Registration Nos. 33-2460
811-4819
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 16 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 21 [X]
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT C
(Exact Name of Registrant)
GREAT AMERICAN RESERVE INSURANCE COMPANY
(Name of Depositor)
11825 N. Pennsylvania Street
Carmel, Indiana 46032-4572
(Address of Depositor's Principal Executive Offices)
(317) 817-3700
(Depositor's Telephone Number, including Area Code)
Michael A. Colliflower
Great American Reserve Insurance Company
11825 N. Pennsylvania Street
Carmel, Indiana 46032-4572
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
space):
[X] immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] on (date) pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a) (1) of Rule 485
[ ] on [date] pursuant to paragraph (a) (1) of Rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date
for a previously filed post- effective amendment
Title of Securities Registered:
Individual Variable Deferred Annuity Contracts
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT C
FORM N-4
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
Under The Securities Act of 1933
<TABLE>
<CAPTION>
Form N-4
Item No. PART A - Prospectus Caption
- - -------- ------------------
<S> <C> <C>
1. Cover Page................................... Cover Page
2. Definitions.................................. Definitions
3. Synopsis or Highlights....................... Summary
4. Condensed Financial Information.............. Condensed Financial Information
5. General Description of Registrant,........... Great American Reserve, Variable Account, and
Depositor and Portfolio Companies Investment Options
6. Deductions and Expense....................... Contract Charges
7. General Description of Variable.............. The Contracts
Annuity Contracts
8. Annuity Period .............................. The Contracts
Section B. Annuity Provisions
9. Death Benefit................................ The Contracts
Section B. Annuity Provisions: Death Benefit During
the Annuity Period
10. Purchase and Contract Values................. Great American Reserve, Variable Account, and
Investment Options
The Contracts
Section A. Accumulation Provisions
11. Redemptions.................................. The Contracts
Section B. Annuity Provisions
12. Taxes........................................ Federal Tax Status
13. Legal Proceedings............................ Not Applicable
14. Table of Contents of the Statement........... Table of Contents of the Statement
of Additional Information of Additional Information
</TABLE>
<TABLE>
<CAPTION>
Form N-4
Item No.
PART B - Statement of Additional Information
-----------------------------------
<S> <C> <C>
15. Cover Page................................... Statement of Additional Information
Cover Page
16. Table of Contents............................ Table of Contents
17. General Information and History.............. General Information and History
18. Services..................................... Not Applicable
19. Purchase of Securities....................... Not Applicable
Being Offered
20. Underwriters................................. Distribution
21. Calculation of Performance Data.............. Calculation of Yield Quotations, Calculation of
Total Return Quotations, and Other Performance Data
22. Annuity Payments............................. Not Applicable
23. Financial Statements......................... Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C of this registration statement.
- --------------------------------------------------------------------------------
Parts A and B were filed in Post-Effective Amendment No. 15 to Registrant's
Form N-4 (File Nos. 33-2460 and 811-04819) and are incorporated herein by
reference.
- --------------------------------------------------------------------------------
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) The financial statements of Great American Reserve Insurance Company
and Great American Reserve Variable Annuity Account C are contained in
Part B of this Registration Statement.
(b) Exhibits
(1) -Resolution of the Board of Directors of Great American
Reserve authorizing the reorganization of Separate Account
dated July 27, 1992.
(2) -Not Applicable.
(3) -Form of Principal Underwriting Agreement by and among Great
American Reserve, Variable Account and GARCO Equity Sales.
(4)(a) -- Form of Stipulated Single Premium Deferred
Fixed/Variable Annuity Contract.
(4)(b) -- Form of Individual Flexible Premium Deferred
Fixed/Variable Annuity Contract.
(5) -- Application for Contracts listed at Exhibits 4(a) and
4(b).
(6) (i) -Articles of Incorporation of Great American Reserve.**
(6) (ii) -By Laws of Great American Reserve.**
(7) -Not Applicable.
(8) (i) Form of Fund Participation Agreement by and among the Alger
American Fund, Great American Reserve Insurance Company and
Fred Alger and Company, Incorporated.*
(ii) Form of Fund Participation Agreement by and among Great
Reserve Insurance Company, Berger Institutional Products
Trust and BBOI Worldwide LLC.*
(iii) Form of Fund Participation Agreement by and between Great
American Reserve Insurance Company, Insurance Management
Series and Federated Securities Corp.*
(iv) Form of Fund Participation Agreement between Great American
Reserve Insurance Company, Van Eck Worldwide Insurance Trust
and Van Eck Worldwide Insurance Trust and Van Eck Associates
Corporation.*
(v) Form of Fund Participation Agreement by and between Lord
Abbett Series Fund, Inc., Lord, Abbett and Co. and Great
American Reserve Insurance Company.*
(vi) Form of Fund Participation Agreement by and between American
Century Investment Services, Inc. and Great American Reserve
Insurance Company.*
(vii) Form of Fund Participation Agreement between INVESCO Variable
Investment Funds, Inc., INVESCO Funds Group, Inc. and the
Company.**
(9) -Opinion and Consent of Counsel.***
(10) -- Consent of Independent Accountants.***
(11) -- Not Applicable.
(12) -- None.
(13) -- Schedule for computation of performance quotations.***
(27) -- Not Applicable.
*Incorporated by reference to Pre-Effective Amendment No. 1 to Form N-4, Great
American Reserve Variable Annuity Account F, File Nos. 333-40309/811-08483 filed
electronically on February 3, 1998.
**Incorporated by reference to Form N-4, Great American Reserve Variable Annuity
Account G, File Nos 333-00373/811-07501, filed electronically on January 23,
1996.
***Incorporated by reference to Post-Effective Amendment No. 15 to Form N-4
(File Nos. 33-2460 and 811-4819) filed electronically on April 28, 1998.
ITEM 25. DIRECTORS AND OFFICERS OF GREAT AMERICAN RESERVE
The following table sets forth certain information regarding the executive
officers of Great American Reserve who are engaged directly or indirectly in
activities relating to the Variable Account or the Contracts. Their principal
business address is 11815 N. Pennsylvania Street, Carmel, IN 46032.
Positions and Offices
Name with Great American Reserve
- - ------------------------ ----------------------------
Ngaire E. Cuneo Director
Stephen C. Hilbert Director and Chairman of the Board
Thomas J. Kilian Director and President
Rollin M. Dick Director, Executive Vice President
and Chief Financial Officer
John J. Sabl Director, Executive Vice President,
General Counsel and Secretary
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
The following information concerns those companies that may be deemed to be
controlled by or under common control with Registrant (all 100% owned unless
indicated otherwise):
CONSECO, INC. (Indiana) - (publicly traded)
CIHC, Incorporated (Delaware)
Bankers National Life Insurance Company (Texas)
National Fidelity Life Insurance Company (Missouri)
Bankers Life Insurance Company of Illinois (Illinois)
Bankers Life & Casualty Company (Illinois)
Certified Life Insurance Company (California)
Jefferson National Life Insurance Company of Texas (Texas)
Beneficial Standard Life Insurance Company (California)
Great American Reserve Insurance Company (Texas)
American Life Holdings, Inc. (Delaware)
American Life Holding Company (Delaware)
American Life and Casualty Insurance Company (Iowa)
Vulcan Life Insurance Company (Alabama) - (98%)
Life Partners Group, Inc. (Delaware)
Wabash Life Insurance Company (Kentucky)
Massachusetts General Life Insurance Company (Massachusetts)
Philadelphia Life Insurance Company (Pennsylvania)
Lamar Life Insurance Company (Mississippi)
American Travellers Life Insurance Company (Pennsylvania)
United General Life Insurance Company (Texas)
American Travellers Insurance Company of New York (New York)
Intermediate Holdings, Inc. (Delaware)
THD, Inc. (Delaware)
TLIC Life Insurance Company (Texas)
Transport Life Insurance Company (Texas)
Continental Life Insurance Company (Texas)
Capitol American Financial Corporation (Ohio)
Capitol Insurance Company of Ohio (Ohio)
Capitol American Life Insurance Company (Arizona)
Frontier National Life Insurance Company (Ohio)
Capitol National Life Insurance Company (Ohio)
Conseco Capital Management, Inc. (Delaware)
Conseco Equity Sales, Inc. (Texas)
Conseco Financial Services, Inc. (Pennsylvania)
Conseco Marketing, LLC (Indiana)
Conseco Services, LLC (Indiana)
Lincoln American Life Insurance Company (Tennessee)
Marketing Distribution Systems, Consulting Group, Inc. (Delaware)
MDS of New Jersey, Inc. (New Jersey)
MDS Securities Incorporated (Delaware)
Bankmark School of Business, Inc. (Delaware)
Conseco Series Trust (Massachusetts)*
Conseco Fund Group (Massachusetts) (publicly held)**
* The shares of Conseco Series Trust currently are sold to Bankers National
Variable Account B, Great American Reserve Variable Annuity Account C,
Great American Reserve Variable Annuity Account E and Great American
Reserve Variable Annuity Account F, each being segregated asset accounts
established pursuant to Texas law by Bankers National Life Insurance
Company and Great American Reserve Insurance Company, respectively.
** The shares of the Conseco Fund Group are sold to the public; Conseco
affiliates currently hold in excess of 95% of its shares.
ITEM 27. NUMBER OF CONTRACT OWNERS
As of March 31, 1998, there were 28,498 Contract Owners of qualified
contracts and 857 contract owners of non-qualified contracts.
ITEM 28. INDEMNIFICATION
The Board of Directors of Great American Reserve is indemnified by Great
American Reserve against claims and liabilities to which such person may become
subject by reason of having been a member of such Board or by reason of any
action alleged to have been taken or omitted by him as such member, and the
member shall be indemnified for all legal and other expenses reasonably incurred
by him in connection with any such claim or liability; however, no
indemnification shall be made in connection with any claim or liability unless
such person (i) conducted himself in good faith, (ii) in the case of conduct in
his official capacity as a member of the Board of Directors, reasonably believed
that his conduct was in the best interests of Variable Account, and, in all
other cases reasonably believed that his conduct was at least not opposed to the
best interests of Variable Account, and (iii) in the case of any criminal
proceeding, had no reasonable cause to believe that his conduct was unlawful.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to members of Great American Reserve's Board of
Directors, officers and controlling persons of the Registrant pursuant to the
provisions described under "Indemnification" 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 payment by the Registrant of expenses incurred or
paid by a member of the Board of Directors, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such member of the Board of Directors, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
The Variable Account has no officers or employees. Employees of an
affiliated company who perform administrative services for the Variable Account
are covered by an officers and directors liability policy.
ITEM 29. PRINCIPAL UNDERWRITER
(a) Conseco Equity Sales, Inc. ("Conseco Equity Sales") is the principal
underwriter for the following investment companies (other than Registrant):
Great American Reserve Variable Annuity Account E
Great American Reserve Variable Annuity Account F
Great American Reserve Variable Annuity Account G
Conseco Fund Group
(b) The following table sets forth certain information regarding such
underwriter's officers and directors. Their address is 11815 N.
Pennsylvania Street, Carmel, IN 46032.
Positions and Offices
Name with Conseco Equity Sales, Inc.
- - ----------------------- --------------------------------
L. Gregory Gloeckner President and Director
Senior Vice President,
James S. Adams Treasurer and Director
Vice President, Senior Counsel,
William P. Latimer Secretary and Director
William T. Devanney, Jr. Senior Vice President,
Corporate Taxes
Christene H. Darnell Vice President, Management
Reporting
Lisa M. Zimmerman Assistant Vice President,
Corporate Taxes
Christine E. Monical Second Vice President and
Assistant General Counsel
<TABLE>
<CAPTION>
Net Underwriting Compensation on
Name of Discounts and Redemption or Brokerage
Principal Underwriter Commissions Annuitization Commissions Compensation*
- - --------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Conseco Equity None None None None
Sales, Inc.
</TABLE>
*Fees paid by Great American Reserve for serving as underwriter
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The accounts, books, or other documents required to be maintained by the
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and
the rules promulgated thereunder are in the possession of Great American Reserve
Insurance Company, 11825 N. Pennsylvania Street, Carmel, Indiana 46032.
ITEM 31. MANAGEMENT SERVICES
Not Applicable.
ITEM 32. UNDERTAKINGS
1. The Registrant hereby undertakes to file a post-effective amendment to
this registration statement as frequently as is necessary to ensure that the
audited financial statements in the registration statement are never more than
16 months old for so long as payments under the variable annuity contracts may
be accepted.
2. The Registrant hereby undertakes to include either (1) as part of any
application to purchase a contract offered by the prospectus, a space that an
applicant can check to request a Statement of Additional Information, or (2) a
postcard or similar written communication affixed to or included in the
prospectus that the applicant can remove to send for a Statement of Additional
Information.
3. The Registrant hereby undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available under
Form N-4 promptly upon written or oral request.
4. The Securities and Exchange Commission (the "SEC") issued the American
Counsel of Life Insurance an industry wide no-action letter dated November 28,
1988, stating that the SEC would not recommend any enforcement action if
registered separate accounts funding tax-sheltered annuity contracts restrict
distributions to plan participants in accordance with the requirements of
Section 403(b)(11), provided certain conditions and requirements were met. Among
these conditions and requirements, any registered separate account relying on
the no-action position of the SEC must:
(1) Include appropriate disclosure regarding the redemption restrictions
imposed by Section 403(b)(11) in each registration statement, including the
prospectus, used in connection with the offer of the contract;
(2) Include appropriate disclosure regarding the redemption restrictions
imposed by Section 403 (b)(11) in any sales literature used in connection with
the offer in the contract;
(3) Instruct sales representatives who solicit participants to purchase the
contract specifically to bring the redemption restrictions imposed by Section
403(b)(11) to the attention of the potential participants; and
(4) Obtain from each plan participant who purchases a Section 403(b)
annuity contract, prior to or at the time of such purchase, a signed statement
acknowledging the participant's understanding of (i) the restrictions on
redemption imposed by Section 403(b)(11), and (ii) the investment alternatives
available under the employer's Section 403(b) arrangement, to which the
participant may elect to transfer his contract value.
The Registrant is relying on the no-action letter. Accordingly, the
provisions of paragraphs (1) - (4) above have been complied with.
5. Great American Reserve represents that the fees and charges deducted
under the Contracts, in the aggregate, are reasonable in relation to the
services rendered, the expenses expected to be incurred, and the risks assumed
by Great American Reserve.
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets the requirements of Securities Act
Rule 485(b) for effectiveness of this Registration Statement and has caused this
Registration Statement to be signed on its behalf, in the city of Carmel, State
of Indiana, on this 14th day of May, 1998.
GREAT AMERICAN RESERVE VARIABLE ANNUITY
ACCOUNT C
Registrant
By: Great American Reserve Insurance Company
By:/s/THOMAS J. KILIAN
-------------------------------------------
GREAT AMERICAN RESERVE INSURANCE COMPANY
Depositor
By:/s/THOMAS J. KILIAN
--------------------------------------------
As required by the Securities Act of 1933, this Registration Statement has
been signed below by the following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
Signature Title Date
- ---------- ----- ----
<S> <C> <C>
/s/STEPHEN C. HILBERT Director and Chairman of the Board May 14, 1998
- ------------------------------- --------------
Stephen C. Hilbert
/s/THOMAS J. KILIAN Director and President May 14, 1998
- -------------------------------- (Principal Executive Officer) --------------
Thomas J. Kilian
/s/ROLLIN M. DICK Director, Executive Vice President May 14, 1998
- ---------------------------------- and Chief Financial Officer --------------
Rollin M. Dick (Principal Financial and Accounting
Officer)
/s/NGAIRE E. CUNEO Director May 14, 1998
- --------------------------------- --------------
Ngaire E. Cuneo
/s/JOHN J. SABL
- --------------------------------- Director, Executive Vice President, May 14, 1998
John J. Sabl General Counsel and Secretary --------------
</TABLE>
INDEX TO EXHIBITS
Exhibit Sequentially
Number Exhibit Numbered Page
- - ------ ------- -------------
EX-99.B(1) Resolution of Board of Directors
EX-99.B(3) Form of Principal Underwriting Agreement
EX-99.B(4)(a) Form of Stipulated Single Premium Deferred
Fixed/Variable Annuity Contract
EX-99.B(4)(b) Form of Individual Flexible Premium Deferred
Fixed/Variable Annuity Contract
EX-99.B(5) Application for Contracts
MINUTES
Board of Managers Meeting
Great American Reserve Variable Annuity Fund
Great American Reserve Variable Annuity Account C
Great American Reserve Variable Annuity Account D
July 27, 1992
CALL TO ORDER
The regular meeting of the Board of Managers (the "Board") of Great
American Reserve Variable Annuity Fund, Great American Reserve Variable Annuity
Account C and Great American Reserve Variable Annuity Account D (the "Accounts")
was called to order, following notice duly given on July 27, 1992, at the
Addison Conference Centre, 15650 Addison Road, Dallas, TX at 2:25 p.m. by
William P. Daves, Jr., Chairman.
ATTENDEES
The following Board members were present in person: William P. Daves, Jr., James
L. Fischer, R. Jan LeCroy, James C. McCormick, Jesse H. Parrish and Harold W.
Hartley.
The following Board member was absent: Walter T. Kirkbride.
Others Present:
From Conseco Capital Management, Inc.: Maxwell E. Bublitz, Gregory J. Hahn and
Davis Smith.
From Great American Reserve Insurance Company: William R. Radez, Jr., Michele J.
Broman and Jim Mulford.
From John McStay Investment Counsel: Wayne G. Willems.
Ms. Broman recorded the minutes of the meeting.
APPROVE THE MINUTES OF THE PREVIOUS MEETING
The first order of business to come before the Meeting was to approve the
minutes of the Board of Managers Meeting held on April 27, 1992. All Board
members indicated that they had received and reviewed a copy of such minutes.
Upon motion duly made, seconded and unanimously carried, the reading of the
minutes of the previous meeting was waived and such minutes were approved as
written and submitted. The following resolution was ratified and adopted:
RESOLVED, that the minutes of the Board of Managers held on April 27,
1992, are hereby approved and adopted.
APPROVE CONTINUATION OF INVESTMENT ADVISORY AGREEMENTS
Mr. Radez read a resolution regarding the Investment Advisory Agreements
between the Accounts and Conseco Capital Management, Inc. All Board members
indicated that they had received and reviewed a copy of such Agreements.
Following a discussion, and upon motion duly made, seconded and unanimously
carried, the following resolution was ratified and adopted by the disinterested
Board members:
RESOLVED, that the continuation of the Investment Advisory Agreements
between the Accounts and Conseco Capital Management, Inc. are hereby
approved until December 31, 1992.
<PAGE>
APPROVE CONTINUATION OF SUB-ADVISORY SERVICES AGREEMENT
Mr. Radez read a resolution regarding the Sub-Advisory Services Agreement
between Great American Reserve Insurance Company, relating to the securities of
Great American Reserve Variable Annuity Fund (Stock Account), and John McStay
Investment Counsel. All Board members indicated that they had received and
reviewed a copy of such Agreement. Following a discussion, and upon motion duly
made, seconded and unanimously carried, the following resolution was ratified
and adopted by the disinterested Board members:
RESOLVED, that the continuation of the Sub-Advisory Services Agreement
between Great American Reserve Insurance Company, relating to the
portfolio securities of Great American Reserve Variable Annuity Fund, and
John McStay Investment Counsel is hereby approved until December 31, 1992.
APPROVE FIDELITY BOND AS TO FORM AND AMOUNT
Mr. Radez discussed the Investment Company Blanket Bond worth $525,000
issued to the Accounts for indemnification during the period from September 30,
1992 to September 30, 1993. Following a discussion, and upon motion duly made,
seconded and unanimously carried, the following resolution was ratified and
adopted by the disinterested Board members:
RESOLVED, that financial institution bond standard form number 14,
Investment Company Blanket Bond for $525,000, issued to the accounts by
National Union Fire Insurance Company for the period of September 30,
1992, to September 30, 1993, is hereby approved for renewal; whereas,
William R. Radez, Jr. is the designated officer authorized to file the
bond.
APPROVE MONEY MARKET PORTFOLIO MANAGEMENT GUIDLINES
Mr. Radez discussed Rule 2a-7, as amended, under the Investment Company
Act of 1940, which became effective June 1, 1991 and that the Money Market
Account is in compliance. Mr. Radez explained that Rule 2a-7 requires money
market funds to follow specific requirements that have been prescribed in the
Money Market Portfolio Management Guidelines. All Board members indicated they
had received and reviewed a copy of such guidelines. Following a discussion and
the rationale for adopting the Guidelines as of June 1, 1991, and upon motion
duly made, seconded and unanimously carried, the following resolution was
ratified and adopted by the disinterested Board members:
RESOLVED, that the Great American Reserve Variable Annuity Account D
(Money Market Account) Portfolio Management Guidelines, in the form
attached hereto as Exhibit A, are hereby approved and adopted as of June
1, 1991.
APPROVE PLAN OF REORGANIZATION AND COMBINATION OF ASSETS
Mr. Radez discussed the proposed reorganization and combination of the
assets of Great American Reserve Variable Annuity Fund and Great American
Reserve Variable Annuity Account D with the assets of Great American Reserve
Variable Account C. Copies of the proposed reorganization and asset combination
were distributed to each board member prior to the meeting for their review.
After the discussion, and upon motion duly made, seconded and unanimously
carried, the following resolutions were ratified and adopted by the
disinterested Board members:
WHEREAS, it is deemed to be in the best interest of Great American Reserve
Variable Annuity Fund ("Annuity Fund"), Great American Reserve Variable
Annuity Account C ("Account C") and Great American Reserve Variable
Annuity Account D ("Account D") (collectively, the "Great American
Accounts"), each a separate account of Great American Reserve Insurance
Company ("Great American"), and the Contractowners and Participants in the
Great American Accounts under variable annuity contracts issued by Great
American to reorganize and combine Annuity Fund, Account C and Account D
into a single unit investment trust-type separate account, with Account C
to be the continuing unit investment trust under its present name; and
2
<PAGE>
WHEREAS, it is proposed that Account C, as a unit investment trust-type separate
account, shall have Subaccounts corresponding to each of the investment
Portfolios offered by Conseco Series Trust (the "Trust"), such portfolios
currently consisting of the Common Stock Portfolio, Government Securities
Portfolio, Money Market Portfolio and Asset Allocation Portfolio, and a
Corporate Bond Portfolio will be added in the near future (collectively, the
"Portfolios*); (the aforesaid reorganization of the Great American Accounts into
Account C and certain related transactions are referred to herein as the
"Reorganization"); and
WHEREAS, it is proposed that the initial assets of the Great American Accounts,
as reconstituted in Account C, be transferred to the Trust in exchange for
shares of the Common Stock Portfolio, Corporate Bond Portfolio and Money Market
Portfolio as described in the Agreement and Plan of Reorganization substantially
in the form presented at this meeting; and
WHEREAS, Great American understands that each Great American Account and the
Trust have authorized, or intend to authorize the Reorganization; and
NOW, THEREFORE, BE IT RESOLVED, that the officers of Great American are hereby
authorized and directed to do all things necessary and appropriate in compliance
with all applicable federal and state laws and regulations to effect and
consummate the Reorganization, including, but not limited to, all things
specified in the following resolutions, subject to compliance with all
applicable regulatory requirements and to approval by a vote of Contractowners
and Participants in the Great American Accounts under variable annuity contracts
issued by Great American, to the extent such approval is required by law and the
Rules and Regulations of those separate accounts; and
FURTHER RESOLVED, that the proposed Agreement and Plan of Reorganization by and
among Great American, each Great American Account and the Trust (the "Plan")
substantially in the form presented to the Board of Directors and made a part of
the records of this meeting, is hereby preliminarily authorized and approved
subject to the Board's further approval of a final Plan at a subsequent meeting
called for that purpose and held prior to the submission of the plan for
participant approval, the Plan and any proposed transfer or reinvestment of
assets being subject to such participant approval, with such non-material
changes as the officers or Directors executing the Plan may approve; and
FURTHER RESOLVED, that the transfer and investment of the portfolio assets of
Annuity Fund, Account D and Account C, under the terms of the Plan, to and into
the certain Portfolios of the Trust is hereby approved and authorized; and
FURTHER RESOLVED, that the Reorganization is in the best interests of all
Contractowners and Participants in the Great American Account and of the
shareholders of the Trust, and will not result in dilution to any Contractowner
or Participant, any Great American Account, any Portfolio of the Trust or any
shareholder of the Trust's Portfolios; and
FURTHER RESOLVED, that a special meeting of Contractowners and Participants
having voting rights with respect to the Great American Accounts to approve the
Plan and the Reorganization contemplated thereby are hereby authorized with
dates, times, places, record dates and notice requirements to be specified at a
later meeting of the Board; and
FURTHER RESOLVED, that to proceed with the Reorganization, authorization and
approval are hereby granted to the filing of applications and amendments thereto
for exemptions from Sections 17(a) and (d) of the Investment Company Act of 1940
("1940 Act") and Rule 17d-I thereunder and such other sections of the 1940 Act
and rules thereunder, as may be necessary or appropriate including any exemptive
relief that may be necessary in connection with the assessment of mortality and
expense risk charges and deductions; and
FURTHER RESOLVED, that contingent upon the consummation and completion of the
Reorganization, authorization and approval are hereby granted to the filing of
applications and amendments thereto to effect the deregistration of Annuity Fund
and Account D as individual investment companies pursuant to Section 8(f) of the
1940 Act; and
FURTHER RESOLVED, that contingent upon consummation and completion of the
Reorganization as of the effective date thereof, termination of Annuity Fund's,
Account C's and Account D's investment management agreement and Annuity Fund's
investment sub-advisory agreement with John McStay Investment Counsel and such
other agreements and arrangements as will no longer be necessary for the
continued operation of Account C as a unit investment trust or as a result of
the discontinuance of Annuity Fund and Account D, is hereby approved and
authorized; and
3
<PAGE>
FURTHER RESOLVED, that the filing with the Securities and Exchange Commission
("Commission") of a Form N-14 registration statement for the Great American
Accounts and the Trust in connection with the Plan, including the filing of any
amendments thereto and all matters property incident thereto, is hereby
authorized and approved; and
FURTHER RESOLVED, that the filing of post-effective amendments on Form N-4 to
the existing Form N-3 registration statements of Annuity Fund, Account C and
Account D in connection with the restructuring of Account C into a unit
investment trust is hereby authorized and approved; and
FURTHER RESOLVED, that there is hereby approved and authorized the preparation
and use of supplements to all present prospectuses relating to Annuity Fund,
Account C and Account D disclosing information necessary or appropriate relative
to the proposed Reorganization; and
FURTHER RESOLVED, that the officers of Great American and each of them is hereby
authorized to take all actions necessary to maintain the registration of Account
C as a unit investment trust under the 1940 Act, and to take such related
actions as they deem necessary or appropriate to carry out the foregoing,
including without limitation, the following: determining that the fundamental
investment policy of Account C shall be to invest or reinvest its assets in
securities issued by such open-end management investment companies registered
under the 1940 Act, as the officers may designate consistent with provisions of
the variable annuity contracts issued by Great American; establishing one or
more Sub-accounts of Account C to which payments under the variable annuity
contracts will be allocated in accordance with instructions received from
Contractowners or Participants, reserving to the officers the authority to
increase or decrease the number of Sub-accounts in Account C as they deem
necessary or appropriate; and investing each Subaccount only in the shares of a
single investment company or a single portfolio of an investment company
organized as a series fund pursuant to the 1940 Act; the aforesaid being subject
to the commencement of Account C's operations as a unit investment trust which
invests in shares of one or more Portfolios of the Trust as provided by the
Plan; and
FURTHER RESOLVED, that the officers of Great American be empowered to take such
further action as they may deem necessary or appropriate to carry out the
intents and purposes of the Reorganization.
APPROVE SUBMISSION OF PROSPECTUS/PROXY STATEMENT TO CONTRACTOWNERS
Mr. Radez discussed the submission of the Prospectus/Proxy Statement to
Contractowners of the Accounts for their approval. After the discussion, and
upon motion duly made, seconded and unanimously carried, the following
resolutions were ratified and adopted by the disinterested Board members:
WHEREAS, Great American desires to hold a Special Meeting of
Contractowners on December 14, 1992, at which the shareholders will vote
on the following items:
1. To approve certain changes to Account C's fundamental investment
policies to expand the range of permissible investments, strategies
and techniques available to the Great American Accounts; and
4
<PAGE>
2. To approve an Agreement and Plan of Reorganization whereby the
assets of the Annuity Fund and Account D would be combined with the
assets of Account C; and
3. To transact such other business as may properly come before the
Meeting or at any adjournments thereof.
WHEREAS, the Board has reviewed and considered the Prospectus/Proxy Statement on
Form N-14 in the form distributed to the Board at this meeting (a copy of which
Prospectus/Proxy Statement shall be identified by the Secretary of Great
American and inserted in the minute book immediately following the of this
meeting); and
NOW, THEREFORE, BE IT RESOLVED, that the prospectus/proxy statement is hereby
approved substantially in the form submitted to this meeting; and
FURTHER RESOLVED, that the officers of the Great American are hereby authorized
to file with the U.S. Securities and Exchange Commission (and to file any
necessary amendments thereto) and mail to all Contractowners entitled to vote, a
prospectus/proxy statement substantially in the form approved at this meeting,
with such changes therein as the officers, with assistance from counsel, deem
necessary or appropriate, along with management for such Special Meeting, and to
solicit proxies on behalf of management for such Special Meeting, and amendments
thereto, all in accordance with applicable laws and regulations; and
FURTHER RESOLVED, that in accordance with Article 1.1 of the By-Laws of Great
American,
December 14, 1992, is designated as the date of the Special Meeting of
Contractowners to be held at the offices of Great American Reserve Insurance
Company, 16415 Addison Road, Dallas, Texas, and that the Chairman of the Board
of Managers is authorized to designate a later date as would be permitted under
Article I.I of Great American's By-Laws; and
FURTHER RESOLVED, that in accordance with Article 1.5 of the By-Laws of Great
American,
October 19, 1992 is designated as the record date for determining the
Contractowners having the right to vote at such Special Meeting, and that the
Chairman of the Board of Managers is authorized to designate a later date as
would be permitted under Article 1.5 of Great American's By-Laws; and
FURTHER RESOLVED, that the officers of the Great American are hereby authorized
to prepare, execute, file and deliver any documents or materials and take any
action which they deem necessary or appropriate to carry out the intent of this
resolution.
APPROVE AUTHORIZATION FOR FILING EXEMPTIVE APPLICATION
Mr. Radez discussed the filing of an Exemptive Application for Great
American Reserve Insurance Company, the Accounts, Conseco Series Trust and GARCO
Equity Sales, Inc. After the discussion, and upon motion duly made, seconded and
unanimously carried, the following resolutions were ratified and adopted by the
disinterested Board members:
WHEREAS, the Board has approved the Agreement and Plan of Reorganization
and the transactions contemplated thereby may be subject to Section 17(a)
of the Investment Company Act of 1940, as amended; and
WHEREAS, Section 17(b) of the Investment Company Act of 1940, as amended,
allows the Great American Accounts to seek exemptive relief from Section
17(a) and the Board believes that each of the proposed transactions
satisfies the standards of Section 17(b); and
NOW, THEREFORE, BE IT RESOLVED, that the Board does hereby approve the
preparation and filing of an exemptive application and any amendments
thereto under the Investment Company Act of 1940 for any exemptive relief
as the officers, with the assistance of counsel, deem necessary or
appropriate; and in
5
<PAGE>
order to effectuate the Agreement and Plan of Reorganization; and
FURTHER RESOLVED, that any officers of Great American be, and they hereby
are, authorized to prepare, execute, file and amend as necessary, or to
have prepared, filed and amended as necessary, an application with the
U.S. Securities and Exchange Commission seeking an order pursuant to
Section 17(b) of the Investment Company Act of 1940, as amended, exempting
from Section 17(a), the combining of the Annuity Fund and Account D with
assets of Account C; and
FURTHER RESOLVED, that officers of Great American are hereby authorized to
prepare, execute, file and deliver any documents or materials and take any
action which they deem necessary or appropriate to carry out the intent of
this resolution.
REPORT ON COMPLIANCE
Mr. Bublitz, on behalf of Conseco Capital Management, Inc., reported that
all portfolio transactions for the quarter ended June 30, 1992, were in
compliance with the provisions of the current prospectus. Mr. Radez, on behalf
of Great American Reserve, and Mr. Willems, on behalf of McStay Investment
Counsel, concurred.
REPORT OF SALES ACTIVITY
Mr. Mulford reviewed the variable annuity sales activity of the Accounts
for the quarter ended June 30, 1992, a copy of which was provided to each Board
member. He reported on the current marketing structure and target markets.
REVIEW OF FINANCIAL REPORT
Mr. Radez discussed the summary ry of financial statement for June 30,
1992, for the Accounts, a copy of which was provided to each Board member.
REVIEW OF AMORTIZED COST VALUATION FOR MONEY MARKET ACCOUNT
Mr. Smith, on behalf of Conseco Capital Management, Inc., reviewed the
valuation of amortized cost of the shares of GARCO Variable Annuity Account D
(Money Market Account). He informed the Board members that there has been no
significant deviation and that the Portfolio continues to be priced at amortized
cost. Mr. Radez, on behalf of Great American Reserve, concurred.
REPORTS FROM CONSECO CAPITAL MANAGEMENT, INC.- ADVISER
Mr. Bublitz reviewed a report on the investment strategy and outlook of
Conseco Capital Management, Inc. for the third, quarter of 1992.
Following Mr. Bublitz's presentation, Mr. Smith reported on the activities
and current status of the Great American Reserve Variable Annuity Account D
(Money Market Account).
Following Mr. Smith's presentation, Mr. Hahn reported on the activities
and current status of the Great American Reserve Variable Annuity Account C
(Bond Account).
The Board members were provided with copies of each report or presentation
made by Conseco Capital Management.
REPORTS FROM JOHN MCSTAY INVESTMENT COUNSEL - SUB-ADVISER
Following Mr. Hahn's presentation, the Chairman recognized Mr. Willems who
presented a report on the sub-advisor's past and recent performance results,
indicating that the sub-advisor's investment style had not changed. Mr. Willems
also presented a report on the investment strategy and outlook of John McStay
Investment Counsel.
6
<PAGE>
In addition, he reported on the activities and current status of Great American
Reserve Variable Annuity Fund (Stock Account).
The Board members were provided with copies of each report or presentation
made by John McStay Investment Counsel.
CALL OF NEXT MEETINGS
The next meeting of the Board of Managers, originally scheduled for
October 26, 1992, has been rescheduled for 2:00 p.m., Monday, December 14, 1992.
A Special Meeting of the Contractowners of the Accounts has been scheduled
for Monday, December 14, 1992, preceding the quarterly meeting of the Board of
Managers.
REPORT ON STOCK ACCOUNT INVESTMENT ADVISORY SERVICES
Mr. Hahn reported on the sub-adviser and expressed the adviser's concerns
regarding its performance managing the Stock Account. He indicated that the
sub-adviser's investment style has under performed versus the index. Based on
the sub-advisers performance and ranking, sales of the Stock Account have been
impacted by the votality. Mr. Hahn further indicated that the adviser is not
asking that the sub-adviser's investment style change, but would like the
opportunity to discuss the concerns directly with the sub-adviser. Subsequently,
the adviser will report to the Board any findings, if any.
ADJOURNMENT
There being no further business to come before the Board, after motion
duly made, seconded and unanimously carried, the Chairman declared the meeting
adjourned at 5:25 p.m.
William R. Radez, Jr.
Secretary
Approved:
William P. Davos, Jr.
Chairman of the Board
PRINCIPAL UNDERWRITING AGREEMENT
This agreement is made among Great American Reserve Insurance Company, a
Texas corporation ("Great American"), Great American Reserve Variable Annuity
Account ("Account "), a separate account established by Great American pursuant
to the Insurance Code of the State of Texas, and GARCO Equity Sales, Inc., a
Texas corporation ("Broker").
WHEREAS, Great American has established Account as a separate account for
use in connection with issuing certain variable annuity contracts ("Contracts");
WHEREAS, pursuant to a separate agreement Great American is responsible
for providing sales and administrative services relative to the variable annuity
contracts for which reserves are maintained in Account ;
WHEREAS, the Broker is registered as a broker-dealer with the Securities
and Exchange Commission (the "Commission") under the Securities Exchange Act of
1934, as amended (the "Act"), and is a member of the National Association of
Securities Dealers, Inc. ("NASD"); and
WHEREAS, Great American and Account desire to have the Contracts sold and
distributed through the Broker and the Broker is willing to sell and distribute
such Contracts under the terms stated herein;
NOW THEREFORE, the parties hereto agree as follows:
(1) Great American and Account hereby designate the Broker as principal
underwriter of the Contracts, and the Broker will use its best efforts to sell
and distribute such Contracts through its registered representatives. Great
American shall have the ultimate right to cease to offer and issue any Contracts
made available to the Broker hereunder.
(2) All premiums and any other monies payable upon the sale, distribution,
renewal or other transaction involving the Contracts will be paid or remitted
directly to Great American which will retain all such premiums and monies for
its own account except to the extent such premiums and monies are allocated to
Account . The Broker, as a broker-dealer registered with the Commission,
acknowledges that all premiums collected by the Broker are held in a fiduciary
capacity on behalf of Great American and are to be paid over to Great American
as soon as possible immediately following receipt and collection. To the extent
permitted by the Contracts and by federal securities law and by insurance laws
of the state of Texas, Great American shall have the ultimate right to decline
to accept any application for issuance of a Contract offered pursuant hereto.
(3) Great American will pay to the Broker or to the registered
representatives of the Broker the salaries or commissions to which
representatives are entitled as a result of the sale, distribution, renewal or
other transaction involving the Contracts. It is the sole prerogative of Great
American to establish commission rates to be paid on Contracts
<PAGE>
offered pursuant hereto, and Great American at all times retains an ultimate
veto as to commission rates to be paid.
(4) Great American, upon receipt of proper evidence of expenditures, will
reimburse the Broker for its expenses incurred in carrying out the terms of this
Agreement.
(5) Great American will at its expense provide the Broker with
prospectuses and such other material as Great American determines to be
desirable for use in connection with the sale of the Contracts. The Broker will
obtain any necessary approvals of such other material in accordance with the
requirements of NASD and appropriate federal and state agencies.
(6) The Broker will be responsible for supervising and controlling the
conduct and activities of its registered representatives with regard to the sale
and distribution of the Contracts.
(7) Great American will supply to the Broker the names of any agents who
indicate a willingness to sell the Contracts.
(8) The Broker will, after careful investigation, select the agents who
are to be trained and qualified to make such sales, will train such agents in
the sale of the Contracts and will use its best efforts to qualify such agents
under federal and state law to engage in the sale of the Contracts. Great
American at all times has the right to refuse to accept the appointment of any
agents selected by the Broker. Agents so trained and qualified ("Agents") will
be "associated persons" of the Broker under Section 15(b) of the Act, and in
addition to all other requirements for such qualification, will be required to
comply with applicable examination requirements before being permitted to engage
in the sale of the Contracts.
(9) Upon qualification of an Agent under applicable federal and state
laws, this fact will be certified in writing to Great American by the Broker.
(10) Prior to permitting any Agent to sell the Contracts, Great American,
the Broker and the Agent will enter into a mutually satisfactory agreement
pursuant to which the Agent will acknowledge that he will be an associated
person of the Broker in connection with his selling activities related to the
Contracts, that such activities will be under the supervision and control of the
Broker and the supervisor designated by the Broker, and that the Agent's right
to continue to sell the Contracts is subject to his continued compliance with
such agreement and rules and procedures established by the Broker.
(11) The Broker will fully comply with the requirements of the Act and
will establish such rules and procedures as may be necessary to supervise
diligently the securities activities of the Agents. Upon request by the Broker,
Great American will furnish or require the Agents to furnish (at Great
American's or the Agent's expense) such appropriate records as may be necessary
to ensure such diligent supervision.
(12) In the event any Agent fails or refuses to submit to supervision of
the Broker in accordance with this Agreement, or otherwise fails to meet the
rules and standards imposed
<PAGE>
by the Broker or its associated persons, the Broker shall certify such fact to
Great American and shall immediately notify such Agent that he is no longer
authorized to sell the Contracts, and the Broker and Great American shall take
whatever additional action may be necessary to terminate the sales activities of
such Agent relating to the Contracts.
(13) The Broker may request that some or all of the books and records
relating to the sales of Contracts required to be maintained by it as a
registered broker-dealer pursuant to Rules 17a-3 and 17a-4 under the Act be
prepared and maintained by Great American. Great American agrees that for
purposes of this Agreement such books and records shall be deemed property of
the Broker and be subject to examination by the Commission in accordance with
Section 17(a) of the Act. The Broker acknowledges, however, that Great American
is the sole owner of all other business records maintained by or on behalf of
Great American, and of all Contracts issued by Great American pursuant hereto.
(14) This Agreement may at any time be terminated by any party hereto on
sixty (60) days' written notice to the other parties and shall automatically
terminate in the event of its assignment.
(15) Any notice under the Agreement shall be in writing, addressed and
delivered or mailed postage prepaid to the other parties at such address as such
other parties may designate for the receipt of such notices. Until further
notice to the other parties, it is agreed that the addresses of Great American,
Account and the Broker for this purpose shall be
(16) This Agreement shall be and is subject to the provisions of the Act
and of the Investment Company Act of 1940, as amended.
(17) This Agreement may not be assigned by the Broker.
Executed this day of ,19 .
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT
By: ____________________________________________________________
GREAT AMERICAN RESERVE INSURANCE COMPANY
By: ____________________________________________________________
GARCO EQUITY SALES, INC.
By: ____________________________________________________________
<PAGE>
AGREEMENT PROVIDING SALES AND ADMINISTRATIVE
SERVICES AND MINIMUM DEALTH BENEFIT PRIOR TO RETIREMENT
Great American Reserve Insurance Company ("Great American") hereby agrees
to provide relative to contracts for which reserves are maintained in Great
American Reserve Variable Annuity Account ("Account ") established by Great
American pursuant to Section 3.75 of the Insurance Code of the State of Texas,
all sales and administrative services required of a life insurance company under
the laws of the State of Texas and the laws of the states to which Great
American may be subject, incident to engaging in the variable annuity business
of Account .
For providing the sales and administrative services (including but not
limited to payment of such expenses as salaries, rent, postage, telephone,
travel, legal, actuarial and auditing fees, costs of office equipment and
stationery) and for providing under certain group variable retirement contracts
a minimum death benefit prior to retirement. Great American shall deduct from
annuity purchase payments or from amounts surrendered, as appropriate, the
percentages as established from time to time for each type of annuity contract
offered; provided, however, that in now event shall deductions exceed 8 1/2% of
the total accumulation of account(s) under any annuity contract.
This Agreement may be terminated at any time by Great American or Account
on sixty (60) days' written notice
Executed this day of , 19 .
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT D
By: _________________________________________________________
GREAT AMERICAN RESERVE INSURANCE COMPANY
By: _________________________________________________________
<PAGE>
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GREAT AMERICAN RESERVE
INSURANCE COMPANY
2020 Live Oak, Dallas, Texas 75201
-----------------------------------------------------------------------
Agrees to pay a life Annuity consisting of a series of monthly payments to the
Annuitant, if living on the Annuity date. The dollar amounts of such payments
will be determined on the basis set forth herein. The first such payment will be
made on the Annuity Date and subsequent payments will be made on the
corresponding day of each month thereafter during the lifetime of the Annuitant;
provided that, if the Annuitant fails to survive until 120 payments have been
made, such payments will be continued thereafter to the beneficiary until 120
payments in all have been made.
Annuitant Age
Contract No. Effective Date
Owner
Beneficiary
The Stipulated Premium of $ _________________, is payable on the Date of Issue.
Upon receipt of due proof that the death of the Annuitant has occurred prior to
the commencement of Annuity payments, We agree to pay the total accumulations of
this Contract to the beneficiary.
The terms and conditions set forth on the subsequent pages hereof are part of
this Contract.
Signed for Great American Reserve at Dallas, Texas on the Effective Date.
/s/ J.R. WOODY /s/ WILLIAM P. TEDRAN
------------------------ ----------------------------
Secretary President
STIPULATED SINGLE PREMIUM ANNUITY CONTRACT
TEN YEAR CERTAIN LIFE ANNUITY COMMENCING AT ANNUITY DATE
NON-PARTICIPATING
ANNUITY PAYMENTS AND TERMINATION VALUES PROVIDED BY THIS CONTRACT, WHEN BASED
ON INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT.
- --------------------------------------------------------------------------------
22-4026(12-85) Page 1
<PAGE>
GENERAL DEFINITIONS
================================================
Account(s) Stock Separate Account, Bond Separate Account,
Money Market Separate Account, or General
Account.
================================================
Accumulation Unit A unit of measurement used to determine the
value of a person's interest under this contract
before annuity payments begin.
================================================
Annuitant The person named under the contract whose life
Annuity payments are based; normally the
recipient of Annuity payments.
================================================
Annuity Commencement Date The date that annuity payments begin with
respect to the Annuitant under the terms of this
contract.
================================================
Annuity A series of periodic payments. They may be for
the lifetime of the Annuitant, for a fixed
period or for the joint lifetime of the
Annuitant and another person and during the
lifetime of the survivor.
================================================
Annuity Unit A unit of measurement used to determine the
amount of an annuity payment to the person
receiving such payment.
================================================
Contract Year The 12 month period starting on either the date
of issue or any annual anniversary thereof.
================================================
Fixed Annuity Annuity payments, each of which remain the same
throughout the annuity payment period. Fixed
annuity payments are guaranteed by Us to their
amount. They are not based upon the investment
experience of any Separate Account.
================================================
General Account The account of Great American Reserve Insurance
Company in which reserves for Fixed Annuities
are maintained.
================================================
"We", "Us", and "Our" Great American Reserve Insurance Company at our
Home Office at 2020 Live Oak, Dallas, Texas
75201.
================================================
Owner The individual, corporation, trust, or
association to whom We issue the contract.
================================================
Separate Account(s) The different asset accounts set up by Us as
diversified investment companies.
The Separate Accounts provide the variable
investment returns under this contract:
(a) "Stock Separate Account" is called Variable
Annuity Fund.
(b) "Bond Separate Account" is called Variable
Annuity Account C.
(c) "Money Market Separate Account" is called
Variable Annuity Account D.
================================================
Total Accumulation The total number of Accumulation Units
credited to this contract in the General Account
and in each Separate Account.
================================================
Valuation Period This is the period of time from the end of one
business day of the New York Stock Exchange to
the end of the next business day. We will
compute the accumulation unit value and annuity
unit value subject to pertinent regulations and
Our procedures as of the end of each Valuation
Period.
================================================
Variable Annuity This is as an Annuity providing for payments
which vary in amount in accordance with the
investment experience of the Separate Accounts.
The Money Market Separate Account is available
during the Accumulation Period only.
- ----------------------------------[LOGO]----------------------------------------
22-4026(12-85) Page 2 ICN 24-0261-02
<PAGE>
GENERAL PROVISIONS
================================================
The Contract The contract and the attached application form
the entire contract. All statements made by the
Annuitant or on his behalf will, in the absence
of fraud, be deemed representations and not
warranties. No such statement will be used in
defense of a claim under this contract unless
contained in the application and a copy of such
application is attached to this contract when
issued. Only Our President or Secretary may
change or waive the provisions of this contract,
and then only in writing. No agent may change or
waive any of the provisions of this contract.
================================================
Age and Sex If the age or sex has been misstated for the
Annuitant (or for any beneficiary upon whose
survival benefit payments are based), then
benefits will be those the premium would have
bought at the correct age or sex. If incorrect
benefits have been paid because of the
misstatement, subsequent annuity payments will
be adjusted to make up or recover any
underpayment or overpayment.
When annuity payments are based upon the
survival of a payee, We will require roof of the
payee's age. Payments will not be due until such
proof is received at your Home Office.
================================================
Ownership and Assignment All the benefits, rights and privileges of the
contract belong to the Owner, but only while the
Annuitant is living. Change of ownership may be
made upon proper written request submitted with
the contract for endorsement. No change will be
recognized by Us unless it is endorsed on the
contract. The change will then be effective on
the date the request was signed, subject to any
action taken by Us before the contract was
endorsed. If the Owner named in the contract is
the trustee(s) of a trust governing any pension
or other benefit plan(s), then "Owner" shall
include any successor trustee(s) appointed under
the terms of such trust.
This contract may not be assigned if it is used
in a qualified retirement plan as defined by the
Internal Revenue Code of 1954, as amended.
Otherwise, this contract may be assigned. No
assignment shall be binding on Us until it is
filed at Our Home Office. We assume no
responsibility for the validity of any
assignment. The rights of the owner or any
beneficiary shall be subject to the rights of
any assignee of record at Our Home Office.
================================================
Beneficiary The beneficiary under this contract may be
changed unless made irrevocable by endorsement
on the contract. Such a change will be made only
upon proper written request received by Us. The
change will take effect on the date the request
is signed and the interest of any prior
beneficiary will end on that date, subject to
any payment made by Us prior to receipt of the
request for change.
If more than one beneficiary has been named, the
interest of any beneficiary who dies before the
Annuitant will pass to the surviving
beneficiary(ies). Payment ill be made equally,
unless otherwise stated in the contract. If no
beneficiary survives the Annuitant, the proceeds
of this contract will be payable in one sum to
the Owner if then living, otherwise to the
estate of the Owner.
- ----------------------------------[LOGO]----------------------------------------
Page 3
<PAGE>
If the Owner has selected a settlement option,
no beneficiary shall have the right to alter or
assign any of the payments or to change the
manner of settlement unless such right has been
granted by the Owner. Except with Our consent,
no settlement options will be available to any
assignee or to any other than a natural person
able to receive proceeds in his or her own
right.
Unless contrary to law, neither the proceeds nor
the payments under any settlement option shall
be subject to any legal process to attach same
for payment of any beneficiary's debts.
================================================
Death Benefit If the Annuitant dies prior to the
Annuity Date, the beneficiary named in the
contract will receive the value of the total
accumulations under this contract upon receipt
in Our Home Office of due proof of death.
The death benefit is payable in one sum unless
other provisions of settlement have been agreed
to in writing to Us.
================================================
Change of Contract by Us We may change any of the terms of this contract
on any contract anniversary date. To do so, We
must give the Owner at least 90 days prior
written notice. It is agreed that no change
will: (1) affect in any way the amount of terms
of any Annuity effected prior to the effective
date of such change: (2) affect the Annuity
tables; (3) stipulated payments; (4) net
investment rate; (5) net investment factor; (6)
accumulation unit value; (7) annual
administration fee; (8) termination value; or
(9) surrender provisions, as those provisions
apply to accumulation units provided by the
payments made by the Owner.
================================================
Change of Contract by Mutual The Owner and We, by agreement in writing, may
Agreement; Retroactive change any or all of the terms of this contract.
Changes. No such change may affect the amount or terms of
the Annuity already effected prior to the
effective date of such change.
Despite any contract terms to the contrary. the
Owner and We. by agreement in writing, may
change any of the terms of this contract in
order to comply with, or receive the benefit of,
any federal or state statute, rule, or
regulation. When applicable, such change may be
retroactive to the Effective Date or any date
thereafter.
================================================
Information to be Furnished The Owner must furnish ail information which We
may reasonably require to administer this
contract. If the Owner cannot furnish any
required information, We may ask the person
concerned to furnish such information. We will
not be liable for any obligations in any way
dependent on such information until We receive
the information.
Incorrect information furnished to Us may be
corrected except for action taken by Us to our
detriment based on such information. Any records
We have prepared from information furnished to
Us shall be deemed evidence as to the truth of
such information.
- ----------------------------------[LOGO]----------------------------------------
224026( 1 2-85) Page 4 ICN 240261-03
<PAGE>
We will accept as proof of death any of the
following: (1) a CERTIFIED copy of the death
certificate; (2) a certified copy of a court
decree finding death; (3) a written statement
from a medical doctor who attended the deceased
at or near the time of death; or (4) any other
proof We find satisfactory.
================================================
Facility of Payment If any payee under this contract is, in Our
opinion, physically or mentally incapable of
giving valid receipt for any payment due under
this contract, We will make such payment to the
payee's legal guardian or legal representative.
In the absence of legal guardian or legal
representative, We may, at our option, make
payments to any person(s) We deem entitled to
such payments for the care and support of the
payee. Any payment made by Us in accordance with
this provision will fully discharge Our
liability to the extent such payments are made.
================================================
Non-Participating This contract is non-participating and will not
share in any of Our surplus or earnings.
PAYMENT AND NONFORFEITURE PROVISIONS
================================================
Stipulated Premium The Stipulated Premium is payable at Our Home
Office.
This contract is a Stipulated Single Premium
Annuity contract. The Stipulated Premium is
payable on the Date of Issue in an amount no
less than $10,000.
A Stipulated Premium in excess of $250,000 may
be made only upon Our approval. Such payments
will be subject to the terms and conditions
required by Us at that time.
================================================
Application of Stipulated The amount of the Stipulated Premium which
Premium; Accumulation Units remains after deduction of any applicable
premium taxes is applied in the form of
Accumulation Units at the close of the Valuation
Period in which such payment is received at Our
Home Office. Each payment shall be applied to
the General Account. Should the Owner so
designate to Our Home Office on or before the
Date of Issue, such payment shall be applied to
one or more of the Separate Accounts. The number
of Accumulation Units applied to each Separate
Account is computed by dividing the amount
applied by the value of an Accumulation Unit at
the close of that Valuation Period. Accumulation
Units are valued separately for each Account. As
a result, an Owner who elects to have amounts
accumulated in more than one Account will have
Accumulation Units from several Accounts applied
to his Total Accumulation. The number of
Accumulation Units so computed will not be
affected by any subsequent change in the dollar
value of an Accumulation Unit of a Separate
Account.
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Page 5
<PAGE>
- --------------------------------------------------------------------------------
================================================
Termination Value This contract may be terminated at any
time. Termination occurs when 100% of the
Termination Value is withdrawn. The Termination
Value of this contract is equal to a portion of
the Total Accumulation shown in the following
chart:
Completed Percentage of
Contract Year Total Accumulation
0-1 93%
2 94%
3 95%
4 96%
5 97%
Thereafter 100%
================================================
Partial Withdrawals At any time after completion of the first
contract year, up to 10% of the Stipulated
Premium may be withdrawn free of charge.
Withdrawals in excess of 10% of the Stipulated
Premium are subject to a charge during the first
5 contract years. The charge on the amount
withdrawn is (1) 7% the first year; (2) 6% the
second year; (3) 5% the third year; (4) 4% the
fourth year; and (5) 3% the fifth year. There is
no charge on withdrawals of the Stipulated
Premium (or its Accumulated Value) held for more
than 5 years. Where amounts in the Total
Accumulation are accumulating in more than one
account, a withdrawal request must specify the
Account(s) from which the withdrawal is to be
made. Withdrawal will be made on a last-in,
first-out basis.
================================================
Administration Fee We will deduct an Administration Fee of $25.00
on each July 2nd and on the date this contract
is fully surrendered or the date the Total
Accumulation values is applied to provide an
Annuity. The deduction will be made on a
last-in, first-out basis from amounts I
accumulated in the General Account. if
available; otherwise from a Separate Account.
================================================
Premium Taxes To the extent that any premium taxes are
assessed against Us, We will pay the taxes if
and when due. Such taxes will not be assessed
until the contract is either surrendered or
annuitized and a life option selected. If a
designated period option (without a life factor)
is chosen, then the tax will not be assessed.
- ----------------------------------[LOGO]----------------------------------------
22-4026(12-85) Page 6 ICN 24-0261-04
<PAGE>
VALUATION PROVISIONS
================================================
General Account Net Rate of The net investment rate for the General Account
Return is guaranteed. Such rate for any Valuation
Period during the first contract year is
guaranteed to be at a rate per annum, compounded
annually, that is equal to Our current declared
return rate as of the date We receive the
Stipulated Premium at Our Home Office.
The guaranteed net investment rates for any
Valuation Period during subsequent contract
years is: (1) 6% for the second and third years;
(2) 4.5% for contract years four through ten;
and (3) 4.5% thereafter.
The net investment rate for any Valuation Period
subsequent to the Annuity Date is guaranteed to
be at least equal to a rate of 3.5% per annum,
compounded annually. We may, in addition,
increase the net investment rate from time to
time.
================================================
General Account Net Return The net investment factor for the General
Factor Account is the sum of 1.0 plus the net
investment rate for the period.
================================================
Separate Account Net The net investment rate for any Valuation Period
Investment Rate of a Separate Account is equal to the gross
investment rate of that Account less a deduction
for each day of the Valuation Period of
.00003945 (an effective annual rate of 1.44%
Such gross investment rate is equal to: (1) the
investment income and capital gains and losses
(both realized and unrealized) on the assets of
the Separate Account less a deduction for any
taxes (or reserve for such taxes), arising from
the same: divided by (2) the amount of such
assets of the Separate Account at the start of
the period. Such gross investment rate may be
either positive or negative.
================================================
Accumulation Unit Value We will determine the value of the General
Account Accumulation Unit in accordance with Our
established practice. Alternatively, We may, at
Our option, determine the value of the portion
of this contract in the General Account by
accumulating the portion of the Stipulated
Premium allocated to the General Account at the
net investment rate shown in the "Net Investment
Rate and Net Investment Factor" provision. The
value of the Accumulation Unit in each Account
on the last day of any Valuation Period is
computed by multiplying such value on the last
day of the preceding Valuation Period by the
Separate Account net investment factor for the
current Valuation Period.
================================================
Valuation of The value of this contract's Total Accumulation
Total Accumulation can be found by adding the value of the
Accumulation Units in each Account.
- ----------------------------------[LOGO]----------------------------------------
Page 7
<PAGE>
================================================
Transfer Between Accounts The Contract Owner may, prior to the Annuity
Date, transfer the value of the Accumulation
Units from one Separate Account to another
Separate Account, or to the General Account, or
vice versa. A transfer cannot be made more than
once in any three month period from any Separate
Account. A transfer cannot be made more than
once in any six month period from the General
Account. Except with Our permission, no more
than 20% of the value of the Accumulation Units
in the General Account may be transferred at one
time. No deduction for expenses will be made
from the amounts transferred. Transfers will
take effect based on Accumulation Unit values
next computed following receipt of a written
request for transfer at Our Home Office.
Transfers from the General Account will be made
last-in, first-out basis.
At the Annuity Date. the value of Accumulation
Units in the Money Market Separate Account will
be transferred to the General Account. The
Contract Owner, however, at least 30 days prior
to the Annuity Date, may direct such value to be
transferred to another account.
================================================
Active Lives Reserves The Active Lives Reserve shall consist of the
sum of Accumulation Units in the contract for
which annuity payments have not commenced.
================================================
Election of Option The Owner may elect to have the Total
accumulation applied on the Annuity Date under
one of the options described below. Any option
must be elected in writing at least 30 days
prior to an Annuitant's Annuity Date.
In the absence of such election, We will apply
the value of the Total Accumulation on the
Annuity Date to a ten year certain life annuity
(as described in Option B below).
================================================
Alternative Assumed The standard assumed investment rate shall be 3
Investment Rates 1/2% The Owner may elect to have all variable
benefits payable for the Annuitant determined on
an assumed investment rate of 5% in lieu of the
standard rate. Such election must be made, in
writing, at least 30 days prior to an
Annuitant's Annuity Date. Such election will not
be allowed if prohibited by the laws or
regulations of the state in which this contract
is issued.
================================================
Annuity Unit Value The value of the General Account Annuity Unit is
fixed at $1.00. The value of a Separate Account
Annuity Unit is computed by multiplying the
value of the unit for the preceding Valuation
Period by: (a) .99990576 (if assumed investment
rate is 3 1/2% or by .99986634 (if alternate
assumed invest rate of 5% applies) for each day
of the Valuation Period; and (b) the net
investment factor for the tenth preceding
Valuation Period.
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22-4026( 1 2-85) Page 8 ICN 24-0261-05
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
================================================
Optional Annuity Forms The amount of the first payment
under the options listed below will be
determined as shown in the "Method of
Calculating Annuity Payments" provision.
No payments will be made under Options A, B. or
C prior to Our receipt of satisfactory evidence
of the Annuitant's (and any joint Annuitant's)
date of birth.
================================================
Option A - Life Annuity An Annuity payable monthly during the lifetime
of an Annuitant, ending with the last payment
due prior to the Annuitant's death.
================================================
Option B - Life Annuity With An Annuity payable monthly during the lifetime
120, 180, or 240 Monthly of an Annuitant. If, at the death of the
Payments Guaranteed Annuitant, payments have been made for less than
the length of time selected, payments shall
continue for the rest of the selected period to
a named beneficiary. If no beneficiary is named,
the then present value of the current dollar
amount of any remaining guaranteed payments,
commuted on the investment rate basis, shall be
paid to the Annuitant's estate. Such amount will
be payable in one sum.
================================================
Option C - Joint and Last An Annuity payable monthly during the joint
Survivor Annuity lifetime of the payee and a second payee, and
then during the remaining lifetime of the
survivor. The payments end with the last payment
prior to the death of the survivor.
================================================
Option D - Payment For a An amount payable monthly for the number of
Designated Period years selected which may be from 1 to 30 years.
The number of years selected may not be less
than 5 years without Our prior written approval.
Should the payee die before the designated
number of monthly payments is made, the then
present value will be paid in one sum. Such
present value will be the current dollar amount
of the remaining number of annuity payments
commuted on the basis of the investment rate(s)
on which the Accumulation Units were applied to
provide an annuity. If such commuted amount is
at least $5,000, it may be applied under Options
A, B. or C. If this election is made within 5
years after the start of annuity payments, and
the present value is elected to be paid in one
sum, then such election shall be treated as a
surrender (as shown in the "Termination Value"
provision.).
</TABLE>
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Page 9
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
================================================
Option E - Payments of a The Total Accumulation value may be paid in
Designated Dollar Amount equal annual, semiannual, quarterly, or monthly
payments of a designated dollar amount until the
remaining balance is less than the amount of one
payment. Such designated amount may not be less
than $6.25 per month per $1,000 value of the
original amount due, nor greater than an amount
which would equal the value applied in less than
five years. The remaining balance in an Account
at the end of any Valuation Period is the
balance at the end of the previous period,
decreased by the amount of any payment made
during the period and the result multiplied by
the net investment factor for the period. If the
remaining balance at any time is less than the
amount of one payment, such balance will be paid
and will be the final payment under the option.
To the extent that this option is effected on a
variable basis (if Federal Securities Law
provides that the Owner may withdraw the
remaining balance), upon such election the then
remaining balance will be paid in one sum. If
the balance is at least $5,000, it may be
applied under Options A, B, or C. If this
election is made within 5 years after the start
of annuity payments, and the remaining balance
is elected to be paid in one sum, then such
election shall be treated as a surrender (as
shown in the "Termination Value" provision).
================================================
Allocation of Variable and The Total Accumulation may be applied to
Fixed Annuities provide: A Variable Annuity; a Fixed Annuity; or
a combination of both. Such election must be in
writing prior to the Annuity Date.
In the absence of such election, when an Annuity
is effected, the value of the Total Accumulation
will be applied as follows: (a) the value of the
Accumulation Units in the Money Market Separate
Account will be transferred to the General
Account, combined with the value of any
Accumulation Units then in the General Account,
and the total value applied to provide a Fixed
Annuity; (b) the value of the Accumulation Units
in the Stock and the Bond Separate Accounts will
be applied, separately, to provide a Variable
Annuity. Such Variable Annuity is based upon the
net investment results of the respective
Separate Accounts.
================================================
Variable Annuity This is an annuity providing for payments which
vary in amount throughout the annuity payment
period. The amounts are based on the net
investment experience of a Separate Account
other than the Money Market Separate Account.
After the first monthly payment for a Variable
Annuity has been computed, the number of
Separate Account Annuity Units is computed by
dividing the first monthly payment by the
Separate Account Annuity Unit value at the start
date of the annuity payments. Once Variable
Annuity payments have begun, the number of the
Annuity Units remains fixed. The method of
computing the unit value is described in the
"Annuity Unit Value" provision.
</TABLE>
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22-4026(12-85) Page 10 ICN 24-0261-06
<PAGE>
The dollar amount of Variable Annuity payments
after the first is not fixed and may change from
month to month. The amount of each Variable
Annuity payment after the first is computed by
multiplying the number of Separate Account
Annuity Units by the Separate Account Annuity
Unit value of the Valuation Period in which the
payment is due.
Any variation in the actual mortality experience
of payees from the expense and mortality
assumptions used to compute the first monthly
payment will not affect the dollar amount of
Variable Annuity payments.
As to Options A, B, and C, if it would produce
greater benefits, We agree that the first
monthly payment under a Variable Annuity will be
determined on the same mortality basis used in
determining the first payment for immediate
Variable Annuities being issued for this class
of Annuitant at the date the first monthly
payment is due under this contract.
================================================
Fixed Annuity This is an annuity providing for payments which
remain fixed dollar amount throughout the
payment period. Since the Account Annuity has a
fixed value, payments made after the first will
never be less than the first monthly payment.
We may, from time to time, increase the amount
of General Account Annuity Units during the
period of benefits. Such increase would be by
action of Our Board of Directors by crediting
interest earned in excess of the guaranteed
rate.
If the guaranteed payments are less than those
of Our similar Single Premium Annuity which
could be purchased by the proceeds at a
discounted premium rate, such larger amounts,
but without excess interest, will be paid if
Annuity Option A, B, or C is elected. This
discounted premium rate is Our base premium rate
on the due date of the first payment, adjusted
for immediate first payment, less such
percentage of that adjusted rate as may be
provided under Our then published rules.
================================================
Frequency of Payment Annuity payments under this contract will be
made monthly. If such payment would amount to
less than $25.00 from any Account, We reserve
the right to change the payment frequency
intervals. If the annual rate of payment to any
payee is less than $100, then We may make
another settlement equitable to the payee. All
annuity payments will be made at equal intervals
on the same date.
METHOD OF CALCULATING ANNUITY PAYMENTS
================================================
Options A, B, and C - Fixed To compute the amount of fixed monthly annuity
Annuity Payments payments under these options, the value of the
Accumulation Units in the Account(s) which are
to be applied to provide Fixed Annuity payments
will be applied to the monthly payment rates
(shown in the Tables found in this contract) for
the appropriate option; and adjusted age of the
Annuitant at the date the first payment is due.
The adjusted age is shown in the "Applicability
and Basis of Tables" provision. The Accumulation
Units so applied will then be cancelled.
- ----------------------------------[LOGO]----------------------------------------
Page 11
<PAGE>
================================================
Options D and E The monthly annuity payments will be computed as
shown in the description of these options (see
"Optional Annuity Forms; Options D and E".)
Please refer to the monthly payment rates in the
applicable Table. When Variable Annuity payments
are elected, as each monthly payment is made, a
number of Accumulation Units in the Total
Accumulation equal in value to the payment will
be cancelled.
TABLES
================================================
Applicability and Basis of The tables in this Article will be used to
Tables determine the Annuity for Tables all Options.
Under options A and B the amount of payment will
depend on the Annuitant's adjusted age at the
time the first payment is due. Under Option C
the amount of payment will depend on the
adjusted age of each Annuitant at the time the
first payment is due.
The Annuity Tables show for various adjusted
ages the amount of the first monthly annuity
payment for each $1,000 of value of the
Accumulation Units of the Owner at the Annuity
Date. Amounts shown in the Tables are based on
investment rates of 3 1/2% and 5% per year.
Amounts for ages not shown will be furnished by
Us upon request.
The adjusted age to be used for the Table is
determined as follows:
Calendar Year of Birth 1901 - 1915 1916 and
thereafter Adjusted Age is Actual Age ---
minus 1
Actual Age, as used above, is the Annuitant's
age on the birthday nearest the date the first
payment is due.
Amount of First Monthly Payment for Each $1,000
of Value of Accumulation Units Applied at the
Annuity Commencement Date after Deducting Any
Premium Taxes.
Second and subsequent monthly annuity payments,
when based on the investment experience of a
Separate Account, are variable and are not
guaranteed as to dollar amount.
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Page 12
<PAGE>
================================================
Amount of First Monthly The amount of first monthly payment for each
Payment $1,000 of Value of Accumulation Units applied at
the Annuity Commencement date after deducting
any premium taxes are listed below. Second and
subsequent monthly annuity payments, when based
on the investment experience of a Separate
Account, are variable and are not guaranteed as
to dollar amount.
<TABLE>
<CAPTION>
OPTIONS A AND B SINGLE LIFE ANNUITIES
NUMBER OF MONTHLY PAYMENTS GUARANTEED
----------------------------------------------------------------------------------------------
Adjusted Age Option One Option Two
of Annuitant ----------------------------------------------------------------------------------------------
None 120 180 240
- -------------------------------------------------------------------------------------------------------------------------------
FV V FV V FV V FV V
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $ 4.74 $ 5.64 $ 4.69 $ 5.58 $ 4.62 $ 5.50 $ 4.52 $ 5.38
51 4 84 5 73 4.78 5.66 4.70 5.57 4.58 5.44
52 4 94 5 83 4.87 5.75 4.78 5.64 4.65 5.50
53 5.04 5.93 4.97 5.84 4.87 5.72 4.71 5.56
54 5 16 6.04 5.07 5.94 4.95 5.80 4.78 5.62
55 5 28 6.16 5.18 6.04 5.04 5.88 4.85 5.68
56 5.40 6.29 5.29 6.15 5.13 5.97 4.91 5.74
57 5.54 6.42 5.41 6.26 5.23 6.06 4.98 5.80
58 5.69 6.57 5.53 6.38 5.33 6.15 5.05 5.86
59 5.84 6.72 5.66 6.50 5.43 6.25 5.11 5.92
60 6.01 6.89 5.79 6.63 5.53 6.34 5.18 5.98
61 6.18 7.06 5.94 6.77 5.63 6.44 5.24 6.04
62 6 37 7 25 6.08 6.91 5.74 6.54 5.30 6.09
63 6 57 7 45 6.24 7.06 5.84 6.63 5.36 6.15
64 6.79 7.67 6.40 7.22 5.95 6.73 5.41 6.20
65 7 02 7.90 6.57 7.38 6.05 6.83 5.46 6.24
66 7 27 8.15 6.74 7.54 6.15 6.93 5.51 6.29
67 7.54 8.42 6.91 7.71 6.26 7.02 5.55 6.32 |
68 7.83 8.71 7.10 7.89 6.35 7.11 5.59 6.36 |LOGO
69 8.14 9.02 7.28 8.06 6.45 7.20 5.62 6.39 |
70 8.48 9.36 7.47 8.24 6.54 7.28 5.65 6.42
71 8.84 9.72 7.66 8.43 6.62 7.36 5.68 6.44
72 9.23 10.12 7.85 8.61 6.70 7.43 5.70 6.46
73 9.65 10.54 8.04 8.79 6.77 7.50 5.71 6.47
74 10.11 11.00 8.23 8.97 6.83 7.56 5.72 6.48
75 10.61 11.50 8.41 9.14 6.88 7.61 5.72 6.49
</TABLE>
The FV columns above assume a net investment rate of 3 1.2% per annum. Amounts
for ages not shown will be provided on request. The V columns above assume a
net investment rate of 5% per annum.
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22-4026(12-85) Page 13 ICN 240261-08
<PAGE>
<TABLE>
<CAPTION>
OPTION C JOINT AND LAST SURVIVOR ANNUITY
Adjusted Age of Primary Annuitant
Adjusted Age Age 45 Age 50 Age 55 Age 60 Age 65 Age 70
of Secondary FV V FV V FV V FV V FV V FV V
Annuitant
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
36 $3.68 $4.62 $3.74 $4.67 $3.77 $4.71 $3.80 $4.74 $3.82 $4.76 $3.83 $4.77
41 3;81 4.73 3.89 4.80 3.95 4.86 4.00 4.91 4.04 4.95 4.06 4.98
46 3.93 4.83 4.05 4.94 4.15 5.04 4.24 5.13 4.30 5.19 4.35 5.24
51 4.03 4.93 4.21 5.09 4.37 5.24 4.51 5.37 4.62 5.49 4.70 5.57
56 4.13 5.02 4.35 5.22 4.58 5.44 4.80 5.65 4.99 5.83 5.14 5.99
61 4.20 5.09 4.47 5.34 4.78 5.63 5.09 5.93 5.39 6.22 5.65 6.48
66 4.25 5.15 4.57 5.44 4.94 5.79 5.36 6.19 5.81 6.62 6.23 7.04
71 4.29 5.19 4.64 5.51 5.07 5.92 5.59 6.42 6.19 7.00 6.83 7.63
76 -- -- 4.68 5.57 5.15 6.02 5.75 6.60 6.50 7.32 7.37 8.18
81 -- -- 4.71 5.60 5.21 6.08 5.87 6.72 6.72 7.56 7.81 8.63
</TABLE>
OPTION D
PAYMENT FOR A DESIGNATED PERIOD
<TABLE>
<CAPTION>
Years of Amount of Years of Amount of Years of Amount of
Payments Payment Payments Payment Payments Payment
FV V FV V FV V
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 $84.65 $85.21 11 $9.09 $9.77 21 $5.56 $6.33
2 43.05 43.64 12 8.46 9.16 22 5.39 6.17
3 29.19 29.80 13 7.94 8.64 23 5.24 6.02
4 22.27 22.89 14 7.49 8.20 24 5.09 5.88
5 18.12 18.74 15 7.10 7.82 25 4.96 5.76
6 15.35 15.99 16 6.76 7.49 26 4.84 5.65
7 13.38 14.02 17 6.47 7.20 27 4.73 5.54
8 11.90 12.56 18 6.20 6.94 28 4.63 5.45
9 10.75 11.42 19 5.97 6.71 29 4.53 5.36
10 9.83 10.51 20 5.75 6.51 30 4.45 5.28
</TABLE>
The FV and V columns above assume a net investment rate of 3 1/2% and 5% per
annum, respectfully.
Amounts for periods not shown will be provided on request.
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22-4026(12-85) Page 14 ICN 24-0261-09
<PAGE>
ADDITIONAL CONTRACT SPECIFICATIONS
Guaranteed Rate of Return
For
General Account Accumulations
The rate of return for any valuation period prior to and including the
Annuity Date is guaranteed to be at least equivalent to the rate of return
per annum compounded annually (as specified below):
Payments received during the first contract year will be credited
with interest at a rate no less than ____% for the unexpired term of
the first contract year.
Payments received during the second and third contract year will be
credited with interest at a rate no less than 6% for the unexpired
term of the second and third contract year.
Payments received subsequent to the third contract year will be
credited with interest at a rate no less than 4.5% for subsequent
contract years beyond the third contract year.
The rate of return applicable to this contract for any valuation period
subsequent to the Annuity Commencement Date is guaranteed to be at least
equivalent to a rate of return of 3 112% per annum compounded annually.
The Company may increase the applicable guaranteed rate of return shown
above from time to time.
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22-4026( 1 2-85) Page 15 ICN 24-0281-10
<PAGE>
- ----------------------------------[LOGO]----------------------------------------
GREAT AMERICAN RESERVE
For prompt service address all correspondence to the Administrative Office
2020 Live Oak Street, Dallas, Texas 75201
STIPULATED SINGLE PREMIUM ANNUITY CONTRACT
TEN YEAR CERTAIN LIFE ANNUITY COMMENCING AT ANNUITY DATE
NON-PARTICIPATING
GREAT AMERICAN RESERVE INSURANCE COMPANY
Home Office: Amarillo, Texas 79105
Administrative Office: 11815 N. Pennsylvania Street, Carmel, Indiana 46032-4572
Telephone: (317) 817-3700
A Stock Company
Agrees to pay a life Annuity consisting of a series of monthly payments to the
Annuitant, if living on the Annuity Date. The dollar amounts of such payments
will be determined on the basis set forth herein. The first such payment will be
made on the Annuity Date and subsequent payments will be made on the
corresponding day of each month thereafter during the lifetime of the Annuitant;
provided that, if the Annuitant fails to survive until 120 payments have been
made, such payments will be continued thereafter to the beneficiary until 120
payments have been made.
Annuitant Age
Contract No. Effective Date
Owner
Beneficiary
Allocation of Payments Among Investment Options (as a percentage):
Variable Account - Sub-accounts
Common Stock
Corporate Bond
Allocation Money Market
of Asset Allocation
Payments Government Securities
Fixed
SEE ATTACHED ENDORSEMENT FOR ADDITIONAL FUNDS
The Initial Premium of $____________ is payable on the Effective Date. Further
payments are payable thereafter on the same day ________________ as provided in
the Payment and Nonforfeiture Provisions. Premiums will not continue beyond the
Annuity Date or the death of the Annuitant.
Upon receipt of due proof that the death of the Annuitant has occurred prior to
the commencement of Annuity payments, We agree to pay the Total Accumulations of
this Contract to the beneficiary.
The terms and conditions set forth on the subsequent pages hereof are part of
this Contract.
Telephone Number: The Owner or Annuitant may call (317) 817-3700 to present
inquiries, obtain information about coverage, or gain assistance in resolving
complaints.
Signed for Great American Reserve at Carmel, Indiana, on the Effective Date.
/s/ [Illegible] /s/ [Illegible]
Secretary President
10 DAY RIGHT TO EXAMINE
Please read your contract carefully. We want you to fully understand it and be
satisfied with it. If for any reason you are not, you may return it to us within
10 days from the date you receive it and receive a refund of all premiums paid.
You may return it by mailing it to our Administrative Office or by returning it
to the agent who sold it. The contract will then be deemed void from its
effective date and all premiums paid will be promptly refunded.
22-7084 (12-86)
Any part of this contract which is funded by a separate account providing
benefits on a variable basis, is a part under which the risk is borne by the
policyholder and is not covered by an insurance guaranty fund or other solvency
protection arrangement.
05-7381 (3-90)
INDIVIDUAL FLEXIBLE PREMIUM DEFERRED FIXED/VARIABLE ANNUITY
ANNUITY PAYMENTS AND TERMINATION VALUES PROVIDED BY THIS CONTRACT, WHEN
BASED ON INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE
NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. THE VALUES OF THE VARIABLE
ACCOUNT MAY INCREASE OR DECREASE.
Page 1
<PAGE>
GENERAL DEFINITIONS
Account(s)
Stock Separate Account, Bond Separate Account, Money Market Separate Account, or
General Account
Annuitant
The person named under the contract whose life Annuity payments are based;
normally the recipient of Annuity payments.
Annuity
A series of periodic payments. They may be for the lifetime of the Annuitant,
for a fixed period or for the joint lifetime of the Annuitant and another person
and during the lifetime of the survivor.
Contract Year
The 12 month period starting on either the effective date of issue or any annual
anniversary thereof.
General Account
The account of Great American Reserve Insurance Company in which reserves for
Fixed Annuities are maintained.
"We", "Us", and "Our"
Great American Reserve Insurance Company at our Home Office at 205 E. 10th
Street, Amarillo, Texas 79101
Separate Account(s)
The different asset accounts set up by Us as diversified investment companies.
The Separate Accounts provide the variable investment returns under this
contract:
(a) "Stock Separate Account" is called Variable Annuity Fund.
(b) "Bond Separate Account" is called Variable Annuity Account C.
(c) "Money Market Separate Account" is called Variable Annuity Account D.
Page 2
<PAGE>
GENERAL PROVISIONS
The Contract
The contract and the attached application form the entire contract. All
statements made by the Annuitant or on his behalf will, in the absence of fraud,
be deemed representations and not warranties. No such statement will be used in
defense of a claim under this contract unless contained in the application and a
copy of such application is attached to this contract when issued. Only Our
President or Secretary may change or waive the provisions of this contract, and
then only in writing. No agent may change or waive any of the provisions of this
contract.
Age and Sex
If the age or sex has been misstated for the Annuitant (or for any beneficiary
upon whose survival benefit payments are based), then benefits will be those the
premium would have bought at the correct age or sex. If incorrect benefits have
been paid because of the misstatement subsequent annuity payments will be
adjusted to make up or recover any underpayment or overpayment.
When annuity payments are based upon the survival of a payee, We will require
proof of the payee's age. Payments will not be due until such proof is received
at Our Home Office.
Ownership and Assignment
The Owner is the individual, Corporation, trust, or association to whom We issue
the contract. All benefits, rights and privileges of the contract belong to the
Owner, but only while the Annuitant is living. Change of ownership may be made
upon proper written request submitted with the contract for endorsement. No
change will be recognized by us unless it is endorsed on the contract. The
change will then be effective on the date the request was signed, subject to any
action taken by Us before the contract was endorsed. If the Owner named in the
contract is the trustee(s) of a trust governing any pension or other benefit
plan(s), then "Owner" shall include any successor trustee(s) appointed under the
terms of such trust.
This contract may not be assigned if it is used in a qualified retirement plan
as defined by the Internal Revenue Code of 1954, as amended. Otherwise, this
contract may be assigned. No assignment shall be binding on Us until it is filed
at Our Home Office. We assume no responsibility for the validity of any
assignment. The rights of the Owner or any beneficiary shall be subject to the
rights of any assignee of record at Our Home Office.
Beneficiary
The beneficiary under this contract may be changed unless made irrevocable by
endorsement on the contract. Such a change will be made only upon proper written
request received by Us. The change will take effect on the date the request is
signed and the interest of any prior beneficiary will end on that date, subject
to any payment made by Us prior to receipt of the request for change.
If more than one beneficiary has been named, the interest of any beneficiary who
dies before the Annuitant will pass to the surviving beneficiary(ies). Payment
will be made equally, unless otherwise stated in the contracts If no beneficiary
survives the Annuitant, the proceeds of this contract will be payable in one sum
to the Owner, if then living, otherwise to the estate of the Owner.
If the Owner has selected a settlement option, no beneficiary shall have the
alter or assign any of the payments or to change the manner of settlement unless
such right has been granted by the Owner. Except with Our consent, no settlement
options will be available to any assignee or to any other than a natural person
able to receive proceeds in his or her own right.
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<PAGE>
Unless contrary to law, neither the proceeds nor the payments under any
settlement option shall be subject to any legal process to attach same for
payment of any beneficiary's debts.
Death Benefit
If the Annuitant dies prior to the Annuity Date, the beneficiary named in the
contract will receive the value of the Total Accumulations under this contract
upon receipt in Our Home Office of proof of death.
The death benefit is payable in one sum unless other provisions of settlement
have been agreed to in writing by Us.
Change of Contract by Us
We may change any of the terms of this contract on any contract anniversary
date. To do so, We must give the Owner at least 90 days prior written notice. It
is agreed that: no change will affect in any way the amount or terms of any
Annuity effected prior to the effective date of such change; affect the Annuity
tables; net investment rate; net investment factor; accumulation unit value;
annual administration fee; termination value; or surrender provisions, as those
provisions apply to accumulation units provided by the payments made by the
Owner.
Change of Contract by Mutual Agreement; Retroactive Changes
The Owner and We, by agreement in writing, may change any or all of the terms of
this contract. No such change may affect the amount or terms of the Annuity
attributable to contributions made prior to the effective date of such change.
Despite any contract terms to the contrary, the Owner and We, by agreement in
writing, may change any of the terms of this contract in order to comply with,
or receive the benefit of, any federal or state statute, rule, or regulation.
When applicable, such change may be retroactive to the Effective Date or any
date thereafter.
Information to be Furnished
The Owner must furnish all information which We may reasonably require to
administer this contract. If the Owner cannot furnish any required information,
We may ask the person concerned to furnish such information. We will not be
liable for any obligations in any way dependent on such information until We
receive the information.
Incorrect information furnished to Us may be corrected except for action taken
by Us to our detriment based on such information. Any records We have prepared
from information furnished to Us shall be deemed evidence as to the truth of
such information.
We will accept as proof of death any of the following: a certified copy of the
death certificate; or a copy of a court decree finding death; a written
statement from a medical doctor who attended the deceased at or near the time of
death; or any other proof We find satisfactory.
Facility of Payment
If any payee under this contract is, in Our opinion, physically or mentally
incapable of giving valid receipt for any payment due under this contract, We
will make such payment to the payee's legal guardian or legal representative. In
the absence of legal guardian or legal representative, We may, at our option,
make payments to any person(s) We deem entitled to such payments for the care
and support of the payee. Any payment made by Us in accordance with this
provision will fully discharge Our liability to the extent such payments are
made.
Non-participation
This contract is non-participating and will not share in any of Our surplus or
earnings.
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Owner Reports
We will send the Owner a statement of the number and dollar value of
Accumulation Units credited to each account as of the Effective Date of the
Contract. We will send subsequent statements at least once per Contract Year.
Such statements shall be mailed within four months of their "as of" date.
Tax Status of Payments
If this contract is issued to qualify under Section 401, 403 or 408 of the
Internal Revenue Code ("Code"), or under an HR-10, We are not responsible to see
that premiums paid to us for this contract will qualify as qualified retirement
plan contributions.
We are not responsible for seeing that premiums paid to us for this contract are
eligible payments per section 311 of the Economic Recovery Act of 1981. If this
contract is issued pursuant to a plan eligible under section 457 of the Code, We
are not responsible for confirming that premiums paid to us for this contract
qualify as deferred compensation.
Separate Account Assets
The assets of the Separate Accounts equal to the reserves and other contract
liabilities in respect of this contract, are not chargeable with any liabilities
arising out of any other business We may conduct.
PAYMENT AND NONFORFEITURE PROVISIONS
All Premiums are Payable at Our Home Office
The contract is an Individual Flexible Premium Deferred Fixed Variable Annuity
Contract. Premiums are payable until the Annuity Date or death of the Annuitant.
Premiums may be paid annually; semi-annually; quarterly; or monthly.
Each premium is applied to each Account according to the allocation percentages
shown on the face page of the contract. The amount applied to an Account buys
accumulation units based upon the value of an accumulation unit. Such value is
computed daily for each Account. The number of accumulation units applied to
each Account is computed by dividing the premium applied to that Account by the
dollar value of one accumulation unit in the Account on the day the premium is
received in the Home Office. The number of accumulation units so computed will
not be affected by any subsequent changes in the dollar value of the
accumulation units. The dollar value of an accumulation unit in the General
Account will increase uniformly each valuation period. The value of an
accumulation unit in a Separate Account will vary from valuation period to
valuation period.
The amount of the premium may be increased or decreased on any due date.
However, premiums in excess of $100,000 may be made only upon Our approval. Such
premiums will be subject to the terms and conditions required by Us at the time.
Termination Value
The Termination Value of this contract is equal to a portion of the total
accumulation value shown in the following chart.
Year Percentage Year Percentage
5 96%
1 92% 6 97%
2 93% 7 98%
3 94% 8 99%
4 95% 9 or more 100%
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This contract may be fully or partially surrendered any time prior to the
Annuity Date. Where amounts are being accumulated in more than one Account, a
request for partial surrender shall state the manner in which the amount
surrendered be shared among Accounts. When a partial surrender from an Account
is made, premiums received by Us (including interest credited) as used to
provide contract benefits and values, shall be reduced on a last-in, first-out
basis by an amount equal to (a) divided by (b), where: (a) is the amount of the
partial surrender plus $5,000; and (b) is equal to the percentage shown in the
above table for the policy year in which the partial surrender takes place.
One partial surrender per calendar year will be permitted without charge when
the amount of such partial surrender does not exceed 10% of the then current
total accumulation value of the contract.
Deferral of Termination Value
We may defer payment of any amount from the General Account for up to six
months.
Change of Allocation and Transfer Between Accounts
Change of allocation. The contract Owner may elect to change the manner in which
future premiums are to be allocated to the General Account and any Separate
Account. Such election must be made prior to the Annuity Date and at least three
calendar months after the contract Effective Date or the last change in
allocation percentages.
Transfers Between Accounts. The Contract Owner may, prior to the Annuity Date,
transfer the value of accumulation units from one Separate Account to another
Separate Account, or the General Account, or vice versa. A transfer cannot be
made more than once in any three month period from any Separate Account. Up to
20% of the value of the accumulation units in the General Account may be
transferred semi-annually. No deductions will be made from amounts transferred
for expenses. Transfers will take effect based on Accumulation Unit values next
computed following receipt of a written request for transfer at Our Home Office.
Transfers from the General Account will be made on a last-in, first-out basis.
On the Annuity Date, the value of Accumulation Units in the Money Market
Separate Account will be transferred to the General Account. The Contract Owner,
however, at least 30 days prior to the Annuity Date may direct such value to be
transferred to another Account.
Administration Fee
We will deduct an Administration Fee of $20.00 on each July 2nd and on the date
this contract is fully surrendered or the date the total Accumulation Value is
applied to provide an Annuity. However, in no event shall the total
Administration Fee deducted during any contract year exceed $30.00. The
deduction will be made on a last-in, first-out basis, from amounts accumulated
in the General Account, if available; otherwise from a Separate Account. If the
Administration fee causes the Total Accumulation to go below the minimum
non-forfeiture values, as required by the state in which this contract is
issued, the fee will not be assessed.
Premium Taxes
To the extent that any premium taxes are assessed against Us, we will deduct the
taxes from: premiums as received; or from an Account at the time an Annuity is
effected; or at such other time as taxes are assessed.
Change to Paid-up Contract
This Contract may be placed on paid-up status if payment of a contribution is
not made within 31 days after Great American Reserve has notified the Owner that
such contribution is due.
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<PAGE>
The entire Contract shall become paid-up on any anniversary of the Effective
Date where written notice is given to Great American Reserve by the Owner to
place the Contract on a paid-up status.
Effective with being placed on a paid-up status, all amounts held by Great
American Reserve pursuant to the Contract shall continue to be accumulated and
governed by the terms of the Contract. The Owner may resume contributions under
the Contract at any time.
Active Lives Reserve
The Active Lives Reserve shall consist of the sum of Accumulated Units in the
contract for which annuity payments have not commenced.
VALUATION PROVISIONS
Valuation Period
This is the period of time from the end of one business day of the New York
Stock Exchange to the end of the next business day. We will compute the
Accumulation Unit Value and Annuity Unit value subject to pertinent regulations
and Our procedures as of the end of each valuation period.
Accumulation Unit
This is a measurement unit used to compute the value of a person's interest
under the contract before annuity payments start. The initial value of an
Accumulation Unit of the General Account and Separate Accounts is fixed at
$1.00. The value of the Accumulation Unit in each Account on the last day of any
valuation period thereafter is computed by multiplying such value on the last
day of the preceding valuation period by the net investment factor for the
Account for that period.
Total Accumulation
This is the total number of Accumulation Units credited to the contract in the
General Account and in each Separate Account. The value of the Total
Accumulation will depend on the value of the Accumulation Units in each account.
The value of the Total Accumulations and any death benefit, including any period
during which this contract is held in a paid-up status, are not less than those
required by the state in which this Contract is delivered.
Annuity Unit
This is a measurement unit used to compute the amount of an annuity payment. The
value of the General Account Annuity Unit is fixed at $1.00. The value of the
Stock Separate Account unit for the valuation period ending October 1, 1965 was
fixed at $1.00. The value of the annuity unit for the Bond Separate Account and
for the Money Market Separate Account for the valuation period ending May 25,
1981 was fixed at $1.00. For any other valuation period, the Annuity Unit Value
is computed by multiplying the value of the particular Separate Account Annuity
unit for the preceding period by the product of: (a) .99990576; and (b) the net
investment factor of that Separate Account for the valuation period preceding
the period for which the value is being computed.
Annuity Value
The Annuity Value is equal to the value at the investment rate shown in the
General Account Net Rate of Return provision less an administration fee (shown
in the (Administration Fee) provision). Any premium taxes payable by Us will be
deducted from either premiums as received, or the Annuity Value at the Annuity
Date, depending upon when the tax is payable.
General Account Net Rate of Return
The rate of return for any valuation period prior to and including the Annuity
Date is guaranteed to be at least equal to the rate of return per annum
compounded annually as shown below:
Premiums received prior to the Annuity Commencement Date will be credited with
interest at a rate no less than 4.5%
Interest will accumulate from the date premiums are received at the Home Office
until the date the total accumulation is determined.
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The rate of return applicable to this contract for any valuation period after
the Annuity Date is guaranteed to be at least equal to a rate of return of 3.5%
per annum compounded annually.
We may increase the guaranteed rate of return shown above from time to time.
General Account Net Return Factor
The net return factor for the General Account is the sum of 1.0 Factor plus the
net rate of return for the Account.
Separate Account Net Investment Rate
The net investment rate for any valuation period for each Separate Account is
equal to: (1) the gross investment rate for that Account for the period; (2)
less a margin deduction of .00003945 (an effective annual rate of 1.44%). Such
gross investment rate is equal to: (I) the investment income and capital gains
and losses (both realized and unrealized) on the assets of a Separate Account
less a deduction for any income taxes arising from same, divided by (II) the
amount of such assets of the Separate Account at the start of the period. Such
gross investment rate may be either positive or negative.
Separate Account Net Investment Factor
The investment factor for each Separate Account is the sum of 1.0 plus the
investment rate for the Separate Account.
SETTLEMENT PROVISIONS
Fixed Annuity
This is an annuity providing for payments, each of which remain the same
throughout the annuity payment period. Fixed annuity payments are guaranteed by
Us as to their amount. They are not based upon the investment experience of any
Separate Account.
Variable Annuity
This is an annuity providing for payments which vary in amount throughout the
annuity payment period. The amounts are based on the net investment experience
of the Stock Separate Account or the Bond Separate Account. The Money Market
Separate Account is available during the accumulation period only. After the
first monthly payment for a variable annuity has been computed, a number of
Separate Account annuity units is computed by dividing that first monthly
payment by the Separate Account Annuity Unit value at the start date of the
annuity payments. Once Variable Annuity payments have begun, the number of the
Annuity Units remains fixed. The method of computing the Separate Account
annuity value is described in the Valuation Provisions.
The dollar amount of Variable Annuity payments after the first is not fixed and
may change from month to month. The amount of each Variable Annuity payment
after the first is computed by multiplying the number of Separate Account
annuity units by the Separate Account annuity unit value for the valuation
period in which the payment is due.
Any variation in the actual mortality experience of payees from the mortality
assumption used to compute the first monthly payment will not affect the dollar
amount of Variable Annuity payments.
Annuity Date
This is the date on which annuity payments to the payee start under the terms of
the contract.
Options Available to Annuitant
Unless otherwise required by law, the Annuity Date for this contract may be the
first day of any month between the Annuitant's 50th and 75th birthdays. In the
absence of a written election to the contrary, the Annuity Date shall be the
first day of the month on or next following the Annuitant's 65th birthday.
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The Owner may elect to have the Termination Value applied on the Annuity Date
under one of the first six options described below. In the absence of such
election, the Termination Value on the Annuity Date will be applied under the
Second Option to provide a life annuity with 120 monthly payments guaranteed.
The Termination Value applied is based on the Accumulation Unit value on the
last day of the second valuation period preceding the date Annuity payments
start.
Any option or optional Annuity Date must be elected in writing at least 30 days
prior to the effective date of such election.
Options Available to Beneficiary
The Owner may elect, in lieu of payment in one sum, that any amount due by Us
under this contract be applied under any of the Options shown below. If the
Owner has not elected an option, the beneficiary, upon the death of the
Annuitant prior to the Annuity Date, may make such election.
Supplementary Contract
When one of these settlement options becomes effective after the death of the
Annuitant, this contract shall be surrendered to us in exchange for a
supplementary contract providing for the manner of settlement elected.
Date of Payment
The first payment under the Sixth Option shall be made at the end of the period
selected. It will be measured from the date of approval of the claim for
settlement. The first payment under any other option shall be made immediately
upon approval of claim for settlement. Subsequent payments shall be made
periodically in accordance with the manner of payment elected.
Annuity Options
First Option: Life Annuity. An Annuity payable monthly during the lifetime of
the payee, ending with the last payment due prior to the death of the payee.
Second Option: Life Annuity with 120, 180 or 240 Monthly Payments Guaranteed. An
Annuity payable monthly during the lifetime of the payee. If, at the death of
the payee, payments have been made for less than the length of time selected,
payments shall continue for the rest of the selected period to a named
beneficiary.
Third Option: Joint and Last Survivor Life Annuity. An Annuity payable monthly
during the joint lifetime of the payee and a second payee, and then during the
remaining lifetime of the survivor. The payments end with the last payment prior
to the death of the survivor.
Fourth Option: Payments for a Designated Period. An amount payable monthly for
the number of years selected which may be from 1 to 30 years.
Fifth Option: Payments of a Specified Dollar Amount. The amount due may be in
equal annual, semi-annual, quarterly, or monthly payments of a designated dollar
amount (not less than $75 per annum per $1,000 of the original amount due) until
the remaining balance is less than the amount of one payment. The remaining
balance in any Account at the end of any valuation period is the balance at the
end of the previous period, decreased by the amount of any payment made during
the period and the result multiplied by the net investment factor for the
period. If the remaining balance at any time is less than the amount of one
payment, such balance will be paid and will be the final payment under the
option.
Sixth Option: Deferred Income. The amount due may be left on deposit in Our
General Account and a sum will be paid annually, semi-annually, quarterly, or
monthly, as selected. The payment shall be equal to the net General Account rate
of return for the period multiplied by the amount remaining on deposit.
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Allocation of Annuity
At the time election of one of the first five options is made, the person
electing the option may further elect to have the Termination Value applied to
provide: a variable annuity; a fixed annuity; or a combination of both.
Election of the Fifth Option may specify that the net investment factor for one
or more Separate Accounts, or for the General Account, is to apply or the amount
due and periodic payment may be split between the Accounts. If no election is
made to the contrary, that portion of the amount due from the Stock Separate
Account or the Bond Separate Account shall be applied to provide a Variable
Annuity. The portion of the amount due from the General Account and from the
Money Market Separate Account shall be applied to a Fixed Annuity.
Minimum Payments
No election of options may be made under this contract for any payee unless such
election would produce a minimum first payment of $25.00. If a combination
benefit is elected, no election may be made unless the first payment from each
account would be at least $25.00 to the payee. If, at any time, any payment to a
payee from any Account should become less than $25.00 each, then We will: (1)
have the right to change the payment frequency to such interval as will result
in a $25.00 minimum payment; or (2) make another settlement equitable to the
payee if any payment should become less than $25.00 per annum.
Death of Beneficiary
If any beneficiary dies while receiving payments, the present values (at the
current dollar amount on date of death) of any remaining guaranteed payments, or
any then remaining balance under the Fifth or Sixth Option will be paid to the
beneficiary's estate. Such amount will be payable in one sum unless provisions
of settlement have previously been made and approved by Us. Calculations for
such present value of remaining guaranteed payments will assume a net rate of
return of 3-1/2% per annum in the General Account and all Separate Account
Options.
TABLES
Applicability and Basic of Tables
The tables in this Article will be used to determine the Annuity for all
Options. Under options A and B the amount of payment will depend on the
Annuitant's adjusted age at the time the first payment is due. Under Option C
the amount of payment will depend on the adjusted age of each Annuitant at the
time the first payment is due.
The Annuity Tables show for various adjusted ages the amount of the first
monthly annuity payment for each $1,000 of value of the Accumulation Units of
the Owner at the Annuity Date. Amounts shown in the Tables are based on
investment rates of 3-1/2% and 5% per year. Amounts for ages not shown will be
furnished by Us upon request.
The adjusted age to be used for the Table is determined as follows:
Calendar Year of Birth 1901 - 1915 1916 and thereafter
Adjusted Age is Actual Age --- minus 1
Actual Age, as used above, is the Annuitant's age on the birthday nearest the
date the first payment is due.
Amount of First Monthly Payment for Each $1,000 of Value of Accumulation Units
Applied at the Annuity Commencement Date after Deducting Any Premium Taxes.
Second and subsequent monthly annuity payments, when based on the investment
experience of a Separate Account, are variable and are not guaranteed as to
dollar amount.
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Amount of First Monthly Payment
The amount of first monthly payment for each $1,000 of Value of Accumulation
Units applied at the Annuity Commencement date after deducting premium taxes
listed below. Second and subsequent monthly annuity payments, when based on the
investment experience of a separate account, are variable and are not guaranteed
as to dollar amount.
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OPTIONS A AND B SINGLE LIFE ANNUITIES
-----------------------------------------------------------------
NUMBER OF MONTHLY PAYMENTS GUARANTEED
-----------------------------------------------------------------
Option One Option Two
-----------------------------------------------------------------
Adjusted Age
of Annuitant None 120 180 240
- --------------------------------------------------------------------------------
FV V FV V FV V FV V
- --------------------------------------------------------------------------------
50 $ 4.74 $ 5.64 $ 4.69 $ 5.58 $ 4.62 $ 5.50 $ 4.52 $ 5.38
51 4.84 5.73 4.78 5.66 4.70 5.57 4.58 5.44
52 4.94 5.83 4.87 5.75 4.78 5.64 4.65 5.50
53 5.04 5.93 4.97 5.84 4.87 5.72 4.71 5.56
54 5.16 6.04 5.07 5.94 4.95 5.80 4.78 5.62
55 5.28 6.16 5.18 6.04 5.04 5.88 4.85 5.68
56 5.40 6.29 5.29 6.15 5.13 5.97 4.91 5.74
57 5.54 6.42 5.41 6.26 5.23 6.06 4.98 5.80
58 5.69 6.57 5.53 6.38 5.33 6.15 5.05 5.86
59 5.84 6.72 5.66 6.50 5.43 6.25 5.11 5.92
60 6.01 6.89 5.79 6.63 5.53 6.34 5.18 5.98
61 6.18 7.06 5.94 6.77 5.63 6.44 5.24 6.04
62 6.37 7.25 6.08 6.91 5.74 6.54 5.30 6.09
63 6.57 7.45 6.24 7.06 5.84 6.63 5.36 6.15
64 6.79 7.67 6.40 7.22 5.95 6.73 5.41 6.20
65 7.02 7.90 6.57 7.38 6.05 6.83 5.46 6.24
66 7.27 8.15 6.74 7.54 6.15 6.93 5.51 6.29
67 7.54 8.42 6.91 7.71 6.26 7.02 5.55 6.32
68 7.83 8.71 7.10 7.89 6.35 7.11 5.59 6.36
69 8.14 9.02 7.28 8.06 6.45 7.20 5.62 6.39
70 8.48 9.36 7.47 8.24 6.54 7.28 5.65 6.42
71 8.84 9.72 7.66 8.43 6.62 7.36 5.68 6.44
72 9.23 10.12 7.85 8.61 6.70 7.43 5.70 6.46
73 9.65 10.54 8.04 8.79 6.77 7.50 5.71 6.47
74 10.11 11.00 8.23 8.97 6.83 7.56 5.72 6.48
75 10.61 11.50 8.41 9.14 6.88 7.61 5.72 6.49
The FV columns above assume a net investment rate of 3-1/2% per annum. Amounts
for ages not shown will be provided on request. The V columns above assume a net
investment rate of 5% per annum.
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OPTION C JOINT AND LAST SURVIVOR ANNUITY
Adjusted Age of Primary Annuitant
<TABLE>
<CAPTION>
Adjusted Age Age 45 Age 50 Age 55 Age 60 Age 65 Age 70
of Secondary
Annuitant FV V FV V FV V FV V FV V FV V
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
36 $3.68 $4.62 $3.74 $4.67 $3.77 $4.71 $3.80 $4.74 $3.82 $4.76 $3.83 $4.77
41 3.81 4.73 3.89 4.80 3.95 4.86 4.00 4.91 4.04 4.95 4.06 4.98
46 3.93 4.83 4.05 4.94 4.15 5.04 4.24 5.13 4.30 5.19 4.35 5.24
51 4.03 4.93 4.21 5.09 4.37 5.24 4.51 5.37 4.62 5.49 4.70 5.57
56 4.13 5.02 4.35 5.22 4.58 5.44 4.80 5.65 4.99 5.83 5.14 5.99
61 4.20 5.09 4.47 5.34 4.78 5.63 5.09 5.93 5.39 6.22 5.65 6.48
66 4.25 5.15 4.57 5.44 4.94 5.79 5.36 6.19 5.81 6.62 6.23 7.04
71 4.29 5.19 4.64 5.51 5.07 5.92 5.59 6.42 6.19 7.00 6.83 7.63
76 -- -- 4.68 5.57 5.15 6.02 5.75 6.60 6.50 7.32 7.37 8.18
81 -- -- 4.71 5.60 5.21 6.08 5.87 6.72 6.72 7.56 7.81 8.63
</TABLE>
OPTION D PAYMENT FOR A DESIGNATED PERIOD
Years of Amount of Years of Amount of Years of Amount of
Payments Payment Payments Payment Payments Payment
FV V FV V FV V
1 $84.65 $85.21 11 $9.09 $9.77 21 $5.56 $6.33
2 43.05 43.64 12 8.46 9.16 22 5.39 6.17
3 29.19 29.80 13 7.94 8.64 23 5.24 6.02
4 22.27 22.89 14 7.49 8.20 24 5.09 5.88
5 18.12 18.74 15 7.10 7.82 25 4.96 5.76
6 15.35 15.99 16 6.76 7.49 26 4.84 5.65
7 13.38 14.02 17 6.47 7.20 27 4.73 5.54
8 11.90 12.56 18 6.20 6.94 28 4.63 5.45
9 10.75 11.42 19 5.97 6.71 29 4.53 5.36
10 9.83 10.51 20 5.75 6.51 30 4.45 5.28
The FV and V columns above assume a net investment rate of 3-1/2% and 5% per
annum, respectfully.
Amounts for periods not shown will be provided on request.
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<PAGE>
ADDITIONAL CONTRACT SPECIFICATIONS
Guaranteed Rate of Return
For
General Account Accumulations
The rate of return for any valuation period prior to and including the Annuity
Date is guaranteed to be at least equivalent to the rate of return per annum
compounded annually (as specified below):
Payments received prior to the Annuity Commencement Date will be credited
with interest at a rate no less than 4.5%.
The rate of return applicable to this contract for any valuation period
subsequent to the Annuity Commencement Date is guaranteed to be at least
equivalent to a rate of return of 3-1/2% per annum compounded annually.
The Company may declare, from time to time, a higher rate of return than that
guaranteed above.
Page 14
<PAGE>
Accumulation Table for Flexible Premium Deferred Annuity
Maxiflex Contract 22-4025
Fixed Fund
$1,000 per year
Guaranteed Surrender Value*
based on a policy issue date of July 3. If your issue date is different,
then your values will be different.
Accumulated
End of Accumulated Value Surrender
Policy Year Value Increase** End of Year Value
1 1,025 1,025 923
2 1,071 2,096 1,929
3 1,119 3,215 3,003
4 1,170 4,385 4,146
5 1,222 5,607 5,363
6 1,277 6,885 6,658
7 1,335 8,220 8,035
8 1,395 9,615 9,498
9 1,458 11,072 11,052
10 1,523 12,595 12,575
11 1,592 14,187 14,167
12 1,663 15,851 15,831
13 1,738 17,589 17,569
14 1,817 19,405 19,385
15 1,898 21,304 21,284
16 1,984 23,287 23,267
17 2,073 25,360 25,340
18 2,166 27,526 27,506
19 2,264 29,790 29,770
20 2,366 32,156 32,136
21 2,472 34,628 34,608
22 2,583 37,211 37,191
23 2,699 39,910 39,890
24 2,821 42,731 42,711
25 2,948 45,679 45,659
26 3,081 48,760 48,740
27 3,219 51,979 51,959
28 3,364 55,343 55,323
29 3,515 58,859 58,839
30 3,674 62,532 62,512
31 3,839 66,371 66,351
32 4,012 70,383 70,363
33 4,192 74,575 74,555
34 4,381 78,956 78,936
35 4,578 83,534 83,514
36 4,784 88,318 88,298
37 4,999 93,317 93,297
38 5,224 98,542 98,522
39 5,459 104,001 103,981
40 5,705 109,706 109,686
* Values shown are based on an interest rate of 4.5% for all years.
** Accumulated Value Increase includes $1,000 annual premium for all years
and reflects no partial withdrawal.
Page 15
<PAGE>
GREAT AMERICAN RESERVE INSURANCE COMPANY
For prompt service address all correspondence to our Administrative Office
11815 N. Pennsylvania Street, Post Office Box 1927
Carmel, Indiana 46032
INDIVIDUAL FLEXIBLE PREMIUM DEFERRED FIXED VARIABLE ANNUITY
GREAT AMERICAN RESERVE INSURANCE COMPANY
ADMINISTRATIVE OFFICE: 11815 N. PENNSYLVANIA STREET, P O BOX 1909,
CARMEL, INDIANA 46032-4909
[ ] FOR GROUP APPLICANTS ONLY: APPLICATION IS HEREBY MADE TO THE GARCO GROUP
BENEFITS INSURANCE TRUST.
VARIABLE ANNUITY
APPLICATION
- --------------------------------------------------------------------------------
1. ANNUITANT (OWNER IF NO OTHER SPECIFIED IN SECTION 3)
- --------------------------------------------------------------------------------
Name first mi last DOB [ ] Age [ ]
Street Address Sex [ ] Marital Status [ ]
City State Zip SS# - -
Home Phone # ( ) Work Phone # ( )
- --------------------------------------------------------------------------------
2. EMPLOYMENT GROUP INFORMATION (REQUIRED ONLY FOR GROUP APPLICANTS)
- --------------------------------------------------------------------------------
Specify the nature of the industry in which you are (or were at retirement)
employed:
[ ] A. Education, Government Employees, Service Industry
[ ] B. Wholesale Trade Industry
[ ] C. Retail Trade Industry
[ ] D. Agriculture
[ ] E. Finance, Insurance, Real Estate Industry
[ ] F. Transportation, Communication, Public Utilities
[ ] G. Manufacturing, Contract Construction Industry
- --------------------------------------------------------------------------------
3. CONTRACT/CERTIFICATE OWNER(S) (COMPLETE IF DIFFERENT FROM ANNUITANT IN
SECTION 1 - MUST BE THE SAME FOR 403(B), IRA, IRA/SEP. USE SECTION 8 FOR
ADDITIONAL SPACE. ANY JOINT OWNER MUST BE THE SPOUSE OF THE OTHER OWNER. WE
MUST HAVE THE SOCIAL SECURITY NUMBER AND ALL OTHER INFORMATION FOR EACH
OWNER.)
- --------------------------------------------------------------------------------
Name(s) first mi last DOB [ ] Age [ ]
Street Address Sex [ ] Marital Status [ ]
City State Zip SS# - -
Home Phone # ( ) Work Phone # ( )
- --------------------------------------------------------------------------------
4. BENEFICIARY(UPON DEATH OF A JOINT OWNER, THE SURVIVING JOINT OWNER WILL BE
TREATED AS THE PRIMARY BENEFICIARY.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Primary [ ] Relationship [ ]
Contingent [ ] Relationship [ ]
- --------------------------------------------------------------------------------
5. TYPE OF PLAN (PLEASE CHECK APPROPRIATE BOXES)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
[ ] Nonqualified [ ] Qualified [ ] 403 (B) [ ] IRA/SEP [ ] ORP [ ] 457 [ ] SIMPLE IRA (Attach Form [ ] ROTH IRA
5304)
- --------------------------------------------------------------------------------
6. PRODUCT SELECTION
- --------------------------------------------------------------------------------
[ ] Monument [ ] Achievement [ ] Educator [ ] Maxiflex [ ] Group [ ] Conseco Advantage
Maxiflex
</TABLE>
- --------------------------------------------------------------------------------
7. PORTFOLIO SELECTION
- --------------------------------------------------------------------------------
Portfolio selections are made on the attached "Variable Annuity Application
Supplement For Portfolio Selection" dated:
- --------------------------------------------------------------------------------
8. SPECIAL REQUESTS (INCLUDE ADDITIONAL INFORMATION FOR ANY ANSWERS TO
APPLICATION QUESTIONS.)
- --------------------------------------------------------------------------------
22-8075 Rev. 0598
<PAGE>
- --------------------------------------------------------------------------------
9. TELEPHONE TRANSFER
- --------------------------------------------------------------------------------
I hereby authorize and direct Great American Reserve Insurance Company (GARCO)
to act on telephone instructions, when proper identification is furnished, to
exchange units form any fixed, Market Value Adjustment (MVA) or sub-account to
any other fixed, MVA or other sub-account and/or to change the allocation of
future deposits. The undersigned agrees that GARCO is not liable for any loss
arising from any exchange or change in allocation of future deposits by acting
in accordance with these telephone instructions. GARCO will employ reasonable
procedures to confirm that telephone instructions are genuine. If it does not,
it may be liable for any losses due to unauthorized or fraudulent transfers.
Please refer to the Prospectus for restrictions regarding the MVA accounts.
Initials of contract owner: [ ]
- --------------------------------------------------------------------------------
10. INVESTMENT AMOUNT, REPLACEMENT INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
a. Initial investment: [$ ] b. Periodic investment: [ ] beginning: [ ]
c. Will the proposed contract replace any existing annuity or insurance contract? [ ] Yes [ ] No
If Yes, list company name, plan and year of issue [ ]
d. Is this a transfer or rollover? [ ] No [ ] Yes - Check one: [ ] 90-24 [ ] 102-318
(ADDITIONAL FORMS REQUIRED)
</TABLE>
- --------------------------------------------------------------------------------
11. BILLING INFORMATION (NOT APPLICABLE TO IRA OR IRA/SEP CONTRACTS.)
- --------------------------------------------------------------------------------
a. Bill to the: [ ] Annuitant [ ] Owner [ ] See Section 8 or Section 11b.
b. Billing Address:
c. Billing Frequency: [ ] Annual [ ] Quarterly [ ] Monthly [ ] Semi-Monthly
d. Non-Paying Months (X): [J] [F] [M] [A] [M] [J] [J] [A] [S] [O] [N] [D]
================================================================================
All statements made in this application (including the reverse side) are true to
the best of our knowledge and belief, and we agree to all terms and conditions
as shown on the front and back. We further agree that this application shall be
a part of the annuity contract, and verify our understanding that ALL PAYMENTS
AND VALUES PROVIDED BY THE CONTRACT, WHEN BASED ON INVESTMENT EXPERIENCE OF THE
VARIABLE ACCOUNT, ARE VARIABLE AND NOT GUARANTEED AS TO DOLLAR AMOUNT. We
acknowledge receipt of current prospectuses. The variable annuity applied for is
not unsuitable for my investment objective, financial situation and needs. Under
penalty of perjury, the contract owner(s) certifies that the Social Security (or
Taxpayer Identification) number is correct as it appears in this application.
Signed at ___________________________ this ______________ day of __________ , 19
X
Signature of Owner/Applicant (if other than Annuitant)
Signature of Annuitant
Amounts payable under the contract may be subject to a market value
adjustment if withdrawals or transfers are made prior to a date specified in
the contract.
Signature of Joint Owner/Applicant (if other than Annuitant)
- --------------------------------------------------------------------------------
AGENT'S REPORT
- --------------------------------------------------------------------------------
Will the proposed contract replace any existing annuity or insurance contract?
[ ] No [ ] Yes - replacement
requirements must be completed. Agent's initials certifying any replacement
requirements has been met:
- --------------------------------------------------------------------------------
REGISTERED REPRESENTATIVE CERTIFICATION
- --------------------------------------------------------------------------------
I certify that I have asked all the questions in the application and correctly
recorded the proposed Annuitant's answers. To the best of my knowledge I have
presented to the Company all the pertinent facts, and I know nothing unfavorable
about the proposed Annuitant that is not stated in the application.
I further certify that I am properly licensed to sell variable annuities in the
state in which the proposed Annuitant resides and that no sales material other
than that furnished by the Home Office was used.
Signed at ___________________________ this ______________ day of __________ , 19
[ ] Agent's Number [ ] Trail [ ] Registered Representative
22-8075 Rev. 0598
