEST POLICIES
ILLUSTRATIONS OF DEATH BENEFIT, TOTAL ACCOUNT VALUES AND
CASH SURRENDER VALUES FOR AETNAVEST POLICIES
The following tables illustrate how the Total Account Values, Cash Surrender
Values, and Death Benefits of a Policy change with the investment experience of
the Funds. The tables show how the Total Account Values, Cash Surrender Values,
and Death Benefits of a Policy issued to an insured of a given age and a given
premium would vary over time if the investment return on the assets held in each
Fund were a uniform, gross, annual rate of 0%, 6%, 12%, respectively.
Tables I through IV illustrate Policies issued to males, ages 25 and 40, in
the nonsmoker rate class. The Total Account Values, Cash Surrender Values, and
Death Benefits would be different from those shown if the gross annual
investment rates of return averaged 0%, 6%, and 12% respectively, over a period
of years, but fluctuated above and below those averages for individual Policy
Years.
The second column of each table shows the accumulated values of the premiums
paid at the stated interest rate of 5%. The third through fifth columns
illustrate the Death Benefit of a Policy over the designated period. The sixth
through eighth columns illustrate the Total Account Values, while the ninth
through eleventh columns illustrate the Cash Surrender Values of each Policy
over the designated period. Tables II and IV assume that the maximum Cost of
Insurance Rates allowable under the Policy are charged in all Policy Years.
These tables also assume that the maximum allowable mortality and expense risk
charge of 0.90% on an annual basis is assessed in each Policy Year. Tables I and
III assume that the current scale of Cost of Insurance Rates applies during all
Policy Years. These tables also assume that the current level of mortality and
expense risk charge, 0.70% on an annual basis, is assessed. The charge for Fund
expenses reflected in the illustrations assumes that Total Account Values have
been allocated equally among all Funds and represent a fixed average of the
investment advisory fees and other expenses charged by each of the Funds as of
December 31, 1995.
The amounts shown for the Death Benefits, Cash Surrender Values, and Total
Account Values reflect the fact that the net investment return is lower than the
gross, return on the assets held in each Fund as a result of expenses paid by
the Fund and other charges levied by the Separate Account.
The hypothetical values shown in the tables do not reflect any Separate
Account charges for federal income taxes, since we are not currently making such
charges. However, such charges may be made in the future, and in that event, the
gross annual investment rate of return would have to exceed 0%, 6%, or 12% by an
amount sufficient to cover the tax charges in order to produce the Death
Benefits, Total Account Values, and Cash Surrender Values illustrated.
The tables illustrate the Policy values that would result based upon the
hypothetical investment rates of return if premiums were paid as indicated, if
all net premiums are allocated to Variable Life Account B and if no Policy loans
have been made. The tables are also based on the assumptions that the Policy
Owner has not requested an increase or decrease in the Specified Amount of the
Policy, that no partial surrenders have been made, and that no transfer charges
have been incurred.
Upon request, we will provide an illustration based upon the proposed
insured's age, sex, and underwriting classification, the specified amount or
premium requested, the proposed frequency of premium payments and any available
riders requested. A fee of $25 is charged for each such illustration.
The hypothetical gross annual investment return assumed in such an
illustration will not exceed 12%.
30
<PAGE>
AETNAVEST POLICY
TABLE I
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY(1)
MALE ISSUE AGE 25
$408.00 ANNUAL BASIC PREMIUM
NONSMOKER RISK
FACE AMOUNT $100,000
DEATH BENEFIT OPTION 1
<TABLE>
<CAPTION>
PREMIUMS DEATH BENEFIT
ACCUMULATED GROSS ANNUAL INVESTMENT TOTAL ACCOUNT VALUE CASH SURRENDER VALUE
AT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY 5% INTEREST ----------------------------- ----------------------------- -----------------------------
YEAR PER YEAR GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
- ------------------ ------------ -------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
40 (Age 65)
</TABLE>
(1) Assumes no Policy loan has been made. Current mortality rates assumed.
Current mortality and expense risk charges, administrative charges, and
premium load assumed.
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
These investment results are illustrative only and should not be considered a
representation of past or future investment results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rates of return. The
Total Account Value and Cash Value for a Policy would be different from those
shown if the actual investment rates of return averaged 0%, 6%, and 12% over a
period of years, but fluctuated above or below those averages for individual
Policy Years. No representations can be made that these rates of return will
definitely be achieved for any one year or sustained over a period of time.
31
<PAGE>
AETNAVEST POLICY
TABLE II
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY(1)
MALE ISSUE AGE 25
$408.00 ANNUAL BASIC PREMIUM
NONSMOKER RISK
FACE AMOUNT $100,000
DEATH BENEFIT OPTION 1
<TABLE>
<CAPTION>
PREMIUMS DEATH BENEFIT
ACCUMULATED GROSS ANNUAL INVESTMENT TOTAL ACCOUNT VALUE CASH SURRENDER VALUE
AT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY 5% INTEREST ----------------------------- ----------------------------- -----------------------------
YEAR PER YEAR GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
- ------------------ ------------ -------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
40 (Age 65)
</TABLE>
(1) Assumes no Policy loan has been made. Guaranteed mortality rates assumed.
Maximum mortality and expense risk charges, administrative charges, and
premium load assumed.
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
These investment results are illustrative only and should not be considered a
representation of past or future investment results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rates of return. The
Total Account Value and Cash Value for a Policy would be different from those
shown if the actual investment rates of return averaged 0%, 6%, and 12% over a
period of years, but fluctuated above or below those averages for individual
Policy Years. No representations can be made that these rates of return will
definitely be achieved for any one year or sustained over a period of time.
32
<PAGE>
AETNAVEST POLICY
TABLE III
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY(1)
MALE ISSUE AGE 40
$744.00 ANNUAL BASIC PREMIUM
NONSMOKER RISK
FACE AMOUNT $100,000
DEATH BENEFIT OPTION 1
<TABLE>
<CAPTION>
PREMIUMS DEATH BENEFIT
ACCUMULATED GROSS ANNUAL INVESTMENT TOTAL ACCOUNT VALUE CASH SURRENDER VALUE
AT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY 5% INTEREST ----------------------------- ----------------------------- -----------------------------
YEAR PER YEAR GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
- ------------------ ------------ -------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
40 (Age 65)
</TABLE>
(1) Assumes no Policy loan has been made. Current mortality rates assumed.
Current mortality and expense risk charges, administrative charges, and
premium load assumed.
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
These investment results are illustrative only and should not be considered a
representation of past or future investment results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rates of return. The
Total Account Value and Cash Value for a Policy would be different from those
shown if the actual investment rates of return averaged 0%, 6%, and 12% over a
period of years, but fluctuated above or below those averages for individual
Policy Years. No representations can be made that these rates of return will
definitely be achieved for any one year or sustained over a period of time.
33
<PAGE>
AETNAVEST POLICY
TABLE IV
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY(1)
MALE ISSUE AGE 40
$744.00 ANNUAL BASIC PREMIUM
NONSMOKER RISK
FACE AMOUNT $100,000
DEATH BENEFIT OPTION 1
<TABLE>
<CAPTION>
PREMIUMS DEATH BENEFIT
ACCUMULATED GROSS ANNUAL INVESTMENT TOTAL ACCOUNT VALUE CASH SURRENDER VALUE
AT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY 5% INTEREST ----------------------------- ----------------------------- -----------------------------
YEAR PER YEAR GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
- ------------------ ------------ -------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
40 (Age 65)
</TABLE>
(1) Assumes no Policy loan has been made. Guaranteed mortality rates assumed.
Maximum mortality and expense risk charges, administrative charges, and
premium load assumed.
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
These investment results are illustrative only and should not be considered a
representation of past or future investment results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rates of return. The
Total Account Value and Cash Value for a Policy would be different from those
shown if the actual investment rates of return averaged 0%, 6%, and 12% over a
period of years, but fluctuated above or below those averages for individual
Policy Years. No representations can be made that these rates of return will
definitely be achieved for any one year or sustained over a period of time.
34
<PAGE>
APPENDIX B
ILLUSTRATIONS OF DEATH BENEFIT, TOTAL ACCOUNT VALUES AND
CASH SURRENDER VALUES FOR AETNAVEST II POLICIES
The following tables illustrate how the Total Account Values, Cash Surrender
Values, and Death Benefits of a Policy change with the investment experience of
the Funds. The tables show how the Total Account Values, Cash Surrender Values,
and Death Benefits of a Policy issued to an insured of a given age and a given
premium would vary over time if the investment return on the assets held in each
Fund were a uniform, gross, annual rate of 0%, 6%, 12%, respectively.
Tables V through VIII illustrate Policies issued to males, ages 35 and 55,
in the nonsmoker rate class. Tables IX through XII illustrate Policies issued on
a unisex basis, ages 35 and 55, in the nonsmoker rate class. These tables are
provided for use in those states where unisex rates are required. The Total
Account Values, Cash Surrender Values, and Death Benefits would be different
from those shown if the gross annual investment rates of return averaged 0%, 6%,
and 12%, respectively, over a period of years, but fluctuated above and below
those averages for individual Policy Years.
The second column of each table shows the accumulated values of the premiums
paid at the stated interest rate of 5%. The third through fifth columns
illustrate the Death Benefit of a Policy over the designated period. The sixth
through eighth columns illustrate the Total Account Values, while the ninth
through eleventh columns illustrate the Cash Surrender Values of each Policy
over the designated period. Tables VI, VIII, X and XII assume that the maximum
Cost of Insurance Rates allowable under the Policy are charged in all Policy
Years. These tables also assume that the maximum allowable mortality and expense
risk charge of .90% on an annual basis, the maximum allowable administrative
charge of .50% and the maximum allowable premium load of 6% are assessed in each
Policy Year. Tables V, VII, IX and XI assume that the current scale of Cost of
Insurance Rates applies during all Policy Years. These tables also assume that
the current mortality and expense risk charge of .70% on an annual basis, the
current administrative charge of .30% on an annual basis, and the current
premium load of 3.5% are assessed. The charge for Fund expenses reflected in the
illustrations assumes that Total Account Values have been allocated equally
among all Funds and represent a fixed average of the investment advisory fees
and other expenses charged by each of the Funds as of December 31, 1995.
The amounts shown for the Death Benefits, Cash Surrender Values, and Total
Account Values reflect the fact that the net investment return is lower than the
gross return on the assets held in each Fund as a result of expenses paid by
each Fund and other charges levied by the Separate Account.
The hypothetical values shown in the tables do not reflect any Separate
Account charges for federal income taxes, since we are not currently making such
charges. However, such charges may be made in the future, and in that event, the
gross annual investment rate of return would have to exceed 0%, 6%, or 12% by an
amount sufficient to cover the tax charges in order to produce the Death
Benefits, Total Account Values, and Cash Surrender Values illustrated.
The tables illustrate the Policy values that would result based upon the
hypothetical investment rates of return if premiums were paid as indicated, if
all net premiums are allocated to Variable Life Account B and if no Policy loans
have been made. The tables are also based on the assumptions that the Policy
Owner has not requested an increase or decrease in the Specified Amount of the
Policy, that no partial surrenders have been made, and that no transfer charges
have been incurred.
Upon request, we will provide an illustration based upon the proposed
insured's age, sex (if necessary), and underwriting classification, the
specified amount or premium requested, the proposed frequency of premium
payments and any available riders requested. A fee of $25 is charged for each
such illustration.
The hypothetical gross annual investment return assumed in such an
illustration will not exceed 12%.
35
<PAGE>
AETNAVEST II POLICY
TABLE V
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY(1)
MALE ISSUE AGE 35
$1410.00 ANNUAL BASIC PREMIUM
NONSMOKER RISK
FACE AMOUNT $250,000
DEATH BENEFIT OPTION 1
<TABLE>
<CAPTION>
PREMIUMS DEATH BENEFIT
ACCUMULATED GROSS ANNUAL INVESTMENT TOTAL ACCOUNT VALUE CASH SURRENDER VALUE
AT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY 5% INTEREST ----------------------------- ----------------------------- -----------------------------
YEAR PER YEAR GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
- ------------------ ------------ -------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
30 (Age 65)
</TABLE>
(1) Assumes no Policy loan has been made. Current mortality rates assumed.
Current mortality and expense risk charges, administrative charges, and
premium load assumed.
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
These investment results are illustrative only and should not be considered a
representation of past or future investment results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rates of return. The
Total Account Value and Cash Value for a Policy would be different from those
shown if the actual investment rates of return averaged 0%, 6%, and 12% over a
period of years, but fluctuated above or below those averages for individual
Policy Years. No representations can be made that these rates of return will
definitely be achieved for any one year or sustained over a period of time.
36
<PAGE>
AETNAVEST II POLICY
TABLE VI
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY(1)
MALE ISSUE AGE 35
$1410.00 ANNUAL BASIC PREMIUM
NONSMOKER RISK
FACE AMOUNT $250,000
DEATH BENEFIT OPTION 1
<TABLE>
<CAPTION>
PREMIUMS DEATH BENEFIT
ACCUMULATED GROSS ANNUAL INVESTMENT TOTAL ACCOUNT VALUE CASH SURRENDER VALUE
AT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY 5% INTEREST ----------------------------- ----------------------------- -----------------------------
YEAR PER YEAR GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
- ------------------ ------------ -------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
30 (Age 65)
</TABLE>
(1) Assumes no Policy loan has been made. Guaranteed mortality rates assumed.
Maximum mortality and expense risk charges, administrative charges, and
premium load assumed.
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
These investment results are illustrative only and should not be considered a
representation of past or future investment results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rates of return. The
Total Account Value and Cash Value for a Policy would be different from those
shown if the actual investment rates of return averaged 0%, 6%, and 12% over a
period of years, but fluctuated above or below those averages for individual
Policy Years. No representations can be made that these rates of return will
definitely be achieved for any one year or sustained over a period of time.
37
<PAGE>
AETNAVEST II POLICY
TABLE VII
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY(1)
MALE ISSUE AGE 55
$4380.00 ANNUAL BASIC PREMIUM
NONSMOKER RISK
FACE AMOUNT $250,000
DEATH BENEFIT OPTION 1
<TABLE>
<CAPTION>
PREMIUMS DEATH BENEFIT
ACCUMULATED GROSS ANNUAL INVESTMENT TOTAL ACCOUNT VALUE CASH SURRENDER VALUE
AT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY 5% INTEREST ----------------------------- ----------------------------- -----------------------------
YEAR PER YEAR GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
- ------------------ ------------ -------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
30 (Age 65)
</TABLE>
(1) Assumes no Policy loan has been made. Current mortality rates assumed.
Current mortality and expense risk charges, administrative charges, and
premium load assumed.
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
These investment results are illustrative only and should not be considered a
representation of past or future investment results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rates of return. The
Total Account Value and Cash Value for a Policy would be different from those
shown if the actual investment rates of return averaged 0%, 6%, and 12% over a
period of years, but fluctuated above or below those averages for individual
Policy Years. No representations can be made that these rates of return will
definitely be achieved for any one year or sustained over a period of time.
38
<PAGE>
AETNAVEST II POLICY
TABLE VIII
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY(1)
MALE ISSUE AGE 55
$4380.00 ANNUAL BASIC PREMIUM
NONSMOKER RISK
FACE AMOUNT $250,000
DEATH BENEFIT OPTION 1
<TABLE>
<CAPTION>
PREMIUMS DEATH BENEFIT
ACCUMULATED GROSS ANNUAL INVESTMENT TOTAL ACCOUNT VALUE CASH SURRENDER VALUE
AT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY 5% INTEREST ----------------------------- ----------------------------- -----------------------------
YEAR PER YEAR GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
- ------------------ ------------ -------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
30 (Age 65)
</TABLE>
(1) Assumes no Policy loan has been made. Guaranteed mortality rates assumed.
Maximum and expense risk charges, administrative charges, and premium load
assumed.
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
These investment results are illustrative only and should not be considered a
representation of past or future investment results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rates of return. The
Total Account Value and Cash Value for a Policy would be different from those
shown if the actual investment rates of return averaged 0%, 6%, and 12% over a
period of years, but fluctuated above or below those averages for individual
Policy Years. No representations can be made that these rates of return will
definitely be achieved for any one year or sustained over a period of time.
39
<PAGE>
AETNAVEST II POLICY
TABLE IX
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY(1)
UNISEX ISSUE AGE 35
$1350.00 ANNUAL BASIC PREMIUM
NONSMOKER RISK
FACE AMOUNT $250,000
DEATH BENEFIT OPTION 1
<TABLE>
<CAPTION>
PREMIUMS DEATH BENEFIT
ACCUMULATED GROSS ANNUAL INVESTMENT TOTAL ACCOUNT VALUE CASH SURRENDER VALUE
AT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY 5% INTEREST ----------------------------- ----------------------------- -----------------------------
YEAR PER YEAR GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
- ------------------ ------------ -------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
30 (Age 65)
</TABLE>
(1) Assumes no Policy loan has been made. Current mortality rates assumed.
Current and expense risk charges, administrative charges, and premium load
assumed.
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
These investment results are illustrative only and should not be considered a
representation of past or future investment results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rates of return. The
Total Account Value and Cash Value for a Policy would be different from those
shown if the actual investment rates of return averaged 0%, 6%, and 12% over a
period of years, but fluctuated above or below those averages for individual
Policy Years. No representations can be made that these rates of return will
definitely be achieved for any one year or sustained over a period of time.
40
<PAGE>
AETNAVEST II POLICY
TABLE X
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY(1)
UNISEX ISSUE AGE 35
$1350.00 ANNUAL BASIC PREMIUM
NONSMOKER RISK
FACE AMOUNT $250,000
DEATH BENEFIT OPTION 1
<TABLE>
<CAPTION>
PREMIUMS DEATH BENEFIT
ACCUMULATED GROSS ANNUAL INVESTMENT TOTAL ACCOUNT VALUE CASH SURRENDER VALUE
AT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY 5% INTEREST ----------------------------- ----------------------------- -----------------------------
YEAR PER YEAR GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
- ------------------ ------------ -------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
30 (Age 65)
</TABLE>
(1) Assumes no Policy loan has been made. Guaranteed mortality rates assumed.
Maximum and expense risk charges, administrative charges, and premium load
assumed.
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
These investment results are illustrative only and should not be considered a
representation of past or future investment results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rates of return. The
Total Account Value and Cash Value for a Policy would be different from those
shown if the actual investment rates of return averaged 0%, 6%, and 12% over a
period of years, but fluctuated above or below those averages for individual
Policy Years. No representations can be made that these rates of return will
definitely be achieved for any one year or sustained over a period of time.
41
<PAGE>
AETNAVEST II POLICY
TABLE XI
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY(1)
UNISEX ISSUE AGE 55
$4,200.00 ANNUAL BASIC PREMIUM
NONSMOKER RISK
FACE AMOUNT $250,000
DEATH BENEFIT OPTION 1
<TABLE>
<CAPTION>
PREMIUMS DEATH BENEFIT
ACCUMULATED GROSS ANNUAL INVESTMENT TOTAL ACCOUNT VALUE CASH SURRENDER VALUE
AT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY 5% INTEREST ----------------------------- ----------------------------- -----------------------------
YEAR PER YEAR GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
- ------------------ ------------ -------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
10 (Age 65)
</TABLE>
(1) Assumes no Policy loan has been made. Current mortality rates assumed.
Current expense risk charges, administrative charges, and premium load
assumed.
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
These investment results are illustrative only and should not be considered a
representation of past or future investment results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rates of return. The
Total Account Value and Cash Value for a Policy would be different from those
shown if the actual investment rates of return averaged 0%, 6%, and 12% over a
period of years, but fluctuated above or below those averages for individual
Policy Years. No representations can be made that these rates of return will
definitely be achieved for any one year or sustained over a period of time.
42
<PAGE>
AETNAVEST II POLICY
TABLE XII
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY(1)
UNISEX ISSUE AGE 55
$4,200.00 ANNUAL BASIC PREMIUM
NONSMOKER RISK
FACE AMOUNT $250,000
DEATH BENEFIT OPTION 1
<TABLE>
<CAPTION>
PREMIUMS DEATH BENEFIT
ACCUMULATED GROSS ANNUAL INVESTMENT TOTAL ACCOUNT VALUE CASH SURRENDER VALUE
AT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY 5% INTEREST ----------------------------- ----------------------------- -----------------------------
YEAR PER YEAR GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12%
- ------------------ ------------ -------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
15
20
25
30
10 (Age 65)
</TABLE>
(1) Assumes no Policy loan has been made. Guaranteed mortality rates assumed.
Maximum expense risk charges, administrative charges, and premium load
assumed.
If premiums are paid more frequently than annually, the Death Benefits, Total
Account Values, and Cash Surrender Values would be less than those illustrated.
These investment results are illustrative only and should not be considered a
representation of past or future investment results. Actual investment results
may be more or less than those shown and will depend on a number of factors
including the Policy Owner's allocations, and the Fund's rates of return. The
Total Account Value and Cash Value for a Policy would be different from those
shown if the actual investment rates of return averaged 0%, 6%, and 12% over a
period of years, but fluctuated above or below those averages for individual
Policy Years. No representations can be made that these rates of return will
definitely be achieved for any one year or sustained over a period of time.
43
<PAGE>
APPENDIX C
MUTUAL FUND ANNUAL EXPENSES
(As a percentage of average net assets, except where otherwise noted, based on
figures for the year ended December 31, 1995.)
<TABLE>
<CAPTION>
INVESTMENT OTHER
ADVISORY EXPENSES
FEES(1) (AFTER
(AFTER EXPENSE EXPENSE TOTAL FUND
REIMBURSEMENT) REIMBURSEMENT) ANNUAL EXPENSES
--------------- ------------- ---------------
<S> <C> <C> <C>
Aetna Variable Fund
Aetna Income Shares
Aetna Variable Encore Fund
Aetna Investment Advisers Fund, Inc.
Aetna Ascent Variable Portfolio(2)
Aetna Crossroads Variable Portfolio(2)
Aetna Legacy Variable Portfolio(2)
Alger American Small Cap Portfolio
Fidelity Equity-Income Portfolio(3)
Fidelity Contrafund Portfolio(2)
Janus Aspen Aggressive Growth(4)
Janus Aspen Balanced Portfolio(4)
Janus Aspen Growth Portfolio(4)
Janus Aspen Short-Term Bond Portfolio(4)
Janus Aspen Worldwide Growth Portfolio(4)
Scudder International Portfolio
TCI Growth(5)
</TABLE>
(1) Certain of the unaffiliated Fund advisers reimburse the Company for
administrative costs incurred in connection with administering the Funds as
variable funding options under the Contract. These reimbursements are paid
out of the investment advisory fees and are not charged to investors.
(2) These Funds have only limited operating history; therefore the expenses are
estimated for the current fiscal year.
(3) A portion of the brokerage commission the Fund paid was used to reduce its
expenses. Without this reduction, total operating expenses would have been
___% for the Equity-Income Portfolio.
(4) The expense figures shown are net of certain expense waivers from Janus
Capital Corporation. Without such waivers, the Investment Advisory Fees,
Other Expenses and Total Mutual Fund Annual Expenses for the Portfolios for
the fiscal year ended December 31, 1995 would have been ___%, ___% and ___%,
respectively, for Janus Aspen Aggressive Growth Portfolio; ___%, ___%, and
___%, respectively for the Janus Aspen Balanced Portfolio; ___%, ___% and
___%, respectively, for Janus Aspen Growth Portfolio; ___%, ___% and ___%,
respectively, for Janus Aspen Short-Term Bond Portfolio; and ___%, ___% and
___%, respectively, for Janus Aspen Worldwide Growth Portfolio.
(5) The Portfolio's investment adviser pays all expenses of the Portfolio
except brokerage commissions, taxes, interest, fees and expenses of the
non-interested directors (including counsel fees) and extraordinary
expenses.
44
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority conferred
in that section.
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 of 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.
REPRESENTATIONS, DESCRIPTION AND UNDERTAKINGS
PURSUANT TO PARAGRAPH (B)(13)(III)(F) OF RULE 6E-3(T)
UNDER THE INVESTMENT COMPANY ACT OF 1940
REGISTRANT MAKES THE FOLLOWING REPRESENTATIONS:
(1) Section 6e-3T(b)(13)(iii)(F) is being relied upon.
(2) The level of the mortality and expense risk charge is within the range of
industry practice for comparable flexible contracts.
(3) Aetna Life Insurance and Annuity Company has concluded that there is a
reasonable likelihood that the distribution financing arrangement of
Variable Life Account B (the "VUL Account") will benefit the VUL Account
and Policy Owners.
<PAGE>
(4) The VUL Account will invest only in management companies which have
undertaken to have a board of directors, a majority of whom are not
interested persons of the Company, formulate and approve any plan under
Rule 12b-1 to finance distribution expenses.
The methodology used to support the representation made in paragraph (2) above
is based on an analysis of selected variable life insurance policies declared
effective by the Commission, which contain similar guarantees and are sold in
similar markets. Registrant undertakes to keep and make available to the
Commission upon request the documents used to support the representation in
paragraph (2) above and a memorandum setting forth the basis for the
representation in paragraph (3) above.
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 2 TO
REGISTRATION STATEMENT
This Post-Effective Amendment No. 2 to Registration Statement No. 33-76004
comprises the following papers and documents:
The facing sheet.
One Variable Life Insurance prospectus consisting of 44 pages.
The undertaking to file reports
The signatures.
Written consents of the following persons:
A. Actuarial Opinion and Consent*
B. Consent of KPMG Peat Marwick LLP*
C. Consent of Counsel*
The following Exhibits:
1. Exhibits required by paragraph A of instructions to exhibits for Form
N-8B-2:
(1) Resolution establishing Variable Life Account B
(2) Not Applicable
(3)(i) Master General Agent Agreement
(3)(ii) Life Insurance General Agent Agreement
(3)(iii) Broker Agreement
(3)(iv) Life Insurance Broker-Dealer Agreement
(4) Not Applicable
(5)(i) Form of AetnaVest I Policy (Policy No. 38899)(1)
(5)(ii) Form of AetnaVest II Policy, including Term Rider (Policy
No. 38899-90)(2)
(6) Certificate of Incorporation and By-laws of Aetna Life
Insurance and Annuity Company, Depositor(3)
(7) Not Applicable
(8)(i) Fund Participation Agreement between Aetna Life Insurance
and Annuity Company, Alger American Fund and Fred Alger
Management, Inc., dated September 1, 1993(4)
<PAGE>
(8)(ii) Fund Participation Agreement between Aetna Life Insurance
and Annuity Company and Fidelity Distributors Corporation
dated February 1, 1994 (Variable Insurance Products Fund)(5)
(8)(iii) Fund Participation Agreement between Aetna Life Insurance
and Annuity Company and Fidelity Distributors Corporation
dated February 1, 1994 (Variable Insurance Products Fund
II)(5)
(8)(iv) Fund Participation Agreement between Aetna Life Insurance
and Annuity Company and Janus Aspen Series dated April 19,
1994 and amended June 15, 1994(6)
(8)(v) Fund Participation Agreement between Aetna Life Insurance
and Annuity Company and Scudder Variable Life Investment
Fund dated April 27, 1992 and amended February 19, 1993 and
August 13, 1993(7)
(8)(vi) Fund Participation Agreement between Aetna Life Insurance
and Annuity Company, Investors Research Corporation and TCI
Portfolios, Inc., dated July 29, 1992 and amended December
22, 1992 and June 1, 1994(7)
(9) Not Applicable
(10)(i) Form of Application for AetnaVest I Policy(1)
(10)(ii) Form of Application for AetnaVest II Policy(8)
2. Opinion of Counsel*
3. Not Applicable
4. Not Applicable
5. Not Applicable
6. Copy of Power of Attorney(9)
* To be filed by amendment.
1. Incorporated by reference to Post-Effective Amendment No. 25 to
Registration Statement on Form S-6 (File No. 33-2339) filed on April 25,
1995.
2. Incorporated by reference to Pre-Effective Amendment No. 1 to Registration
Statement on Form S-6 (File No. 33-76004) filed on April 23, 1994.
3. Incorporated by reference to Post-Effective Amendment No. 58 to
Registration Statement on Form N-4 (File No. 2-52449) filed on February 28,
1994.
4. Incorporated by reference to Pre-Effective Amendment No. 1 to Registration
Statement on Form N-4 (File No. 33-75996) filed on April 21, 1994.
5. Incorporated by reference to Pre-Effective Amendment No. 1 to Registration
Statement on Form N-4 (File No. 33-75978) filed on April 25, 1994
6. Incorporated by reference to Post-Effective Amendment No. 2 to Registration
Statement on Form N-4 (File No. 33-75960) filed on August 9, 1994.
7. Incorporated by reference to Registration Statement on Form N-4 (File No.
33-88720) filed on January 20, 1995.
8. Incorporated by reference to Post-Effective Amendment No. 1 to Registration
Statement on Form S-6 (File No. 33-76004) filed on April 25, 1995.
<PAGE>
9. The Power of Attorney for David E. Bushong, Acting Chief Financial Officer,
is incorporated by reference to Post-Effective Amendment No. 1 to
Registration Statement on Form N-4 (File No. 33-87932) as filed
electronically on September 18, 1995. The Powers of Attorney for all other
signatories are included in this Registration Statement.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant, Variable Life Account B of Aetna Life Insurance and Annuity Company,
has duly caused this Post-Effective Amendment No. 2 to its Registration
Statement No. 33-76004 to be signed on its behalf by the undersigned, thereunto
duly authorized, and the seal of the Depositor to be hereunto affixed and
attested, all in the City of Hartford, and State of Connecticut, on this 16th
day of February, 1996.
VARIABLE LIFE ACCOUNT B OF AETNA LIFE
INSURANCE AND ANNUITY COMPANY
(REGISTRANT)
By: AETNA LIFE INSURANCE AND
ANNUITY COMPANY
(DEPOSITOR)
By: Daniel P. Kearney*
-------------------------------
Daniel P. Kearney
Principal Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 2 to the Registration Statement No. 33-76004 has been
signed below by the following persons in the capacities indicated and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
Daniel P. Kearney* Director and President )
- --------------------- (Principal Executive Officer) )
Daniel P. Kearney )
)
David E. Bushong * Acting Chief Financial Officer )
- --------------------- )
David E. Bushong )
)
Eugene M Trovato* Vice President, Chief Accounting Officer )
- --------------------- and Corporate Controller ) February
Eugene M. Trovato ) 16, 1996
)
Timothy A. Holt* Director )
- --------------------- )
Timothy A. Holt )
)
<PAGE>
Christopher J. Burns* Director )
- --------------------- )
Christopher J. Burns )
)
Laura R. Estes* Director )
- --------------------- )
Laura R. Estes )
)
Gail P. Johnson* Director )
- --------------------- )
Gail P. Johnson )
)
John Y. Kim* Director )
- --------------------- )
John Y. Kim )
)
Shaun P. Mathews* Director )
- --------------------- )
Shaun P. Mathews )
)
Glen Salow* Director )
- --------------------- )
Glen Salow )
)
Creed R. Terry* Director )
- --------------------- )
Creed R. Terry )
By: /s/ Julie E. Rockmore
------------------------------
*Attorney-in-Fact
</TABLE>
<PAGE>
VARIABLE LIFE ACCOUNT B
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT PAGE
- ----------- ------- ----
99-1.1 Resolution of the Board of Directors of
Aetna Life Insurance and Annuity Company
establishing Variable Life Account B __________
99-1.3(i) Master General Agent Agreement __________
99-1.3(ii) Life Insurance General Agent Agreement __________
99-1.3(iii) Broker-Dealer Agreement __________
99-1.3(iv) Life Insurance Broker-Dealer Agreement __________
99-1.5(i) Form of AetnaVest I Policy (Policy No. 38899) *
99-1.5(ii) Form of AetnaVest II Policy, including
Term Rider (Policy No. 38899-90) *
99-1.6 Certification of Incorporation and
By-Laws of Depositor *
99-1.8(i) Fund Participation Agreement between Aetna
Life Insurance and Annuity Company, Alger
American Fund and Fred Alger Management, Inc.
dated September 1, 1993 *
99-1.8(ii) Fund Participation Agreement between Aetna
Life Insurance and Annuity Company and
Variable Insurance Products Fund, Fidelity
Distributors Corporation dated February 1, 1994 *
99-1.8(iii) Fund Participation Agreement between Aetna Life
Insurance and Annuity Company and Variable
Insurance Products Fund II, Fidelity Distributors
Corporation dated February 1, 1994 *
99-1.8(iv) Fund Participation Agreement between Aetna Life
Insurance and Annuity Company and Janus Aspen
Series dated April 19, 1994 and amended
June 15, 1994 *
99-1.8(v) Fund Participation Agreement between Aetna Life
Insurance and Annuity Company and Scudder Variable
Life Investment Fund dated April 27, 1992 and
amended February 19, 1993 and August 13, 1993 *
*Incorporated by reference
<PAGE>
EXHIBIT NO. EXHIBIT PAGE
- ----------- ------- ----
99-1.8(vi) Fund Participation Agreement between Aetna
Life Insurance and Annuity Company, Investors
Research Corporation and TCI Portfolios, Inc.
dated July 29, 1992 and amended December 22,
1992 and June 1, 1994 *
99-1.10(i) Form of Application for AetnaVest I Policy *
99-1.10(ii) Form of Application for AetnaVest II Policy *
99-2 Opinion of Counsel **
99-6 Copy of Power of Attorney __________
*Incorporated by reference
**To be filed by amendment
<PAGE>
[AETNA LOGO] EXHIBIT 99(1)
AETNA LIFE INSURANCE AND ANNUITY COMPANY
I, Susan E. Schechter, hereby certify that I am the duly elected and acting
Corporate Secretary of Aetna Life Insurance and Annuity Company (the
"Corporation"), a corporation organized and existing under the laws of the State
of Connecticut, and that the following Vote was duly adopted by the Board of
Directors of the Corporation on June 18, 1986 and that it remains in full force
and effect:
VOTED: That the officers of this Company are hereby severally authorized
to take such action as they may severally deem necessary or
appropriate (1) to create a new separate account, to be called
Variable Life Account B, for the purpose of funding variable life
insurance policies; (2) to make any filings under applicable law,
whether federal, state or otherwise, which may be deemed necessary
or appropriate to operations of that separate account; and (3) to
further the purpose and operations of that separate account; and
any actions, heretofore taken consistent with the above are hereby
ratified and confirmed.
Dated at Hartford, Connecticut on February 8, 1996.
/s/ SUSAN E. SCHECHTER
--------------------------------
Susan E. Schechter
Corporate Secretary
Aetna Life Insurance and Annuity Company
<PAGE>
EXHIBIT 99(3)(i)
MASTER GENERAL AGENT AGREEMENT
MASTER GENERAL AGENT AGREEMENT between AETNA LIFE INSURANCE COMPANY and AETNA
LIFE INSURANCE AND ANNUITY COMPANY, with offices at 151 Farmington Avenue,
Hartford, Connecticut 06156 (collectively referred to in this agreement as the
"Company") and _____________________ of _____________________ (referred to in
this agreement as "MGA").
MGA has read and fully understands the terms and conditions of this Master
General Agent Agreement (the "Agreement"), and its attachments.
To signify their agreement to the following provisions, Company and MGA have
caused this instrument to be executed by their duly authorized representatives.
Signed at _____________________ on _____________________ ,
Effective: ____________________.
AETNA LIFE INSURANCE COMPANY
AETNA LIFE INSURANCE AND
ANNUITY COMPANY
- --------------------------------
- --------------------------------
MGA Vice President
By: ____________________________
Title: _________________________
- --------------------------------------------------------------------------------
(In triplicate)
Life Code No. _________________ Social Security No. ___________________________
or
Aetna Life Insurance and Annuity Company IRS Account No. ___________________
Code No. ______________________________
1
<PAGE>
1. APPOINTMENT
The company wishes to appoint MGA as Master General Agent of the Company,
and MGA agrees to accept such appointment, subject to the terms and
conditions of this Agreement.
2. STATUS OF MGA
Nothing contained in this Agreement shall be construed to create the
relationship of employer and employee between the Company and MGA. The MGA
is acting as an independent contractor only and not as an employee,
partner, joint venturer or associate of the Company.
3. DUTIES OF THE MGA
(a) The MGA is authorized to solicit and submit to the Company personally
or through its property licensed agents or brokers (referred to in
this Agreement as "Agents") applications for all of the Company's
Individual Life Insurance products listed in the Company's Standard
Schedule of Life Insurance MGA Compensation ("Compensation Schedule"),
to deliver the policies, to collect first premiums, and to service the
business.
(b) The MGA shall exercise reasonable due care for the faithful
performance, fidelity and honesty of its Agents and employees, and
will maintain responsibility for all funds collected and business done
by or entrusted to the MGA and its employees.
(c) The MGA will comply with all requirements of the Company governing the
submission of applications and shall make available to the Company all
information, whether favorable or unfavorable, which comes into the
MGA's possession concerning the underwriting of any risk.
(d) The MGA will obligate the Company only to the extent authorized (1) by
this Agreement, and amendments to this Agreement as may be made by the
Company from time to time; (2) by the published rules, procedures and
practices set forth by the Company; and (3) as may be authorized in
writing by an officer of the Company.
(e) The MGA shall pay all expenses of every nature incurred in connection
with the conduct and maintenance of the Master General Agency.
(f) The MGA will notify the Company in writing of a change in its chief
executive officer or its majority voting stock ownership, if a
corporation; a general partner if a partnership; or the majority
ownership of the agency.
2
<PAGE>
(g) The MGA shall exercise reasonable care and diligence and exert its
best efforts to ensure that the policies issued under this Agreement
are maintained current and in force. The MGA shall promote the
interests of the Company as contemplated by this Agreement so as not
to adversely affect the MGA or Company's business reputation.
4. LIMITATIONS OF THE MGA'S AUTHORITY
(a) The MGA is not authorized on behalf of the Company to make, alter,
modify, waive or change any of the terms, rates, or conditions of any
of the Company's forms, policies, contracts, or advertising materials.
The MGA shall not discharge contracts or waive forfeitures, quote
rates not approved by the Company, extend the time of payment of any
premium, extend credit, or guarantee dividends.
(b) The MGA is not authorized and is expressly forbidden on behalf of the
Company to estimate future policy performance except through the use
of authorized projections or illustrations of the Company.
(c) The MGA is not authorized to receive Company Funds (as defined in
Section 10) except initial premiums, and is not authorized to deduct
compensation, commissions, service fees, or allowances from Company
Funds it collects.
(d) The MGA has no exclusive territory.
(e) The MGA shall not hold itself out as an employee, partner, joint
venturer, officer, or associate of the Company; nor as an agent of the
Company in any other manner, or for any other purpose, than is
specifically provided in this Agreement.
5. BOND/ERRORS & OMISSIONS
MGA shall maintain Errors & Omissions insurance coverage and/or a Bond of
indemnity in such amount and in such form as the Company may from time to
time determine and the MGA shall provide evidence of such coverage when
requested by the Company.
6. APPOINTMENT OF AGENTS
(a) The MGA has the authority to recruit insurance Agents, at MGA's
expense without any reimbursement from the Company, and recommend
their licensing and appointment to the Company. The Company reserves
the right to refuse to contract, license or appoint any such Agent.
(b) The MGA may not recruit Agents on behalf of the Company who act as
life insurance wholesalers or distributors without the prior written
approval of the Company. The MGA must remain at all times the sole
intermediary between the Agent and the Company.
3
<PAGE>
(c) The MGA shall submit to the Company agreements with Agents, on Company
forms without modification, authorizing the Agents to solicit life
insurance applications for the Company. A copy of each executed
agreement shall be furnished to the Company by the MGA. These
agreements are not in effect until signed by the Company's authorized
representative.
(d) The Company may terminate an Agent agreement in its sole discretion
and without liability to the MGA. The Company will provide the MGA a
written explanation of the specific reasons for the termination.
(e) The MGA shall be responsible for keeping its Agents informed of
Company's published rules, procedures, and practices which the Company
provides to the MGA.
(f) The MGA shall promptly report to the Company, in writing, any known or
alleged misappropriation of funds by any Agent or employee regardless
of whether such known or alleged misappropriation is with respect to
funds of this Company or funds of any other person or company.
(g) If an Agent terminates his or her relationship with the MGA or
Company, the MGA may designate another Agent to provide service to the
policyholder involved; provided, however, that such Agent meets all of
the requirements of this Agreement.
7. LICENSES
(a) The MGA agrees not to solicit any Company products in any state or
jurisdiction unless the MGA and its writing Agent are properly
licensed in that state or jurisdiction, and, as necessary, registered
with the National Association of Securities Dealers.
(b) The MGA will be responsible for maintaining in effect any required
licenses to represent the Company and to sell life insurance within
each state in which the MGA intends to carry on business.
8. ACCEPTANCE OF APPLICATIONS
The MGA is responsible for assuring that applications for insurance and
other Company forms and payments obtained or received from Agents will be
promptly forwarded to the Company. The Company reserves the right in its
sole discretion and without liability to the MGA to refuse to accept,
approve, or amend any applications submitted by the MGA.
9. DELIVERY OF POLICIES
(a) Delivery of a policy may be made only if (1) to the best of the MGA or
Agent's knowledge and belief, nothing material to the risk has changed
since the initial application for such policy; (2) all required
Company forms and amendments have
4
<PAGE>
been signed by the applicant and/or the insured; (3) the first premium
has been fully paid; and (4) delivery is made within forty-five (45)
days from the date the policy is mailed by the Company, unless the
delivery period is extended by the Company.
(b) The MGA will promptly return to the Company all policies not delivered
to the applicant within the forty-five (45) day period. Any premium
refunded by the Company to the MGA must be immediately returned to the
applicant.
(c) For each policy issued in a form as applied for and returned for
cancellation on account of non-acceptance by the applicant, or which
is rewritten at MGA's or Agent's request, the Company reserves the
right to require the MGA to reimburse the Company for the cost of
underwriting requirements and policy reissue, or the Company may elect
to charge-back such costs against any compensation otherwise due the
MGA.
10. COMPANY FUNDS
Any money due or to become due the Company from customers as premiums or
otherwise are funds of the Company ("Company Funds"). All Company Funds
collected by the MGA for the Company must be immediately delivered to the
Company and shall not be commingled with the MGA's personal funds.
11. POLICIES CREDITED
The MGA will be credited with all life insurance policies issued by the
Company upon application bearing its name as MGA, or the name of Agents
appointed with the Company through the MGA.
12. COMPENSATION
(a) The MGA shall receive compensation in accordance with the Compensation
Schedule in force on the date of issue of the policy for all services
that it performs for the Company, subject to all the terms and
conditions of this Agreement. The Compensation Schedule in effect on
the date of this Agreement is attached to and made part of this
Agreement.
(b) The Company reserves the right to revise the Compensation Schedule
upon thirty (30) days notice to the MGA, but the revision of the
Compensation Schedule shall apply only to policies thereafter issued.
Any revised Compensation Schedule shall become a part of this
Agreement on its effective date.
13. PAYMENTS TO AGENTS
(a) The Company shall pay commission in accordance with the schedule of
commissions included in or attached to the Agents' agreements.
5
<PAGE>
(b) The Company shall not be bound by an assignment or pledge of, or lien
on, any Agent's commissions on behalf of the MGA, unless the Company
has received specific and timely written notice of, and has agreed in
writing to honor such assignment, pledge or lien.
14. REFUND OF COMPENSATION
Should the Company in its sole discretion for any reason refund or credit
to the customer any premium, the MGA will promptly, on demand, refund to
the Company all compensation paid to the MGA for such premium.
Compensation adjustments may be made on decreases in premium for which
first year compensation has previously been paid.
15. ADVANCES AND INDEBTEDNESS
(a) The Company is authorized, at any time either before or after the
termination of this Agreement, to deduct from any compensation due
from the Company to the MGA the entire amount of any Company Funds or
other funds, including, but not limited to, advances or debts, owed by
the MGA to the Company or its affiliates, associates, parents or
subsidiaries.
(b) Any compensation paid to the MGA for premiums later refunded or
credited to the customer, or any overpayment of compensation shall be
debt due the Company from the MGA and payable in accordance with this
Section.
(c) In addition to all other rights available to the Company as a
creditor, the Company shall have a first lien on all compensation
payable under this Agreement for any of the funds, advances or debts
described herein.
(d) To the extent that compensation due to the MGA from the Company is
insufficient to cover advances, the difference shall become a debt due
to the Company. Interest at the rate of 8% per annum shall be charged
on any indebtedness remaining due and payable to the Company after one
year.
16. ASSIGNMENT
An assignment of the MGA's rights and obligations under this Agreement or
any compensation hereunder shall not be binding upon the Company until a
copy of the assignment has been received at the Company's Home Office and
approved in writing by an officer of the Company. The Company does not
assume any responsibility for the validity, sufficiency or tax consequences
of any assignment.
6
<PAGE>
17. HOLD HARMLESS
(a) The MGA will indemnify and hold the Company harmless for all expenses,
loss or damage suffered by the Company because of a violation of, or
refusal or failure to comply with the terms of this Agreement or with
any federal or state laws, rules or regulations, or resulting from
unauthorized acts or transactions, errors or omissions by the MGA or
the MGA's employees except to the extent that the Company caused,
contributed to or compounded such violation, refusal, failure, or
other such transactions, acts, errors or omissions.
(b) The Company will indemnify and hold the MGA harmless for all expenses,
loss or damage suffered by the MGA caused by the Company's errors in
preparing, processing or billing of any policy, except to the extent
that the MGA caused, contributed to or compounded such errors.
However, the Company will not be liable to the MGA for any legal or
other expenses the MGA chooses to incur, solely on its own, in
connection with any such error.
18. SETTLEMENT OF DISPUTES
(a) Disputes between the Company, MGA, Agents, and/or policyholders
relating to the Company's business, may be settled in good faith by
the Company and such settlement is binding on the MGA.
(b) The MGA shall cooperate fully with the Company in any investigation or
proceeding of any regulatory or governmental body, or court of
competent jurisdiction, if it is determined by the Company that the
investigation or proceeding affects matters covered by or arising out
of this Agreement.
(c) The MGA has no authority to institute legal or administrative
proceedings in the Company's name nor institute such proceedings in
connection with the transaction of the Company's business unless the
Company provides prior written approval for such actions by the MGA.
(d) The MGA shall defend any act or alleged act of the MGA at its own
expense. The MGA shall reimburse the Company for all costs, expenses
or legal fees that the Company incurs for the defense of any
administrative action in which the Company or the MGA is named and
which is, in the Company's opinion, the consequence of any
unauthorized act of the MGA.
(e) The MGA shall immediately notify the Company if it is served with any
paper or has knowledge of any legal or administrative action against
the Company or which involves the Company.
7
<PAGE>
19. GENERAL CONDUCT, REBATES, REPLACEMENTS
(a) The MGA will comply with all published rules of the Company and with
applicable federal, state or other laws and regulations governing the
sale of the Company's products.
(b) The MGA shall not rebate, or offer to rebate, all or any part of its
compensation, commission or premium on a policy issued or to be issued
by the Company, except where permitted by, and in accordance with,
state law and established Company practices.
(c) The MGA shall comply with the replacement rules and regulations of the
Company and the state in which the MGA is licensed.
20. ADVERTISING
The MGA will not, directly or indirectly, use or disseminate any
advertising matter, prospectuses, circulars, letters, booklets, schedules,
stationery, broadcasting, or sales material of any kind concerning the
Company or its products, or which contains the Company's name or any of the
Company's trademarks, unless produced by the Company; or use the name of
the Company or any of the Company's trademarks in a publication of any form
without obtaining the prior written authorization of an officer of the
Company.
21. OWNERSHIP OF COMPANY PROPERTY
(a) In order to assist the MGA in the solicitation and sale of Company's
products, the Company may from time to time make available to the MGA
Company records, literature, authorization cards, sales aids, sales
and rate manuals, computer software, computer hardware, supplies and
equipment. The MGA recognizes that such materials and equipment of
every kind and nature furnished to the MGA by the Company shall be and
remain the property of the Company. The MGA shall not reproduce such
materials without the Company's prior written approval.
(b) The MGA shall safely keep and preserve Company property and shall
replace at the MGA's expense any part thereof which may be lost,
destroyed or defaced while the same are in the MGA's possession or
control. On termination, the MGA shall deliver to the Company, or
such person as it may designate, all Company property in the MGA's
possession or control. Pending return of these items, the Company may
withhold any and all compensation which may be due to the MGA.
22. TERMINATION AND THE RIGHT TO COMPENSATION THEREAFTER
(a) This Agreement may be terminated without cause by either party upon at
least thirty days written notice specifying the termination date.
8
<PAGE>
(b) This Agreement will automatically terminate:
(i) upon the death or total and permanent physical or mental
disability of the MGA, if an individual;
(ii) upon the dissolution of the corporation, if the MGA is a
corporation;
(iii) upon the dissolution of the partnership, if the MGA is a
partnership;
(iv) upon the expiration or lapse of the MGA's license to
represent the Company; or
(v) at the end of any calendar year during which the MGA has not
maintained the life premium persistency or minimum credited
amount of first year premium on life insurance sold under
this Agreement established by the Company and attached to
and made part of this Agreement.
If this Agreement is terminated as provided in this Section 22(b), the MGA
shall be entitled to compensation as set forth in the Compensation Schedule
subject to the provisions of Section 15.
(c) The Company may terminate this Agreement for cause at any time,
immediately upon notice to the MGA, if:
(i) the MGA shall knowingly and intentionally fail to conform to
the published rules and regulations of the Company;
(ii) the MGA shall have his license to transact business
hereunder revoked, suspended, or refused by a state
licensing authority;
(iii) as it relates to a policy issued by the Company or while the
MGA is conducting business on the Company's behalf, the MGA
shall knowingly and intentionally fail to comply with the
laws, Insurance Department regulations, or other
administrative regulations, governing the insurance business
of the state in which the MGA is licensed or of any other
state in which the Company is authorized to do business;
(iv) the MGA shall improperly induce any policyholder of the
Company to discontinue premium payments, cancel or fail to
renew his policy;
(v) the MGA shall knowingly or intentionally make false or
misleading statements about the Company or its products; or
(vi) the MGA shall fail to remit Company Funds to the Company or
return Company property upon written request; or subject the
Company to any liability due to the MGA's misfeasance; or
malfeasance or commit any fraud hereunder.
If the Company terminates this Agreement for cause, no further compensation
in any form shall be payable to the MGA after such termination, except
compensation, service fees, or expense reimbursement allowance which were
payable prior to such termination, less any outstanding indebtedness to the
Company.
(d) For purposes of determining whether this Agreement has been breached,
if the MGA is a partnership or a corporation, then the acts of all
general partners of the partnership, or of all officers, directors and
voting shareholders of the corporation, as the case may be, shall be
deemed acts of the MGA.
9
<PAGE>
(e) Termination of this Agreement will result in the termination of all
agreements with Agents recruited by the MGA.
23. REVOCATION OF PRIOR AGREEMENTS
(a) This Agreement, together with its attachments and schedules, contains
the entire agreement between the MGA and the Company as of the
effective date of this Agreement, and shall be effective to cover all
applications taken by the MGA on or after the date of this Agreement.
(b) The execution of this Agreement by the Company and MGA terminates and
supersedes all previous written or verbal contracts or agreements made
between said parties except as to renewal commissions, first year
commissions and the service fees provided for in such contracts, if
any, that may now be due or shall become due the MGA on business
heretofore written. But nothing in this Agreement shall be construed
to affect or waive any claim of any kind, whether for money or
otherwise, of the Company against the MGA or any obligations or vested
right under any prior contract or agreement.
24. PROVISIONS THAT SURVIVE THIS AGREEMENT
(a) Sections 14, 15, 17, and 18 of this Agreement shall survive the
termination of the other items and provisions of this Agreement.
(b) In the event that the MGA, or any partner of the MGA, or any
shareholder of the MGA, at any time after the termination of this
Agreement shall improperly induce any policyholder of the Company to
discontinue the payment of premiums, or cancel or fail to renew any
policy, contract or certificate with the Company, then the Company
shall have the right to terminate payment of any compensation of any
sort hereunder.
25. GOVERNING LAW
This contract shall be governed by the laws of the State of Connecticut.
26. SEVERABILITY
In the event one or more, but not all of the provisions of this Agreement
are determined to be unlawful or unenforceable by a court or regulatory
agency of competent jurisdiction or rendered so by statute or regulation,
such determination shall not affect the legality or enforceability of the
remainder of the terms of this Agreement.
27. MODIFICATIONS OF THIS AGREEMENT
This Agreement and its attached schedules may not be changed or cancelled
orally. The Company may, at any time after thirty (30) days notice to MGA,
amend this Agreement in
10
<PAGE>
whole or in part. Any such amendment, however, shall in no way, except by
mutual consent, affect policies issued or applications submitted before the
amendment date.
28. NOTICE
(a) All notices and demands made under this Agreement shall be valid only
if in writing and hand-delivered or properly sent by (i) United States
certified or registered mail, postage prepaid, return receipt
requested; or (ii) overnight delivery service such as Emery or Federal
Express with provisions for a receipt and delivery charge prepaid,
addressed as follows or to any other address a party may designate by
giving notice to the other party.
(b) Any notice sent to the Company should be sent to Vice President,
Individual Life SBU, Aetna Life Insurance and Annuity Company, 151
Farmington Avenue, Hartford, CT 06156. Any notice sent to the MGA
should be sent to the address indicated on page 1.
29. BENEFIT
This Agreement shall be binding upon, and inure to the benefit of the
parties hereto, their legal representatives, successors, and assigns (to
the extent limited by this Agreement).
30. MISCELLANEOUS
(a) If the MGA or any of its Agents desires to sell any product produced
currently or in the future by the Company or any of the Company's
affiliates, the MGA or Agent must also have a valid agreement to
distribute any such products.
(b) The Company reserves the right to:
(i) modify the amount or plan of any policy available for sale
or its premium rates;
(ii) modify any issue or underwriting rules;
(iii) cancel or rescind any existing product available for sale;
(iv) withdraw any policy from any state at any time or introduce
new policies.
(c) The failure of the Company to enforce the performance of any of the
terms of this Agreement will not constitute a waiver unless agreed to
in writing by the Company and the MGA.
(d) The captions and headings of the sections of this Agreement are for
convenience only and are not to be used to interpret, modify, define
or limit the provisions of this Agreement.
(e) The rights and remedies reserved by the Company in this Agreement are
in addition to and not exclusive of any other right or remedy
available to the Company.
11
<PAGE>
EXHIBIT 99(3)(ii)
-----------------------------------------------------------------
[AETNA LOGO] LIFE INSURANCE
GENERAL AGENT AGREEMENT
Life Insurance General Agent Agreement made as of
__________________, _______ between Aetna Life Insurance Company
and Aetna Life Insurance and Annuity Company, with offices at 151
Farmington Avenue, Hartford, Connecticut 06156 (collectively
referred to in this Agreement as the "Company") and
________________________ of ______________________ (referred to
in this Agreement as "GA").
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. The Company wishes to appoint GA as General Agent of the Company,
APPOINTMENT and GA agrees to accept such appointment, subject to the terms
and conditions of this Agreement.
- --------------------------------------------------------------------------------
2. (a) The GA is authorized to solicit and submit to the Company
DUTIES OF applications for all of the Company's Individual Life
THE GA Insurance products listed in the Company's Life Insurance
General Agents Commission Schedule ("Commission Schedule"),
to deliver the policies, to collect first premiums, and to
service the business.
(b) The GA will comply with all requirements of the Company
governing the submission of applications and shall make
available to the Company all information, whether favorable
or unfavorable, which comes into the GA's possession
concerning the underwriting of any risk.
(c) The GA will obligate the Company only to the extent
authorized (1) by this Agreement, and amendments to this
Agreement as may be made by the Company from time to time;
(2) by the rules, procedures and regulations set forth by
the Company; and (3) as may be authorized in writing by an
officer of the Company.
(d) The GA will promptly return to the Company all policies not
delivered within the prescribed time period.
(e) The GA will notify the Company in writing of a change in the
chief executive officer or majority voting stock ownership,
if a corporation; a general partner if a partnership; or the
majority ownership of the agency.
<PAGE>
- --------------------------------------------------------------------------------
3. (a) The GA is not authorized and is expressly forbidden on
LIMITATIONS behalf of the Company to make, alter, modify, waive or
OF GA'S change any of the terms, rates, or conditions of any of the
AUTHORITY Company's forms, policies, contracts, or advertising
materials. The GA shall not discharge contracts or waive
forfeitures, quote extra rates, extend the time of payment
of any premium, extend credit, or guarantee dividends.
(b) The GA is not authorized and is expressly forbidden on
behalf of the Company to estimate future dividends or policy
performance except through the use of authorized projections
or illustrations of the Company.
(c) The GA is not authorized to receive Company Funds except the
initial premiums, and is not authorized to deduct
commissions, service fees, or allowances from Company Funds
he collects.
(d) The GA has no exclusive territory, and has no exclusive
rights in any term conversions, policy increases or purchase
options, or any salary budget, group, pension or other
multiple-life case.
(e) The GA shall not hold himself out as an employee, partner,
joint venturer, officer or associate of the Company; nor as
an agent of the Company in any other manner, or for any
other purpose, than is specifically provided in this
Agreement.
- --------------------------------------------------------------------------------
4. The GA will be responsible for securing and keeping in effect any
LICENSES required licenses to represent the Company. The GA agrees not to
solicit any Company products unless he is properly licensed and
appointed by the Company, and, as necessary, registered with the
National Association of Securities Dealers to do so. No person
whether licensed or unlicensed may solicit any Company products
on behalf of such licensed GA unless approval in writing has been
granted from an officer of the Company.
- --------------------------------------------------------------------------------
5. The GA will be credited with all life insurance policies issued
POLICIES by the Company upon application bearing his name as GA.
CREDITED
- --------------------------------------------------------------------------------
6. (a) The Company will pay the GA, subject to all the terms and
COMPENSATION conditions of this Agreement, in full compensation for all
services rendered by the GA under this Agreement, the
commissions, fees and allowances specified in the Commission
Schedule in force on the date of issue of the policy, on
premiums paid for each life insurance policy credited to him
under this Agreement.
(b) The Company reserves the right to revise the Commission
Schedule, but the revision of Commission Schedule shall
apply only to policies thereafter issued. The publication
of revisions to the Commission Schedule shall constitute
notification to the GA, and any revised Commission Schedule
shall become a part of this Agreement on its effective date.
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
7. Commissions payable on the following cases, irrespective of any
COMMISSIONS other provisions of this Agreement, will be at the rates allowed
ON SPECIAL under the Company's rules and practices at the time the premium
CASES is due:
(a) Premiums on backdated conversions of Term Life Insurance
Policies;
(b) Premiums on reinstatement of lapsed policies; and
(c) Premiums on special plans not shown in the Company's rate
books, or on cases carrying special rate quotations.
- --------------------------------------------------------------------------------
8. Commissions will not be payable on premiums on conversions of
GROUP Group and Employee Insurance, or premiums waived on account of
CONVERSIONS disability.
AND WAIVED
PREMIUMS
- --------------------------------------------------------------------------------
9. Should the Company for any reason refund or credit to the
REFUND OF customer any premium, the GA will promptly, on demand, refund to
COMMISSIONS the Company all commissions and other compensation received on
such premium. Commission adjustments will be made on decreases
in premium on which first year commissions have previously been
paid.
- --------------------------------------------------------------------------------
10. (a) The Company is authorized, at any time either before or
ADVANCES AND after the termination of this Agreement, to deduct from any
INDEBTEDNESS compensation due from the Company to the GA the entire
amount of any funds, including, but not limited to, advances
or debts, owed by the GA to the Company or its affiliates,
associates, parents or subsidiaries, but only to the extent
of the actual amount owed by the GA as determined by the
Company.
(b) Any compensation paid to the GA for premiums or
considerations later returned or credited to the customer,
or any overpayment of compensation shall be a debt due to
the Company from the GA and payable in accordance with
Section 10(a) above.
(c) In addition to all other rights available to the Company as
a creditor, the Company shall have a first lien on all
compensation payable under this Agreement for any of the
funds, advances or debts described herein.
(d) To the extent that compensation due to the GA from the
Company is insufficient to cover advances, the difference
shall become a debt due to the Company. Interest at the
rate of 6% per annum shall be charged from the date any
indebtedness becomes due and payable to the Company.
- --------------------------------------------------------------------------------
11. The Company reserves the right in its sole discretion and without
ACCEPTANCE OF liability to the GA to refuse to accept or approve any
APPLICATIONS applications obtained by the GA.
- --------------------------------------------------------------------------------
3
<PAGE>
- --------------------------------------------------------------------------------
12. An assignment of commissions hereunder shall not be binding upon
ASSIGNMENT the Company until a copy of the assignment has been received at
the Company's Home Office and approved in writing by an officer
of the Company. The Company does not assume any responsibility
for the validity, sufficiency or tax consequences of any
assignment.
- --------------------------------------------------------------------------------
13. (a) The GA will indemnify and hold the Company harmless for all
LIABILITIES OF expenses, loss or damage suffered by the Company because of
GA a violation of, or refusal or failure to comply with the
terms of this Agreement or with any federal or state laws,
rules or regulations, by the GA, the GA's employees,
assigns, and any other persons engaged by or acting on the
GA's behalf. The rights and remedies reserved by the
Company in this Agreement are in addition to and not
exclusive of any other right or remedy available to the
Company.
(b) The GA will reimburse the Company for any and all expenses
incurred by the Company to enforce any of the provisions of
this Agreement.
- --------------------------------------------------------------------------------
14. (a) The GA will comply with all rules of the Company and with
GENERAL applicable federal, state or other laws and regulations
CONDUCT, governing the sale of the Company's products.
REBATES, (b) The GA shall not rebate or offer to rebate all or any part
REPLACEMENTS of a commission or premium on a policy issued or to be
issued by the Company, or withhold any money or property of
the Company.
(c) The GA shall not either before or after the termination of
this Agreement induce or endeavor to induce any customers of
the Company to discontinue the payment of premiums or to
relinquish a policy, contract or certificate or induce any
agent or general agent of the Company to leave its service.
(d) The GA shall comply with the replacement rules and
regulations of the Company and the state in which the GA is
licensed and shall not directly or indirectly engage in
selling practices involving "twisting" or "switching" of
contracts of the Company or of other companies.
- --------------------------------------------------------------------------------
15. Any money or property due or to become due the Company from
COMPANY customers as premiums or otherwise are funds of the Company
FUNDS ("Company Funds"). All Company Funds collected by the GA for the
Company must be immediately delivered to the Company and shall
not be commingled with the GA's personal funds. Any Company
Funds held by the GA will be held by the GA in trust for the
Company, in separate accounts. If any Company Funds are not
remitted to the Company, the Company shall have a first lien on
all compensation due or which may become due the GA to the extent
of such funds.
- --------------------------------------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
16. The GA agrees that he or she will not, directly or indirectly,
ADVERTISING use or disseminate any advertising matter, prospectuses,
circulars, letters, booklets, schedules, stationery,
broadcasting, or sales material of any kind concerning the
Company or its products until approved by an officer of the
Company in writing.
- --------------------------------------------------------------------------------
17. (a) All records, literature, authorization cards, sales aids,
OWNERSHIP OF sales and rate manuals, computer software, supplies and
RECORDS equipment of every kind and nature furnished to the GA by
the Company, shall be and remain the property of the
Company.
(b) The GA shall safely keep and preserve said property and
shall replace at the GA's expense any part thereof which may
be lost, destroyed or defaced while the same are in the GA's
possession or control. On termination, the GA shall deliver
to the Company, or such person as it may designate, all
property in the GA's possession or control. Pending return
of these items, the Company may withhold any and all
compensation which may be due to the GA.
- --------------------------------------------------------------------------------
18. (a) This Agreement may be terminated without cause by either
TERMINATION party upon at least thirty days written notice specifying
AND THE RIGHT the termination date. It will automatically terminate:
TO (i) upon the death or total and permanent physical or
COMPENSATION metal disability of the GA, if an individual;
THEREAFTER (ii) upon the dissolution of the corporation, if the GA
is a corporation;
(iii) upon the dissolution of the partnership, if the GA
is a partnership;
(iv) upon the expiration or lapse of the GA's license
to represent the Company; or
(v) at the end of any calendar year during which the
GA has not maintained the agreed upon thirteen
month life premium persistency, and has not been
credited with the minimum amount of first year
commission on life insurance sold under this
Agreement established by the Company at the date
of this Agreement and set forth by the Company at
the beginning of each calendar year thereafter.
If this Agreement is terminated as provided in this Section
18(a), the GA shall be entitled to commissions as set forth in
the Commission Schedule.
(b) The Company may terminate this Agreement for cause at any
time, without prior notice, if:
(i) the GA shall fail to conform to the rules and
regulations of the Company;
(ii) the GA shall have his license to transact business
hereunder revoked, suspended, or refused by a
state licensing authority;
5
<PAGE>
- --------------------------------------------------------------------------------
(iii) the GA shall fail to comply with the laws,
Insurance Department regulations, or other
administrative regulations, governing the
insurance business of the state in which the GA is
licensed or of any other state in which the
Company is authorized to do business;
(iv) the GA shall induce, or attempt to induce, any
general agent, or any producer contracted with a
general agent, or any other agent or employee of
the Company to leave its service, or to cease
soliciting or writing business for the Company, or
to decrease the volume of business so written, or
if the GA shall improperly induce, or attempt to
induce, any policyholder of the Company to
discontinue premium payments on his policy;
(v) the GA shall make false or misleading statements
about the Company; or
(vi) the GA shall commit any fraud hereunder.
- --------------------------------------------------------------------------------
If the Company terminates this Agreement for cause, no further
commission, service fees, or expense reimbursement allowance
shall be payable to the GA after such termination, except
commissions, service fees, or expense reimbursement allowance
which were payable prior to such termination, less any
outstanding indebtedness to the Company.
(c) For purposes of determining whether this Agreement has been
breached, if the GA is a partnership or a corporation, then
the acts of all general partners of the partnership, or of
all officers, directors and voting shareholders of the
corporation, as the case may be, shall be deemed acts of the
GA.
(d) In the event that the GA, or any partner of the GA, or any
shareholder of the GA, at any time after the termination of
this Agreement shall improperly induce, or attempt to
induce, any policyholder of the Company to cancel or fail to
renew any insurance with the Company, or shall induce or
attempt to induce, within two years after the termination of
this Agreement, any general agent, or any other agent or
employee of the Company to leave its service, or to cease
soliciting or writing business for the Company, or to reduce
the volume of such business written, then the Company shall
have the right to terminate all future payments of any sort
hereunder. This provision shall survive the termination of
the other items and provisions of this Agreement.
(e) Payments becoming due after termination also shall be
subject to the provisions of Section 10.
- --------------------------------------------------------------------------------
6
<PAGE>
- --------------------------------------------------------------------------------
19. The execution of this Agreement by the Company and GA terminates
REVOCATION OF and supersedes all previous contracts or agreements made between
PRIOR said parties except as to renewal commissions, first year
AGREEMENTS commissions and the service fees provided for in such contracts,
if any, that may now be due or shall become due the GA on
business heretofore written. But nothing herein shall be
construed to effect or waive any claim of any kind, whether for
money or otherwise, of the Company against the GA or any
obligations or vested right under any prior contract or
agreement. This Agreement shall be effective to cover all
applications taken by the GA on or after the date of this
Agreement. Notwithstanding prior or subsequent verbal agreements
to the contrary, this Agreement and the appropriate Commissions
Schedule shall constitute the entire agreement between the
parties.
- --------------------------------------------------------------------------------
20. Nothing contained in this Agreement shall be construed to create
STATUS OF GA the relationship of employer and employee between the Company and
GA. The GA is acting as an independent contractor only and not
as an employee, partner, joint venturer or associate of the
Company.
- --------------------------------------------------------------------------------
21. This contract shall be governed by the laws of the State of
GOVERNING LAW Connecticut.
- --------------------------------------------------------------------------------
22. In the event one or more, but not all of the provisions of this
SEVERABILITY Agreement are declared unlawful or unenforceable by a court of
competent jurisdiction, such determination shall not affect the
legality or enforceability of the remainder of the terms of this
Agreement.
- --------------------------------------------------------------------------------
23. This Agreement may not be changed or cancelled orally. The
MODIFICATIONS Company shall have the unilateral right to amend the terms and
OF THIS conditions of this Agreement only by a written instrument
AGREEMENT indicating the Company's intention to modify this Agreement.
- --------------------------------------------------------------------------------
24. (a) All notices and demands made under this Agreement shall be
NOTICE valid only if in writing and hand-delivered or properly sent
by (i) United States certified or registered mail, postage
prepaid, return receipt requested; or (ii) overnight
delivery service such as Emery or Federal Express with
provisions for a receipt and delivery charge prepaid,
addressed as follows or to any other address a party may
designate by giving notice to the other party.
(b) Any notice sent to the Company should be sent to Vice
President, Life Marketing, Aetna Life Insurance and Annuity
Company, 151 Farmington Avenue, Hartford, CT 06156 and a
copy sent to the Company's Life Sales Manager. Any notice
sent to the GA should be sent to the address indicated on
page 1.
- --------------------------------------------------------------------------------
25. This Agreement shall be binding upon, and inure to the benefit of
BENEFIT the parties hereto, their legal representatives, successors, and
assigns (to the extent limited by this Agreement).
- --------------------------------------------------------------------------------
7
<PAGE>
- --------------------------------------------------------------------------------
26. (a) The Company reserves the right to:
MISCELLANEOUS (i) modify the amount or plan of any policy or its
premium rates;
(ii) modify and issue or underwriting rules;
(iii) cancel or rescind any existing policy;
(iv) withdraw any policy from any state at any time or
introduce new policies.
(b) The failure of the Company to enforce the performance of any
of the terms of this Agreement will not constitute a waiver
unless agreed to in writing by the Company and the GA.
(c) The captions and headings of the sections of this Agreement
are for convenience only and are not to be used to
interpret, modify, define or limit the provisions of this
Agreement.
- --------------------------------------------------------------------------------
SIGNATURES
Signed at_______________________________ on
____________________________
City Date
Effective:___________________________________
Date
Aetna Life Insurance Company
Aetna Life Insurance and Annuity Company
----------------------------- -----------------------------
General Agent Life Sales Manager
- --------------------------------------------------------------------------------
Life Code No._______________________
Aetna Life Insurance Social Security No.
and Annuity or
Code No.__________________________ IRS Account
No._____________
8
<PAGE>
[AETNA LOGO] EXHIBIT 99(3)(iii)
[PART 1]
BROKER AGREEMENT
BETWEEN
AETNA LIFE INSURANCE COMPANY, HARTFORD, CONNECTICUT
AETNA LIFE INSURANCE AND ANNUITY COMPANY, HARTFORD, CONNECTICUT
(HEREINAFTER COLLECTIVELY REFERRED TO AS "THE COMPANY")
AND
______________ of ____________________
Who is Hereby Appointed Broker of the Company
The Broker is authorized to solicit and submit to the Company applications for
Life Insurance, Variable and Fixed Annuities, Accident, Sickness, and
Hospitalization Insurance, Group Insurance and Group Annuities; to deliver the
policies, collect first premiums thereon, and service the business.
In full compensation for his services, the Company will pay the Broker, or his
executors or administrators, the commissions specified on the appropriate
Schedules of Commissions on premiums paid to the Company on policies credited to
him under this Agreement.
Life Insurance and Variable and Fixed Annuities (Other than Group)
The Commission on each premium paid during the continuance of this Agreement, on
each life insurance or annuity policy, shall be as specified in the Company's
Standard Schedule of Commissions for the Broker Agreement in force on the date
of issue of the policy.
Accident, Sickness and Hospitalization Insurance.
Commissions on this business will be in accordance with the Standard Schedule of
Commissions for Accident, Sickness and Hospitalization Insurance in force on the
date of issue of the policy for Non-Cancelable or Guaranteed Renewable policies;
or in force on the date the premium was due for Commercial policies.
Group Insurance and Group Annuities
Commissions on premiums for all Group Policies shall be as specified in the
Company's Standard Commission Schedule applicable to the particular type of
Group Policy or Policies, and in accordance with the Company's Group commission
rules in force when the new business premium is written.
The "Standard Practices" listed in following pages constitute a part of this
Agreement the same as though fully set forth over the signatures of the parties
hereto.
<PAGE>
Signed at _______________________________ on __________________________
Effective: ______________________________
__________________________ __________________________
Broker Life Sales Manager
- --------------------------------------------------------------------------------
Life Code No. __________________________ Social Security No.________________
Aetna Life Insurance and Annuity or
Code No. __________________________ IRS Account No. ___________________
(in triplicate)
2
<PAGE>
EXHIBIT 99(3)(iii)
[PART 2]
STANDARD PRACTICES
1. EXTENT OF AUTHORITY
The Broker will obligate the Company only to the extent authorized by the
rules and regulations set forth by the Company from time to time, or as may
be authorized in writing by an officer of the Company. Specifically, the
Broker is NOT AUTHORIZED and is expressly forbidden on behalf of the
Company to make, alter or discharge contracts or waive forfeitures, quote
extra rates, extend the time of payment of any premium, extend credit,
guarantee dividends or estimate future dividends except through the use of
authorized projections of the Company. Further, the Broker is not
authorized to receive any money due or to become due the Company except the
initial premiums. All funds collected for the Company must be immediately
delivered to the Company. The Broker has no exclusive territory, and has
no exclusive rights in any salary budget, group, pension or other multiple-
life case, or term conversions.
2. POLICIES CREDITED
The Broker will be credited with all insurance and Variable and Fixed
Annuity policies issued by the Company upon application bearing his name as
Broker.
3. COMPENSATION
For all services rendered under this Agreement by the Broker, the Broker
shall be compensated solely in accordance with the appropriate Schedule of
Commissions for the amount of premium he or she was responsible for
producing.
The Company reserves the right to revise the Commission Schedules but the
revision of Commission Schedules shall apply only to policies, contracts
and securities thereafter issued. The publication of revisions of
Commission Schedules shall constitute notification of the Broker, and
revisions and Revised Schedules shall become a part of this Agreement on
the effective date of these Schedules.
4. COMMISSIONS - REFUND OF
Should the Company for any reason refund any premium, the Broker will
promptly, on demand, refund to the Company all commissions received on such
premium. Commission adjustments will be made on decreases in premium on
which first year commissions have previously been paid.
5. COMMISSIONS ON SPECIAL CASES
Commissions payable on the following cases, irrespective of any other
provisions of this Agreement, will be at the rates allowed under the
Company's rules and practices at the time the premium is due: (a) Premiums
on back-dated conversions of Term Life Insurance
<PAGE>
Policies; (b) Premiums on reinstatement of lapsed policies; (c) Premiums on
insurance or annuities which, in the judgment of the Company is to take the
place of insurance previously issued by the Company on the same life; (d)
Premiums on special plans not shown in the Company's rate books, or on
cases having special rate quotations.
6. GROUP CONVERSIONS AND WAIVED PREMIUMS
Commissions will not be payable on (1) premiums on conversions of Group and
Employee Insurance, or (2) premiums waived on account of disability.
7. SERVICE FEES
Service fees are in payment for all services rendered by the Broker in
providing customer service after the initial sale. Therefore, it is agreed
that transferable service fees will be paid so long as the Broker, in the
judgment of the Company, continues to service the customer or until the
Broker's license or his Broker's Agreement to represent the Company is
terminated.
8. LICENSES
Where consistent with state law, the Broker will be responsible for
securing and keeping in effect any required licenses to represent the
Company. The Broker agrees not to solicit any Company products unless he
is properly licensed and, as necessary, registered with the National
Association of Securities Dealers to do so. No person whether licensed or
unlicensed may solicit any Company products on behalf of such licensed
Broker unless approval in writing has been granted from an office of the
Company.
9. ADVANCES AND INDEBTEDNESS
The Company is authorized to deduct either before or after the termination
of the Agreement, the entire amount of any funds due to the Company or its
affiliates, associates, parents or subsidiaries, but only to the extent of
the actual amount owed by the Broker, including advances to the Broker,
from any compensation due from the Company to the Broker. The Company
shall have a first lien on all compensation payable under this Agreement
for any of the funds, advances or debts described herein. To the extent
that compensation due the Broker from the Company is insufficient to cover
advances, the difference shall become a debt due to the Company.
Interest at the rate of 6% per annum shall be charged on any indebtedness
due the Company.
Any compensation paid to a Broker for premiums or considerations later
returned or credited to the customer or any overpayment of compensation
shall be a debt due to the Company from the Broker. In addition to all
other rights available to the Company as a creditor, they shall have the
right to deduct such overpayment from any future compensation due.
2
<PAGE>
10. ACCEPTANCE OF APPLICATIONS
The Company reserves the right to refuse to accept or approve any
application obtained by the Broker.
11. ASSIGNMENT
An assignment of commissions hereunder shall not be binding upon the
Company until a copy thereof has been received and approved at the
Company's Home Office. With respect to Variable Annuities, the Broker
shall not assign any sum due hereunder without the prior written consent of
an officer of Aetna Life Insurance and Annuity Company. The Company does
not assume any responsibility for the validity or sufficiency of any
assignment.
12. LIABILITIES OF BROKER
The Broker will be liable to the Company for all expenses, loss or damages
suffered by the Company because of a violation of, or refusal or failure to
comply with the terms of this Agreement or with any Federal or State laws,
rules or regulations. The rights and remedies reserved by the Company
hereunder shall be construed and held to be in addition to and not
exclusive of any other right or remedy available to the Company.
13. SECURITY PLANS
Subject to their terms and conditions, the Broker shall be eligible for the
Group Insurance, Deferred Compensation and Stock Purchase Plans for Brokers
of the Company.
14. GENERAL CONDUCT, REBATES, TWISTING
The Broker will comply with all rules of the Company and with applicable
Federal, state or other laws and regulations governing the sale of the
Company's products. The Broker shall not rebate or offer all or any part
of a premium on a policy issued or to be issued by the Company, or withhold
any money or property of the Company. The Broker shall not at any time
induce or endeavor to induce any customers of the Company to discontinue
the payment of premiums or to relinquish any policy, contract or
certificate or induce any Broker of the Company to leave its service. The
Broker shall not directly or indirectly engage in selling practices
involving "twisting", "switching", or "stripping" of contracts of the
Company or of other companies offering mutual funds, securities, other
investment contracts, annuities or insurance contracts.
15. COMPANY FUNDS
All funds coming into the Broker's possession from customers as premiums
are funds of the Company and shall not be commingled with the Broker's
personal funds but shall be immediately remitted to the Company. If any
such funds are not remitted to the Company,
3
<PAGE>
the Company shall have a first lien on all compensation due or which may
become due the Broker to the extend of such funds.
16. ADVERTISING
The Broker agrees that he or she will not, directly or indirectly, use or
disseminate any advertising matter, prospectuses, circulars, letters,
booklets, schedules, stationery, broadcasting, or sales material of any
kind concerning the Company or its products until approved by an office of
the Company in writing.
17. OWNERSHIP OF RECORDS
All records, literature, authorization cards, sales aids, sales and rate
manuals, and supplies of every kind and nature furnished to the Broker by
the Company, shall be and remain the property of the Company.
The Broker shall safely keep and preserve said property and shall replace
at the Broker's expense any part thereof which may be lost, destroyed or
defaced while the same are in the Broker's possession or control. On
termination, the Broker shall deliver to the Company or such person as it
may designate, all property in the Broker's possession or control. Pending
return of these items the Company may withhold any and all compensation
which may be due to the Broker.
18. TERMINATION
This Agreement may be terminated at any time by the Broker or by the
Company by written notice to the other party. This Agreement shall
terminate automatically (1) if the Broker dies or becomes totally and
permanently disabled, either physically or mentally, (2) if the Broker
fails to comply with any of the obligations of this Agreement or (3) upon
termination of the Broker's license to represent the Company.
19. REVOCATION OF PRIOR AGREEMENTS
The execution of this Agreement by the parties hereto terminate and
supersedes all previous contracts or agreements made between said parties
except as to renewal commissions, first year commissions and the service
fees provided for in such contracts, if any, that may now be due or shall
become due the Broker on business heretofore written, PROVIDED, that
nothing herein shall be construed to affect or waive any claim of any kind,
whether for money or otherwise, of the Company against the Broker or any
obligations or vested right under any prior contract or agreement.
This Agreement shall be effective to cover all applications taken by the
Broker on or after the date of this Agreement. Prior or subsequent verbal
agreements to the contrary, this Agreement and the appropriate Schedules of
Commission shall constitute the entire agreement between the parties.
4
<PAGE>
The following provision shall govern commission assignments made with
regard to Fixed or Variable Annuities, guaranteed cost, participating or
group life or health products. If this Agreement replaces any Agreements
with Aetna Life Insurance Company, Aetna variable Annuity Life Insurance
Company or Aetna Financial Services, Inc. which were in effect on
December 31, 1979, payments will continue to be made in the manner
designated under such prior Agreements. Beneficiary designations in effect
on December 31, 1979 will also remain in full force and effect under the
January 1, 1980 Agreement.
20. This contract shall be governed by the laws of the State of Connecticut.
21. The Company shall have the right to amend unilaterally the standard
practices described herein.
5
<PAGE>
EXHIBIT 99(3)(iv)
LIFE INSURANCE BROKER-DEALER AGREEMENT
LIFE INSURANCE BROKER-DEALER AGREEMENT made as of __________, 199_ between AETNA
LIFE INSURANCE AND ANNUITY COMPANY, an insurance company organized and existing
under the laws of the state of Connecticut, with offices at 151 Farmington
Avenue, Hartford, Connecticut 06156 (referred to in this Agreement as the
"Company") and ____________________, a ______________________ corporation with
offices at ____________________________________________ (referred to in this
Agreement as "Broker-Dealer").
1. APPOINTMENT AND AUTHORIZATION
(a) The Company wishes to appoint Broker-Dealer as Broker-Dealer of the
Company, and Broker-Dealer agrees to accept this appointment, subject
to the terms and conditions of this Agreement.
(b) The Broker-Dealer is authorized to solicit and submit to the Company
applications for all of the Company's life insurance products
(referred to in this Agreement as "Policies"), including but not
limited to, the Company's variable life insurance products, to deliver
the Policies, to collect first premiums, and to service the business.
(c) The Company and the Broker-Dealer represent that each is registered
with the Securities and Exchange Commission as a Broker-Dealer under
the Securities Exchange Act of 1934, as amended, and that each is a
member in good standing of the National Association of Securities
Dealers, Inc. (referred to in this Agreement as "NASD").
(d) The Company represents that its variable life insurance products are
registered, as necessary, under the Securities Act of 1933, and that
it is qualified to transact the business of insurance in all states
and the District of Columbia, and has received all the necessary state
approvals to sell its Policies.
2. DUTIES OF THE BROKER-DEALER
(a) The Broker-Dealer will comply with all requirements of the Company
governing the submission of applications and shall make available to
the Company all information, whether favorable or unfavorable, which
comes into the Broker-Dealer's possession concerning the underwriting
of any risk.
(b) The Broker-Dealer will obligate the Company only to the extent
authorized (1) by this Agreement, and amendments to this Agreement as
may be made by the Company from time to time; (2) by the rules,
procedures and regulations set forth by the Company; and (3) as may be
authorized in writing by an authorized officer of the Company.
<PAGE>
(c) The Broker-Dealer will promptly return to the Company all Policies not
delivered within the prescribed time period.
(d) The Broker-Dealer will notify the Company in writing of a change in
the chief executive officer, if a corporation; a general partner if a
partnership; or the majority ownership of the agency.
3. LIMITATIONS OF BROKER-DEALER'S AUTHORITY
(a) The Broker-Dealer is not authorized and is expressly forbidden on
behalf of the Company to make, alter, modify, waive or change any of
the terms, rates, or conditions of any of the Company's forms,
Policies, contracts, or advertising materials. The Broker-Dealer
shall not discharge contracts or waive forfeitures, quote extra rates,
extend the time of payment of any premium, extend credit, or guarantee
dividends.
(b) The Broker-Dealer is not authorized and is expressly forbidden on
behalf of the Company to estimate future dividends or policy
performance except through the use of authorized projections or
illustrations of the Company.
(c) Any money or property due or to become due the Company from customers
as premiums or otherwise are funds of the Company ("Company Funds").
The Broker-Dealer is not authorized to receive Company Funds except
the initial premiums, and is not authorized to deduct commissions,
service fees, or allowances from any Company Funds it collects. All
Company Funds collected by the Broker-Dealer for the Company must be
immediately delivered to the Company and shall not be commingled with
the Broker-Dealer's personal funds. If any Company Funds are not
remitted to the Company in accordance with this Section, the Company
shall have a first lien on all compensation due or which may become
due the Broker-Dealer to the extent of such funds.
(d) The Broker-Dealer has no exclusive territory, and has no exclusive
rights in any term conversions, policy increases or purchase options,
or any salary budget, group, pension or other multiple-life case.
(e) The Broker-Dealer shall not hold itself out as an employee, partner,
joint venturer, officer, or associate of the Company; nor as an agent
of the Company in any other manner, or for any other purpose, than as
specifically provided in this Agreement.
(f) The Company reserves the right to approve the form of any agreement
between the Broker-Dealer and its employees, agents, and registered
representatives with regard to services provided or compensation paid
in accordance to this Agreement, but such agreement and approval shall
not create any liability on the Company's part whatsoever.
2
<PAGE>
4. LICENSES
Where consistent with state law, the Broker-Dealer will be responsible for
not only securing and keeping in effect for itself and its employees,
agents, and registered representatives any licenses required to represent
the Company, but also for not allowing any of its employees, agents, or
registered representatives to sell any Company Policy if subject to either
an NASD or state bar or suspension order. The Broker-Dealer agrees to
offer, solicit or service the Company's Policies only through persons who
are properly licensed and appointed by the Company and, as necessary,
registered with the NASD to do so. No person, whether licensed or
unlicensed, may solicit any Company Policy on behalf of the Broker-Dealer
unless approval in writing has been granted by an authorized officer of the
Company.
5. ADMINISTRATIVE PROCEDURES
(a) The Broker-Dealer is not authorized to offer or solicit a Company
Policy for sale until notified by the Company that the Policy has been
approved by the appropriate state and federal authorities, as
required.
(b) The Company controls the sale of all its Policies, and reserves the
unconditional right to refuse to accept or approve any applications or
enrollments obtained by the Broker-Dealer. Assuming Company
acceptance of the application submitted by the Broker-Dealer, each
Policy sold through the Broker-Dealer will be mailed directly from the
Company to the Broker-Dealer's office for personal delivery to the
appropriate person.
(c) Applications, enrollment forms, other Company forms and payments
received by Broker-Dealer's employees, agents, or registered
representatives will promptly be forwarded to the Broker-Dealer, which
will conduct a review to determine the suitability of the proposed
sale. After the Broker-Dealer has conducted its suitability review,
and assuming good order, it will forward all relevant documents,
including any required completed forms and related payments, to the
Company's designated office within two (2) business days, whereupon
the Company will begin its underwriting process.
(d) Broker-Dealer personnel will follow established Company administrative
procedures, unless otherwise provided in this Agreement, with regard
to the processing of applications, prospectus receipts, and related
documents. The Company will, as appropriate, advise the Broker-Dealer
of these procedures.
(e) The Broker-Dealer will be credited with all Policies issued by the
Company upon application bearing its name as Broker-Dealer.
(f) Commission statements and checks related to business generated by the
Broker-Dealer will be mailed directly by the Company to its designated
office for distribution to the Broker-Dealer as directed.
3
<PAGE>
6. COMPENSATION
(a) The Company will pay the Broker-Dealer in full compensation for all
services rendered by the Broker-Dealer under this Agreement, the
applicable commissions, fees and allowances specified in the Company's
Individual Life Insurance Schedule of Agents Commissions ("Commissions
Schedule") in force on the date of issue of the Policy, on premiums
paid for each Policy credited to the Broker-Dealer under this
Agreement.
(b) The Company reserves the right to revise the Commissions Schedule, but
any revision of Commissions Schedule shall apply only to Policies
thereafter issued. The publication of revisions to the Commissions
Schedule shall constitute notification to the Broker-Dealer, and any
revised Commissions Schedule shall become a part of this Agreement on
the effective date of the revisions.
(c) Commissions based on premiums applicable to the Company's variable
life insurance products will only be paid to or through the Broker-
Dealer if it is properly registered with the NASD.
7. COMMISSIONS ON SPECIAL CASES
Commissions payable on the following cases, irrespective of any other
provision of this Agreement, will be at the rates allowed under the
Company's rules and practices at the time the premium is due:
(a) Premiums on backdated conversions of Term Life Insurance Policies;
(b) Premiums on reinstatement of lapsed policies; and
(c) Premiums on special plans not shown in the Company's rate books, or on
cases carrying special rate quotations.
8. GROUP CONVERSIONS AND WAIVED PREMIUMS
Commissions will not be payable on premiums on conversions of Group and
Employee Insurance, or premiums waived on account of disability.
9. REFUND OF COMMISSIONS
Should the Company for any reason refund or credit to the customer any
premium, the Broker-Dealer will promptly, on demand, refund to the Company
all commissions and other compensation received on such premium.
Commission adjustments will be made on decreases in premium on which first
year commissions have previously been paid.
4
<PAGE>
10. ADVANCES AND INDEBTEDNESS
(a) The Company is authorized, at any time either before or after the
termination of this Agreement, to deduct from any compensation due
from the Company to the Broker-Dealer the entire amount of any funds,
including, but not limited to, advances or debts, owed by the Broker-
Dealer to the Company or its affiliates, associates, parents or
subsidiaries, but only to the extent of the actual amount owed by the
Broker-Dealer as determined by the Company.
(b) Any compensation paid to the Broker-Dealer for premiums or
considerations later returned or credited to the customer, or any
overpayment of compensation shall be a debt due to the Company from
the Broker-Dealer and payable in accordance with Section 10(a) above.
(c) In addition to all other rights available to the Company as a
creditor, the Company shall have a first lien on all compensation
payable under this Agreement for any of the funds, advances or debts
described in this Section.
(d) To the extent that compensation due to the Broker-Dealer from the
Company is insufficient to cover advances, the difference shall become
a debt due to the Company. Interest at the rate of 6% per annum shall
be charged from the date any indebtedness becomes due and payable to
the Company.
11. GENERAL CONDUCT, REBATES, REPLACEMENTS
(a) The Company will conduct training programs for the appropriate
employees, agents, and registered representatives of the Broker-Dealer
at times and places mutually agreed upon to describe the Company's
Policies and related sales as well as administrative processes. The
Broker-Dealer agrees that it will use its best efforts to participate
in conducting these programs and that the appropriate employees,
agents, and registered representatives will attend these programs
before they will be permitted to sell any Company Policy in accordance
with this Agreement. Moreover, the Broker-Dealer agrees that it will
pay all expenses that its employees, agents, and registered
representatives incur in connection with these programs, as well as,
the cost of any meeting room required in connection with the programs.
(b) The Company and Broker-Dealer agree to cooperate fully in any
investigation or proceeding with respect to any employee, agent, or
registered representative of the Broker-Dealer or the Broker-Dealer
itself to the extent that this investigation or proceeding has been
undertaken in connection with the Company Policies and related
services marketed under this Agreement. Without limiting the
foregoing:
(i) The Company will promptly notify the Broker-Dealer of any
customer complaint or notice of any investigation or
proceeding received by it with respect to the Broker-Dealer
or any employee, agent, or registered representative of the
5
<PAGE>
Broker-Dealer or the Company that may affect the issuance of
the Policies or services marketed under this Agreement.
(ii) The Broker-Dealer will promptly notify the Company of any
customer complaint or notice of any investigation or
proceeding received by the Broker-Dealer with respect to it
or any employee, agent, or registered representative of the
Broker-Dealer in connection with the Policies or services
marketed under this Agreement or any related activity.
(c) The Broker-Dealer will comply with all rules of the Company and with
applicable federal, state or other laws and regulations governing the
sale of the Company's Policies.
(d) The Broker-Dealer shall not rebate, or allow to be rebated, or offer,
or allow to be offered, all or any part of a commission or premium on
a Policy issued, or to be issued by the Company, or withhold any money
due to, or property of, the Company.
(e) The Broker-Dealer shall not either before or after the termination of
this Agreement induce or endeavor to induce any customers of the
Company to discontinue the payment of premiums or to relinquish a
policy, contract or certificate or induce any other broker-dealer,
agent or general agent of the Company to leave its service.
(f) The Broker-Dealer shall comply with the replacement rules and
regulations of the Company and the state in which the Broker-Dealer is
licensed and shall not directly or indirectly engage in selling
practices involving "twisting" or "switching" of contracts of the
Company or of other companies offering mutual funds, securities, other
investment products, insurance or annuity contracts.
12. ADVERTISING
(a) The Broker-Dealer agrees that it will not, directly or indirectly, use
or disseminate advertising matter, prospectuses, circulars, letters,
booklets, schedules, stationery, broadcasting, or sales material of
any kind concerning the Company or its Policies until approved by an
officer of the Company in writing.
(b) The Company will supply the Broker-Dealer with reasonable quantities
of current prospectuses as filed with the Securities and Exchange
Commission and appropriate sales material. In offering Company
variable Policies, the Broker-Dealer shall use only sales or
promotional material that has been approved by the Company and filed
with the NASD. All Broker-Dealer plans and methods for marketing
Company Policies will be subject to review by the Company on a
periodic basis, but not less frequently than annually.
6
<PAGE>
13. OWNERSHIP OF RECORDS
(a) All records, customer files and related paperwork, literature,
authorization cards, sales aids, sales and rate manuals, computer
software, supplies and equipment of every kind and nature furnished to
the Broker-Dealer by the Company or obtained by the Broker-Dealer and
relating to the solicitation, service or sale of Policies subject to
this Agreement shall be the exclusive property of the Company and
shall be returned to the Company free from any claims or asserted
retention rights of the Broker-Dealer upon termination of this
Agreement.
(b) The Broker-Dealer shall safely keep and preserve Company property and
shall replace at the Broker-Dealer's expense any item which may be
lost, destroyed or defaced while in the Broker-Dealer's possession or
control. On termination of this Agreement, the Broker-Dealer shall
deliver to the Company, or any person as it may designate, all Company
property in the Broker-Dealer's possession or control. Pending return
of these items, the Company may withhold any and all compensation
which may be due to the Broker-Dealer.
(c) The Broker-Dealer agrees to keep confidential any and all information
obtained pursuant to this Agreement, and shall disclose this
information only if either authorized by the Company or expressly
required by applicable statute, regulation, or other regulatory rule.
14. TERMINATION AND THE RIGHT TO COMPENSATION THEREAFTER
(a) This Agreement may be terminated without cause by either party upon at
least thirty days written notice specifying the termination date.
(b) This Agreement will automatically terminate:
(i) upon the death or total and permanent physical or mental
disability of the Broker-Dealer, if an individual;
(ii) upon the dissolution of the corporation, if the Broker-
Dealer is a corporation;
(iii) upon the dissolution of the partnership, if the Broker-
Dealer is a partnership;
(iv) upon the expiration or lapse of the Broker-Dealer's license
and appointment to represent the Company; or
(v) upon at the end of any calendar year during which the
Broker-Dealer has not maintained the agreed upon thirteen
month life premium persistency, and has not been credited
with the minimum amount of first year commission on life
insurance sold under this Agreement established by the
Company at the date of this Agreement and set forth by the
Company at the beginning of each calendar year thereafter.
7
<PAGE>
If this Agreement is terminated as provided in Section 18(a) or (b), the
Broker-Dealer shall be entitled to commissions as set forth in the
Commissions Schedule.
(c) The Company may terminate this Agreement for cause at any time,
without prior notice, if:
(i) the Broker-Dealer shall fail to conform to the rules and
regulations of the Company;
(ii) the Broker-Dealer shall have his license to transact
business as contemplated by this Agreement revoked,
suspended, or refused by a state licensing authority;
(iii) the Broker-Dealer shall fail to comply with the laws,
Insurance Department regulations, or other administrative
regulations, governing the insurance business of the state
in which the Broker-Dealer is licensed or of any other state
in which the Company is authorized to do business;
(iv) the Broker-Dealer shall induce, or attempt to induce, any
registered representative, general agent, or any producer
contracted with a general agent, or any other agent or
employee of the Company to leave its service, or to cease
soliciting or writing business for the Company, or to
decrease the volume of business so written, or if the
Broker-Dealer shall improperly induce, or attempt to induce,
any policyholder of the Company to discontinue premium
payments on his policy;
(v) the Broker-Dealer shall make false or misleading statements
about the Company; or
(vi) the Broker-Dealer shall commit any fraud in connection with
the solicitation, sale, or service of any Company Policy.
If the Company terminates this Agreement for cause, no further commission,
service fees, or expense reimbursement allowance shall be payable to the
Broker-Dealer after the termination, except commissions, service fees, or
expense reimbursement allowance which were payable prior to the
termination, less any outstanding indebtedness to the Company.
(d) For purposes of determining whether this Agreement has been breached,
if the Broker-Dealer is a partnership or a corporation, then the acts
of all general partners of the partnership, or of all officers,
directors and voting shareholders of the corporation, as the case may
be, shall be deemed acts of the Broker-Dealer.
(e) In the event that the Broker-Dealer, or any partner of the Broker-
Dealer, or any shareholder of the Broker-Dealer, at any time after the
termination of this Agreement shall improperly induce, or attempt to
induce, any policyholder of the Company to cancel or fail to renew any
insurance with the Company, or shall induce or attempt to induce,
within two years after the termination of this Agreement, any
registered representative, general agent, or any other agent or
employee of the Company to leave its service, or to cease soliciting
or writing business for the Company, or to reduce the volume of
business written, then the Company shall have the right to terminate
all future payments of any sort. This provision shall survive the
termination of the other items and provisions of this Agreement.
8
<PAGE>
(f) Payments becoming due after termination also shall be subject to the
provisions of Section 10.
(g) Notwithstanding the termination of the Agreement, the Company and
Broker-Dealer acknowledge that each of them shall be individually and
respectively liable, responsible and accountable for any and all
actions undertaken prior to the effective date of the Agreement's
termination.
15. ASSIGNMENT
(a) An assignment of commissions shall not be binding upon the Company
until a copy of the assignment has been received at the Company's Home
Office and approved in writing by an officer of the Company. The
Company does not assume any responsibility for the validity,
sufficiency or tax consequences of any assignment.
(b) This Agreement may not be assigned unless an authorized officer of the
nonassigning party agrees in writing to the proposed assignment.
16. LIABILITIES OF BROKER-DEALER
(a) The Broker-Dealer assumes full responsibility for the supervision of
its employees, agents, and registered representatives in all their
activities relating to the Company under this Agreement.
(b) The Broker-Dealer will indemnify and hold the Company harmless for all
expenses, loss or damage suffered by the Company because of a
violation of, or refusal or failure to comply with the terms of this
Agreement or with any federal or state laws, rules or regulations, by
the Broker-Dealer, the Broker-Dealer's employees, registered
representatives, assigns, and any other persons engaged by or acting
on the Broker-Dealer's behalf. The rights and remedies reserved by
the Company in this Agreement are in addition to and not exclusive of
any other right or remedy available to the Company.
(c) The Company, in its sole discretion and business judgment, may make a
financial settlement with respect to a particular customer's policy or
account in response to this customer's allegation of an error,
omission, or wrongdoing by the Broker-Dealer, its employees, agents,
or registered representatives. If a settlement is made, the Company
will recover the amount of that settlement under Section 10, "Advances
and Indebtedness," as if the settlement is a debt owed by the Broker-
Dealer to the Company.
(d) The Broker-Dealer will reimburse the Company for any and all expenses
incurred by the Company to enforce any of the provisions of this
Agreement.
9
<PAGE>
17. REVOCATION OF PRIOR AGREEMENTS
The execution of this Agreement by the Company and Broker-Dealer terminates
and supersedes all previous contracts or agreements made between said
parties except as to renewal commissions, first year commissions and the
service fees provided for in those contracts, if any, that may now be due
or shall become due the Broker-Dealer on business written prior to the
effective date of this Agreement. But nothing in this Section shall be
construed to effect or waive any claim of any kind, whether for money or
otherwise, of the Company against the Broker-Dealer or any obligations or
vested right under any prior contract or agreement.
This Agreement shall be effective to cover all applications taken by the
Broker-Dealer on or after the date of this Agreement. Notwithstanding
prior or subsequent oral agreements to the contrary, this Agreement and the
appropriate Commissions Schedule shall constitute the entire agreement
between the parties.
18. STATUS OF BROKER-DEALER
The relationship of the Broker-Dealer and its employees, agents, and
registered representatives to the Company shall be that of an independent
contractor, and nothing contained in the Agreement shall be construed to
create an employer-employee relationship, partnership, or joint venture
between the Company and Broker-Dealer.
19. GOVERNING LAW
This contract shall be governed by the laws of the State of Connecticut.
20. SEVERABILITY
In the event one or more, but not all of the provisions of this Agreement
are declared unlawful or unenforceable by a court of competent
jurisdiction, such determination shall not affect the legality or
enforceability of the remainder of the terms of this Agreement.
21. MODIFICATIONS OF THIS AGREEMENT
Neither this Agreement nor any of its provisions shall be modified or
amended unless in writing and signed by the Company and Broker-Dealer.
10
<PAGE>
22. NOTICE
(a) All notices and demands made under this Agreement shall be valid only
if in writing and hand-delivered or properly sent by (i) United States
certified or registered mail, postage prepaid, return receipt
requested; or (ii) overnight delivery service such as Emery or Federal
Express with provisions for a receipt and delivery charge prepaid,
addressed as follows or to any other address a party may designate by
giving notice to the other party.
(b) Any notice sent to the Company should be sent to Vice President,
Individual Life Sales, Aetna Life Insurance and Annuity Company, 151
Farmington Avenue, Hartford, CT 06156 and a copy sent to the Company's
Life Sales Manager. Any notice sent to the Broker-Dealer should be
sent to the address indicated on page 1.
23. BENEFIT
This Agreement shall be binding upon, and inure to the benefit of the
parties to this Agreement, their legal representatives, successors, and
assigns (to the extent limited by this Agreement).
24. MISCELLANEOUS
(a) The Company reserves the right to:
(i) modify the amount or plan of any Policy or its premium
rates;
(ii) modify any issue or underwriting rules;
(iii) cancel or rescind any existing Policy;
(iv) withdraw any Policy from any state at any time or introduce
new Policies.
(b) The failure of the Company to enforce the performance of any of the
terms of this Agreement will not constitute a waiver unless agreed to
in writing by the Company and the Broker-Dealer.
(c) The captions and headings of the sections of this Agreement are for
convenience only and are not to be used to interpret, modify, define
or limit the provisions of this Agreement.
The Company and Broker-Dealer, by their duly authorized officers, have caused
this Agreement to be executed.
Signed at ________________________ on _______________________________
Effective: ______________________________
11
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY CO.
__________________________________ ___________________________________
By:_______________________________ By: _______________________________
(Print Name and Title) (Print Name and Title)
- --------------------------------------------------------------------------------
Life Code No. ____________________ Social Security (or EIN) No. ______
Aetna Life Insurance and Annuity Code No. _________________________________
12
<PAGE>
EXHIBIT 99(6)
POWER OF ATTORNEY
I, Eugene M. Trovato, Vice President, Chief Accounting Officer and Corporate
Controller of Aetna Life Insurance and Annuity Company, do hereby constitute and
appoint Susan E. Bryant, Steven J. Lauwers, and Julie E. Rockmore and each of
them individually, my true and lawful attorneys, with full power to them and
each of them to sign for me, and in my name and in the capacity indicated below,
any and all amendments to the Registration Statements listed below filed with
the Securities and Exchange Commission by Aetna Life Insurance and Annuity
Company under the Securities Act of 1933, as amended, and/or the Investment
Company Act of 1940, including but not limited to pre-effective amendments and
post-effective amendments to such filings:
Registration Statements filed under the Securities Act of 1933, as amended:
2-52448 33-75960 33-75996
2-52449 33-75962 33-75998
33-02339 33-75964 33-76000
33-34370 33-75966 33-76002
33-34583 33-75968 33-76004
33-42555 33-75970 33-76018
33-60477 33-75972 33-76024
33-61897 33-75974 33-76026
33-62473 33-75976 33-79118
33-62481 33-75978 33-79122
33-63611 33-75980 33-81216
33-63657 33-75982 33-87642
33-64277 33-75984 33-87932
33-64331 33-75986 33-88720
33-75248 33-75988 33-88722
33-75954 33-75990 33-88724
33-75956 33-75992 33-89858
33-75958 33-75994 33-91846
Registration Statements filed under the Investment Company Act of 1940:
811-2512 811-2513 811-4536 811-5906
hereby ratifying and confirming on this 8th day of February, 1996 my signature
as it may be signed by my said attorneys to any such registration statements,
applications and any and all amendments thereto:
/s/ Eugene M. Trovato
- -------------------------------------
Eugene M. Trovato
Vice President, Chief Accounting Officer
and Corporate Controller
<PAGE>
POWER OF ATTORNEY
I, Christopher J. Burns, Director of Aetna Life Insurance and Annuity Company,
do hereby constitute and appoint Susan E. Bryant, Steven J. Lauwers, and Julie
E. Rockmore and each of them individually, my true and lawful attorneys, with
full power to them and each of them to sign for me, and in my name and in the
capacity indicated below, any and all amendments to the Registration Statements
listed below filed with the Securities and Exchange Commission by Aetna Life
Insurance and Annuity Company under the Securities Act of 1933, as amended,
and/or the Investment Company Act of 1940, including but not limited to pre-
effective amendments and post-effective amendments to such filings:
Registration Statements filed under the Securities Act of 1933, as amended:
2-52448 33-75960 33-75996
2-52449 33-75962 33-75998
33-02339 33-75964 33-76000
33-34370 33-75966 33-76002
33-34583 33-75968 33-76004
33-42555 33-75970 33-76018
33-60477 33-75972 33-76024
33-61897 33-75974 33-76026
33-62473 33-75976 33-79118
33-62481 33-75978 33-79122
33-63611 33-75980 33-81216
33-63657 33-75982 33-87642
33-64277 33-75984 33-87932
33-64331 33-75986 33-88720
33-75248 33-75988 33-88722
33-75954 33-75990 33-88724
33-75956 33-75992 33-89858
33-75958 33-75994 33-91846
Registration Statements filed under the Investment Company Act of 1940:
811-2512 811-2513 811-4536 811-5906
hereby ratifying and confirming on this 8th day of February, 1996 my signature
as it may be signed by my said attorneys to any such registration statements,
applications and any and all amendments thereto:
/s/ Christopher J. Burns
- -------------------------------------
Christopher J. Burns
Director
<PAGE>
POWER OF ATTORNEY
I, Laura R. Estes, Director of Aetna Life Insurance and Annuity Company, do
hereby constitute and appoint Susan E. Bryant, Steven J. Lauwers, and Julie E.
Rockmore and each of them individually, my true and lawful attorneys, with full
power to them and each of them to sign for me, and in my name and in the
capacity indicated below, any and all amendments to the Registration Statements
listed below filed with the Securities and Exchange Commission by Aetna Life
Insurance and Annuity Company under the Securities Act of 1933, as amended,
and/or the Investment Company Act of 1940, including but not limited to pre-
effective amendments and post-effective amendments to such filings:
Registration Statements filed under the Securities Act of 1933, as amended:
2-52448 33-75960 33-75996
2-52449 33-75962 33-75998
33-02339 33-75964 33-76000
33-34370 33-75966 33-76002
33-34583 33-75968 33-76004
33-42555 33-75970 33-76018
33-60477 33-75972 33-76024
33-61897 33-75974 33-76026
33-62473 33-75976 33-79118
33-62481 33-75978 33-79122
33-63611 33-75980 33-81216
33-63657 33-75982 33-87642
33-64277 33-75984 33-87932
33-64331 33-75986 33-88720
33-75248 33-75988 33-88722
33-75954 33-75990 33-88724
33-75956 33-75992 33-89858
33-75958 33-75994 33-91846
Registration Statements filed under the Investment Company Act of 1940:
811-2512 811-2513 811-4536 811-5906
hereby ratifying and confirming on this 8th day of February, 1996 my signature
as it may be signed by my said attorneys to any such registration statements,
applications and any and all amendments thereto:
/s/ Laura R. Estes
- -------------------------------------
Laura R. Estes
Director
<PAGE>
POWER OF ATTORNEY
I, Timothy A. Holt, Director of Aetna Life Insurance and Annuity Company, do
hereby constitute and appoint Susan E. Bryant, Steven J. Lauwers, and Julie E.
Rockmore and each of them individually, my true and lawful attorneys, with full
power to them and each of them to sign for me, and in my name and in the
capacity indicated below, any and all amendments to the Registration Statements
listed below filed with the Securities and Exchange Commission by Aetna Life
Insurance and Annuity Company under the Securities Act of 1933, as amended,
and/or the Investment Company Act of 1940, including but not limited to pre-
effective amendments and post-effective amendments to such filings:
Registration Statements filed under the Securities Act of 1933, as amended:
2-52448 33-75960 33-75996
2-52449 33-75962 33-75998
33-02339 33-75964 33-76000
33-34370 33-75966 33-76002
33-34583 33-75968 33-76004
33-42555 33-75970 33-76018
33-60477 33-75972 33-76024
33-61897 33-75974 33-76026
33-62473 33-75976 33-79118
33-62481 33-75978 33-79122
33-63611 33-75980 33-81216
33-63657 33-75982 33-87642
33-64277 33-75984 33-87932
33-64331 33-75986 33-88720
33-75248 33-75988 33-88722
33-75954 33-75990 33-88724
33-75956 33-75992 33-89858
33-75958 33-75994 33-91846
Registration Statements filed under the Investment Company Act of 1940:
811-2512 811-2513 811-4536 811-5906
hereby ratifying and confirming on this 8th day of February, 1996 my signature
as it may be signed by my said attorneys to any such registration statements,
applications and any and all amendments thereto:
/s/ Timothy A. Holt
- -------------------------------------
Timothy A. Holt
Director
<PAGE>
POWER OF ATTORNEY
I, Gail P. Johnson, Director of Aetna Life Insurance and Annuity Company, do
hereby constitute and appoint Susan E. Bryant, Steven J. Lauwers, and Julie E.
Rockmore and each of them individually, my true and lawful attorneys, with full
power to them and each of them to sign for me, and in my name and in the
capacity indicated below, any and all amendments to the Registration Statements
listed below filed with the Securities and Exchange Commission by Aetna Life
Insurance and Annuity Company under the Securities Act of 1933, as amended,
and/or the Investment Company Act of 1940, including but not limited to pre-
effective amendments and post-effective amendments to such filings:
Registration Statements filed under the Securities Act of 1933, as amended:
2-52448 33-75960 33-75996
2-52449 33-75962 33-75998
33-02339 33-75964 33-76000
33-34370 33-75966 33-76002
33-34583 33-75968 33-76004
33-42555 33-75970 33-76018
33-60477 33-75972 33-76024
33-61897 33-75974 33-76026
33-62473 33-75976 33-79118
33-62481 33-75978 33-79122
33-63611 33-75980 33-81216
33-63657 33-75982 33-87642
33-64277 33-75984 33-87932
33-64331 33-75986 33-88720
33-75248 33-75988 33-88722
33-75954 33-75990 33-88724
33-75956 33-75992 33-89858
33-75958 33-75994 33-91846
Registration Statements filed under the Investment Company Act of 1940:
811-2512 811-2513 811-4536 811-5906
hereby ratifying and confirming on this 12th day of February, 1996 my signature
as it may be signed by my said attorneys to any such registration statements,
applications and any and all amendments thereto:
/s/ Gail P. Johnson
- -------------------------------------
Gail P. Johnson
Director
<PAGE>
POWER OF ATTORNEY
I, Daniel P. Kearney, Director and President (principal executive officer) of
Aetna Life Insurance and Annuity Company, do hereby constitute and appoint Susan
E. Bryant, Steven J. Lauwers, and Julie E. Rockmore and each of them
individually, my true and lawful attorneys, with full power to them and each of
them to sign for me, and in my name and in the capacity indicated below, any and
all amendments to the Registration Statements listed below filed with the
Securities and Exchange Commission by Aetna Life Insurance and Annuity Company
under the Securities Act of 1933, as amended, and/or the Investment Company Act
of 1940, including but not limited to pre-effective amendments and post-
effective amendments to such filings:
Registration Statements filed under the Securities Act of 1933, as amended:
2-52448 33-75960 33-75996
2-52449 33-75962 33-75998
33-02339 33-75964 33-76000
33-34370 33-75966 33-76002
33-34583 33-75968 33-76004
33-42555 33-75970 33-76018
33-60477 33-75972 33-76024
33-61897 33-75974 33-76026
33-62473 33-75976 33-79118
33-62481 33-75978 33-79122
33-63611 33-75980 33-81216
33-63657 33-75982 33-87642
33-64277 33-75984 33-87932
33-64331 33-75986 33-88720
33-75248 33-75988 33-88722
33-75954 33-75990 33-88724
33-75956 33-75992 33-89858
33-75958 33-75994 33-91846
Registration Statements filed under the Investment Company Act of 1940:
811-2512 811-2513 811-4536 811-5906
hereby ratifying and confirming on this 8th day of February, 1996 my signature
as it may be signed by my said attorneys to any such registration statements,
applications and any and all amendments thereto:
/s/ Daniel P. Kearney
- -------------------------------------
Daniel P. Kearney
Director and President
<PAGE>
POWER OF ATTORNEY
I, John Y. Kim, Director of Aetna Life Insurance and Annuity Company, do hereby
constitute and appoint Susan E. Bryant, Steven J. Lauwers, and Julie E. Rockmore
and each of them individually, my true and lawful attorneys, with full power to
them and each of them to sign for me, and in my name and in the capacity
indicated below, any and all amendments to the Registration Statements listed
below filed with the Securities and Exchange Commission by Aetna Life Insurance
and Annuity Company under the Securities Act of 1933, as amended, and/or the
Investment Company Act of 1940, including but not limited to pre-effective
amendments and post-effective amendments to such filings:
Registration Statements filed under the Securities Act of 1933, as amended:
2-52448 33-75960 33-75996
2-52449 33-75962 33-75998
33-02339 33-75964 33-76000
33-34370 33-75966 33-76002
33-34583 33-75968 33-76004
33-42555 33-75970 33-76018
33-60477 33-75972 33-76024
33-61897 33-75974 33-76026
33-62473 33-75976 33-79118
33-62481 33-75978 33-79122
33-63611 33-75980 33-81216
33-63657 33-75982 33-87642
33-64277 33-75984 33-87932
33-64331 33-75986 33-88720
33-75248 33-75988 33-88722
33-75954 33-75990 33-88724
33-75956 33-75992 33-89858
33-75958 33-75994 33-91846
Registration Statements filed under the Investment Company Act of 1940:
811-2512 811-2513 811-4536 811-5906
hereby ratifying and confirming on this 8th day of February, 1996 my signature
as it may be signed by my said attorneys to any such registration statements,
applications and any and all amendments thereto:
/s/ John Y. Kim
- -------------------------------------
John Y. Kim
Director
<PAGE>
POWER OF ATTORNEY
I, Shaun P. Mathews, Director of Aetna Life Insurance and Annuity Company, do
hereby constitute and appoint Susan E. Bryant, Steven J. Lauwers, and Julie E.
Rockmore and each of them individually, my true and lawful attorneys, with full
power to them and each of them to sign for me, and in my name and in the
capacity indicated below, any and all amendments to the Registration Statements
listed below filed with the Securities and Exchange Commission by Aetna Life
Insurance and Annuity Company under the Securities Act of 1933, as amended,
and/or the Investment Company Act of 1940, including but not limited to pre-
effective amendments and post-effective amendments to such filings:
Registration Statements filed under the Securities Act of 1933, as amended:
2-52448 33-75960 33-75996
2-52449 33-75962 33-75998
33-02339 33-75964 33-76000
33-34370 33-75966 33-76002
33-34583 33-75968 33-76004
33-42555 33-75970 33-76018
33-60477 33-75972 33-76024
33-61897 33-75974 33-76026
33-62473 33-75976 33-79118
33-62481 33-75978 33-79122
33-63611 33-75980 33-81216
33-63657 33-75982 33-87642
33-64277 33-75984 33-87932
33-64331 33-75986 33-88720
33-75248 33-75988 33-88722
33-75954 33-75990 33-88724
33-75956 33-75992 33-89858
33-75958 33-75994 33-91846
Registration Statements filed under the Investment Company Act of 1940:
811-2512 811-2513 811-4536 811-5906
hereby ratifying and confirming on this 8th day of February, 1996 my signature
as it may be signed by my said attorneys to any such registration statements,
applications and any and all amendments thereto:
/s/ Shaun P. Mathews
- -------------------------------------
Shaun P. Mathews
Director
<PAGE>
POWER OF ATTORNEY
I, Glen Salow, Director of Aetna Life Insurance and Annuity Company, do hereby
constitute and appoint Susan E. Bryant, Steven J. Lauwers, and Julie E. Rockmore
and each of them individually, my true and lawful attorneys, with full power to
them and each of them to sign for me, and in my name and in the capacity
indicated below, any and all amendments to the Registration Statements listed
below filed with the Securities and Exchange Commission by Aetna Life Insurance
and Annuity Company under the Securities Act of 1933, as amended, and/or the
Investment Company Act of 1940, including but not limited to pre-effective
amendments and post-effective amendments to such filings:
Registration Statements filed under the Securities Act of 1933, as amended:
2-52448 33-75960 33-75996
2-52449 33-75962 33-75998
33-02339 33-75964 33-76000
33-34370 33-75966 33-76002
33-34583 33-75968 33-76004
33-42555 33-75970 33-76018
33-60477 33-75972 33-76024
33-61897 33-75974 33-76026
33-62473 33-75976 33-79118
33-62481 33-75978 33-79122
33-63611 33-75980 33-81216
33-63657 33-75982 33-87642
33-64277 33-75984 33-87932
33-64331 33-75986 33-88720
33-75248 33-75988 33-88722
33-75954 33-75990 33-88724
33-75956 33-75992 33-89858
33-75958 33-75994 33-91846
Registration Statements filed under the Investment Company Act of 1940:
811-2512 811-2513 811-4536 811-5906
hereby ratifying and confirming on this 8th day of February, 1996 my signature
as it may be signed by my said attorneys to any such registration statements,
applications and any and all amendments thereto:
/s/ Glen Salow
- -------------------------------------
Glen Salow
Director
<PAGE>
POWER OF ATTORNEY
I, Creed R. Terry, Director of Aetna Life Insurance and Annuity Company, do
hereby constitute and appoint Susan E. Bryant, Steven J. Lauwers, and Julie E.
Rockmore and each of them individually, my true and lawful attorneys, with full
power to them and each of them to sign for me, and in my name and in the
capacity indicated below, any and all amendments to the Registration Statements
listed below filed with the Securities and Exchange Commission by Aetna Life
Insurance and Annuity Company under the Securities Act of 1933, as amended,
and/or the Investment Company Act of 1940, including but not limited to pre-
effective amendments and post-effective amendments to such filings:
Registration Statements filed under the Securities Act of 1933, as amended:
2-52448 33-75960 33-75996
2-52449 33-75962 33-75998
33-02339 33-75964 33-76000
33-34370 33-75966 33-76002
33-34583 33-75968 33-76004
33-42555 33-75970 33-76018
33-60477 33-75972 33-76024
33-61897 33-75974 33-76026
33-62473 33-75976 33-79118
33-62481 33-75978 33-79122
33-63611 33-75980 33-81216
33-63657 33-75982 33-87642
33-64277 33-75984 33-87932
33-64331 33-75986 33-88720
33-75248 33-75988 33-88722
33-75954 33-75990 33-88724
33-75956 33-75992 33-89858
33-75958 33-75994 33-91846
Registration Statements filed under the Investment Company Act of 1940:
811-2512 811-2513 811-4536 811-5906
hereby ratifying and confirming on this 8th day of February, 1996 my signature
as it may be signed by my said attorneys to any such registration statements,
applications and any and all amendments thereto:
/s/ Creed R. Terry
- -------------------------------------
Creed R. Terry
Director
