Registration Nos. 33-61122
811-4819
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ___
Pre-Effective Amendment No. ___
Post-Effective Amendment No. 8 _X_
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 25 _X_
CONSECO VARIABLE ANNUITY ACCOUNT C
(Exact Name of Registrant)
CONSECO VARIABLE 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
Conseco Variable 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):
_____ immediately upon filing pursuant to paragraph (b) of Rule 485
_ X__ on November 8, 1999 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:
Group Variable Deferred Annuity Contracts and Certificates
CONSECO VARIABLE ANNUITY ACCOUNT C
FORM N-4
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
Under The Securities Act of 1933
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Form N-4
Item No. PART A - Prospectus Caption
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1. Cover Page................................... Cover Page
2. Definitions.................................. Definitions
3. Synopsis or Highlights....................... Summary
4. Condensed Financial Information.............. Appendix-Condensed Financial
Information
5. General Description of Registrant,........... Conseco Variable, The Variable
Depositor and Portfolio Companies Account, and Investment Options
6. Deductions and Expense....................... Charges and Deductions
7. General Description of Variable.............. The Contracts
Annuity Contracts
8. Annuity Period .............................. The Contracts
Annuity Provisions
9. Death Benefit................................ The Contracts
Annuity Provisions: Death Benefit During
the Annuity Period
10. Purchase and Contract Values................. Conseco Variable, The Variable Account,
and Investment Options
The Contracts
Accumulation Provisions
11. Redemptions.................................. The Contracts
The Annuity Period-Settlement Provisions
12. Taxes........................................ Federal Tax Status
13. Legal Proceedings............................ Legal Proceedings
14. Table of Contents of the Statement........... Table of Contents of the Statement
of Additional Information of Additional Information
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<TABLE>
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Form N-4
Item No.
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PART B - Statement of Additional Information
-----------------------------------
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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
Performance Data, and Other Performance Data
22. Annuity Payments............................. Not Applicable
23. Financial Statements......................... Financial Statements
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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.
PART A
Conseco Variable Annuity Account C
(formerly, Great American Reserve Variable Annuity Account C)
GROUP VARIABLE DEFERRED ANNUITY CONTRACTS
offered by
CONSECO VARIABLE INSURANCE COMPANY
(formerly, Great American Reserve Insurance Company)
Administrative Office:
11815 N. Pennsylvania Street o Carmel, IN 46032 (317) 817-3700
November __, 1999
This prospectus describes the group variable deferred annuity contract
("Contract") issued by Conseco Variable Insurance Company ("Conseco Variable").
The Contracts are designed for use in retirement planning.
You can invest your Purchase Payments in one of the Variable Account
Investment Options listed below. Depending on market conditions, you can make or
lose money in any of these Variable Account Investment Options. You can also
invest in the Conseco Variable Fixed Account.
Conseco Series Trust
o Balanced Portfolio (formerly, Asset Allocation Portfolio)
o Equity Portfolio (formerly, Common Stock Portfolio)
o Fixed Income Portfolio (formerly, Corporate Bond Portfolio)
o Government Securities Portfolio
o Money Market Portfolio
The Alger American Fund
o Alger American Growth Portfolio
o Alger American Leveraged AllCap Portfolio
o Alger American MidCap Growth Portfolio
o Alger American Small Capitalization Portfolio
American Century Variable Portfolios, Inc.
o VP Income & Growth
o VP International
o VP Value
Berger Institutional Products Trust
o Berger IPT--100 Fund
o Berger IPT--Growth and Income Fund
o Berger IPT--Small Company Growth Fund
o Berger/BIAM IPT--International Fund
The Dreyfus Socially Responsible Growth Fund, Inc.
Dreyfus Stock Index Fund
Dreyfus Variable Investment Fund
o Disciplined Stock Portfolio
o International Value Portfolio
Federated Insurance Series
o Federated High Income Bond Fund II
o Federated International Equity Fund II
o Federated Utility Fund II
INVESCO Variable Investment Funds, Inc.
o INVESCO VIF--High Yield Fund
o INVESCO VIF--Equity Income Fund (formerly, INVESCO VIF--Industrial
Income Portfolio)
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The Securities and Exchange Commission has not approved or disapproved
these securities or determined if this prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
Janus Aspen Series
o Aggressive Growth Portfolio
o Growth Portfolio
o Worldwide Growth Portfolio
Lazard Retirement Series, Inc.
o Lazard Retirement Equity Portfolio
o Lazard Retirement Small Cap Portfolio
Lord Abbett Series Fund, Inc.
o Growth and Income Portfolio
Mitchell Hutchins Series Trust
o Growth and Income Portfolio
Neuberger Berman Advisers Management Trust
o Limited Maturity Bond Portfolio
o Partners Portfolio
Strong Opportunity Fund II, Inc.
o Opportunity Fund II
Strong Variable Insurance Funds, Inc.
o Strong Mid Cap Growth Fund II (formerly, Growth Fund II)
Van Eck Worldwide Insurance Trust
o Worldwide Bond Fund
o Worldwide Emerging Markets Fund
o Worldwide Hard Assets Fund
o Worldwide Real Estate Fund
Please read this prospectus carefully before investing and keep it on file
for future reference. It contains important information about the group fixed
and variable annuity contracts issued by Conseco Variable.
To learn more about the Contracts, you can obtain a copy of the Statement
of Additional Information (SAI) dated November 4, 1999. The SAI has been filed
with the Securities and Exchange Commission (SEC) and is legally a part of this
Prospectus. The SEC has a Web site (http://www.sec.gov) that contains the SAI,
material incorporated by reference, and other information regarding companies
that file electronically with the SEC. The Table of Contents of the SAI is on
Page __ of this prospectus. For a free copy of the SAI, call us or write to us
at the address or telephone number given above.
The Contracts:
o are not bank deposits
o are not federally insured
o are not endorsed by any bank or government agency
o are not guaranteed and may be subject to loss of principal
Table of Contents
Page
Definitions.................................................................
Summary.....................................................................
Fee Table...................................................................
Conseco Variable, The Variable Account and Investment Options...............
Conseco Variable..........................................................
The Variable Account......................................................
Investment Options........................................................
Voting Rights...........................................................
Fixed Account...........................................................
The Contracts...............................................................
Accumulation Provisions...................................................
Purchase Payments.........................................................
Allocation of Purchase Payments...........................................
Accumulation Units........................................................
Accumulation Unit Values................................................
Transfers.................................................................
Dollar Cost Averaging.....................................................
Rebalancing...............................................................
Sweeps....................................................................
Withdrawals...............................................................
Suspension of Payments....................................................
Restrictions Under Optional Retirement Programs...........................
Restrictions Under Section 403(b) Plans...................................
Systematic Withdrawal Plan................................................
Loans.....................................................................
Charges and Deductions......................................................
Withdrawal Charge.........................................................
Administrative Charge.....................................................
Mortality and Expense Risk Charge.........................................
Premium Taxes.............................................................
Fund Expenses.............................................................
Reduction or Elimination of Contract Charges..............................
Other Charges.............................................................
Death Benefits..............................................................
The Annuity Period .........................................................
Optional Annuity Period Elections.........................................
Annuity Options...........................................................
Transfers During the Annuity Period.......................................
Death Benefit Amount During the Annuity Period............................
Federal Tax Status..........................................................
Annuity Contracts in General..............................................
Qualified and Non-Qualified Contracts.....................................
Withdrawals--Non-Qualified Contracts......................................
Withdrawals--Qualified Contracts..........................................
Withdrawals--Tax-Sheltered Annuities......................................
Diversification...........................................................
Investor Control..........................................................
General Matters.............................................................
Performance Information...................................................
Year 2000.................................................................
Distribution of Contracts.................................................
Legal Proceedings.........................................................
Table of Contents of the SAI................................................
Appendix....................................................................
Definitions
ACCUMULATION PERIOD: The period before the commencement of Annuity Payments
during which you can make Purchase Payments.
ACCUMULATION UNIT: An accounting unit of measure we use to calculate the
value of your Contract during the Accumulation Period.
ANNUITANT: The named individual upon whose life Annuity Payments are based.
ANNUITY PAYMENTS: A series of income payments we make under an annuity
option.
ANNUITY PERIOD: The period during which we make Annuity Payments.
CONTRACT OWNER: The entity to which the group Contract is issued, usually
the employer. You are a Participant in the group and will receive a certificate
evidencing your ownership. References to "you" and "your" in this prospectus
refers to you as the Participant.
CONTRACT VALUE: The total value of your values held under the Contract in
each Investment Option of the Variable Account plus the Fixed Account.
CODE: Internal Revenue Code of 1986, as amended.
FIXED ACCOUNT: The general account of Conseco Variable. You may choose to
allocate Purchase Payments and Contract Value to the Fixed Account. It provides
guaranteed values and periodically adjusted interest rates.
FUND: The underlying mutual funds (or portfolio of a mutual fund) which the
sub-accounts of the Variable Account invest in.
INDIVIDUAL ACCOUNT: The record we establish to represent your interest as a
Participant in an Investment Option during the Accumulation Period.
INVESTMENT OPTIONS: The investment choices available to Contract Owners.
PARTICIPANT: Any eligible person participating in a Plan and for whom an
Individual Account is established. References to "you" and "your" in this
prospectus refers to you as the Participant.
PLAN: A voluntary program for an employer that qualifies for special tax
treatment.
PURCHASE PAYMENTS: The premium payments made to Conseco Variable under the
terms of the Contract.
VALUATION PERIOD: 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.
VARIABLE ACCOUNT: The separate account we established known as Conseco
Variable Annuity Account C. Prior to May 1, 1999, it was known as Great American
Reserve Variable Annuity Account C. The Variable Account is divided into
sub-accounts.
Summary
THE CONTRACT: The Contract described in this prospectus is a tax deferred
flexible Purchase Payment group variable annuity contract. The Contract also
offers you a Fixed Account option.
The Contract provides for the accumulation of Contract Values and the
payment of annuity benefits on a variable and/or fixed basis. In general, this
prospectus describes only the variable portion of the Contract.
RETIREMENT PLANS: The Contract may be issued pursuant to Plans qualifying
for special income tax treatment under the Code. Examples of the Plans
qualifying for special tax treatment are: tax-sheltered annuities (TSAs) and
state and local government deferred compensation plans. (See "Federal Tax
Status.")
PURCHASE PAYMENTS: You may make Purchase Payments on a flexible basis. This
means that you can make payments at any time you like during the Accumulation
Period. o The minimum initial Purchase Payment is $10 and for each subsequent
Purchase Payment is $10 per month. o If your Purchase Payment is more than
$500,000, it requires our prior approval.
INVESTMENT OPTIONS: You can allocate your Purchase Payment to the Fixed
Account of Conseco Variable or the following Variable Account Investment
Options:
Conseco Series Trust
o Balanced Portfolio (formerly, Asset Allocation Portfolio)
o Equity Portfolio (formerly, Common Stock Portfolio)
o Fixed Income Portfolio (formerly, Corporate Bond Portfolio)
o Government Securities Portfolio
o Money Market Portfolio
The Alger American Fund
o Alger American Growth Portfolio
o Alger American Leveraged AllCap Portfolio
o Alger American MidCap Growth Portfolio
o Alger American Small Capitalization Portfolio
American Century Variable Portfolios, Inc.
o VP Income & Growth
o VP International
o VP Value
Berger Institutional Products Trust
o Berger IPT--100 Fund
o Berger IPT--Growth and Income Fund
o Berger IPT--Small Company Growth Fund
o Berger/BIAM IPT--International Fund
The Dreyfus Socially Responsible Growth Fund, Inc.
Dreyfus Stock Index Fund
Dreyfus Variable Investment Fund
o Disciplined Stock Portfolio
o International Value Portfolio
Federated Insurance Series
o Federated High Income Bond Fund II
o Federated International Equity Fund II
o Federated Utility Fund II
Invesco Variable Investment Funds, Inc.
o INVESCO VIF--High Yield Fund
o INVESCO VIF--Equity Income Fund (formerly, INVESCO-VIF Industrial
Income Portfolio)
Janus Aspen Series
o Aggressive Growth Portfolio
o Growth Portfolio
o Worldwide Growth Portfolio
Lazard Retirement Series, Inc.
o Lazard Retirement Equity Portfolio
o Lazard Retirement Small Cap Portfolio
Lord Abbett Series Fund, Inc.
o Growth and Income Portfolio
Mitchell Hutchins Series Trust
o Growth and Income Portfolio
Neuberger Berman Advisers Management Trust
o Limited Maturity Bond Portfolio
o Partners Portfolio
Strong Opportunity Fund II, Inc.
o Opportunity Fund II
Strong Variable Insurance Funds, Inc.
o Strong Mid Cap Growth Fund II (formerly, Growth Fund II)
Van Eck Worldwide Insurance Trust
o Worldwide Bond Fund
o Worldwide Emerging Markets Fund
o Worldwide Hard Assets Fund
o Worldwide Real Estate Fund
The portion of your Contract Value allocated to the Variable Account
Investment Options will reflect the investment performance of the Funds you
select.
TRANSFERS: During the Accumulation Period, you may make transfers among the
Variable Account Investment Options and from the Variable Account Investment
Options to the Fixed Account Investment Option without charge. Subject to
certain limitations, you may also transfer amounts from the Fixed Account
Investment Option to the Variable Account Investment Options. You may transfer
from the Fixed Account once in any six-month period subject to a limit of 20% of
the Fixed Account Value. You may also make transfers under certain programs we
offer known as the dollar cost averaging program, sweep program, and
rebalancing. During the Annuity Period, you may not make transfers from a
variable annuity to a fixed annuity or from a fixed annuity to a variable
annuity. Conseco Variable may impose certain additional limitations on
transfers.
WITHDRAWALS: You may make withdrawals from your Contract. We may impose a
withdrawal charge and an annual contract fee when you make a withdrawal. You may
also make withdrawals pursuant to the systematic withdrawal plan. A withdrawal
may be subject to income taxes and tax penalties. In addition, certain
restrictions apply to withdrawals from TSA Contracts.
LOANS: Under certain circumstances, you may make loans from your Contract.
DEATH BENEFIT: Generally, if the Participant dies during the Accumulation
Period, Conseco Variable will pay a death benefit (less any outstanding loans)
to the beneficiary.
ANNUITY PAYMENTS: We offer a variety of fixed and variable annuity options
which you can select to receive your Annuity Payments. Your Annuity Payments
will begin during the Annuity Period. You can select the date when Annuity
Payments begin, the frequency of the payments and the annuity option.
TEN-DAY REVIEW: If you cancel the Contract within 10 days after receiving
it (or whatever period is required in your state) we will refund your Purchase
Payment, unless a larger amount is required by state law.
TAXES: For TSA Contracts, you can only make withdrawals of amounts
attributable to contributions you made pursuant to a salary reduction agreement
(as defined in the Code) under the following circumstances:
(i) when you attain age 59 1/2
(ii) when you separate from service;
(iii) when you die;
(iv) when you become disabled;
(v) in the case of hardship; or
(vi) made pursuant to a qualified domestic relations order, if otherwise
permitted.
Withdrawals for hardship are restricted to a portion of the Contract
Owner's Contract Value which represents contributions made by the Owner and does
not include any investment results.
Your earnings are not taxed until you take them out. If you take money out
during the Accumulation Period, earnings come out first and are taxed as income.
If you are younger than 59 1/2 when you take money out, you may be charged a 10%
federal tax penalty on the earnings.
Payments during the Annuity Period are considered partly a return of your
original investment. That part of each payment is not taxable as income. If your
Contract was purchased under a tax-qualified plan, your payments may be fully
taxable.
CHARGES AND DEDUCTIONS:
o Each year Conseco Variable deducts an Annual Contract Fee from your
Contract. The amount of the fee is equal to $15.
o Conseco Variable deducts a Mortality and Expense Risk Fee which is
equal, on an annual basis, to 1.00% of the average daily net assets of
the Variable Account.
o If you take money out of the Contract, Conseco Variable may assess a
deferred sales load (withdrawal charge). The charge ranges from 5% to
0%.
o You may be assessed a premium tax charge which generally ranges from
0% - 3.5%, depending on the state.
o As with other professionally managed investments, there are also
investment charges which currently range from .26% to 1.50%, on an
annual basis, of the average daily value of the portfolio, depending
upon the Variable Account Investment Option you select.
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CONSECO VARIABLE ANNUITY ACCOUNT C FEE TABLE
================================================================================
CONTRACT OWNER TRANSACTION EXPENSES(1)
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Sales Load Imposed on Purchases................................ None
Deferred Sales Load (as a percentage of amount redeemed)
Completed Annual Purchase Payment
Periods for the Individual Account Charge
---------------------------------- ------
Less than 5 ............................... 5.00%
5 but less than 10 ........................ 3.00%
10 but less than 15 ....................... 2.00%
15 or more ................................ None
Surrender Fees............................................. None
Exchange Fee............................................... None
ANNUAL CONTRACT FEE........................................ $15
ANNUAL EXPENSES OF VARIABLE ACCOUNT (as a percentage of average
account value)
Mortality and Expense Risk Fees........................ 1.00%
Other Expenses......................................... None
------
Total Annual Expenses of the Variable Account(2)........... 1.00%
================================================================================
</TABLE>
(1) Premium taxes are not shown. Any premium tax due may be deducted from
Purchase Payments or from Individual Account values at the time Annuity
Payments begin or at such other time based on our sole discretion. The
current range of premium taxes in jurisdictions in which we make the
Contracts available is from 0% to 3.5%.
(2) Conseco Variable has guaranteed the total of the investment management fees
charged against Conseco Series Trust's Equity, Fixed Income and Money
Market Portfolios whose shares are purchased by the Variable Account, plus
the mortality and expense risk fee imposed upon the assets of the
corresponding sub-accounts of the Variable Account will not exceed an
amount that is equal to the total amount of the same charges that would
have been imposed under the Contracts had the Combination not occurred (see
"Charges and Deductions - Expense Guarantee Agreement").
ANNUAL FUND EXPENSES
(as a percentage of the average daily net assets of a portfolio)
<TABLE>
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TOTAL ANNUAL
OTHER EXPENSES PORTFOLIO
(AFTER EXPENSE EXPENSES
REIMBURSEMENT (AFTER EXPENSE
MANAGEMENT 12b-1 FOR CERTAIN REIMBURSEMENT FOR
FEES FEES PORTFOLIOS) CERTAIN PORTFOLIOS)
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CONSECO SERIES TRUST (1)
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Balanced Portfolio (2).................................. 0.75% -- 0.00% 0.75%
Equity Portfolio (2).................................... 0.80% -- 0.00% 0.80%
Fixed Income Portfolio.................................. 0.70% -- 0.00% 0.70%
Government Securities Portfolio......................... 0.70% -- 0.00% 0.70%
Money Market Portfolio (2).............................. 0.45% -- 0.00% 0.45%
THE ALGER AMERICAN FUND
Alger American Growth Portfolio......................... 0.75% -- 0.04% 0.79%
Alger American Leveraged AllCap Portfolio (3)........... 0.85% -- 0.11% 0.96%
Alger American MidCap Growth Portfolio.................. 0.80% -- 0.04% 0.84%
Alger American Small Capitalization Portfolio........... 0.85% -- 0.04% 0.89%
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
VP Income & Growth...................................... 0.70% -- 0.00% 0.70%
VP International........................................ 1.50% -- 0.00% 1.50%
VP Value................................................ 1.00% -- 0.00% 1.00%
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger IPT--100 Fund (4)................................ 0.00% -- 1.00% 1.00%
Berger IPT--Growth and Income Fund (4).................. 0.00% -- 1.00% 1.00%
Berger IPT--Small Company Growth Fund (4)............... 0.00% -- 1.15% 1.15%
Berger/BIAM IPT--International Fund (4)................. 0.00% -- 1.20% 1.20%
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC....... 0.75% -- 0.05% 0.80%
DREYFUS STOCK INDEX FUND................................ 0.25% -- 0.01% 0.26%
DREYFUS VARIABLE INVESTMENT FUND
Disciplined Stock Portfolio............................. 0.75% -- 0.13% 0.88%
International Value Portfolio........................... 1.00% -- 0.29% 1.29%
FEDERATED INSURANCE SERIES
Federated High Income Bond Fund II...................... 0.60% -- 0.18% 0.78%
Federated International Equity Fund II (5).............. 0.53% -- 0.72% 1.25%
Federated Utility Fund II (5)........................... 0.68% -- 0.25% 0.93%
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF - High Yield Fund (6)....................... 0.60% -- 0.47% 1.07%
INVESCO VIF - Equity Income Fund (6)(7)................. 0.75% -- 0.18% 0.93%
JANUS ASPEN SERIES
Aggressive Growth Portfolio............................. 0.72% -- 0.03% 0.75%
Growth Portfolio (8).................................... 0.65% -- 0.03% 0.68%
Worldwide Growth Portfolio (8).......................... 0.65% -- 0.07% 0.72%
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Equity Portfolio (9).................. 0.75% 0.25% 0.25% 1.25%
Lazard Retirement Small Cap Portfolio (9)............... 0.75% 0.25% 0.25% 1.25%
LORD ABBETT SERIES FUND, INC.
Growth and Income Portfolio............................. 0.50% -- 0.26% 0.76%
MITCHELL HUTCHINS SERIES TRUST
Growth and Income Portfolio............................. 0.70% -- 0.34% 1.04%
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST (10)
Limited Maturity Bond Portfolio......................... 0.65% -- 0.11% 0.76%
Partners Portfolio...................................... 0.78% -- 0.06% 0.84%
STRONG OPPORTUNITY FUND II, INC.
Opportunity Fund II..................................... 1.00% -- 0.16% 1.16%
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Mid Cap Growth Fund II (11)...................... 1.00% -- 0.20% 1.20%
VAN ECK WORLDWIDE INSURANCE TRUST (12)
Worldwide Bond Fund..................................... 1.00% -- 0.15% 1.15%
Worldwide Emerging Markets Fund......................... 1.00% -- 0.50% 1.50%
Worldwide Hard Assets Fund.............................. 1.00% -- 0.20% 1.20%
Worldwide Real Estate Fund.............................. 0.89% -- 0.00% 0.89%
</TABLE>
(1) The expense information in the table has been restated to reflect
current fees. Pursuant to a contractual arrangement with the Trust, Conseco
Capital Management, Inc., the adviser, has agreed to waive fees and/or reimburse
portfolio expenses through 4/30/00, so that the annual operating expenses of
each portfolio are limited to the Total Annual Expenses for each respective
portfolio, as set forth above. This arrangement does not cover interest, taxes,
brokerage commissions, and extraordinary expenses. The total percentages in the
above table are after reimbursement. In the absence of expense reimbursement,
the total estimated fees and expenses for 1999 would total: 0.83% for the Money
Market Portfolio; 0.97% for the Government Securities Portfolio; 0.89% for the
Fixed Income Portfolio; 1.01% for the Balanced Portfolio and 0.95% for the
Equity Portfolio.
(2) Conseco Capital Management, Inc., since January 1, 1993, has waived its
management fees in excess of the annual rates set forth above. Absent such fee
waivers, the management fees would be: .85% for the Balanced Portfolio; .85% for
the Equity Portfolio; and .70% for the Money Market Portfolio.
(3) The Alger American Leveraged AllCap Portfolio's "Other Expenses"
includes .03% of interest expense.
(4) The Funds' investment advisers have agreed to waive their advisory fee
and reimburse the Funds for additional expenses to the extent that normal
operating expenses in any fiscal year, including the investment advisory fee but
excluding brokerage commissions, interest, taxes and extraordinary expenses, of
each of the Berger IPT--100 Fund and the Berger IPT--Growth and Income Fund
exceed 1.00%, the normal operating expenses in any fiscal year of the Berger
IPT--Small Company Growth Fund exceed 1.15%, and the normal operating expenses
of the Berger/BIAM IPT--International Fund exceed 1.20% of the respective Fund's
average daily net assets. Absent the waiver and reimbursement, the Management
Fee for the Berger IPT--100 Fund, Berger IPT--Growth and Income Fund, the Berger
IPT--Small Company Growth Fund and the Berger/BIAM IPT--International Fund would
have been .75%, .75%, .90%, and .90% respectively, and their Total Annual
Portfolio Expenses would have been 2.88%, 1.99%, 2.19% and 2.85%, respectively.
(5) In the absence of a voluntary waiver by Federated Investment Management
Company, the Funds' investment adviser, the Management Fee and Total Annual
Portfolio Expenses would have been 0.75% and 1.00%, respectively, for Utility
Fund II. Absent a voluntary waiver of the management fee and the voluntary
reimbursement of certain other operating expenses by Federated Investment
Management Company, the Management Fee and Total Annual Portfolio Expenses for
International Equity Fund II would have been 1.00% and 1.72%, respectively.
(6) The Fund's actual Total Annual Fund Operating Expenses were lower than
the figures shown because its transfer agent and/or custodian fees were reduced
under expense offset arrangements. Because of an SEC requirement, the figures
shown do not reflect these reductions.
(7) Certain expenses of the Fund are being absorbed voluntarily by INVESCO
Funds Group, Inc. pursuant to a commitment to the Fund. In the absence of such
absorption, Other Expenses and Total Annual Fund Operating Expenses for the year
ended December 31, 1998 were 0.42% and 1.17%, respectively. This commitment may
be changed at any time following consultation with the board of directors.
(8) The expense figures shown are net of certain fee waivers or reductions
from Janus Capital Corporation, the investment adviser of the Janus Aspen
Series. Without such waivers or reductions, the total fees and expenses in 1998
would have totaled: 0.75% for Growth and 0.74% for Worldwide Growth.
(9) Lazard Asset Management, the Fund's investment adviser, has voluntarily
agreed to reimburse all expenses through December 31, 1999 to the extent total
annual portfolio expenses exceed in any fiscal year 1.25% of the Portfolio's
average daily net assets. Absent such an agreement with the adviser, the total
annual portfolio expenses for the year ended December 31, 1998 would have been
21.32% for the Lazard Retirement Equity Portfolio and 16.20% for the Lazard
Retirement Small Cap Portfolio.
(10) Neuberger Berman Advisers Management Trust is divided into portfolios
("Portfolios"), each of which invests all of its net investable assets in a
corresponding series ("Series") of Advisers Managers Trust. The figures reported
under "Management Fees" include the aggregate of the administration fees paid by
the Portfolio and the management fees paid by its corresponding Series.
Similarly, "Other Expenses" includes all other expenses of the Portfolio and its
corresponding Series.
(11) Strong Capital Management, Inc., the investment adviser of the Strong
Mid Cap Growth Fund II, has voluntarily agreed to cap the Fund's total operating
expenses at 1.20%. In the absence of the expense cap, total annual portfolio
expenses for the year ended December 31, 1998 were 1.55%. The Adviser has no
current intention to, but may in the future, discontinue or modify any waiver of
fees or absorption of expenses at its discretion with appropriate notification
to its shareholders.
(12) Van Eck Associates Corporation (the "Adviser") agreed to assume
expenses exceeding 1.50% of the Worldwide Emerging Markets Fund's average daily
net assets. Absent this expense reimbursement, Other Expenses would have been
0.61% and Total Portfolio Expenses would have been 1.61%. The Worldwide Hard
Assets Fund's Other Expenses was reduced by a fee arrangement based on cash
balances left on deposit with the custodian and a directed brokerage arrangement
where the Fund directs certain portfolio trades to a broker that, in turn, pays
a portion of the Fund's expenses. This arrangement is not reflected in the table
above. With these arrangements, the Other Expenses were 0.16% and Total
Portfolio Expenses were 1.16%. For the Worldwide Real Estate Fund the Adviser
agreed to waive its management fees and assume certain expenses for the period
January 1, 1998 to February 28, 1998. The Adviser also agreed to assume expenses
exceeding 1.00% of the Worldwide Real Estate Fund's average daily net assets for
the period March 1, 1998 to December 31, 1998. The Worldwide Real Estate Fund
expenses were also reduced by a fee arrangement based on cash balances left on
deposit with the custodian and a directed brokerage arrangement where the Fund
directs certain portfolio trades to a broker that, in turn, pays a portion of
the Fund's expenses. Absent these arrangements, the management fee would have
been 1.00%, the Other Expenses would have been 4.32% and Total Portfolio
Expenses would have been 5.32% for the Worldwide Real Estate Fund.
Examples:
o Please remember that the examples that follow should not be considered
a representation of past or future expenses. Actual expenses may be
greater or less than those shown. Similarly, the 5% annual rate of
return is not an estimate or a guarantee of future investment
performance.
o This Contract is designed for retirement planning. Surrenders prior to
the Annuity Period are not consistent with the long-term purposes of
the Contract and the applicable tax laws.
o The above table reflects estimates of expenses of the Variable Account
and the Funds. The table and examples assume the highest deductions
possible under a Contract, whether or not such deductions actually
would be made under your Contract.
o Annual contract charges have been approximated as a .07% annual asset
charge.
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return on assets:
Example 1 - If you surrender the Contract at the end of the time periods:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CONSECO SERIES TRUST
Balanced Portfolio....................................... $68 $106 $127 $230
Equity Portfolio......................................... $69 $108 $130 $236
Fixed Income Portfolio................................... $68 $105 $124 $225
Government Securities Portfolio.......................... $68 $105 $124 $225
Money Market Portfolio................................... $65 $ 97 $111 $198
THE ALGER AMERICAN FUND
Alger American Growth Portfolio.......................... $69 $108 $129 $235
Alger American Leveraged AllCap Portfolio................ $70 $113 $138 $252
Alger American MidCap Growth Portfolio................... $69 $109 $132 $240
Alger American Small Capitalization Portfolio............ $70 $111 $134 $245
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
VP Income and Growth..................................... $68 $105 $124 $225
VP International......................................... $76 $129 $165 $307
VP Value................................................. $71 $114 $140 $257
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger IPT--100 Fund..................................... $71 $114 $140 $257
Berger IPT--Growth and Income Fund....................... $71 $114 $140 $257
Berger IPT--Small Company Growth Fund.................... $72 $118 $147 $272
Berger/BIAM IPT--International Fund...................... $73 $120 $150 $277
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC........ $69 $108 $130 $236
DREYFUS STOCK INDEX FUND................................. $63 $ 91 $102 $177
DREYFUS VARIABLE INVESTMENT FUND, INC.
Disciplined Stock Portfolio.............................. $70 $110 $134 $244
International Value Portfolio............................ $74 $123 $154 $286
FEDERATED INSURANCE SERIES
Federated High Income Bond Fund II....................... $69 $107 $129 $234
Federated International Equity Fund II................... $73 $121 $152 $282
Federated Utility Fund II................................ $70 $112 $136 $249
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF - High Yield Fund ........................... $71 $116 $143 $264
INVESCO VIF - Equity Income Fund......................... $70 $112 $136 $249
JANUS ASPEN SERIES
Aggressive Growth Portfolio.............................. $68 $106 $127 $230
Growth Portfolio......................................... $68 $104 $123 $223
Worldwide Growth Portfolio............................... $68 $105 $125 $227
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Equity Portfolio....................... $73 $121 $152 $282
Lazard Retirement Small Cap Portfolio.................... $73 $121 $152 $282
LORD ABBETT SERIES FUND, INC.
Growth and Income Portfolio.............................. $68 $107 $127 $231
MITCHELL HUTCHINS SERIES TRUST
Growth and Income Portfolio.............................. $71 $115 $142 $261
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
Limited Maturity Bond Portfolio.......................... $68 $107 $127 $231
Partners Portfolio....................................... $69 $109 $132 $240
STRONG OPPORTUNITY FUND II, INC.
Opportunity Fund II...................................... $72 $119 $148 $273
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Mid Cap Growth Fund II............................ $73 $120 $150 $277
VAN ECK WORLDWIDE INSURANCE TRUST
Worldwide Bond Fund...................................... $72 $118 $147 $272
Worldwide Emerging Markets Fund.......................... $76 $129 $165 $307
Worldwide Hard Assets Fund............................... $73 $120 $150 $277
Worldwide Real Estate Fund............................... $70 $111 $134 $245
</TABLE>
Example 2 - If you do not surrender your Contract at the end of each time
period:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CONSECO SERIES TRUST
Balanced Portfolio....................................... $18 $56 $ 97 $210
Equity Portfolio......................................... $19 $58 $100 $216
Fixed Income Portfolio................................... $18 $55 $ 94 $205
Government Securities Portfolio.......................... $18 $55 $ 94 $205
Money Market Portfolio................................... $15 $47 $ 81 $178
THE ALGER AMERICAN FUND
Alger American Growth Portfolio.......................... $19 $58 $ 99 $215
Alger American Leveraged AllCap Portfolio................ $20 $63 $108 $232
Alger American MidCap Growth Portfolio................... $19 $59 $102 $220
Alger American Small Capitalization Portfolio............ $20 $61 $104 $225
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
VP Income and Growth..................................... $18 $55 $ 94 $205
VP International......................................... $26 $79 $135 $287
VP Value................................................. $21 $64 $110 $237
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger IPT--100 Fund..................................... $21 $64 $110 $237
Berger IPT--Growth and Income Fund....................... $21 $64 $110 $237
Berger IPT--Small Company Growth Fund.................... $22 $68 $117 $252
Berger/BIAM IPT--International Fund...................... $23 $70 $120 $257
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC........ $19 $58 $100 $216
Dreyfus Stock Index Fund................................. $13 $41 $ 72 $157
DREYFUS VARIABLE INVESTMENT FUND, INC.
Disciplined Stock Portfolio.............................. $20 $60 $104 $224
International Value Portfolio............................ $24 $73 $124 $266
FEDERATED INSURANCE SERIES
Federated High Income Bond Fund II....................... $19 $57 $ 99 $214
Federated International Equity Fund II................... $23 $71 $122 $262
Federated Utility Fund II................................ $20 $62 $106 $229
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF--High Yield Fund............................. $21 $66 $113 $244
INVESCO VIF--Equity Income Fund.......................... $20 $62 $106 $229
JANUS ASPEN SERIES
Aggressive Growth Portfolio.............................. $18 $56 $ 97 $210
Growth Portfolio......................................... $18 $54 $ 93 $203
Worldwide Growth Portfolio............................... $18 $55 $ 95 $207
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Equity Portfolio....................... $23 $71 $122 $262
Lazard Retirement Small Cap Portfolio.................... $23 $71 $122 $262
LORD ABBETT SERIES FUND, INC.
Growth and Income Portfolio.............................. $18 $57 $ 97 $211
MITCHELL HUTCHINS SERIES TRUST
Growth and Income Portfolio.............................. $21 $65 $112 $241
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
Limited Maturity Bond Portfolio.......................... $18 $57 $ 97 $211
Partners Portfolio....................................... $19 $59 $102 $220
STRONG OPPORTUNITY FUND II, INC.
Opportunity Fund II...................................... $22 $69 $118 $253
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Mid Cap Growth Fund II............................ $23 $70 $120 $257
VAN ECK WORLDWIDE INSURANCE TRUST
Worldwide Bond Fund...................................... $22 $68 $117 $252
Worldwide Emerging Markets Fund.......................... $26 $79 $135 $287
Worldwide Hard Assets Fund............................... $23 $70 $120 $257
Worldwide Real Estate Fund............................... $20 $61 $104 $225
</TABLE>
Example 3 - If you annuitize at the end of the time periods:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CONSECO SERIES TRUST
Balanced Portfolio....................................... $68 $106 $ 97 $210
Equity Portfolio......................................... $69 $108 $100 $216
Fixed Income Portfolio................................... $68 $105 $ 94 $205
Government Securities Portfolio.......................... $68 $105 $ 94 $205
Money Market Portfolio................................... $65 $ 97 $ 81 $178
THE ALGER AMERICAN FUND
Alger American Growth Portfolio.......................... $69 $108 $ 99 $215
Alger American Leveraged AllCap Portfolio................ $70 $113 $108 $232
Alger American MidCap Growth Portfolio................... $69 $109 $102 $220
Alger American Small Capitalization Portfolio............ $70 $111 $104 $225
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
VP Income and Growth..................................... $68 $105 $ 94 $205
VP International......................................... $76 $129 $135 $287
VP Value................................................. $71 $114 $110 $237
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger IPT--100 Fund..................................... $71 $114 $110 $237
Berger IPT--Growth and Income Fund....................... $71 $114 $110 $237
Berger IPT--Small Company Growth Fund.................... $72 $118 $117 $252
Berger/BIAM IPT--International Fund...................... $73 $120 $120 $257
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC........ $69 $108 $100 $216
DREYFUS STOCK INDEX FUND................................. $63 $ 91 $ 72 $157
DREYFUS VARIABLE INVESTMENT FUND, INC.
Disciplined Stock Portfolio.............................. $70 $110 $104 $224
International Value Portfolio............................ $74 $123 $124 $266
FEDERATED INSURANCE SERIES
Federated High Income Bond Fund II....................... $69 $107 $ 99 $214
Federated International Equity Fund II................... $73 $121 $122 $262
Federated Utility Fund II................................ $70 $112 $106 $229
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF - High Yield Fund ........................... $71 $116 $113 $244
INVESCO VIF - Equity Income Fund......................... $70 $112 $106 $229
JANUS ASPEN SERIES
Aggressive Growth Portfolio.............................. $68 $106 $ 97 $210
Growth Portfolio......................................... $68 $104 $ 93 $203
Worldwide Growth Portfolio............................... $68 $105 $ 95 $207
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Equity Portfolio....................... $73 $121 $122 $262
Lazard Retirement Small Cap Portfolio.................... $73 $121 $122 $262
LORD ABBETT SERIES FUND, INC.
Growth and Income Portfolio.............................. $68 $107 $ 97 $211
MITCHELL HUTCHINS SERIES TRUST
Growth and Income Portfolio.............................. $71 $115 $112 $241
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
Limited Maturity Bond Portfolio.......................... $68 $107 $ 97 $211
Partners Portfolio....................................... $69 $109 $102 $220
STRONG OPPORTUNITY FUND II, INC.
Opportunity Fund II...................................... $72 $119 $118 $253
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Mid Cap Growth Fund II............................ $73 $120 $120 $257
VAN ECK WORLDWIDE INSURANCE TRUST
Worldwide Bond Fund...................................... $72 $118 $117 $252
Worldwide Emerging Markets Fund.......................... $76 $129 $135 $287
Worldwide Hard Assets Fund............................... $73 $120 $120 $257
Worldwide Real Estate Fund............................... $70 $111 $104 $225
</TABLE>
There is an Accumulation Unit value history (Condensed Financial Information)
contained in the Appendix.
Conseco Variable, The Variable Account and Investment Options
Conseco Variable
Conseco Variable Insurance Company ("Conseco Variable" or the "Company")
was originally organized in 1937. Prior to October 7, 1998, the Company was
known as Great American Reserve Insurance Company. In certain states, we may
continue to use the name Great American Reserve Insurance Company until our name
change is approved in that state. The Company is principally engaged in the life
insurance business in 49 states and the District of Columbia. Conseco Variable
is a stock company organized under the laws of the state of Texas and is an
indirect wholly-owned subsidiary of Conseco, Inc. Conseco, Inc. is a publicly
owned financial services organization headquartered in Carmel, Indiana. Through
its subsidiaries, Conseco, Inc. is one of the nation's leading providers of
supplemental health insurance, retirement annuities and universal life
insurance.
Contract Owner Inquiries
You should direct any inquiries you have regarding your Individual Account,
the Contracts, or any related matter to the Company's Variable Annuity
Department at the address and telephone number shown under "Administrative
Office" on page 1 of this Prospectus.
Financial Statements
The financial statements of Conseco Variable and the Variable Account are
contained in the Statement of Additional Information. You should consider the
financial statements of Conseco Variable only as bearing upon the ability of
Conseco Variable to meet its obligations under the Contracts. Neither the assets
of Conseco Variable nor those of any company in the Conseco Variable group of
companies other than Conseco Variable support these obligations.
The Variable Account
The Variable Account was originally established in 1980 by Voyager Life
Insurance Company. The Variable Account is registered with the SEC as a unit
investment trust under the Investment Company Act of 1940 (the "1940 Act").
At a combined Special Meeting held on December 14, 1992, the Contract
Owners and participants in the Variable Account, Great American Reserve Variable
Annuity Account Fund ("Annuity Fund") and Great American Reserve Variable
Annuity Account D ("Account D") approved an Agreement and Plan of Reorganization
and the reorganization (the "Combination") of the Variable Account, Annuity
Fund, and Account D. On May 1, 1993, the effective date of the Combination,
Variable Account, Annuity Fund and Account D were combined and restructured into
a single continuing unit investment trust separate account investing exclusively
in shares of the Conseco Series Trust, and the Variable Account became the
continuing separate account. Also on May 1, 1993, all of the sub-account assets
of the Variable Account, including those of Annuity Fund and Account D, were
sold, assigned and transferred to the Equity (formerly, Common Stock), Fixed
Income (formerly, Corporate Bond) and Money Market Portfolios of Conseco Series
Trust. In exchange for such assets, shares of the Equity, Fixed Income and Money
Market Portfolios were issued to the Equity sub-account, Fixed Income
sub-account and Money Market sub-account of restructured Variable Account,
respectively.
The respective interests of Contract Owners and participants immediately
after the Combination were equal to their former interests in the Variable
Account, Annuity Fund or Account D, as the case may be, immediately before the
Combination. Prior to the Combination, Variable Account, Annuity Fund and
Account D had been operated by Conseco Variable as managed separate accounts
investing directly in securities. As a result of the Combination, the Variable
Account invests in shares of Conseco Series Trust. The Variable Account also
invests in shares of other Funds.
Prior to May 1, 1999, the Variable Account was known as Great American
Reserve Variable Annuity Account C. Registration under the 1940 Act does not
involve the supervision by the SEC of the management or investment policies or
practices of the Variable Account. The Variable Account is regulated by the
Insurance Department of Texas. Regulation by the state, however, does not
involve any supervision of the Variable Account, except to determine compliance
with broad statutory criteria.
The assets of the Variable Account are held in Conseco Variable's name on
behalf of the Variable Account and legally belong to Conseco Variable. However,
those assets that underlie the Contracts are not available to be used to pay the
liabilities arising out of any other business Conseco Variable may conduct. All
the income, gains and losses (realized or unrealized) resulting from these
assets are credited to or charged against the Contracts and not against any
other Contracts Conseco Variable may issue.
The Variable Account is divided into sub-accounts. Each sub-account invests
in shares of one of the Funds.
Conseco Variable has also reserved the right, subject to compliance with
the law as currently applicable or subsequently changed,
(a) to operate the Variable Account in any form permitted under the 1940
Act or in any other form permitted by law;
(b) to take any action necessary to comply with or obtain and continue any
exemptions from the 1940 Act or to comply with any other applicable
law;
(c) to transfer any assets in any sub-account to another sub-account, or
to one or more separate investment accounts, or to Conseco Variable's
Fixed Account; or to add, combine or remove sub-accounts in the
Variable Account; and
(d) to change the way Conseco Variable assesses charges, so long as the
aggregate amount is not increased beyond that currently charged to the
Variable Account and the portfolios in connection with the Contract.
Investment Options
The Contract offers 40 Variable Account Investment Options which are listed
below. You bear the investment risk for amounts you allocate to the Variable
Account Investment Options. We may make additional Investment Options available
in the future.
Shares of the Funds are also offered in connection with certain variable
annuity contracts and variable life insurance policies of various life insurance
companies which may or may not be affiliated with Conseco Variable. Certain
Funds are also sold directly to qualified plans. The Funds believe that offering
their shares in this manner will not be disadvantageous to you.
Conseco Variable may enter into certain arrangements under which it is
reimbursed by the Funds' advisers, distributors and/or affiliates for the
administrative services which it provides to the Funds.
The investment objectives and policies of certain of the portfolios below
are similar to the investment objectives and policies of other mutual funds that
certain of the investment advisers manage. Although the objectives and policies
may be similar, the investment results of the portfolios may be higher or lower
than the results of such other mutual funds. The investment advisers cannot
guarantee, and make no representation, that the investment results of similar
funds will be comparable even though the funds have the same investment
advisers.
You should read the prospectus for these funds carefully before investing.
Copies of these prospectuses are attached to this prospectus. Certain portfolios
contained in the fund prospectuses may not be available with your contract.
Conseco Series Trust
Conseco Series Trust is a mutual fund with multiple portfolios. Conseco
Series Trust is managed by Conseco Capital Management, Inc. The following
portfolios are available under the Contract:
Balanced Portfolio (formerly, Asset Allocation Portfolio)
Equity Portfolio (formerly, Common Stock Portfolio)
Fixed Income Portfolio (formerly, Corporate Bond Portfolio)
Government Securities Portfolio
Money Market Portfolio
The Alger American Fund
The Alger American Fund is a mutual fund with multiple portfolios. Fred
Alger Management, Inc. serves as the Fund's investment adviser. The following
portfolios are available under the Contract:
Alger American Growth Portfolio
Alger American Leveraged AllCap Portfolio
Alger American MidCap Growth Portfolio
Alger American Small Capitalization Portfolio
American Century Variable Portfolios, Inc.
American Century Variable Portfolios, Inc. is a series of funds managed by
American Century Investment Management, Inc. The following portfolios are
available under the Contract:
VP Income & Growth
VP International
VP Value (long-term capital growth with income as a secondary objective)
Berger Institutional Products Trust
Berger Institutional Products Trust is a mutual fund with multiple
portfolios. Berger Associates, Inc. is the investment adviser to all portfolios
except the Berger/BIAM IPT--International Fund. BBOI Worldwide, LLC is the
adviser to the Berger/BIAM IPT--International Fund. The following portfolios are
available under the Contract:
Berger IPT--100 Fund (long-term capital appreciation)
Berger IPT--Growth and Income Fund
Berger IPT--Small Company Growth Fund
Berger/BIAM IPT--International Fund
The Dreyfus Socially Responsible Growth Fund, Inc.
The Dreyfus Socially Responsible Growth Fund, Inc. is managed by The
Dreyfus Corporation. Dreyfus has hired NCM Capital Management Group, Inc. to
serve as sub-investment adviser and to provide day-to-day management of the
Fund's investments.
Dreyfus Stock Index Fund
The Dreyfus Corporation serves as the Fund's manager. Dreyfus has hired its
affiliate, Mellon Equity Associates, to serve as the Fund's index fund manager
and to provide day-to-day management of the Fund's investments.
Dreyfus Variable Investment Fund
The Dreyfus Variable Investment Fund is a mutual fund with multiple
portfolios. The Dreyfus Corporation serves as the investment adviser. The
following portfolios are available under the Contract:
Disciplined Stock Portfolio (seeks to outperform the total return
performance of the Standard & Poor's 500 Composite Stock Price Index)
International Value Portfolio
Federated Insurance Series
Federated Insurance Series is a mutual fund with multiple portfolios.
Federated Investment Management Company is the investment adviser. The adviser
changed its name from Federated Advisers to Federated Investment Management
Company on March 31, 1999. Federated Global Investment Management Corp. is the
sub-adviser of the Federated International Equity Fund II. The following
portfolios are available under the Contract:
Federated High Income Bond Fund II
Federated International Equity Fund II
Federated Utility Fund II
INVESCO Variable Investment Funds, Inc.
INVESCO Variable Investment Funds, Inc. is a mutual fund with multiple
portfolios. INVESCO Funds Group, Inc. is the investment adviser. The following
portfolios are available under the Contract:
INVESCO VIF--High Yield Fund (seeks high level of current income)
INVESCO VIF--Equity Income Fund (formerly, INVESCO VIF--Industrial Income
Portfolio) (seeks high current income with growth of capital as a
secondary goal)
Janus Aspen Series
The Janus Aspen Series is a mutual fund with multiple portfolios which are
advised by Janus Capital Corporation. The following portfolios are available
under the Contract:
Aggressive Growth Portfolio
Growth Portfolio
Worldwide Growth Portfolio
Lazard Retirement Series, Inc.
Lazard Retirement Series, Inc. is a mutual fund with multiple portfolios.
Lazard Asset Management, a division of Lazard Freres & Co. LLC, is the
investment manager for each portfolio. The following portfolios are available
under the Contract:
Lazard Retirement Equity Portfolio
Lazard Retirement Small Cap Portfolio
Lord Abbett Series Fund, Inc.
Lord Abbett Series Fund, Inc. is a mutual fund managed by Lord, Abbett &
Co. The following portfolio is available under the Contract:
Growth and Income Portfolio
Mitchell Hutchins Series Trust
Mitchell Hutchins Series Trust is a mutual fund with multiple portfolios.
Mitchell Hutchins Asset Management Inc. provides advisory and administrative
services to the Fund. The following portfolio is available under the Contract:
Growth and Income Portfolio
Neuberger Berman Advisers Management Trust
Each portfolio of Neuberger Berman Advisers Management Trust invests in a
corresponding series of Advisers Managers Trust. All series of Advisers Managers
Trust are managed by Neuberger Berman Management Inc. The following are
available under the Contract:
Limited Maturity Bond Portfolio
Partners Portfolio (capital growth)
Strong Opportunity Fund II, Inc.
Strong Opportunity Fund II is a mutual fund managed by Strong Capital
Management, Inc. The following portfolio is available under the Contract:
Opportunity Fund II (capital growth)
Strong Variable Insurance Funds, Inc.
Strong Variable Insurance Funds, Inc. is a mutual fund with multiple
series. Strong Capital Management, Inc. serves as the investment adviser. The
following series is available under the Contract:
Strong Mid Cap Growth Fund II (formerly, Growth Fund II)
Van Eck Worldwide Insurance Trust
Van Eck Worldwide Insurance Trust is a mutual fund with multiple portfolios
which are managed by Van Eck Associates Corporation. The following portfolios
are available under the Contract:
Worldwide Bond Fund
Worldwide Emerging Markets Fund
Worldwide Hard Assets Fund
Worldwide Real Estate Fund
Voting Rights
Conseco Variable is the legal owner of the Fund shares. However, Conseco
Variable believes that when a Fund solicits proxies in conjunction with a vote
of shareholders, it is required to obtain from you and other owners instructions
as to how to vote those shares. When we receive those instructions, we will vote
all of the shares we own in proportion to those instructions. If we determine
that we are no longer required to comply with the above, we will vote the shares
in our own right without obtaining instructions from you. We have provided a
further discussion of voting rights in the Statement of Additional Information.
Fixed Account
The Fixed Account is not registered with the SEC because of certain
exemptive and exclusionary provisions. Conseco Variable has been advised that
the staff of the SEC has not reviewed the disclosure in this Prospectus relating
to the Fixed Account. The disclosure may, however, be subject to certain
generally applicable provisions of the federal securities laws relating to the
accuracy and completeness of statements made in prospectuses.
Purchase Payments and transfers to the Fixed Account become part of the
general account of Conseco Variable. You can transfer Contract Values between
the Fixed and Variable Accounts, but the transfers are subject to the following:
1. You may transfer Contract Values from the Variable Account to the
Fixed Account once in any 30-day period;
2. You may transfer Contract Values from the Fixed Account to the
Variable Account once in any six-month period subject to a limit of
20% of the Fixed Account value;
3. You may not make transfers from the Fixed Account once Annuity
Payments begin.
The mortality and expense risk charge does not apply to values allocated to
the Fixed Account.
If you buy the Contract as a TSA or under certain other qualified plans,
the Contract may contain a provision that allows you to take a loan against the
Contract Value you have allocated to the Fixed Account. Loan provisions are
described in detail in your Contract.
THE CONTRACT
The Contract, like all deferred annuity Contracts, has two phases: the
Accumulation Period and the Annuity Period. When you are making Purchase
Payments to the Contract, it is called the Accumulation Period. During the
Accumulation Period, earnings accumulate on a tax deferred basis and are taxed
as income when you make a withdrawal. When you begin receiving Annuity Payments
from the Contract, it switches to the Annuity Period.
Unless contrary to law, assignment of the Contract or of a Participant's
Individual Account is prohibited.
Accumulation Provisions
Purchase Payments
The Contract is designed for Plans generally involving 25 or more
Participants. Purchase Payments must be at least $10 per month. Purchase
Payments in excess of $500,000 may be made only with our approval and will be
subject to such terms and conditions as we may require.
Conseco Variable must approve each application. Upon acceptance, a Contract
is issued to the Contract Owner and the Purchase Payment, as applicable to each
Individual Account, is credited to the Participant's account. When Conseco
Variable accepts your application, it will issue you a Contract and allocate
your Purchase Payment as described below.
Allocation of Purchase Payments
You may elect to have Purchase Payments accumulate:
(a) on a fully variable basis, which means they are invested in the sub-
accounts of the Variable Account (Variable Account Investment
Options);
(b) on a fully fixed basis, which means they are invested in our general
account and receive a periodically adjusted interest rate guaranteed
by Conseco Variable (Fixed Account); or
(c) a combination of both.
You may request to change your allocation of future Purchase Payments 30
days after either we establish your Individual Account, or 30 days after you
have made a prior change in allocation.
TEN-DAY RIGHT TO REVIEW. The Contracts provide a "10-day free look" (in some
states, the period may be longer). This allows the Contract Owner or Participant
to revoke the Contract by returning it to either a Conseco Variable
representative or to our Variable Annuity Department within 10 days (or the
period required in your state) of delivery of the Contract. Conseco Variable
deems this period as ending 15 days after it mails a Contract from its Variable
Annuity Department. If you return the Contract under the terms of the free look
provision, Conseco Variable will refund the Purchase Payments, unless a larger
refund is required by state law.
Once we receive your Purchase Payment and the necessary information, we
will issue your Contract and allocate your first Purchase Payment within 2
business days. If you do not provide us all of the information needed, we will
contact you. If for some reason we are unable to complete this process within 5
business days, we will either send back your money or get your permission to
keep it until we get all of the necessary information.
If you add more money to your Contract by making additional Purchase
Payments, we will credit these amounts to your Contract within one business day.
Our business day closes when the New York Stock Exchange closes, usually 4:00
P.M. Eastern time.
Accumulation Units
We credit Purchase Payments that you allocate to the sub-accounts with
Accumulation Units. We do this at the end of the Valuation Period when we
receive your Purchase Payment at our Administrative Office. We determine the
number of Accumulation Units credited to your Contract by dividing the Purchase
Payment amount by the value of an Accumulation Unit at the end of that Valuation
Period. We value Accumulation Units for each sub-account separately.
Accumulation Unit Values
Every day we determine the value of an Accumulation Unit for each of the
sub-accounts by multiplying the Accumulation Unit value for the previous
Valuation Period by a factor for the current Valuation Period. The factor is
determined by:
1. dividing the value of a Fund share at the end of the current Valuation
Period (and any charges for taxes) by the value of a Fund share for
the previous Valuation Period; and
2. subtracting the daily amount of the mortality and expense risk fee.
The value of an Accumulation Unit may go up or down from Valuation Period
to Valuation Period. There is no guarantee that the value of your Individual
Account will equal or exceed the Purchase Payments you have made.
We will tell you at least once each year the number of Accumulation Units
which we credited to your Individual Account, the current Accumulation Unit
values and the value of your Individual Account.
Transfers
During the Accumulation Period, you may make transfers from one sub-account
to another sub-account and/or to the Fixed Account. Except with our permission,
you can only make a transfer once in any 30-day period. You can only make one
transfer from the Fixed Account in any 6 month period of no more than 20% of the
Fixed Account value. You can make transfers between sub-accounts and changes in
allocations in writing or by telephone (if you have completed a telephone
authorization request).
How You Can Make Transfers
Transfers must be made by written authorization from you or from the person
acting on your behalf as an attorney-in-fact under a power-of-attorney if
permitted by state law. You must request telephone transfers on forms we
provide. By authorizing Conseco Variable to accept telephone transfer
instructions, you agree to accept and be bound by the conditions and procedures
established by Conseco Variable from time to time. We have instituted reasonable
procedures to confirm that any instructions communicated by telephone are
genuine. We will record all telephone calls and will ask the caller to produce
your personalized data prior to our initiating any transfer requests by
telephone. Additionally, as with other transactions, you will receive a written
confirmation of your transfer. If reasonable procedures are employed, neither
Conseco Variable nor Conseco Equity Sales, Inc. will be liable for following
telephone instructions which it reasonably believes to be genuine.
Transfer requests received by Conseco Variable before the close of trading
on the New York Stock Exchange (currently 4:00 p.m. Eastern time) will be
initiated at the close of business that day. If we receive a request later it
will be initiated at the close of the next business day.
Dollar Cost Averaging
Conseco Variable offers a Dollar Cost Averaging (DCA) program which enables
you to transfer values from the Fixed Account or Money Market sub-account to
another Investment Option on a predetermined and systematic basis. The DCA
program allows you to make investments in equal installments over time in an
effort to potentially reduce the risk of market fluctuations. There is no
guarantee that this will happen. Currently, there is no charge for participating
in this program.
Rebalancing
Rebalancing is a program, which if elected, permits you to pre-authorize
periodic automatic transfers during the Accumulation Period among the
sub-accounts pursuant to your written instructions. The transfers under this
program are made to maintain a particular percentage allocation among the
sub-accounts you select. Any amount you have in the Fixed Account will not be
transferred pursuant to the rebalancing program. You must have at least $5,000
of Contract Value to have transfers made pursuant to this program. Transfers
must be in whole percentages in one (1%) percent allocation increments. The
maximum number of sub-accounts you can use for rebalancing is 15. You can
request that rebalancing occur quarterly, semi-annually or annually on a date
you select. There is no fee for participating in the program. Conseco Variable
reserves the right to terminate, modify or suspend the rebalancing program at
any time.
Sweeps
Sweeps is a program which provides for the automatic transfer of the
earnings from the Fixed Account into a Variable Account Investment Option on a
periodic and systematic basis. The transfers under this program do not count
toward the number of transfers you can make in a year. Currently, there is no
charge for participating in this program.
Withdrawals
You can withdraw all or a portion of the Contract Value at any time before
the commencement of Annuity Payments and, under certain circumstances, during
the Annuity Period (subject to any restrictions of the Code). We will determine
the value of the Contract as of the date we receive a written request for a
withdrawal at our Administrative Office or a later date you specify in the
request. The redemption payment will be the value of Accumulation Units then
credited to the Individual Account under the Contract less applicable
withdrawal charges, any outstanding loans and applicable administrative fees.
With respect to any Individual Account value or portion thereof which has been
applied to provide Annuity Payments, Conseco Variable will continue to make
Annuity Payments under the option you selected until its obligations to make
such payments terminates.
For certain qualified Contracts, your withdrawal rights may be restricted
and may require the consent of your spouse as required under the Code.
If you have amounts allocated to more than one Investment Option, a request
for a partial withdrawal must specify the manner in which the amount redeemed is
to be allocated between the Investment Options. If you do not specify how the
withdrawal is to be allocated between Investment Options, Conseco Variable will
call you to get instructions. If Conseco Variable cannot get instructions from
you, it will return the withdrawal request to you.
Withdrawals may be subject to income taxes, penalty taxes and certain
restrictions.
Suspension of Payments
We will pay the amount of any withdrawal from the Variable Account
promptly, and in any event within seven days of the date Conseco Variable
receives the written request at its Administrative Office. Conseco Variable
reserves the right to defer the right of withdrawal or postpone payments for any
period when:
(1) the New York Stock Exchange is closed (other than customary weekend
and holiday closings);
(2) trading on the New York Stock Exchange is restricted;
(3) an emergency exists as a result of which disposal of securities held
in the Variable Account is not reasonably practicable or it is not
reasonably practical to determine the value of the Variable Account's
net assets; or
(4) the SEC, by order, so permits for the protection of security holders,
provided that applicable rules and regulations of the SEC will govern
as to whether the conditions described in (2) and (3) exist.
Restrictions Under Optional Retirement Programs
If you participate in certain Optional Retirement Programs (ORP), you can
withdraw your interest in a Contract only upon:
(1) termination of employment in all public institutions of higher
education as defined by applicable law,
(2) retirement, or
(3) death.
Accordingly, you (as a participant in ORP) may be required to obtain a
certificate of termination from your employer before you can withdraw your
interest. Certain plans may have additional restrictions on distributions.
Restrictions Under Section 403(b) Plans
If you own the Contract under a TSA-403(b) plan, you can only make
withdrawals of amounts attributable to contributions you made pursuant to a
salary reduction agreement (as defined in Section 403(b)(11) of the Code) under
the following circumstances:
(1) when you attain age 59 1/2,
(2) when you separate from service,
(3) when you die,
(4) when you become disabled (within the meaning of Section 72(m)(7) of
the Code),
(5) in the case of hardship, or
(6) made pursuant to a qualified domestic relations order, if otherwise
permitted.
Withdrawals for hardship are restricted to the portion of your Contract
Value which represents contributions you made and does not include any
investment results. The limitations on withdrawals became effective on January
1, 1989, and apply only to:
o salary reduction contributions made after December 31, 1988;
o income attributable to such contributions; and
o income attributable to amounts held as of December 31, 1988.
The limitations on withdrawals do not affect rollovers or transfers between
certain qualified plans. Tax penalties may also apply.
Conversion to Individual Account Upon Termination in Plan
Upon termination of participation in Plan, the Participant who is entitled
to a benefit under the terms of the Plan may elect, if the Contract Owner so
requests, to convert to an individual annuity contract. The individual annuity
contract will be of the form then currently issued for this class of individual,
at a duration equivalent to the lesser of the number of full years: (a) the
Participant has been in the Plan; or (b) the Contract has been in force.
Systematic Withdrawal Plan
Conseco Variable offers a Systematic Withdrawal Plan (SWP) which enables
you to pre-authorize periodic withdrawals. You can participate in this program
by sending a written request to our Administrative Office. You can instruct
Conseco Variable to withdraw a level dollar amount from specified Investment
Options on a periodic basis. If you do a reallocation and do not specify
Investment Options, all systematic withdrawals will be withdrawn from the Fixed
Account and Variable Account Investment Options on a pro-rata basis. The total
SWP withdrawals in a Contract Year which you are permitted to make is limited to
amounts that can be withdrawn without the withdrawal charge (see "Charges and
Deductions--Withdrawal Charge").
SWP is not available if you participate in the dollar cost averaging
program or if you have Purchase Payments automatically deducted from a bank
account on a periodic basis.
Systematic withdrawals may be subject to income taxes, penalty taxes and
certain restrictions.
Loans
Your Contract may contain a loan provision issued in connection with
certain qualified plans. If you own a Contract which contains a loan provision,
you may obtain loans using the Contract as the only security for the loan. Loans
are subject to provisions of the Code and to applicable retirement program
rules. You should consult a tax adviser and retirement plan fiduciary before
exercising loan privileges. Loan provisions are described in detail in your
Contract.
The amount of any loan outstanding on the date of death will be deducted
from the death benefit. In addition, a loan, whether or not repaid, will have a
permanent effect on the Contract Value because the investment performance of the
Investment Options will apply only to the unborrowed portion of the Contract
Value. The longer the loan is outstanding, the greater the effect is likely to
be. The effect could be favorable or unfavorable. If the investment performance
results are greater than the rate being credited on amounts held in the loan
account while the loan is outstanding, the Contract Value will not increase as
rapidly as it would have if no loan were outstanding. If the investment
performance results are below that rate, the Contract Value will be higher than
it would have been if no loan had been outstanding.
Charges and Deductions
Withdrawal Charge
If you make a partial or full withdrawal during the Accumulation Period,
Conseco Variable will deduct a withdrawal charge from the amount withdrawn
("amount redeemed") if there are less than 15 completed annual purchase payment
periods (annual purchase payment period means a contract year which is the one
year period beginning on the issue date and each subsequent one year period)
for the Individual Account. During the Annuity Period, withdrawal charges
may apply to the fourth and fifth options.
We do not deduct withdrawal charges from Annuity Payments under an annuity
option involving lifetime payments or from amounts paid due to the death of a
participant.
The withdrawal charge will be a percentage of the amount redeemed, ranging
from 5% to 0% depending upon the number of completed annual Purchase Payment
periods for the Individual Account. In no event, however, will the cumulative
deductions exceed 8.5% of the cumulative Purchase Payments made. Until such
percentage reaches zero, it is possible that the actual dollar amount of the
withdrawal charge will increase, even though the percentage will decline,
because of the increased Participant's Individual Account.
Completed Annual Purchase Payment
Periods for the Individual Account Charge
- ----------------------------------- ------
Less than 5 ............................. 5.00%
5 but less than 10 ...................... 3.00%
10 but less than 15 ..................... 2.00%
15 or more .............................. None
Examples:
(1) If you make a complete withdrawal of your Individual Account before
five completed Purchase Payment periods:
Value of
Contract or
Individual
Account
(Amount Withdrawal Administrative Redemption
Redeemed) Charge Fee Deduction* Payment
- -----------------------------------------------------------------------
$ 2,000 5% ($100) $15 $ 1,885
*Applicable to full withdrawals only.
(2) If you make a partial withdrawal of your Individual Account before five
completed Purchase Payment periods, assuming you request a $1,000 redemption
payment:
AMOUNT AMOUNT WITHDRAWAL REDEMPTION
REQUESTED REDEEMED CHARGE PAYMENT
- --------------------------------------------------------------------------------
$1,000.00 $1,052.63 $52.63 (5%) $1,000.00
In order to make a redemption payment of $1,000, the amount redeemed must
be greater than the amount requested by the amount of the withdrawal charge. We
calculate the amount redeemed by dividing (a) the amount requested ($1,000) by
(b) 1.00 minus the deduction rate of 5% (or .95), which produces $1,052.63. The
value of the Individual Account will be reduced by this amount.
Administrative Charge (Annual Contract Fee)
During the Accumulation Period, Conseco Variable deducts an annual contract
fee of $15 on each July 2 from the Individual Account value. If you fully
surrender your Individual Account prior to the commencement of Annuity Payments,
the annual contract fee will be deducted from proceeds paid. However, in no
event will the amount of such fee exceed 2% of the surrender value of the
Individual Account when it is fully surrendered.
Conseco Variable deducts the administrative fee first from amounts
accumulated in the Fixed Account; if no or an insufficient value exists in the
Fixed Account, any balance will then be deducted from the sub-accounts of
Variable Account. These administrative fees have been set at a level that will
recover no more than the actual costs associated with administering the
Contracts.
Mortality And Expense Risk Charge
Conseco Variable makes daily deductions from the Variable Account at an
effective annual rate equal to 1.00% of the value of the assets of the Variable
Account for the mortality and expense risks it assumes. The amounts are deducted
from the assets of Variable Account in accordance with the Contracts.
Variable Annuity Payments made under the Contracts vary with the investment
performance of the sub-accounts of the Variable Account, but are not affected by
Conseco Variable's actual mortality experience among Annuitants. The life span
of the Annuitant, or changes in life expectancy in general, do not affect the
monthly Annuity Payments payable under the Contracts. If Annuitants live longer
than the life expectancy determined by Conseco Variable, Conseco Variable
provides funds from its general funds to make Annuity Payments. Conversely, if
longevity among Annuitants is lower than Conseco Variable determined, Conseco
Variable realizes a gain. This is the mortality expense risk.
Conseco Variable performs all administrative functions and pays all
administrative expenses with respect to the Contracts. These expenses include
but are not limited to salaries, rents, postage, telephone, travel, legal,
actuarial and accounting fees, office equipment and stationery. Conseco Variable
also provides the death benefits under the Contracts. Conseco Variable also
assumes the risk, the expense risk, that deductions provided for in the
Contracts for sales and administrative expenses may not be enough to cover
actual costs. Where the deductions are not adequate, Conseco Variable will pay
the amount of any shortfall from its general funds. Any amounts paid by Conseco
Variable may consist of, among other things, proceeds derived from mortality and
expense risk charges.
Expense Guarantee Agreement. Pursuant to the Combination (See "Variable
Account"), Conseco Variable issued an endorsement with respect to each existing
Contract outstanding immediately prior to the effective time of the Combination
guaranteeing that the total of the investment management fees charged against
the Equity (formerly, Common Stock), Fixed Income (formerly, Corporate Bond),
and Money Market Portfolios of Conseco Series Trust whose shares are purchased
by the Variable Account, plus the mortality and expense risk, administrative and
any other charges imposed upon the assets of the corresponding sub-accounts of
the Variable Account, will not exceed an amount that is equal to the total
amount of the same charges that would have been imposed under the Contracts had
the Combination not occurred (the "Expense Guarantee Agreement"). Accordingly,
Conseco Variable will reimburse the appropriate sub-account of the Variable
Account an amount that represents the difference between the investment
management fees charged the Variable Account, Annuity Fund or Account D, as
applicable, prior to the Combination and the amount of such fees charged to
Conseco Series Trust, plus any other charges in excess of those that would have
been incurred if the Combination had not taken place.
The mortality and expense risk and administrative charges will not change,
and any other charges imposed on the assets of the Variable Account are not
expected to be more than before the Combination. Conseco Variable will not,
however, assume extraordinary or non-recurring expenses of Conseco Series Trust,
such as legal claims and liabilities, litigation costs and indemnification
payments in connection with litigation. Also, the Expense Guarantee Agreement
will not apply to any federal income tax if Conseco Series Trust fails to
qualify as a "regulated investment company" under applicable provisions of the
Code. The Expense Guarantee Agreement, described above, also applies to
Contracts issued after the Combination. Conseco Variable, however, may eliminate
the Expense Guarantee Agreement with respect to Contracts issued in the future.
Premium Taxes
We may deduct any premium tax due from Purchase Payments or from Individual
Account values at the annuity commencement date or at any such other time as
Conseco Variable determines in its sole discretion. The current range of premium
taxes in jurisdictions in which we make the Contracts available is from 0% to
3.5%.
Fund Expenses
There are deductions from and expenses paid out of the assets of the Funds,
which are described in the attached Fund prospectuses.
Reduction or Elimination of Contract Charges
In some cases, Conseco Variable may expect to incur lower sales and
administrative expenses or perform fewer services due to the size of the
Contract, the average contribution and the use of group enrollment procedures.
Then, Conseco Variable may be able to reduce or eliminate the Contract charges
for administrative expense and withdrawal charges.
Other Charges
Currently, Conseco Variable does not make a charge against the Variable
Account for its federal income taxes, or provisions for such taxes, that may be
as a result of the Variable Account. Conseco Variable may charge each
sub-account of the Variable Account for its portion of any income tax charged to
the sub-account or its assets.
Under present laws, Conseco Variable may incur state and local taxes (in
addition to premium taxes) in several states. At present, these taxes are not
significant. If they increase, however, Conseco Variable may decide to make
charges for such taxes or provisions for such taxes against the Variable
Account. Any such charges against the Variable Account or its sub-accounts could
have an adverse effect on the investment performance of the sub-accounts.
Death Benefits
In the event of the death of a Participant before Annuity Payments
commence, Conseco Variable will pay the beneficiary the value of the
Participant's Individual Account, less any debt. We will determine the
Individual Account value as of the Valuation Period in which we receive proof of
death acceptable to us at our Administrative Office. There is no withdrawal
charge applicable to amounts paid due to the death of a Participant.
Generally, the distribution of the Owner's interest in the Contract must be
made within five years after the Owner's death. If the beneficiary is an
individual, in lieu of distribution within five years of the Owner's death,
distribution may generally be made as an annuity which begins within one year of
the Owner's death and is payable over the life of the beneficiary or over a
period not in excess of the life expectancy of the beneficiary. If the Owner's
spouse is the beneficiary, that spouse may elect to continue the Contract as the
new Owner in lieu of receiving the distribution. In such a case, the
distribution rules applicable when a Contract Owner dies will apply when that
spouse, as the Owner, dies. In the case of a qualified contract, the date on
which distributions are required to begin must be no later than April 1 of the
first calendar year following the later of (a) the calendar year in which the
Annuitant attains age 70 1/2 or (b) the calendar year in which the Annuitant
retires. Additional requirements may apply to certain qualified contracts, In
the case of a Contract involving more than one Contract Owner, the death of any
Contract Owner shall cause this section to apply.
In lieu of a lump-sum payment, the death proceeds may be applied under any
of the annuity options available in the Contract and in accordance with the
terms of the Plan.
If a lump sum payment is elected and all the necessary requirements are
met, the payment will be made within 7 days.
THE ANNUITY PERIOD
Optional Annuity Period Elections
The retirement date and the annuity options are normally established by the
terms of the Plan. If you do not elect otherwise (a) the manner of payment will
be a lifetime annuity with 120 monthly payments certain, and (b) the value of
the Participant's Individual Account will be applied as follows:
* any value accumulated in the Fixed Account will be applied to provide
a fixed annuity; and
* the value in the sub-account(s) of Variable Account will be applied,
separately, to provide variable annuity payments.
By giving written notice to Conseco Variable at least 30 days prior to the
commencement of Annuity Payments, the Contract Owner may, as to each
Participant, elect to change:
* the annuity option to any of the annuity options described below, and
* the manner in which the value of a Participant's Individual Account is
to be applied to provide Annuity Payments (for example, an election
that a portion or all of the amounts accumulated on a variable basis
be applied to provide fixed Annuity Payments or vice versa).
Once Annuity Payments begin, no changes may be elected by the Contract Owner.
Prior to the selected Annuity Date, an Individual Account may be terminated
by the Contract Owner and the value thereof received in a lump sum. Once Annuity
Payments have begun, neither the Annuitant nor the Contract Owner can terminate
the annuity benefit and receive a lump-sum settlement in lieu thereof, except as
permitted under the Fourth and Fifth Options below.
The assumed investment rate (AIR) is 3 1/2%. The Contract Owner may elect
to have all variable benefits payable for a Participant based on a 5% AIR
instead. The election must be made in writing at least 30 days prior to the
Participant's retirement date. If the performance of the Variable Account
Investment Options exceeds the 3 1/2% or 5% AIR, as applicable, the Annuity
Payments will increase. Similarly, if the actual rate is less than the 3 1/2% or
5% AIR, as applicable, the Annuity Payments will decrease.
You cannot make an election that would result in a first monthly Annuity
Payment of less than $25 if payments are to be on a fully fixed or variable
basis, or less than $25 on each basis if a combination of variable and fixed
annuity payments is elected. If, at any time, payments are or become less than
$25 per monthly payment, Conseco Variable has the right to change the frequency
of payments to an interval which will result in Annuity Payments of at least $25
each, except that it will not make payments less frequently than annually.
See "Federal Tax Status" for information on the federal tax treatment of
Annuity Payments or other settlements.
Annuity Options
You may select one of the following annuity options:
First Option - Life Annuity. Under this option, we will make monthly
payments during the lifetime of the Annuitant. The payments will cease with the
last monthly payment due prior to the death of the Annuitant. Of the first three
options, this option offers the maximum level of monthly payments since there is
no minimum number of payments guaranteed (nor a provision for a death benefit
payable to a beneficiary). It would be possible under this option to receive
only one Annuity Payment if the Annuitant died prior to the due date of the
second Annuity Payment.
Second Option - Life Annuity with 120, 180 or 240 Monthly Payments
Guaranteed. Under this option, we will make monthly payments during the lifetime
of the Annuitant with the guarantee that if, at the death of the Annuitant, we
have made payments for less than 120, 180 or 240 months, as elected, we will
continue to make Annuity Payments during the remainder of such period to your
beneficiary. Because this option provides a specified minimum number of Annuity
Payments, this option results in somewhat lower payments per month than the
First Option.
Third Option - Joint and Last Survivor Life Annuity. Under this option, we
will make monthly payments during the joint lifetime of the Annuitant and a
designated second person, and thereafter during the remaining lifetime of the
survivor. Payments to the survivor will be at the rate of 100%, 75%, 66 2/3% or
50% of the amount which would have been payable to the Annuitant (you can select
the rate at the time this option is elected). This option is designed primarily
for couples who require the maximum possible payments during their joint lives
and are not concerned with providing for beneficiaries at the death of the last
to survive.
Under current law, this option is automatically provided for a participant
in a pension plan who is married and for married participants in most other
qualified plans; however, a married participant may waive the joint and last
survivor annuity during the appropriate election period if the participant's
spouse consents in writing (acknowledging the effect of such consent) to such
waiver.
Fourth Option - Payments for a Designated Period. Under this option, we
make payments for the number of years selected, which may be from one through
30, except that, if the number of completed annual Purchase Payment periods for
the Individual Account is five or less, the number of years selected for this
option may not be less than five minus the number of completed annual Purchase
Payment periods. For example, if the number of completed annual Purchase Payment
periods is three, then the minimum Annuity Payment period which can be elected
for this Option is two years (i.e., five minus three). If you elect payments
under this option on a variable basis, payments will vary monthly in accordance
with the investment results of the sub-accounts of the Variable Account. If the
Annuitant dies before we have made the specified number of monthly payments, the
present value of the remaining payments (as set forth in your Contract) will be
paid to the designated beneficiary in one sum. If the Annuitant dies within 5
years after the start of Annuity Payments, Conseco Variable will treat this one
sum payment as a surrender. If the present value of the remaining payment is at
least $5,000 it may be applied under the first three options.
Fifth Option - Payments of a Designated Dollar Amount. Under this option,
we will make payments on a monthly, quarterly, semi-annual, or annual basis of a
designated dollar amount until the Individual Account value you applied under
this option, adjusted each Valuation Period to reflect investment experience, is
exhausted within a minimum of three years and a maximum of 20 years. The
designated amount of each installment may not be less than $6.25 per month per
$1,000 of Individual Account value applied. If the number of completed annual
Purchase Payment periods for the Individual Account is five or less, the
designated amount of each installment may not be greater than an amount which
would total the value applied in less than five minus the number of completed
annual Purchase Payment periods. For example, if the number of completed annual
Purchase Payment periods is three, then the payments cannot be greater than an
amount which would total the value applied in two years (i.e., five minus
three). If the Annuitant dies before the value is exhausted, we will pay the
remaining value to the beneficiary in one sum. In lieu of a lump sum payment,
the beneficiary may elect an annuity option for distribution of any amount on
deposit at the date of the Annuitant's death which will result in a rate of
payment at least as rapid as the rate of payment during the life of the
Annuitant.
To the extent that the Fourth or Fifth Option is chosen on a variable
basis, at any time during the payment period you may elect that the remaining
value be applied to provide a lifetime annuity under one of the first three
Options described above, provided that the balance is at least $5,000 and the
distribution will be made at least as rapidly as during the life of the
Annuitant. 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 will be treated as a surrender. Since you may elect a lifetime annuity
at any time, the annuity rate and expense risks continue during the payment
period. Accordingly, deductions for these risks will continue to be made from
the Individual Account values.
The SAI contains a further discussion of Annuity Provisions, including how
annuity unit values are calculated.
Transfers During The Annuity Period
You can make transfers during the Annuity Period by giving us written
notice at least 30 days before the due date of the first Annuity Payment for
which the change will apply. We will make transfers by converting the number of
annuity units being transferred to the number of annuity units of the
sub-account to which the transfer is made. The next Annuity Payment, if it were
made at that time, would be the same amount that it would have been without the
transfer. After that, Annuity Payments will reflect changes in the value of the
new annuity units. Conseco Variable reserves the right to limit, upon notice,
the maximum number of transfers you can make to one in any six-month period once
Annuity Payments have begun. In addition, you may not make transfers from a
fixed annuity option.
Conseco Variable reserves the right to defer the transfer privilege at any
time that it is unable to purchase or redeem shares of the Funds. Conseco
Variable also reserves the right to modify or terminate the transfer privilege
at any time in accordance with applicable law.
Death Benefit Amount During The Annuity Period
If you selected Annuity Payments based on an annuity option providing
payments for a guaranteed period, and the Annuitant dies during the Annuity
Period, Conseco Variable will make the remaining guaranteed payments to the
beneficiary. Such payments will be made at least as rapidly as under the method
of distribution being used as of the date of the Annuitant's death. If no
beneficiary is living, Conseco Variable will commute any unpaid guaranteed
payments to a single sum (on the basis of the interest rate used in determining
the payments) and pay that single sum to the Annuitant's estate.
Federal Tax Status
NOTE: Conseco Variable has prepared the following information on taxes as a
general discussion of the subject. It is not intended as tax advice to any
individual. You should consult your own tax adviser about your own
circumstances. Conseco Variable has included an additional discussion regarding
taxes in the Statement of Additional Information.
Annuity Contracts In General
Annuity contracts are a means of setting aside money for future needs,
usually retirement. Congress recognized how important saving for retirement was
and provided special rules in the Internal Revenue Code (Code) for annuities.
Simply stated, these rules provide that you will not be taxed on the
earnings on the money held in your annuity contract until you take the money
out. This is referred to as tax-deferral. There are different rules as to how
you will be taxed depending on how you take the money out and the type of
Contract--Qualified or Non-Qualified (see following sections).
You will not be taxed on increases in the value of your Contract until a
distribution occurs --either as a withdrawal or as annuity payments. When you
make a withdrawal you are taxed on the amount of the withdrawal that is
earnings. For annuity payments, different rules apply. A portion of each annuity
payment is treated as a partial return of your purchase payments and will not be
taxed. The remaining portion of the annuity payment will be treated as ordinary
income. How the annuity payment is divided between taxable and non-taxable
portions depends upon the period over which the annuity payments are expected to
be made. Annuity payments received after you have received all of your Purchase
Payments are fully includible in income.
When a non-qualified Contract is owned by a non-natural person (e.g.,
corporation or certain other entities other than a trust holding the Contract as
an agent for a natural person), the Contract will generally not be treated as an
annuity for tax purposes.
Qualified and Non-Qualified Contracts
If you purchase the Contract as an individual and not under any specially
sponsored program, your Contract is referred to as a non-qualified Contract.
If you purchase the Contract under a specially sponsored program, your
Contract is referred to as a qualified Contract.
Withdrawals - Non-Qualified Contracts
If you make a withdrawal from your Contract, the Code generally treats such
a withdrawal as first coming from earnings and then from your Purchase Payments.
Such withdrawn earnings are includible in income.
The Code also provides that any amount received under an annuity contract
which is included in income may be subject to a penalty. The amount of the
penalty is equal to 10% of the amount that is includible in income. Some
withdrawals will be exempt from the penalty. They include any amounts:
(1) paid on or after you reach age 59 1/2;
(2) paid after you die;
(3) paid if you become totally disabled (as that term is defined in the
Code);
(4) paid in a series of substantially equal payments made annually (or
more frequently) for life or a period not exceeding life expectancy;
(5) paid under an immediate annuity; or
(6) which are allocable to Purchase Payments made prior to August 14,
1982.
Withdrawals - Qualified Contracts
If you make a withdrawal from your qualified Contract, a portion of the
withdrawal is treated as taxable income. This portion depends on the ratio of
the pre-tax Purchase Payments to the after-tax Purchase Payments in your
Contract. If all of your Purchase Payments were made with pre-tax money then the
full amount of any withdrawal is includible in taxable income. Special rules may
apply to withdrawals from certain types of qualified Contracts. The Code also
provides that any amount received under a qualified Contract which is included
in income may be subject to a penalty. The amount of the penalty is equal to 10%
of the amount that is includible in income. Some withdrawals will be exempt from
the penalty. They include any amounts:
(1) paid on or after you reach age 59 1/2;
(2) paid after you die;
(3) paid if you become totally disabled (as that term is defined in Code);
(4) paid to you after leaving your employment in a series of substantially
equal payments made annually (or more frequently) under a lifetime
annuity;
(5) paid to you after you have attained age 55 and left your employment;
(6) paid for certain allowable medical expenses (as defined in the Code);
(7) paid pursuant to a qualified domestic relations order.
We have provided a more complete discussion in the Statement of Additional
Information.
Withdrawals - Tax-Sheltered Annuities
The Code limits the withdrawal of amounts attributable to Purchase Payments
made by owners under a salary reduction agreement. Withdrawals can only be made
when a Contract Owner:
(1) reaches age 59 1/2;
(2) leaves his or her job;
(3) dies;
(4) becomes disabled (as that term is defined in the Code);
(5) in the case of hardship; or
(6) pursuant to a qualified domestic relations order, if otherwise
permitted.
However, in the case of hardship, the owner can only withdraw the Purchase
Payments and not any earnings.
Diversification
The Code provides that the underlying investments for a variable annuity
must satisfy certain diversification requirements in order to be treated as an
annuity contract. Conseco Variable believes that the Funds are being managed so
as to comply with the requirements.
Investor Control
Neither the Code nor the Internal Revenue Service Regulations issued to
date provide guidance as to the circumstances under which you, because of the
degree of control you exercise over the underlying investments, and not Conseco
Variable would be considered the owner of the shares of the portfolios. If you
are considered the owner of the shares, it will result in the loss of the
favorable tax treatment for the Contract. It is unknown to what extent under
federal tax law owners are permitted to select portfolios, to make transfers
among the portfolios or the number and type of portfolios owners may select from
without being considered the owner of the shares. If any guidance is provided
which is considered a new position, then the guidance would generally be applied
prospectively. However, if such guidance is considered not to be a new position,
it may be applied retroactively. This would mean that you, as the owner of the
Contract, could be treated as the owner of the portfolios.
Due to the uncertainty in this area, Conseco Variable reserves the right to
modify the Contract as reasonably deemed necessary to maintain favorable tax
treatment.
General Matters
PERFORMANCE INFORMATION. Conseco Variable may advertise performance
information for the Variable Account Investment Options (sub-accounts) from time
to time in advertisements or sales literature. Performance information reflects
only the performance of a hypothetical investment in the Variable Account
Investment Options during the particular time period on which the calculations
are based. Performance information may consist of yield, effective yield, and
average annual total return quotations reflecting the deduction of all
applicable charges for recent one-year and, when applicable, five- and 10-year
periods and, where less than 10 years, for the period subsequent to the date
each sub-account first became available for investment. We may show additional
total return quotations that do not reflect a withdrawal charge deduction. We
may show performance information by means of schedules, charts or graphs. The
Statement of Additional Information contains a description of the methods we use
to determine yield and total return information for the sub-accounts.
YEAR 2000. Many existing computer programs had been designed and developed
to use only two digits to identify a year in the date field. If not corrected,
these computer programs could cause system failures in the year 2000, with
possible adverse effects on Conseco Variable's operations. In 1996, Conseco,
Inc. initiated a comprehensive corporate-wide program designed to ensure that
its computer programs (including those relating to Conseco Variable) function
properly in the year 2000. A number of Conseco, Inc.'s employees (including
several officers), as well as external consultants and contract programmers, are
working on various year-2000 projects.
Conseco, Inc. also has been working with vendors and other external
business relations to help avoid year-2000 problems related to the software or
services they provide to us. Under the program, our application systems,
operating systems, hardware, networks, electronic data interfaces and
infrastructure devices (such as facsimile machines and telephone systems) are
being analyzed.
Our year-2000 projects are currently on schedule. The year-2000 projects
are being conducted in three phases:
(i) an audit and assessment phase, designed to identify year-2000 issues;
(ii) a modification phase, designed to correct year-2000 issues; and
(iii)a testing phase, designed to test the modifications after they have
been installed.
We have completed the audit and assessment phase for all critical systems
and the second phase of our program is substantially complete. The testing phase
of our program will be conducted throughout 1999. We have provided for
significant contingency time in order to complete any additional modifications
before December 31, 1999.
The year-2000 issues are being addressed in three ways. For some, work is
being done to complete the previously planned conversions of older systems to
the more modern, year-2000 compliant systems already used in other areas. In
other cases, new, more modern systems are being purchased. In the remaining
cases, modifications are being made to existing systems. We currently estimate
that the total expense of our year-2000 projects are not material to Conseco
Variable's financial position.
The impact of year-2000 issues will depend, not only on the corrective
actions we take, but also on the way in which year-2000 issues are addressed by
governmental agencies, business and other third parties
(i) that provide services, utilities or data to Conseco Variable;
(ii) that receive services or data from Conseco Variable; or
(iii)whose financial condition or operating capability is important to
Conseco Variable.
We are in the process of identifying risks and assessing potential
year-2000 risks associated with our external business relationships, including
those with agents, financial institutions and the mutual funds underlying the
variable annuity contracts we issue. These procedures are necessarily limited to
matters over which we are able to reasonably exercise control. We have been
informed by our key financial institutions and utilities that they will be
year-2000 compliant in early 1999.
We are also assessing what contingency plans will be needed if any of our
critical systems or those of external business relationships are not year-2000
compliant at year-end 1999. We do not currently anticipate such a situation, but
our consideration of contingency plans will continue to evolve as new
information becomes available.
The failure to correct a material year-2000 problem could result in an
interruption in, or failure of, a number of normal business activities or
operations. Such failures could materially and adversely affect Conseco
Variable's results of operations, liquidity and financial condition. Due to the
general uncertainty inherent in the year-2000 problem, including the uncertainty
of the preparedness of our external business relationships, we are not able to
currently determine whether the consequences of year-2000 failures will have a
material impact on Conseco Variable's results of operations, liquidity and
financial condition. However, we believe our year-2000 compliance efforts will
reduce the likelihood of a material adverse impact.
DISTRIBUTION OF CONTRACTS. Conseco Equity Sales, Inc. (Conseco Equity
Sales), 11815 N. Pennsylvania Street, Carmel, IN 46032, an affiliate of Conseco
Variable, is the principal underwriter of the Contracts. Conseco Equity Sales is
a broker-dealer registered under the Securities and Exchange Act of 1934 and a
member of the National Association of Securities Dealers, Inc. Sales of the
Contracts will be made by registered representatives of Conseco Equity Sales and
broker-dealers authorized to sell the Contracts. The registered representatives
will also be licensed insurance representatives of Conseco Variable. See the
Statement of Additional Information for more information.
Commissions will be paid to broker-dealers who sell the Contracts.
Broker-dealers may be paid commissions up to 8.5% of Purchase Payments and may
include reimbursement of promotional or distribution expenses associated with
marketing the Contracts. The commission rate paid to the broker-dealer will
depend upon the nature and level of services provided by the broker-dealer.
LEGAL PROCEEDINGS. There are no legal proceedings to which the Variable
Account is a party or to which the assets of the Variable Account are subject.
Neither Conseco Variable nor Conseco Equity Sales is involved in any litigation
that is of material importance in relation to their total assets or that relates
to the Variable Account.
Table of Contents of the Statement of Additional Information
General Information and History
Independent Accountants
Distribution
Voting Rights
Calculation of Yield Quotations
Calculation of Total Return Quotations
Other Performance Data
Federal Tax Status
Annuity Provisions
Financial Statements
...............................................................................
(cut along dotted line)
If you would like a free copy of the Statement of Additional Information
dated November __, 1999 for this prospectus, please complete this form,
detach, and mail to:
Conseco Variable Insurance Company
Administrative Office
11815 N. Pennsylvania Street
Carmel, Indiana 46032
Gentlemen:
Please send me a free copy of the Statement of Additional Information for
Conseco Variable Annuity Account C group contract at the following address:
Name:_____________________________________________________________________
Mailing Address:__________________________________________________________
__________________________________________________________________________
Sincerely,
__________________________________________________________________________
(Signature)
Appendix
Condensed Financial Information
The table below provides per unit information about the financial history of the
sub-accounts for the periods indicated.
<TABLE>
<CAPTION>
6/30/99 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
CONSECO SERIES TRUST:
BALANCED (c)
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $2.219 $2.030 $1.740 $1.370 $1.052 $1.068
Accumulation unit value at end of period.................... $2.364 $2.219 $2.030 $1.740 $1.370 $1.052
Percentage change in accumulation unit value................ 6.57% 9.27% 16.68% 27.01% 30.19% (1.51)%
Number of accumulation units outstanding at end of period... 6,633,144 300,114 6,907,154 5,801,102 5,007,682 3,888,125
- ---------------------------------------------------------------------------------------------------------------------------------
EQUITY - QUALIFIED (a)
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $24.295 $21.148 $17.933 $12.448 $9.191 $9.069
Accumulation unit value at end of period.................... $26.848 $24.295 $21.148 $17.933 $12.448 $9.191
Percentage change in accumulation unit value................ 10.51% 14.88% 17.93% 44.06% 35.44% 1.35%
Number of accumulation units outstanding at end of period...6,565,303 7,294,849 8,714,598 8,464,009 7,950,068 7,356,167
- ---------------------------------------------------------------------------------------------------------------------------------
EQUITY - NON-QUALIFIED (a)
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $19.232 $16.740 $14.195 $9.854 $7.275 $7.179
Accumulation unit value at end of period.................... $21.252 $19.232 $16.740 $14.195 $9.854 $7.275
Percentage change in accumulation unit value................ 10.51% 14.88% 17.93% 44.06% 35.44% 1.35%
Number of accumulation units outstanding at end of period... 187,781 223,506 274,648 283,828 286,775 271,457
- ---------------------------------------------------------------------------------------------------------------------------------
FIXED INCOME - QUALIFIED (b)
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $5.738 $5.445 $4.990 $4.790 $4.080 $4.224
Accumulation unit value at end of period.................... $5.620 $5.738 $5.445 $4.990 $4.790 $4.080
Percentage change in accumulation unit value................ -2.07% 5.39% 9.11% 4.19% 17.38% (3.41)%
Number of accumulation units outstanding at end of period...2,470,862 2,455,411 2,784,065 2,973,412 3,072,607 2,961,739
- ---------------------------------------------------------------------------------------------------------------------------------
FIXED INCOME - NON-QUALIFIED (b)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $5.514 $5.232 $4.795 $4.602 $3.921 $4.059
Accumulation unit value at end of period ................... $5.400 $5.514 $5.232 $4.795 $4.602 $3.921
Percentage change in accumulation unit value................ -2.07% 5.39% 9.11% 4.19% 17.38% (3.41)%
Number of accumulation units outstanding at end of period .. 71,237 93,115 125,557 136,642 179,684 197,847
- --------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT SECURITIES (c)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.336 $1.261 $1.176 $1.156 $0.995 $1.034
Accumulation unit value at end of period ................... $1.299 $1.336 $1.261 $1.176 $1.156 $0.995
Percentage change in accumulation unit value................ -2.82% 6.01% 7.19% 1.72% 16.18% (3.79)%
Number of accumulation units outstanding at end of period ..1,102,327 702,665 485,631 365,164 422,359 335,451
- --------------------------------------------------------------------------------------------------------------------------------
MONEY MARKET (b)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period ............. $2.821 $2.708 $2.598 $2.496 $2.387 $2.321
Accumulation unit value at end of period.................... $2.871 $2.821 $2.708 $2.598 $2.496 $2.387
Percentage change in accumulation unit value................ 1.76% 4.18% 4.22% 4.10% 4.57% 2.85%
Number of accumulation units outstanding at end of period...2,434,574 1,922,118 1,624,326 1,849,618 1,538,629 1,619,841
- --------------------------------------------------------------------------------------------------------------------------------
THE ALGER AMERICAN FUND:
ALGER AMERICAN GROWTH (e)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.765 $1.204 $1.000 N/A N/A N/A
Accumulation unit value at end of period ................... $2.038 $1.765 $1.204 N/A N/A N/A
Percentage change in accumulation unit value................ 15.43% 46.60% 20.42% N/A N/A N/A
Number of accumulation units outstanding at end of period .. 942,494 335,852 120,648 N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
CONSECO SERIES TRUST:
BALANCED (c)
- -------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.000 N/A N/A N/A N/A
Accumulation unit value at end of period.................... $1.068 N/A N/A N/A N/A
Percentage change in accumulation unit value................ 6.84% N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... 2,257,426 N/A N/A N/A N/A
- -------------------------------------------------------------------------------------------------------------------------
EQUITY - QUALIFIED (a)
- -------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $8.492 $8.292 $5.827 $6.313 $4.804
Accumulation unit value at end of period.................... $9.069 $8.492 $8.292 $5.827 $6.313
Percentage change in accumulation unit value................ 6.79% 2.41% 42.30% (7.70)% 31.41%
Number of accumulation units outstanding at end of period... 6,310,119 499,342 4,667,263 4,275,235 4,188,009
- -------------------------------------------------------------------------------------------------------------------------
EQUITY - NON-QUALIFIED (a)
- -------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $6.722 $6.564 $4.612 $4.997 $3.803
Accumulation unit value at end of period.................... $7.179 $6.722 $6.564 $4.612 $4.997
Percentage change in accumulation unit value................ 6.79% 2.41% 42.30% (7.70)% 31.41%
Number of accumulation units outstanding at end of period... 252,573 191,299 152,332 125,393 105,484
- -------------------------------------------------------------------------------------------------------------------------
FIXED INCOME - QUALIFIED (b)
- -------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $3.768 $3.466 $2.899 $2.743 $2.405
Accumulation unit value at end of period.................... $4.224 $3.768 $3.466 $2.899 $2.743
Percentage change in accumulation unit value................ 12.12% 8.70% 19.57% 5.66% 14.09%
Number of accumulation units outstanding at end of period... 3,003,770 490,084 2,145,672 1,998,622 2,083,583
- -------------------------------------------------------------------------------------------------------------------------
FIXED INCOME - NON-QUALIFIED (b)
- -------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $3.620 $3.330 $2.785 $2.636 $2.310
Accumulation unit value at end of period ................... $4.059 $3.620 $3.330 $2.785 $2.636
Percentage change in accumulation unit value................ 12.12% 8.70% 19.57% 5.66% 14.09%
Number of accumulation units outstanding at end of period .. 185,569 123,618 98,273 118,597 140,928
- -------------------------------------------------------------------------------------------------------------------------
GOVERNMENT SECURITIES (c)
- -------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.000 N/A N/A N/A N/A
Accumulation unit value at end of period ................... $1.034 N/A N/A N/A N/A
Percentage change in accumulation unit value................ 3.42 N/A N/A N/A N/A
Number of accumulation units outstanding at end of period .. 535,607 N/A N/A N/A N/A
- -------------------------------------------------------------------------------------------------------------------------
MONEY MARKET (b)
- -------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period ............. $2.280 $2.224 $2.120 $1.978 $1.830
Accumulation unit value at end of period.................... $2.321 $2.280 $2.224 $2.120 $1.978
Percentage change in accumulation unit value................ 1.79% 2.52% 4.89% 7.22% 8.08%
Number of accumulation units outstanding at end of period... 1,465,429 790,486 1,762,019 1,798,156 1,869,049
- -------------------------------------------------------------------------------------------------------------------------
THE ALGER AMERICAN FUND:
ALGER AMERICAN GROWTH (e)
- -------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period ................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value................ N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period .. N/A N/A N/A N/A N/A
</TABLE>
35
<PAGE>
================================================================================
Condensed Financial Information
<TABLE>
<CAPTION>
6/30/99 1998 1997 1996 1995 1994
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
ALGER AMERICAN LEVERAGED ALLCAP (d)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period ............. $2.898 $1.855 $1.565 $1.411 $1.000 N/A
Accumulation unit value at end of period ................... $3.620 $2.898 $1.855 $1.565 $1.411 N/A
Percentage change in accumulation unit value................ 24.92% 56.26% 18.49% 10.92% 41.12% N/A
Number of accumulation units outstanding at end of period... 891,899 479,432 388,810 332,180 48,284 N/A
- --------------------------------------------------------------------------------------------------------------------------------
ALGER AMERICAN MIDCAP GROWTH (e)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period ............. $1.547 $1.199 $1.000 N/A N/A N/A
Accumulation unit value at end of period ................... $1.738 $1.547 $1.199 N/A N/A N/A
Percentage change in accumulation unit value................ 12.35% 29.00% 19.91% N/A N/A N/A
Number of accumulation units outstanding at end of period... 75,249 85,729 10,680 N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------------
ALGER AMERICAN SMALL CAPITALIZATION (d)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period ............. $1.590 $1.390 $1.260 $1.222 $1.000 N/A
Accumulation unit value at end of period ................... $1.792 $1.590 $1.390 $1.260 $1.222 N/A
Percentage change in accumulation unit value................ 12.77% 14.38% 10.28% 3.14% 22.18% N/A
Number of accumulation units outstanding at end of period...1,466,984 1,509,932 1,616,358 1,294,236 421,326 N/A
- --------------------------------------------------------------------------------------------------------------------------------
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
VP INTERNATIONAL (e)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.289 $1.096 $1.000 N/A N/A N/A
Accumulation unit value at end of period ................... $1.376 $1.289 $1.096 N/A N/A N/A
Percentage change in accumulation unit value ............... 6.82% 17.58% 9.59% N/A N/A N/A
Number of accumulation units outstanding at end of period .. 84,510 105,233 95 N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------------
VP VALUE (e)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.276 $1.229 $1.000 N/A N/A N/A
Accumulation unit value at end of period ................... $1.436 $1.276 $1.229 N/A N/A N/A
Percentage change in accumulation unit value ............... 12.59% 3.77% 22.93% N/A N/A N/A
Number of accumulation units outstanding at end of period... 172,175 111,175 19,126 N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------------
VP INCOME & GROWTH (f)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.085 $1.000 N/A N/A N/A N/A
Accumulation unit value at end of period ................... $1.185 $1.085 N/A N/A N/A N/A
Percentage change in accumulation unit value ............... 9.22% 8.48% N/A N/A N/A N/A
Number of accumulation units outstanding at end of period .. 144,778 91,593 N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------------
BERGER INSTITUTIONAL PRODUCTS TRUST:
BERGER IPT -100 (e)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.307 $1.136 $1.000 N/A N/A N/A
Accumulation unit value at end of period ................... $1.433 $1.307 $1.136 N/A N/A N/A
Percentage change in accumulation unit value ............... 9.62% 15.13% 13.55% N/A N/A N/A
Number of accumulation units outstanding at end of period .. 210,470 196,342 42,167 N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------------
BERGER IPT - GROWTH AND INCOME (e)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.509 $1.219 $1.000 N/A N/A N/A
Accumulation unit value at end of period ................... $1.776 $1.509 $1.219 N/A N/A N/A
Percentage change in accumulation unit value ............... 17.76% 23.79% 21.87% N/A N/A N/A
Number of accumulation units outstanding at end of period .. 209,383 115,344 64,326 N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------------
BERGER IPT - SMALL COMPANY GROWTH (e)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.386 $1.374 $1.000 N/A N/A N/A
Accumulation unit value at end of period ................... $1.595 $1.386 $1.374 N/A N/A N/A
Percentage change in accumulation unit value ............... 15.14% 0.85% 37.38% N/A N/A N/A
Number of accumulation units outstanding at end of period .. 130,745 83,064 1,949 N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
ALGER AMERICAN LEVERAGED ALLCAP (d)
- ------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period ............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period ................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value................ N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... N/A N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------
ALGER AMERICAN MIDCAP GROWTH (e)
- ------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period ............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period ................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value................ N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... N/A N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------
ALGER AMERICAN SMALL CAPITALIZATION (d)
- ------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period ............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period ................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value................ N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... N/A N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
VP INTERNATIONAL (e)
- ------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period ................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value ............... N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period .. N/A N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------
VP VALUE (e)
- ------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period ................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value ............... N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... N/A N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------
VP INCOME & GROWTH (f)
- ------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period ................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value ............... N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period .. N/A N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------
BERGER INSTITUTIONAL PRODUCTS TRUST:
BERGER IPT -100 (e)
- ------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period ................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value ............... N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period .. N/A N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------
BERGER IPT - GROWTH AND INCOME (e)
- ------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period ................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value ............... N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period .. N/A N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------
BERGER IPT - SMALL COMPANY GROWTH (e)
- ------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period ................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value ............... N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period .. N/A N/A N/A N/A N/A
</TABLE>
Condensed Financial Information
<TABLE>
<CAPTION>
6/30/99 1998 1997 1996 1995 1994
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
BERGER/BIAM IPT - INTERNATIONAL (e)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.118 $0.972 $1.000 N/A N/A N/A
Accumulation unit value at end of period ................... $1.182 $1.118 $0.972 N/A N/A N/A
Percentage change in accumulation unit value ............... 5.72% 14.97% -2.75% N/A N/A N/A
Number of accumulation units outstanding at end of period .. 547 0 3,085 N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------------
THE DREYFUS SOCIALLY RESPONSIBLE
GROWTH FUND, INC. (d)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $2.301 $1.796 $1.413 $1.178 $ 1.000 N/A
Accumulation unit value at end of period ................... $2.582 $2.301 $1.796 $1.413 $ 1.178 N/A
Percentage change in accumulation unit value ............... 12.22% 28.09% 27.11% 20.01% 17.76% N/A
Number of accumulation units outstanding at end of period .. 1,247,817 802,406 359,437 114,173 27,728 N/A
- --------------------------------------------------------------------------------------------------------------------------------
DREYFUS STOCK INDEX FUND (d)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $2.352 $1.853 $1.402 $1.160 $ 1.000 N/A
Accumulation unit value at end of period ................... $2.624 $2.352 $1.853 $1.402 $ 1.160 N/A
Percentage change in accumulation unit value ............... 11.59% 26.94% 32.20% 20.79% 16.03% N/A
Number of accumulation units outstanding at end of period .. 8,033,670 5,996,870 3,025,807 1,395,520 561,967 N/A
- --------------------------------------------------------------------------------------------------------------------------------
FEDERATED INSURANCE SERIES
FEDERATED HIGH INCOME BOND II (d)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.387 $1.364 $1.210 $1.070 $ 1.000 N/A
Accumulation unit value at end of period ................... $1.416 $1.387 $1.364 $1.210 $ 1.070 N/A
Percentage change in accumulation unit value ............... 2.10% 1.68% 12.70% 13.17% 6.96% N/A
Number of accumulation units outstanding at end of period .. 504,138 402,613 103,898 44,124 1,178 N/A
- --------------------------------------------------------------------------------------------------------------------------------
FEDERATED INTERNATIONAL EQUITY II (d)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.494 $1.201 $1.102 $1.028 $ 1.000 N/A
Accumulation unit value at end of period ................... $1.584 $1.494 $1.201 $1.102 $ 1.028 N/A
Percentage change in accumulation unit value ............... 6.03% 24.33% 8.99% 7.23% 2.80% N/A
Number of accumulation units outstanding at end of period .. 126,962 153,805 117,785 70,090 9,399 N/A
- --------------------------------------------------------------------------------------------------------------------------------
FEDERATED UTILITY II (d)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.758 $1.558 $1.243 $1.125 $ 1.000 N/A
Accumulation unit value at end of period ................... $1.801 $1.758 $1.558 $1.243 $ 1.125 N/A
Percentage change in accumulation unit value ............... 2.46% 12.82% 25.38% 10.45% 12.53% N/A
Number of accumulation units outstanding at end of period .. 409,509 428,133 196,753 111,929 53,189 N/A
- --------------------------------------------------------------------------------------------------------------------------------
JANUS ASPEN SERIES
AGGRESSIVE GROWTH (d)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $2.011 $1.513 $1.357 $1.269 $1.000 N/A
Accumulation unit value at end of period.................... $2.616 $2.011 $1.513 $1.357 $1.269 N/A
Percentage change in accumulation unit value................ 30.09% 32.92% 11.54% 6.87% 26.93% N/A
Number of accumulation units outstanding at end of period...1,682,811 1,484,765 1,145,154 881,491 398,348 N/A
- --------------------------------------------------------------------------------------------------------------------------------
GROWTH (d)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $2.240 $1.668 $1.372 $1.170 $1.000 N/A
Accumulation unit value at end of period.................... $2.600 $2.240 $1.668 $1.372 $1.170 N/A
Percentage change in accumulation unit value................ 16.09% 34.31% 21.53% 17.27% 17.02% N/A
Number of accumulation units outstanding at end of period ..2,686,165 1,772,621 1,026,609 570,927 144,293 N/A
- --------------------------------------------------------------------------------------------------------------------------------
WORLDWIDE GROWTH (d)
- --------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $2.394 $1.876 $1.551 $1.214 $1.000 N/A
Accumulation unit value at end of period.................... $2.686 $2.394 $1.876 $1.551 $1.214 N/A
Percentage change in accumulation unit value................ 12.20% 27.64% 20.94% 27.74% 21.40% N/A
Number of accumulation units outstanding at end of period...7,541,298 6,332,820 4,929,502 1,845,276 230,889 N/A
</TABLE>
<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
BERGER/BIAM IPT - INTERNATIONAL (e)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period ................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value ............... N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period .. N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
THE DREYFUS SOCIALLY RESPONSIBLE
GROWTH FUND, INC. (d)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period ................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value ............... N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period .. N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
DREYFUS STOCK INDEX FUND (d)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period ................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value ............... N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period .. N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
FEDERATED INSURANCE SERIES
FEDERATED HIGH INCOME BOND II (d)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period ................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value ............... N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period .. N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
FEDERATED INTERNATIONAL EQUITY II (d)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period ................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value ............... N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period .. N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
FEDERATED UTILITY II (d)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period ................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value ............... N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period .. N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
JANUS ASPEN SERIES
AGGRESSIVE GROWTH (d)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period.................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value................ N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
GROWTH (d)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period.................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value................ N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period .. N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
WORLDWIDE GROWTH (d)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period.................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value................ N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... N/A N/A N/A N/A N/A
</TABLE>
Condensed Financial Information
<TABLE>
<CAPTION>
6/30/99 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
LIMITED MATURITY BOND (e)
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.081 $1.046 $1.000 N/A N/A N/A
Accumulation unit value at end of period.................... $1.079 $1.081 $1.046 N/A N/A N/A
Percentage change in accumulation unit value................ -0.17% 3.35% 4.59% N/A N/A N/A
Number of accumulation units outstanding at end of period... 291,194 225,717 0 N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
PARTNERS (e)
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.283 $1.243 $1.000 N/A N/A N/A
Accumulation unit value at end of period.................... $1.446 $1.283 $1.243 N/A N/A N/A
Percentage change in accumulation unit value................ 12.71% 3.17% 24.32% N/A N/A N/A
Number of accumulation units outstanding at end of period... 401,726 336,371 60,137 N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
STRONG OPPORTUNITY FUND II, INC.
OPPORTUNITY FUND II (e)
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.386 $1.233 $1.000 N/A N/A N/A
Accumulation unit value at end of period.................... $1.651 $1.386 $1.233 N/A N/A N/A
Percentage change in accumulation unit value................ 19.11% 12.41% 23.32% N/A N/A N/A
Number of accumulation units outstanding at end of period... 112,365 89,350 4,089 N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
STRONG VARIABLE INSURANCE FUNDS, INC.:
STRONG MID CAP GROWTH II (e)
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.622 $1.274 $1.000 N/A N/A N/A
Accumulation unit value at end of period.................... $2.059 $1.622 $1.274 N/A N/A N/A
Percentage change in accumulation unit value................ 26.91% 27.40% 27.35% N/A N/A N/A
Number of accumulation units outstanding at end of period... 54,287 145,329 3,989 N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
VAN ECK WORLDWIDE INSURANCE TRUST
WORLDWIDE BOND (d)
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.172 $1.050 $1.036 $1.021 $1.000 N/A
Accumulation unit value at end of period ................... $1.084 $1.172 $1.050 $1.036 $1.021 N/A
Percentage change in accumulation unit value ............... -7.51% 11.63% 1.37% 1.50% 2.05% N/A
Number of accumulation units outstanding at end of period .. 36,641 30,830 16,578 23,735 6,030 N/A
- ---------------------------------------------------------------------------------------------------------------------------------
WORLDWIDE EMERGING MARKETS (e)
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $0.527 $0.808 $1.000 N/A N/A N/A
Accumulation unit value at end of period ................... $0.765 $0.527 $0.808 N/A N/A N/A
Percentage change in accumulation unit value ............... 45.21% -34.80% -19.24% N/A N/A N/A
Number of accumulation units outstanding at end of period .. 180,958 177,924 99,333 N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
WORLDWIDE HARD ASSETS (d)
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $0.840 $1.228 $1.262 $1.080 $1.000 N/A
Accumulation unit value at end of period ................... $0.988 $0.840 $1.228 $1.262 $1.080 N/A
Percentage change in accumulation unit value ............... 17.66% -31.62% -2.66% 16.88% 7.97% N/A
Number of accumulation units outstanding at end of period .. 245,197 198,619 $280,960 49,773 27,240 N/A
- ---------------------------------------------------------------------------------------------------------------------------------
WORLDWIDE REAL ESTATE (f)
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $0.854 $1.00 N/A N/A N/A N/A
Accumulation unit value at end of period ................... $0.941 0.854 N/A N/A N/A N/A
Percentage change in accumulation unit value ............... 10.18% 14.60% N/A N/A N/A N/A
Number of accumulation units outstanding at end of period .. 16,109 2,276 N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
DREYFUS VARIABLE INVESTMENT FUND
DISCIPLINED STOCK (f)
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.075 $1.000 N/A N/A N/A N/A
Accumulation unit value at end of period.................... $1.181 $1.075 N/A N/A N/A N/A
Percentage change in accumulation unit value................ 9.91% 7.48% N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... 38,587 18,002 N/A N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
LIMITED MATURITY BOND (e)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period.................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value................ N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
PARTNERS (e)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period.................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value................ N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
STRONG OPPORTUNITY FUND II, INC.
OPPORTUNITY FUND II (e)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period.................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value................ N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
STRONG VARIABLE INSURANCE FUNDS, INC.:
STRONG MID CAP GROWTH II (e)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period.................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value................ N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
VAN ECK WORLDWIDE INSURANCE TRUST
WORLDWIDE BOND (d)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period ................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value ............... N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period .. N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
WORLDWIDE EMERGING MARKETS (e)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period ................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value ............... N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period .. N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
WORLDWIDE HARD ASSETS (d)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period ................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value ............... N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period .. N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
WORLDWIDE REAL ESTATE (f)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period ................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value ............... N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period .. N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
DREYFUS VARIABLE INVESTMENT FUND
DISCIPLINED STOCK (f)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period.................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value................ N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... N/A N/A N/A N/A N/A
</TABLE>
Condensed Financial Information
<TABLE>
<CAPTION>
6/30/99 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL VALUE (f)
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $0.944 $1.000 N/A N/A N/A N/A
Accumulation unit value at end of period.................... $1.030 $0.944 N/A N/A N/A N/A
Percentage change in accumulation unit value............... 9.13% -5.58% N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... 0 0 N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF - HIGH YIELD (f)
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $0.953 $1.000 N/A N/A N/A N/A
Accumulation unit value at end of period.................... $1.007 $0.953 N/A N/A N/A N/A
Percentage change in accumulation unit value............... 5.66% -4.69% N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... 52,045 22,719 N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
INVESCO VIF - EQUITY INCOME (f)
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.032 $1.000 N/A N/A N/A N/A
Accumulation unit value at end of period.................... $1.168 $1.032 N/A N/A N/A N/A
Percentage change in accumulation unit value................ 13.19% 3.20% N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... 6,527 34,697 N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
LAZARD RETIREMENT SERIES, INC.
LAZARD RETIREMENT EQUITY (f)
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.058 $1.000 N/A N/A N/A N/A
Accumulation unit value at end of period.................... $1.178 $1.058 N/A N/A N/A N/A
Percentage change in accumulation unit value................ 11.30% 5.81% N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... 413 0 N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
LAZARD RETIREMENT SMALL CAP (f)
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $0.858 $1.000 N/A N/A N/A N/A
Accumulation unit value at end of period.................... $0.957 $0.858 N/A N/A N/A N/A
Percentage change in accumulation unit value................ 11.53% -14.23% N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... 4,307 4,307 N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
LORD ABBETT SERIES FUND, INC.
GROWTH AND INCOME (f)
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $1.007 $1.000 N/A N/A N/A N/A
Accumulation unit value at end of period.................... $1.151 $1.007 N/A N/A N/A N/A
Percentage change in accumulation unit value................ 14.26% 0.73% N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... 25,066 13,870 N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
MITCHELL HUTCHINS SERIES TRUST
GROWTH & INCOME (f)
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. $0.992 $1.000 N/A N/A N/A N/A
Accumulation unit value at end of period.................... $1.021 $0.992 N/A N/A N/A N/A
Percentage change in accumulation unit value............... 2.87% -0.75% N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... 6,181 5,287 N/A N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
INTERNATIONAL VALUE (f)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period.................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value............... N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF - HIGH YIELD (f)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period.................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value............... N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
INVESCO VIF - EQUITY INCOME (f)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period.................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value................ N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
LAZARD RETIREMENT SERIES, INC.
LAZARD RETIREMENT EQUITY (f)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period.................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value................ N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
LAZARD RETIREMENT SMALL CAP (f)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period.................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value................ N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
LORD ABBETT SERIES FUND, INC.
GROWTH AND INCOME (f)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period.................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value................ N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
MITCHELL HUTCHINS SERIES TRUST
GROWTH & INCOME (f)
- -----------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period.............. N/A N/A N/A N/A N/A
Accumulation unit value at end of period.................... N/A N/A N/A N/A N/A
Percentage change in accumulation unit value............... N/A N/A N/A N/A N/A
Number of accumulation units outstanding at end of period... N/A N/A N/A N/A N/A
</TABLE>
(a) The unit value was $1.000 on the inception date of December 3, 1965.
(b) The unit value was $1.000 on the inception date of May 19, 1981.
(c) The unit value was $1.000 on the inception date of May 1, 1993.
(d) The unit value was $1.000 on the inception date of June 1, 1995.
(e) The unit value was $1.000 on the inception date of May 1, 1997.
(f) The unit value was $1.000 on the inception date of May 1, 1998.
PART B
STATEMENT OF ADDITIONAL INFORMATION
GROUP VARIABLE DEFERRED ANNUITY CONTRACTS
issued by
CONSECO VARIABLE INSURANCE COMPANY
(formerly Great American Reserve Insurance Company)
and
CONSECO VARIABLE ANNUITY ACCOUNT C
(formerly Great American Reserve Variable Annuity Account C)
11815 N. PENNSYLVANIA ST., CARMEL, IN 46032
(317) 817-3700
November __, 1999
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. IT SHOULD BE READ
IN CONJUNCTION WITH THE PROSPECTUS DATED NOVEMBER 4, 1999 FOR CONSECO VARIABLE
ANNUITY ACCOUNT C - GROUP VARIABLE DEFERRED ANNUITY CONTRACTS. YOU CAN OBTAIN A
COPY OF THE PROSPECTUS BY CONTACTING CONSECO VARIABLE INSURANCE COMPANY AT THE
ADDRESS OR TELEPHONE NUMBER GIVEN ABOVE.
TABLE OF CONTENTS
Page
GENERAL INFORMATION AND HISTORY......................................
INDEPENDENT ACCOUNTANTS..............................................
DISTRIBUTION.........................................................
VOTING RIGHTS .......................................................
CALCULATION OF YIELD QUOTATIONS......................................
CALCULATION OF TOTAL RETURN QUOTATIONS...............................
OTHER PERFORMANCE DATA...............................................
FEDERAL TAX STATUS ..................................................
ANNUITY PROVISIONS ..................................................
FINANCIAL STATEMENTS.................................................
GENERAL INFORMATION AND HISTORY
Conseco Variable Insurance Company (the "Company" or "Conseco Variable") is an
indirect wholly owned subsidiary of Conseco, Inc. On or about October 7,1998,
the Company changed its name from Great American Reserve Insurance Company to
its present name. In certain states, the Company may continue to use the name
Great American Reserve Insurance Company until the name change is approved in
that state. The operations of the Company are handled by Conseco, Inc. Conseco,
Inc. is a publicly owned financial services holding company, the principal
operations of which are in the development, marketing and administration of
specialized annuity and life insurance products. The Company has its principal
offices at 11815 N. Pennsylvania Street, Carmel, Indiana 46032. The Variable
Account was established by the Company.
INDEPENDENT ACCOUNTANTS
The financial statements of Conseco Variable Annuity Account C and Conseco
Variable Insurance Company have been examined by PricewaterhouseCoopers LLP,
independent accountants, for the periods indicated in their reports as stated in
their opinion and have been so included in reliance upon such opinion given upon
the authority of that firm as experts in accounting and auditing.
DISTRIBUTION
The Company continuously offers the Contracts through associated persons of
the principal underwriter for Variable Account, Conseco Equity Sales, Inc.
("Conseco Equity Sales"), a registered broker-dealer and member of the National
Association of Securities Dealers, Inc. Conseco Equity Sales is located at 11815
N. Pennsylvania Street, Carmel, Indiana 46032, and is an affiliate of the
Company. For the years ending December 31, 1998, 1997 and 1996, the Company paid
Conseco Equity Sales total underwriting commissions of $1,723,064, $1,896,989
and $1,930,300, respectively. In addition, certain Contracts may be sold by life
insurance/registered representatives of other registered broker-dealers.
Conseco Equity Sales performs the sales functions relating to the Contracts
and the company provides all administrative services. To cover the sales
expenses and administrative expenses (including such items as salaries, rent,
postage, telephone, travel, legal, actuarial, audit, office equipment and
printing), the Company makes sales and administrative deductions, varying by
type of Contract. See "Charges and Deductions" in the Prospectus.
VOTING RIGHTS
Contract Owners may instruct Conseco Variable as to the voting of Fund
shares attributable to their respective interests under the Contracts at
meetings of shareholders of the Funds. Contract Owners entitled to vote will
receive proxy material and a form on which voting instructions may be given.
Conseco Variable will vote the shares of Sub-Accounts held by Variable Account
attributable to the Contracts in accordance with instructions received from
Contract Owners. Shares held in each Sub-Account for which timely instructions
have not been received from Contract Owners will be voted by Conseco Variable
for or against any proposition, or Conseco Variable will abstain, in the same
proportion as shares in that Sub-Account for which instructions are received.
Conseco Variable will vote, or abstain from voting, any shares that are not
attributable to Contract Owners in the same proportion as all Contract Owners in
Variable Account vote or abstain. However, if Conseco Variable determines that
it is permitted to vote such shares of the Funds in its own right, it may elect
to do so, subject to the then-current interpretation of the 1940 Act and the
rules thereunder.
Under certain Variable Annuity Contracts, not including contracts issued in
connection with governmental employers deferred compensation plans described in
the Prospectus, Participants and Annuitants have the right to instruct the
Contract Owner with respect to the number of votes attributable to their
Individual Accounts or valuation reserve. Votes attributable to Participants and
Annuitants who do not instruct the Contract Owner will be cast by the Contract
Owner for or against each proposal to be voted upon, in the same proportion as
votes for which instructions have been received. Participants and Annuitants
entitled to instruct the casting of votes will receive a notice of each meeting
of Contract Owners, and proxy solicitation materials, and a statement of the
number of votes attributable to their participation under the Contract.
The number of shares held in a Sub-Account deemed attributable to a
Contract Owner's interest under a Contract will be determined on the basis of
the value of the Accumulation Units credited to the Contract Owner's account as
of the record date. On or after the commencement of Annuity payments, the number
of attributable shares will be based on the amount of assets held to meet
annuity obligations to the payee under the Contract as of the record date.
During the annuity period, the number of votes attributable to a Contract will
generally decrease since funds set aside for Annuitants will decrease as
payments are made.
CALCULATION OF YIELD QUOTATIONS
The Money Market Sub-account's standard yield quotations may appear in
sales material and advertising as calculated by the standard method prescribed
by rules of the Securities and Exchange Commission. Under this method, the yield
quotation is based on a seven-day period and computed as follows: The Money
Market Sub-account's daily net investment factor minus one (1.00) is multiplied
by 365 to produce an annualized yield. The annualized yields of the seven-day
period are then averaged and carried to the nearest one-hundredth of one
percent. This yield reflects investment results less deductions for investment
advisory fees and mortality and expense risk fees but does not include
deductions for any applicable annual administrative fees. Because of these
deductions, the yield for the Money Market Sub-account will be lower than the
yield for the corresponding Portfolio of the Conseco Series Trust.
The Money Market Sub-account's effective yield may appear in sales material
and advertising for the same seven-day period, determined on a compound basis.
The effective yield is calculated by compounding the unannualized base period
return by adding one to the base period return, raising the sum to a power equal
to 365 divided by 7, and subtracting one from the result.
The yield on the Money Market Sub-account will generally fluctuate on a
daily basis. Therefore, the yield for any given past period is not an indication
or representation of future yields or rates of return. The actual yield is
affected by changes in interest rates on money market securities, average
portfolio maturity, the types and quality of portfolio securities held by the
corresponding Portfolio of Conseco Series Trust and its operating expenses.
The Portfolios of the eligible Funds may advertise investment performance
figures, including yield. Each Sub-account's yield will be based upon a stated
30-day period and will be computed by dividing the net investment income per
share earned during the period by the maximum offering price per share on the
last day of the period, according to the following formula:
YIELD = 2 ((A-B) + 1)6 -1)
-----
CD
Where:
A = the net investment income earned during the period by the Portfolio.
B = the expenses accrued for the period (net of reimbursements, if any).
C = the average daily number of accumulation units outstanding during the
period.
D = the maximum offering price per accumulation unit on the last day of the
period.
CALCULATION OF TOTAL RETURN QUOTATIONS
Conseco Variable may include certain total return quotations for one or
more of the Portfolios of the eligible Funds in advertising, sales literature or
reports to Contract Owners or prospective purchasers. Such total return
quotations will be expressed as the average annual rate of total return over
one-, five- and 10-year periods ended as of the end of the immediately preceding
calendar quarter, and as the dollar amount of annual total return on a
year-to-year, rolling 12-month basis ended as of the end of the immediately
preceding calendar quarter.
Average annual total return quotations are computed according to the
following formula:
n
P (1+T) = ERV
Where:
P = beginning purchase payment of $1,000.
T = average annual total return.
n = number of years in period.
ERV = ending redeemable value of a hypothetical $1,000 purchase payment
made at the beginning of the one-, five- or 10-year period at the end of
the one-, five- or 10-year period (or fractional portion thereof).
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDING 6/30/99:
VARIABLE ACCOUNT SUB-ACCOUNTS 10 YEARS
OR SINCE
1 YEAR 5 YEARS INCEPTION
------- ------- ---------
CONSECO SERIES TRUST
Balanced Portfolio (1)................... 0.00% 18.08% 14.43%
Equity Portfolio ........................ 6.43% 20.38% 16.79%
Fixed Income Portfolio................... -4.61% -6.24% 7.52%
Government Securities Portfolio (1) -4.50% 4.95% 3.83%
THE ALGER AMERICAN FUND
Alger American Growth Portfolio (3)...... 27.74% N/A 35.95%
Alger American Leveraged AllCap
Portfolio (2) ......................... 49.01% N/A 36.11%
Alger American MidCap Growth
Portfolio (3) ......................... 15.34% N/A 26.33%
Alger American Small Capitalization
Portfolio (2) ......................... 9.15% N/A 14.59%
AMERICAN CENTURY VARIABLE
PORTFOLIOS, INC
VP International (3) .................... -3.89% N/A 13.43%
VP Value (3) ............................ 5.79% N/A 15.68%
VP Income and Growth (4)................. 11.98% N/A 11.13%
BERGER INSTITUTIONAL
PRODUCTS TRUST
Berger IPT - 100 Fund (3) ............... 9.33% N/A 15.57%
Berger IPT - Growth and Income
Fund (3) .............................. 24.53% N/A 27.61%
Berger IPT - Small Company
Growth Fund (3) ....................... -1.33% N/A 21.43%
Berger/BIAM IPT - International
Fund (3) .............................. .36% N/A 5.73%
THE DREYFUS SOCIALLY RESPON-
SIBLE GROWTH FUND, INC (2) ............ 16.44% N/A 25.31%
DREYFUS STOCK INDEX FUND (2) ............ 15.59% N/A 25.51%
FEDERATED INSURANCE SERIES
Federated High Income Bond
Fund II (2) ........................... -4.30% N/A 0.14%
Federated International Equity
Fund II (2) ........................... -3.83% N/A 11.14%
Federated Utility Fund II (2) ........... 5.65% N/A 14.70%
JANUS ASPEN SERIES
Aggressive Growth Portfolio (2) ......... 41.40% N/A 25.70%
Growth Portfolio (2) .................... 25.40% N/A 25.50%
Worldwide Growth Portfolio (2) .......... 8.11% N/A 26.51%
NEUBERGER BERMAN
ADVISERS MANAGEMENT TRUST
Limited Maturity Bond Portfolio (3)...... -3.48% N/A 1.38%
Partners Portfolio (3) .................. 5.23% N/A 16.03%
STRONG VARIABLE INSURANCE
FUNDS, INC
Strong Mid Cap Growth Fund II (3) ....... 33.04% N/A 36.61%
STRONG OPPORTUNITY FUND, INC.
Strong Opportunity Fund II (3) .......... 13.21% N/A 33.37%
VAN ECK WORLDWIDE
INSURANCE TRUST
Worldwide Bond Fund (2) ................. -4.24% N/A 1.31%
Worldwide Emerging Markets
Fund (3) .............................. 17.55% N/A -13.53%
Worldwide Hard Assets Fund (2) .......... -11.04% N/A -.95%
Worldwide Real Estate Fund (4)........... -5.78% N/A 8.82%
DREYFUS VARIABLE INVESTMENT FUND
Disciplined Stock Portfolio (4)....... 12.28% N/A 10.85%
International Value Portfolio (4)..... -.22% N/A -1.40%
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF - High Yield Fund (4)..... -3.90% N/A -3.32%
INVESCO VIF - Equity Income Fund (4).. 12.43% N/A 9.79%
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Equity
Portfolio (4)....................... 12.56% N/A 10.56%
Lazard Retirement Small Cap
Portfolio (4)....................... -.85% N/A -7.50%
LORD ABBETT SERIES FUND, INC.
Growth and Income Portfolio (4)....... 11.39% N/A 8.40%
MITCHELL HUTCHINS SERIES TRUST
Growth & Income Portfolio (4)......... -.56% N/A -2.19%
- -----------------------------------
(1) Since inception (May 1, 1993).
(2) Since inception (June 1, 1995).
(3) Since inception (May 1, 1997).
(4) Since inception (May 1, 1998).
OTHER PERFORMANCE DATA
Conseco Variable may from time to time also illustrate average annual total
returns in a non-standard format as appears in the following "Gross Average
Annual Total Returns" tables, in conjunction with the standard format described
above. The non-standard format will be identical to the standard format except
that the withdrawal charge percentage will be assumed to be zero.
GROSS AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDING 6/30/99:
VARIABLE ACCOUNT SUB-ACCOUNTS 10 YEARS
OR SINCE
1 YEAR 5 YEARS INCEPTION
------- ------- ---------
CONSECO SERIES TRUST
Balanced Portfolio (1)................... 4.21% N/A 14.97%
Equity Portfolio ........................ 11.53% N/A 17.11%
Fixed Income Portfolio................... -.02% N/A 7.82%
Government Securities Portfolio (1)...... .05% N/A 4.33%
THE ALGER AMERICAN FUND
Alger American Growth Portfolio (3)...... 33.87% N/A 38.89%
Alger American Leveraged AllCap
Portfolio (2) ......................... 56.15% N/A 37.05%
Alger American MidCap Growth
Portfolio (3) ......................... 20.87% N/A 29.05%
Alger American Small Capitalization
Portfolio (2) ......................... 14.39% N/A 15.37%
AMERICAN CENTURY VARIABLE
PORTFOLIOS, INC
VP International (3) .................... .73% N/A 15.88%
VP Value (3) ............................ 10.87% N/A 18.18%
VP Income & Growth (4)................... 17.36% N/A 15.64%
BERGER INSTITUTIONAL
PRODUCTS TRUST
Berger IPT - 100 Fund (3) ............... 14.47% N/A 18.06%
Berger IPT - Growth and Income
Fund (3) .............................. 30.51% N/A 30.36%
Berger IPT - Small Company Growth
Fund (3) .............................. 3.41% N/A 24.06%
Berger/BIAM IPT - International
Fund (3) .............................. 5.18% N/A 8.02%
THE DREYFUS SOCIALLY RESPON-
SIBLE GROWTH FUND, INC (2) ............ 22.03% N/A 26.16%
DREYFUS STOCK INDEX FUND (2) ............ 21.14% N/A 26.66%
FEDERATED INSURANCE SERIES
Federated High Income Bond
Fund II (2) ........................... .30% N/A 8.90%
Federated International Equity
Fund II (2) ........................... 1.85% N/A 11.92%
Federated Utility Fund II (2) ........... 10.72% N/A 15.51%
JANUS ASPEN SERIES
Aggressive Growth Portfolio (2) ......... 48.18% N/A 26.57%
Growth Portfolio (2) .................... 31.41% N/A 26.38%
Worldwide Growth Portfolio (2) .......... 13.31% N/A 27.39%
NEUBERGER BERMAN
ADVISERS MANAGEMENT TRUST
Limited Maturity Bond Portfolio (3) 1.16% N/A 3.58%
Partners Portfolio (3) .................. 10.28% N/A 18.54%
STRONG VARIABLE INSURANCE
FUNDS, INC
Strong Mid Cap Growth Fund II (3) ....... 39.42% N/A 39.56%
STRONG OPPORTUNITY FUND, INC.
Strong Opportunity Fund II (3) .......... 18.64% N/A 26.04%
VAN ECK WORLDWIDE
INSURANCE TRUST
Worldwide Bond Fund (2) ................. .36% N/A 2.00%
Worldwide Emerging Markets
Fund (3) .............................. 23.20% N/A 11.65%
Worldwide Hard Assets Fund (2) .......... -6.75% N/A -.29%
Worldwide Real Estate Fund (4)........... -1.25% N/A -5.11%
DREYFUS VARIABLE INVESTMENT FUND
Disciplined Stock Portfolio (4)....... 17.67% N/A 15.35%
International Value Portfolio (4)..... 4.58% N/A 2.61%
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF - High Yield Fund (4)..... .72% N/A .61%
INVESCO VIF - Equity Income Fund (4).. 17.82% N/A 14.35%
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Equity
Portfolio (4)....................... 17.96% N/A 15.04%
Lazard Retirement Small Cap
Portfolio (4)....................... 3.01% N/A -3.74%
LORD ABBETT SERIES FUND, INC.
Growth and Income Portfolio (4)....... 16.74% N/A 12.80%
MITCHELL HUTCHINS SERIES TRUST
Growth & Income Portfolio (4)......... 4.22% N/A 1.79%
- --------------------------------------
(1) Since inception (May 1, 1993).
(2) Since inception (June 1, 1995).
(3) Since inception (May 1, 1997).
(4) Since inception (May 1, 1998).
All non-standard performance data will only be advertised if the standard
performance data for the same period, as well as for the required periods, is
also illustrated.
Performance data for the Variable Account investment options may be
compared in advertisements, sales literature and reports to Contract Owners,
with the investment returns of various mutual funds, stocks, bonds, certificates
of deposit, tax free bonds, or common stock and bond indices, and other groups
of variable annuity separate accounts or other investment products tracked by
Morningstar, Inc., a widely used independent research firm which ranks mutual
funds and other investment companies by overall performance, investment
objectives, and assets, or tracked by other services, companies, publications,
or persons who rank such investment companies on overall performance or other
criteria.
Reports and promotional literature may also contain other information,
including the effect of tax-deferred compounding on an investment options
performance returns, or returns in general, which may be illustrated by graphs,
charts or otherwise, and which may include a comparison, at various points in
time, of the return from an investment in a Contract (or returns in general) on
a tax-deferred basis (assuming one or more tax rates) with the return on a
taxable basis.
Reports and promotional literature may also contain the ratings Conseco
Variable has received from independent rating agencies. However, Conseco
Variable does not guarantee the investment performance of the Variable Account
investment options.
FEDERAL TAX STATUS
NOTE: THE FOLLOWING DESCRIPTION IS BASED UPON THE COMPANY'S UNDERSTANDING
OF CURRENT FEDERAL INCOME TAX LAW APPLICABLE TO ANNUITIES IN GENERAL. THE
COMPANY CANNOT PREDICT THE PROBABILITY THAT ANY CHANGES IN SUCH LAWS WILL BE
MADE. PURCHASERS ARE CAUTIONED TO SEEK COMPETENT TAX ADVICE REGARDING THE
POSSIBILITY OF SUCH CHANGES. THE COMPANY DOES NOT GUARANTEE THE TAX STATUS OF
THE CONTRACTS. PURCHASERS BEAR THE COMPLETE RISK THAT THE CONTRACTS MAY NOT BE
TREATED AS "ANNUITY CONTRACTS" UNDER FEDERAL INCOME TAX LAWS. IT SHOULD BE
FURTHER UNDERSTOOD THAT THE FOLLOWING DISCUSSION IS NOT EXHAUSTIVE AND THAT
SPECIAL RULES NOT DESCRIBED HEREIN MAY BE APPLICABLE IN CERTAIN SITUATIONS.
MOREOVER, NO ATTEMPT HAS BEEN MADE TO CONSIDER ANY APPLICABLE STATE OR OTHER TAX
LAWS.
GENERAL
Section 72 of the Internal Revenue Code of 1986, as amended ("Code")
governs taxation of annuities in general. An Owner is not taxed on increases in
the value of a Contract until distribution occurs, either in the form of a lump
sum payment or as annuity payments under the annuity option selected. For a lump
sum payment received as a total withdrawal (total surrender), the recipient is
taxed on the portion of the payment that exceeds the cost basis of the Contract.
For non-qualified Contracts, this cost basis is generally the purchase payments,
while for Qualified Contracts there may be no cost basis. The taxable portion of
the lump sum payment is taxed at ordinary income tax rates.
For annuity payments, a portion of each payment in excess of an exclusion
amount is includable in taxable income. The exclusion amount for payments based
on a fixed annuity option is determined by multiplying the payment by the ratio
that the cost basis of the Contract (adjusted for any period or refund feature)
bears to the expected return under the Contract. The exclusion amount for
payments based on a variable annuity option is determined by dividing the cost
basis of the Contract (adjusted for any period certain or refund guarantee) by
the number of years over which the annuity is expected to be paid. Payments
received after the investment in the Contract has been recovered (i.e. when the
total of the excludable amount equals the investment in the Contract) are fully
taxable. The taxable portion is taxed at ordinary income tax rates. For certain
types of Qualified Plans there may be no cost basis in the Contract within the
meaning of Section 72 of the Code. Owners, annuitants and beneficiaries under
the Contracts should seek competent financial advice about the tax consequences
of any distributions.
Conseco Variable is taxed as a life insurance company under the Code. For
federal income tax purposes, the Variable Account is not a separate entity from
Conseco Variable, and its operations form a part of Conseco Variable.
DIVERSIFICATION
Section 817(h) of the Code imposes certain diversification standards on the
underlying assets of variable annuity contracts. The Code provides that a
variable annuity contract will not be treated as an annuity contract for any
period (and any subsequent period) for which the investments are not, in
accordance with regulations prescribed by the United States Treasury Department
("Treasury Department"), adequately diversified. Disqualification of the
Contract as an annuity contract would result in the imposition of federal income
tax to the Owner with respect to earnings allocable to the Contract prior to the
receipt of payments under the Contract. The Code contains a safe harbor
provision which provides that annuity contracts such as the Contract meet the
diversification requirements if, as of the end of each quarter, the underlying
assets meet the diversification standards for a regulated investment company and
no more than fifty-five percent (55%) of the total assets consist of cash, cash
items, U.S. Government securities and securities of other regulated investment
companies.
Regulations issued by the Treasury Department (the "Regulations") amplify
the diversification requirements for variable contracts set forth in the Code
and provide an alternative to the safe harbor provision described above. Under
the Regulations, an investment portfolio will be deemed adequately diversified
if: (1) no more than 55% of the value of the total assets of the portfolio is
represented by any one investment; (2) no more than 70% of the value of the
total assets of the portfolio is represented by any two investments; (3) no more
than 80% of the value of the total assets of the portfolio is represented by any
three investments; and (4) no more than 90% of the value of the total assets of
the portfolio is represented by any four investments.
The Code provides that, for purposes of determining whether or not the
diversification standards imposed on the underlying assets of variable contracts
by Section 817(h) of the Code have been met, "each United States government
agency or instrumentality shall be treated as a separate issuer."
Conseco Variable intends that all Variable Account Investment Options
underlying the Contracts will be managed in such a manner as to comply with
these diversification requirements.
The Treasury Department has indicated that the diversification Regulations
do not provide guidance regarding the circumstances in which Owner control of
the investments of the Variable Account will cause the Owner to be treated as
the owner of the assets of the Variable Account, thereby resulting in the loss
of favorable tax treatment for the Contract. At this time it cannot be
determined whether additional guidance will be provided and what standards may
be contained in such guidance.
The amount of Owner control which may be exercised under the Contract is
different in some respects from the situations addressed in published rulings
issued by the Internal Revenue Service in which it was held that the policy
owner was not the owner of the assets of the separate account. It is unknown
whether these differences, such as the Owner's ability to transfer among
investment choices or the number and type of investment choices available, would
cause the Owner to be considered as the owner of the assets of the Variable
Account resulting in the imposition of federal income tax to the Owner with
respect to earnings allocable to the Contract prior to receipt of payments under
the Contract.
In the event any forthcoming guidance or ruling is considered to set forth
a new position, such guidance or ruling will generally be applied only
prospectively. However, if such ruling or guidance was not considered to set
forth a new position, it may be applied retroactively resulting in the Owners
being retroactively determined to be the owners of the assets of the Separate
Account.
Due to the uncertainty in this area, Conseco Variable reserves the right to
modify the Contract in an attempt to maintain favorable tax treatment.
MULTIPLE CONTRACTS
The Code provides that multiple non-qualified annuity contracts which are
issued within a calendar year to the same contract owner by one company or its
affiliates are treated as one annuity contract for purposes of determining the
tax consequences of any distribution. Such treatment may result in adverse tax
consequences including more rapid taxation of the distributed amounts from such
combination of contracts. For purposes of this rule, contracts received in a
Section 1035 exchange will be considered issued in the year of the exchange.
Owners should consult a tax adviser prior to purchasing more than one
non-qualified annuity contract in any calendar year.
CONTRACTS OWNED BY OTHER THAN NATURAL PERSONS
Under Section 72(u) of the Code, the investment earnings on premiums for
the Contracts will be taxed currently to the Owner if the Owner is a non-natural
person, e.g., a corporation or certain other entities. Such Contracts generally
will not be treated as annuities for federal income tax purposes. However, this
treatment is not applied to a Contract held by a trust or other entity as an
agent for a natural person nor to Contracts held by Qualified Plans. Purchasers
should consult their own tax counsel or other tax adviser before purchasing a
Contract to be owned by a non-natural person.
TAX TREATMENT OF ASSIGNMENTS
An assignment or pledge of a Contract may be a taxable event. Owners should
therefore consult competent tax advisers should they wish to assign or pledge
their Contracts.
If the Contract is issued pursuant to a retirement plan which receives
favorable treatment under the provision of Sections 403(b) or 457 of the Code,
it may not be assigned, pledged or otherwise transferred except as allowed under
applicable law.
DEATH BENEFITS
Any death benefits paid under the Contract are taxable to the beneficiary.
The rules governing the taxation of payments from an annuity contract, as
discussed above, generally apply to the payment of death benefits and depend
on whether the death benefits are paid as a lump sum or as annuity payments.
Estate taxes may also apply.
INCOME TAX WITHHOLDING
All distributions or the portion thereof which is includable in the gross
income of the Owner are subject to federal income tax withholding. Generally,
amounts are withheld from periodic payments at the same rate as wages and at the
rate of 10% from non-periodic payments. However, the Owner, in many cases, may
elect not to have taxes withheld or to have withholding done at a different
rate.
Certain distributions from retirement plans qualified under Section 401 or
Section 403(b) of the Code, which are not directly rolled over to another
eligible retirement plan or individual retirement account or individual
retirement annuity, are subject to a mandatory 20% withholding for federal
income tax. The 20% withholding requirement generally does not apply to: a) a
series of substantially equal payments made at least annually for the life or
life expectancy of the participant or joint and last survivor expectancy of the
participant and a designated beneficiary or for a specified period of 10 years
or more; or b) distributions which are required minimum distributions; or c) the
portion of the distributions not includable in gross income (i.e. Returns of
after-tax contributions), or d) hardship withdrawals. Participants should
consult their own tax counsel or other tax adviser regarding withholding
requirements.
TAX TREATMENT OF WITHDRAWALS - NON-QUALIFIED CONTRACTS
Section 72 of the Code governs treatment of distributions from annuity
contracts. It provides that if the Contract Value exceeds the aggregate purchase
payments made, any amount withdrawn will be treated as coming first from the
earnings and then, only after the income portion is exhausted, as coming from
the principal. Withdrawn earnings are includable in gross income. It further
provides that a ten percent (10%) penalty will apply to the income portion of
any premature distribution. However, the penalty is not imposed on amounts
received: (a) after you reach age 59 1/2; (b) after your death; (c) if you
become totally disabled (for this purpose disability is as defined in Section
72(m)(7) of the Code); (d) in a series of substantially equal periodic payments
made not less frequently than annually for your life (or life expectancy) or for
the joint lives (or joint life expectancies) of you and your Beneficiary; (e)
under an immediate annuity; or (f) which are allocable to purchase payments made
prior to August 14, 1982.
With respect to (d) above, if the series of substantially equal periodic
payments is modified before the later of your attaining age 59 1/2 or 5 years
from the date of the first periodic payment, then the tax for the year of the
modification is increased by an amount equal to the tax which would have been
imposed (the 10% penalty tax) but for the exception, plus interest for the tax
years in which the exception was used.
The above information does not apply to Qualified Contracts. However,
separate tax withdrawal penalties and restrictions may apply to such Qualified
Contracts. (See "Tax Treatment of Withdrawals - Qualified Contracts" below.)
QUALIFIED PLANS
The Contracts offered herein are designed to be suitable for use under
various types of Qualified Plans. Taxation of participants in each Qualified
Plan varies with the type of plan and terms and conditions of each specific
plan. Owners, Annuitants and beneficiaries are cautioned that benefits under a
Qualified Plan may be subject to the terms and conditions of the plan regardless
of the terms and conditions of the Contracts issued pursuant to the plan. Some
retirement plans are subject to distribution and other requirements that are not
incorporated into the Company's administrative procedures. Owners, participants
and beneficiaries are responsible for determining that contributions,
distributions and other transactions with respect to the Contracts comply with
applicable law. Following are general descriptions of the types of Qualified
Plans with which the Contracts may be used. Such descriptions are not exhaustive
and are for general informational purposes only. The tax rules regarding
Qualified Plans are very complex and will have differing applications depending
on individual facts and circumstances. Each purchaser should obtain competent
tax advice prior to purchasing a Contract issued under a Qualified Plan.
Contracts issued pursuant to Qualified Plans include special provisions
restricting Contract provisions that may otherwise be available as described
herein. Generally, Contracts issued pursuant to Qualified Plans are not
transferable except upon surrender or annuitization. Various penalty and excise
taxes may apply to contributions or distributions made in violation of
applicable limitations. Furthermore, certain withdrawal penalties and
restrictions may apply to surrenders from Qualified Contracts. (See "Tax
Treatment of Withdrawals - Qualified Contracts" below.)
On July 6, 1983, the Supreme Court decided in ARIZONA GOVERNING COMMITTEE
v. NORRIS that optional annuity benefits provided under an employer's deferred
compensation plan could not, under Title VII of the Civil Rights Act of 1964,
vary between men and women. The Contracts sold by Conseco Variable in connection
with Qualified Plans will utilize annuity tables which do not differentiate on
the basis of sex. Such annuity tables will also be available for use in
connection with certain non-qualified deferred compensation plans.
a. TAX-SHELTERED ANNUITIES
Section 403(b) of the Code permits the purchase of "tax-sheltered
annuities" by public schools and certain charitable, educational and scientific
organizations described in Section 501(c)(3) of the Code. These qualifying
employers may make contributions to the Contracts for the benefit of their
employees. Such contributions are not includable in the gross income of the
employees until the employees receive distributions from the Contracts. The
amount of contributions to the tax-sheltered annuity is limited to certain
maximums imposed by the Code. Furthermore, the Code sets forth additional
restrictions governing such items as transferability, distributions,
nondiscrimination and withdrawals. (See "Tax Treatment of Withdrawals Qualified
Contracts" and "Tax-Sheltered Annuities - Withdrawal Limitations" below.) Any
employee should obtain competent tax advice as to the tax treatment and
suitability of such an investment.
b. GOVERNMENT AND TAX-EXEMPT ORGANIZATION'S DEFERRED COMPENSATION PLANS
Under Code provisions, employees and independent contractors performing
services for state and local governments and other tax-exempt organizations may
participate in Deferred Compensation Plans. While participants in such Plans may
be permitted to specify the form of investment in which their Plan accounts will
participate, all such investments are owned by the sponsoring employer and are
subject to the claims of its creditors until December 31, 1998, or such earlier
date as may be established by Plan amendment. However, amounts deferred under a
Plan created on or after August 20, 1996 and amounts deferred under any 457
governmental Plan after December 31, 1998 must be held in trust, custodial
account or annuity contract for the exclusive benefit of Plan participants and
their beneficiaries. The amounts deferred under a Plan which meets the
requirements of Section 457 of the Code are not taxable as income to the
participant until paid or otherwise made available to the participant or
beneficiary. As a general rule, the maximum amount which can be deferred in any
one year is the lesser of $7,500 ($8,000 in 1999, as indexed for inflation) or
33 1/3 percent of the participant's includable compensation. However, in limited
circumstances, up to $15,000 may be deferred in each of the last three years
before normal retirement age. Furthermore, the Code provides additional
requirements and restrictions regarding eligibility and distributions.
TAX TREATMENT OF WITHDRAWALS - QUALIFIED CONTRACTS
In the case of a withdrawal under a Qualified Contract, a ratable portion
of the amount received is taxable, generally based on the ratio of the
individual's cost basis to the individual's total accrued benefit under the
retirement plan. Special tax rules may be available for certain distributions
from a Qualified Contract. Section 72(t) of the Code imposes a 10% penalty tax
on the taxable portion of any distribution from qualified retirement plans,
including Contracts issued and qualified under Code Section
(403(b)(Tax-Sheltered Annuities). To the extent amounts are not includable in
gross income because they have been rolled over to an IRA or to another eligible
Qualified Plan, no tax penalty will be imposed. The tax penalty will not apply
to the following distributions: (a) made on or after the date on which the Owner
or Annuitant (as applicable) reaches age 59 1/2; (b) following the death or
disability of the Owner or Annuitant (as applicable) (for this purpose
disability is as defined in Section 72(m) (7) of the Code); (c) after separation
from service, distributions that are part of substantially equal periodic
payments made not less frequently than annually for the life (or life
expectancy) of the Owner or Annuitant (as applicable) or the joint lives (or
joint life expectancies) of such Owner or Annuitant (as applicable) and his or
her designated Beneficiary; (d) to an Owner or Annuitant (as applicable) who has
separated from service after he has attained age 55; (e) made to the Owner or
Annuitant (as applicable) to the extent such distributions do not exceed the
amount allowable as a deduction under Code Section 213 to the Owner or Annuitant
(as applicable) for amounts paid during the taxable year for medical care; and
(f) made to an alternate payee pursuant to a qualified domestic relations order.
With respect to (c) above, if the series of substantially equal periodic
payments is modified before the later of your attaining age 59 1/2 or 5 years
from the date of the first periodic payment, then the tax for the year of the
modification is increased by an amount equal to the tax which would have been
imposed (the 10% penalty tax) but for the exception, plus interest for the tax
years in which the exception was used.
TAX-SHELTERED ANNUITIES - WITHDRAWAL LIMITATIONS
The Code limits the withdrawal of amounts attributable to contributions
made pursuant to a salary reduction agreement (as defined in Section 403(b)(11)
of the Code) to circumstances only when the Owner: (1) attains age 59 1/2; (2)
separates from service; (3) dies; (4) becomes disabled (within the meaning of
Section 72(m)(7) of the Code); or (5) in the case of hardship. However,
withdrawals for hardship are restricted to the portion of the Owner's Contract
Value which represents contributions made by the Owner and does not include any
investment results. The limitations on withdrawals became effective on January
1, 1989 and apply only to salary reduction contributions made after December 31,
1988, to income attributable to such contributions and to income attributable to
amounts held as of December 31, 1988. The limitations on withdrawals do not
affect rollovers and transfers between certain Qualified Plans. Owners should
consult their own tax counsel or other tax adviser regarding any distributions.
MANDATORY DISTRIBUTIONS - QUALIFIED PLANS
Generally, distributions from a qualified plan must begin no later than
April 1st of the calendar year following the later of (a) the year in which the
employee attains age 70 1/2 or (b) the calendar year in which the employee
retires. Required distributions must be over a period not exceeding the life
expectancy of the individual or the joint lives or life expectancies of the
individual and his or her designated beneficiary. If the required minimum
distributions are not made, a 50% penalty tax is imposed as to the amount not
distributed.
ANNUITY PROVISIONS
DETERMINATION OF AMOUNT OF THE FIRST MONTHLY VARIABLE ANNUITY PAYMENT. When
annuity payments commence, the value of the Individual Account is determined as
the total of the product(s) of (a) the value of an Accumulation Unit for each
portfolio at the end of the Valuation Period immediately preceding the
Valuation Period in which the first annuity payment is due and (b) the number of
Accumulation Units credited to the Individual Account with respect to each
portfolio as of the date the Annuity is to commence. Premium tax, if
assessed at such time by the applicable jurisdiction, will be deducted from the
Individual Account value. Any portion of the Individual Account value for which
a fixed annuity election has been made is applied to provide fixed-dollar
payments under the option elected.
The amount of the first monthly variable annuity payment is then calculated
by multiplying the Individual Account value which is to be applied to provide
variable payments by the amount of first monthly payment per $1,000 of value, in
accordance with annuity tables contained in the Contract. The annuity tables are
based on the Progressive Annuity Table, assuming births in the year 1900. For
Annuitants whose year of birth is after 1915, an "adjusted age" is used, which
is one year less than actual age. The amount of first monthly payment per $1,000
of value varies according to the form of annuity selected (see "Annuity Options"
in the prospectus), the age of the Annuitant (for certain options) and the
assumed net investment rate selected by the Contract Owner. The standard assumed
net investment rate is 3 1/2 percent per annum; however, an alternative 5
percent per annum, or such other rate as Conseco Variable may offer, may be
selected prior to the commencement of annuity payments.
The assumed net investment rates built into the annuity tables affect both
the amount of the first monthly variable annuity payment and the amount by which
subsequent payments may increase or decrease. Selection of a 5 percent rate,
rather than the standard 3 1/2 percent rate, would produce a higher first
payment but subsequent payments would increase more slowly in periods when
Annuity Unit values are rising and decrease more rapidly in periods when Annuity
Unit values are declining. With either assumed rate, if the actual net
investment rate during any two or more successive months were equal to the
assumed rate, the annuity payments would be level during that period.
If a greater first monthly payment would result, Conseco Variable will
compute the first monthly payment on the same mortality basis as used in
determining the first payment under immediate annuity contracts being issued for
a similar class of Annuitants at the date the first monthly payment is due under
the Contract.
VALUE OF AN ANNUITY UNIT. At the commencement of the Annuity Period, a
number of Annuity Units is established for the Contract Owner for each
Investment Option on which variable annuity payments are to be based. For each
Sub-account of Variable Account, the number of Annuity Units established is
calculated by dividing (i) the amount of the first monthly variable annuity
payment on that basis by (ii) the annuity unit value for that basis for the
current Valuation Period. That number of Annuity Units remains constant
throughout the Annuity Period and is the basis for calculating the amount of the
second and subsequent annuity payments.
The Annuity Unit value is determined for each Valuation Period, for each
Investment Option, and is equal to the Annuity Unit value for the preceding
Valuation Period multiplied by the product of (i) the net investment factor for
the appropriate Sub-Account for the immediately preceding Valuation Period and
(ii) a factor to neutralize the assumed net investment rate built into the
annuity tables (discussed under the preceding caption), for it is replaced by
the actual net investment rate in step (i). The daily factor for a 3 1/2 percent
assumed net investment rate is .99990576; for a 5 percent rate, the daily factor
is .99986634.
AMOUNTS OF SUBSEQUENT MONTHLY VARIABLE ANNUITY PAYMENTS. The amounts of
second and subsequent monthly variable annuity payments are determined by
multiplying (i) the number of Annuity Units established for the applicable
Sub-Account by (ii) the Annuity Unit value for the Sub-Account. If Annuity Units
are established for more than one Sub-Account, the calculation is made
separately and the results combined to determine the total monthly variable
annuity payment.
1. EXAMPLE OF CALCULATION OF MONTHLY VARIABLE ANNUITY PAYMENTS. The
determination of the amount of the variable annuity payments can be
illustrated by the following hypothetical example. The example assumes that
the monthly payments are based on the investment experience of only one
Sub-Account. If payments were based on the investment experience of more
than one Sub-Account, the same procedure would be followed to determine the
portion of the monthly payment attributed to each Sub-Account.
2. FIRST MONTHLY PAYMENT. Assume that at the date of retirement there are
40,000 Accumulation Units credited under a particular Individual Account
and that the value of an Accumulation Unit for the Valuation Period
immediately prior to retirement was $1.40000000; this produces a total
value for the Individual Account of $56,000. Assume also that no premium
tax is payable and that the annuity tables in the Contract provide, for the
option elected, a first monthly variable annuity payment of $6.57 per
$1,000 of value applied; the first monthly payment would thus be 56
multiplied by $6.57, or $367.92.
Assume that the Annuity Unit Value for the Valuation Period in which the
first monthly payment was due was $1.3000000000. This is divided into the amount
of the first monthly payment to establish the number of Annuity Units for the
Participant: $367.92 / $1.30000000 produces 283.015 Annuity Units. The value of
this number of Annuity Units will be paid in each subsequent month.
3. SECOND MONTHLY PAYMENT. The current Annuity Unit value is first calculated.
Assume a net investment factor of 1.01000000 for the Valuation Period
immediately preceding the due date of the second monthly payment. This is
multiplied by .99713732 to neutralize the assumed net investment rate of 3
1/2 percent per annum built into the number of Annuity Units determined
above (if an assumed net investment rate of 5 percent had been elected, the
neutralization factor would be .99594241), producing a result of
1.00710869. This is then multiplied by the Annuity Unit value for the
Valuation Period preceding the due date of the second monthly payment
(assume this value to be $1.30000000) to produce the current Annuity Unit
value, $1.30924130. The second monthly payment is then calculated by
multiplying the constant number of Annuity Units by the current Annuity
Unit value: 283.015 times $1.30924130 produces a payment of $370.53.
FINANCIAL STATEMENTS
Audited financial statements of Conseco Variable Annuity Account C as of
December 31, 1998 and unaudited financial statements as of June 30, 1999 are
included below as well as audited financial statements of Conseco Variable
Insurance Company as of December 31, 1998.
[LOGO]
CONSECO VARIABLE INSURANCE COMPANY
FORMERLY
GREAT AMERICAN RESERVE INSURANCE COMPANY
Semiannual Report
to Contract Owners
June 30, 1999
Conseco Variable Annuity Account C
<PAGE>
<PAGE>
SEMIANNUAL REPORT TO CONTRACT OWNERS
TABLE OF CONTENTS
JUNE 30, 1999
<TABLE>
<CAPTION>
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<S> <C>
CONSECO VARIABLE ANNUITY ACCOUNT C PAGE
Statement of Assets and Liabilities as of June 30, 1999.................................................................. 2
Statements of Operations for the Six Months Ended June 30, 1999, and the Year Ended December 31, 1998.................... 5
Statements of Changes in Net Assets for the Six Months Ended June 30, 1999, and the Year Ended December 31, 1998........ 5
Notes to Financial Statements............................................................................................ 6
</TABLE>
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT C
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
NET ASSET
SHARES COST VALUE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets:
Investments in portfolio shares (Note 2):
The Alger American Fund:
Growth Portfolio......................................................... 34,423.4 $ 1,827,418 $ 1,922,200
Leveraged AllCap Portfolio.............................................. 79,070.5 2,681,305 3,231,611
MidCap Growth Portfolio.................................................. 4,742.5 126,224 130,892
Small Capitalization Portfolio........................................... 60,392.5 2,500,916 2,631,904
American Century Variable Portfolios, Inc:
Income and Growth Fund................................................... 23,076.1 160,822 171,686
International Fund....................................................... 14,234.6 108,912 116,439
Value Fund............................................................... 36,449.8 233,922 247,494
Berger Institutional Products Trust:
100 Fund................................................................. 21,260.5 256,965 301,900
Growth and Income Fund................................................... 18,916.6 306,317 372,278
Small Company Growth Fund................................................ 14,692.2 186,672 208,776
BIAM International Fund.................................................. 54.4 625 647
Conseco Series Trust:
Balanced Portfolio....................................................... 1,100,132.8 14,893,508 15,868,777
Equity Portfolio......................................................... 7,639,371.3 155,870,504 182,708,616
Fixed Income Portfolio................................................... 1,500,604.7 14,945,214 14,370,209
Government Securities Portfolio.......................................... 126,927.4 1,524,511 1,433,225
Money Market Portfolio................................................... 7,021,628.9 7,021,629 7,021,629
The Dreyfus Socially Responsible Growth Fund, Inc.......................... 92,009.3 2,755,478 3,224,926
Dreyfus Stock Index Fund................................................... 586,252.9 17,418,876 21,169,594
Dreyfus Variable Investment Fund:
Disciplined Stock Portfolio.............................................. 1,799.6 42,417 45,621
Federated Insurance Series:
High Income Bond Fund II................................................. 69,582.7 748,087 714,615
International Equity Fund II............................................ 12,634.7 191,320 201,271
Utility Fund II.......................................................... 50,808.0 712,162 738,241
Invesco Variable Investment Funds, Inc:
High Yield Fund.......................................................... 4,364.5 50,589 52,461
Equity Income Fund....................................................... 361.4 7,100 7,650
Janus Aspen Series:
Aggressive Growth Portfolio.............................................. 127,287.4 3,273,389 4,406,688
Growth Portfolio......................................................... 256,143.9 5,905,051 6,990,167
Worldwide Growth Portfolio............................................... 623,128.3 15,925,927 20,401,222
Lazard Retirement Series, Inc:
Equity Portfolio......................................................... 39.4 461 487
Small Cap Portfolio...................................................... 386.5 3,320 4,124
Lord Abbett Series Fund, Inc:
Growth and Income Portfolio.............................................. 1,217.8 25,233 28,874
Mitchell Hutchins Series Trust:
Growth and Income Portfolio.............................................. 412.6 5,939 6,317
Neuberger Berman Advisers Management Trust:
Limited Maturity Bond Portfolio.......................................... 24,024.4 323,751 314,479
Partners Portfolio....................................................... 28,054.9 526,311 581,298
Strong Variable Insurance Funds, Inc:
Mid Cap Growth Fund II................................................... 5,484.4 94,376 111,881
Strong Opportunity Fund II, Inc............................................ 8,053.3 173,776 185,710
Van Eck Worldwide Insurance Trust:
Worldwide Hard Assets Fund............................................... 22,647.3 230,704 242,552
Worldwide Bond Fund...................................................... 3,688.1 41,697 39,758
Worldwide Emerging Markets Fund.......................................... 13,327.8 110,188 138,476
Worldwide Real Estate Fund.............................................. 1,466.7 13,402 15,166
- ----------------------------------------------------------------------------------------------------------------------------
Total Assets ...................................................................................... 290,359,861
Liabilities:
Amounts due to Conseco Variable Insurance Company ...................................................... 92,707
- ----------------------------------------------------------------------------------------------------------------------------
Net assets (Note 6) ............................................................................... $290,267,154
============================================================================================================================
2
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT C
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
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TOTAL VALUE
UNITS UNIT VALUE OF UNITS
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net assets attributable to:
Contract owners' deferred annuity reserves:
The Alger American Fund:
Growth Portfolio......................................................... 942,494.2 $ 2.037767 $ 1,920,584
Leveraged AllCap Portfolio............................................... 891,898.6 3.620184 3,228,837
MidCap Growth Portfolio................................................. 75,249.5 1.737966 130,781
Small Capitalization Portfolio........................................... 1,466,983.8 1.792488 2,629,551
American Century Variable Portfolios, Inc:
Income and Growth Fund................................................... 144,778.1 1.184794 171,532
International Fund....................................................... 84,509.6 1.376380 116,317
Value Fund............................................................... 172,174.9 1.436181 247,274
Berger Institutional Products Trust:
100 Fund................................................................. 210,470.1 1.433130 301,631
Growth and Income Fund................................................... 209,382.5 1.776363 371,939
Small Company Growth Fund................................................ 130,744.7 1.595395 208,590
BIAM International Fund.................................................. 547.3 1.182051 647
Conseco Series Trust:
Balanced Portfolio....................................................... 6,633,144.0 2.364314 15,682,835
Equity Portfolio
Qualified.............................................................. 6,565,303.1 26.847897 176,264,583
Nonqualified.......................................................... 187,780.9 21.252390 3,990,793
Fixed Income Portfolio
Qualified.............................................................. 2,470,861.5 5.619832 13,885,826
Nonqualified........................................................... 71,236.6 5.399662 384,654
Government Securities Portfolio.......................................... 1,102,326.6 1.298765 1,431,663
Money Market Portfolio
Qualified.............................................................. 2,170,004.0 2.870946 6,229,964
Nonqualified........................................................... 264,569.7 2.870945 759,565
The Dreyfus Socially Responsible Growth Fund, Inc.......................... 1,247,817.6 2.582219 3,222,138
Dreyfus Stock Index Fund................................................... 8,033,670.3 2.624419 21,083,714
Dreyfus Variable Investment Fund:
Disciplined Stock Portfolio.............................................. 38,586.6 1.181336 45,584
Federated Insurance Series:
High Income Bond Fund II................................................. 504,137.8 1.416113 713,916
International Equity Fund II............................................. 126,962.1 1.583734 201,074
Utility Fund II.......................................................... 409,509.3 1.801099 737,567
Invesco Variable Investment Funds, Inc:
High Yield Fund.......................................................... 52,045.3 1.007081 52,414
Equity Income Fund....................................................... 6,526.9 1.168211 7,625
Janus Aspen Series:
Aggressive Growth Portfolio.............................................. 1,682,810.7 2.616436 4,402,967
Growth Portfolio........................................................ 2,686,165.2 2.600124 6,984,362
Worldwide Growth Portfolio............................................... 7,541,298.4 2.685990 20,255,855
Lazard Retirement Series, Inc:
Equity Portfolio......................................................... 412.8 1.177689 486
Small Cap Portfolio...................................................... 4,307.2 0.956521 4,120
Lord Abbett Series Fund, Inc:
Growth and Income Portfolio.............................................. 25,065.9 1.150891 28,848
Mitchell Hutchins Series Trust:
Growth and Income Portfolio.............................................. 6,181.7 1.020901 6,311
Neuberger Berman Advisers Management Trust:
Limited Maturity Bond Portfolio.......................................... 291,193.6 1.079175 314,249
Partners Portfolio...................................................... 401,726.4 1.445715 580,782
Strong Variable Insurance Funds, Inc:
Mid Cap Growth Fund II................................................... 54,287.1 2.059111 111,783
Strong Opportunity Fund II, Inc............................................ 112,365.1 1.651089 185,525
Van Eck Worldwide Insurance Trust:
Worldwide Hard Assets Fund............................................... 245,197.3 0.988359 242,343
Worldwide Bond Fund...................................................... 36,641.2 1.084109 39,723
Worldwide Emerging Markets Fund.......................................... 180,957.5 0.764550 138,351
Worldwide Real Estate Fund............................................... 16,108.9 0.940611 15,152
- ----------------------------------------------------------------------------------------------------------------------------
Net assets attributable to contract owners' deferred
annuity reserves ............................................................................. $287,332,455
============================================================================================================================
</TABLE>
3
The accompanying notes are an integral part of these financial statements.
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT C
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
======================================================================================================================
TOTAL VALUE
OF UNITS
- ----------------------------------------------------------------------------------------------------------------------
<S> <C>
Net assets attributable to contract owners' deferred annuity reserves (from page 3)...................... $287,332,455
- ----------------------------------------------------------------------------------------------------------------------
Net assets attributable to contract owners' annuity payment reserves:
Conseco Series Trust:
Balanced Portfolio
Qualified....................................................................................... 245,195
Equity Portfolio
Qualified....................................................................................... 2,204,919
Nonqualified.................................................................................... 21,569
Fixed Income Portfolio
Qualified...................................................................................... 90,796
Money Market Portfolio
Qualified....................................................................................... 25,760
Dreyfus Stock Index Fund............................................................................ 145,040
Janus Aspen Worldwide Growth Portfolio.............................................................. 201,420
- -----------------------------------------------------------------------------------------------------------------------
Net assets attributable to contract owners' annuity payment reserves.......................... 2,934,699
- -----------------------------------------------------------------------------------------------------------------------
Net assets................................................................................. $290,267,154
=======================================================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
4
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT C
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
===============================================================================================================================
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31,
(UNAUDITED) 1998
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment income:
Dividends from investments in portfolio shares............................................ $ 2,229,424 $ 19,540,381
- -------------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk fees............................................................ 1,009,243 1,827,897
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income................................................................. 1,220,181 17,712,484
- -------------------------------------------------------------------------------------------------------------------------------
Net realized gains (losses) and unrealized appreciation (depreciation) of investments:
Net realized gains on sales of investments in portfolio shares............................. 6,562,723 9,273,245
Net change in unrealized appreciation of investments in portfolio shares................... 17,359,366 8,806,324
- -------------------------------------------------------------------------------------------------------------------------------
Net gain on investments in portfolio shares.............................................. 23,922,089 18,079,569
- -------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations............................................. $ 25,142,270 $ 35,792,053
===============================================================================================================================
</TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
===============================================================================================================================
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31,
(UNAUDITED) 1998
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Changes from operations:
Net investment income..................................................................... $ 1,220,181 $ 17,712,484
Net realized gains on sales of investments in portfolio shares............................. 6,562,723 9,273,245
Net change in unrealized appreciation of investments in portfolio shares................... 17,359,366 8,806,324
- -------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations.............................................. 25,142,270 35,792,053
- -------------------------------------------------------------------------------------------------------------------------------
Changes from contract owners' transactions:
Net contract purchase payments............................................................. 13,375,110 25,628,081
Contract redemptions....................................................................... (15,573,183) (34,314,124)
Net transfers............................................................................. (250,610) (8,796,326)
- -------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets from contract owners' transactions............................ (2,448,683) (17,482,369)
- -------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets............................................................ 22,693,587 18,309,684
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, beginning of period............................................................... 267,573,567 249,263,883
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (Note 6).................................................... $290,267,154 $267,573,567
===============================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT C
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
(UNAUDITED)
================================================================================
(1) GENERAL
Conseco Variable Annuity Account C (formerly Great American Reserve Variable
Annuity Account C) ("Account C") was established in 1980 as a segregated
investment account for individual and group variable annuity contracts which are
registered under the Securities Act of 1933. Account C is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a unit investment
trust. Account C was originally registered with the U.S. Securities and Exchange
Commission as a diversified open-end management investment company under the
Act. Effective May 1, 1993, Account C was restructured into a single unit
investment trust which invested solely in shares of the portfolios of the
Conseco Series Trust, a diversified open-end management investment company.
The operations of Account C are included in the operations of Conseco
Variable Insurance Company (the "Company") pursuant to the provisions of the
Texas Insurance Code. The Company is an indirect wholly owned subsidiary of
Conseco, Inc., a publicly-held specialized financial services holding company
listed on the New York Stock Exchange.
Currently, the following investment options are available (effective date in
parenthesis):
THE ALGER AMERICAN FUND
Growth Portfolio (May 1, 1997)
Leveraged AllCap Portfolio (June 1, 1995)
MidCap Portfolio (May 1, 1997)
Small Capitalization Portfolio (June 1, 1995)
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
Income and Growth Fund (May 1, 1998)
International Fund (May 1, 1997)
Value Fund (May 1, 1997)
BERGER INSTITUTIONAL PRODUCTS TRUST (MAY 1, 1997)
100 Fund
Growth and Income
Fund Small Company Growth Fund
BIAM International Fund
CONSECO SERIES TRUST
Balanced Portfolio
Equity Portfolio
Fixed Income Portfolio
Government Securities Portfolio
Money Market Portfolio
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
(JUNE 1, 1995)
DREYFUS STOCK INDEX FUND (JUNE 1, 1995)
DREYFUS VARIABLE INVESTMENT FUND (MAY 1, 1998)
International Value Portfolio
Disciplined Stock Portfolio
FEDERATED INSURANCE SERIES (JUNE 1, 1995)
High Income Bond Fund II
International Equity Fund II
Utility Fund II
INVESCO VARIABLE INVESTMENT FUNDS, INC. (MAY 1, 1998)
High Yield Fund
Equity Income Fund
JANUS ASPEN SERIES (JUNE 1, 1995)
Aggressive Growth Portfolio
Growth Portfolio
Worldwide Growth Portfolio
LAZARD RETIREMENT SERIES, INC. (MAY 1, 1998)
Equity Portfolio
Small Cap Portfolio
LORD ABBETT SERIES FUND, INC. (MAY 1, 1998)
Growth and Income Portfolio
MITCHELL HUTCHINS SERIES TRUST (MAY 1, 1998)
Growth and Income Portfolio
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST (MAY 1, 1997)
Limited Maturity Bond Portfolio
Partners Portfolio
STRONG VARIABLE INSURANCE FUNDS, INC. (May 1, 1997)
Mid Cap Growth Fund II
STRONG OPPORTUNITY FUND II (MAY 1, 1997)
VAN ECK WORLDWIDE INSURANCE TRUST
Worldwide Bond Fund (June 1, 1995)
Worldwide Emerging Markets Fund (June 1, 1996)
Worldwide Hard Assets Fund (June 1, 1995)
Worldwide Real Estate Fund (May 1, 1998)
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported increases and decreases in net assets from operations during the
reporting period. Actual results could differ from those estimates.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION, TRANSACTIONS AND INCOME
Investments in portfolio shares are valued using the net asset value of the
respective portfolios at the end of each New York Stock Exchange business day.
Investment share transactions are accounted for on a trade date basis (the date
the order to purchase or redeem shares is executed) and dividend income is
recorded on the ex-dividend date. The cost of investments in portfolio shares
sold is determined on a first-in first-out basis. Account C does not hold any
investments which are restricted as to resale.
Net investment income and net realized gains (losses) and unrealized
appreciation (depreciation) on investments are allocated to the contracts on
each valuation date based on each contract's pro rata share of the assets of
Account C as of the beginning of the valuation date.
FEDERAL INCOME TAXES
No provision for federal income taxes has been made in the accompanying
financial statements because the operations of Account C are included in the
total operations of the Company, which is treated as a life insurance company
for federal income tax purposes under the Internal Revenue Code. Net investment
income and realized gains (losses) are retained in Account C and are not taxable
until received by the contract owner or beneficiary in the form of annuity
payments or other distributions.
6
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT C
NOTES TO FINANCIAL STATEMENTS--CONTINUED
JUNE 30, 1999
(UNAUDITED)
================================================================================
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ANNUITY RESERVES
Deferred annuity contract reserves are comprised of net contract purchase
payments less redemptions and benefits. These reserves are adjusted daily for
the net investment income and net realized gains (losses) and unrealized
appreciation (depreciation) on investments.
Annuity payment reserves for contracts under which contract owners are
receiving periodic retirement payments are computed according to the Progressive
Annuity Mortality Table and the 1983 Group Annuity Mortality Table. The assumed
net investment rate is equal to the assumed rate of accumulation. The annuity
unit values for periodic retirement payments are as follows:
June 30, December 31,
1999 1998
================================================================================
Conseco Series Trust:
Balanced Portfolio.................... $ 1.093 $ 1.043
Equity Portfolio
Qualified........................... 7.939 7.308
Nonqualified........................ 7.351 6.766
Fixed Income Portfolio
Qualified........................... 4.826 5.012
Nonqualified........................ 4.829 5.016
Money Market Portfolio
Qualified........................... 1.019 1.019
Dreyfus Stock Index Fund.............. 1.211 1.097
Janus Aspen Worldwide Growth Portfolio 1.830 1.660
================================================================================
(3) PURCHASES AND SALES OF INVESTMENTS IN PORTFOLIO SHARES
The aggregate cost of purchases of investments in portfolio shares were
$34,436,385 and $63,530,550 for the six months ended June 30, 1999, and the year
ended December 31, 1998, respectively. The aggregate proceeds from sales of
investments in portfolio shares were $35,787,686 and $63,152,626 for the six
months ended June 30, 1999, and the year ended December 31, 1998, respectively.
(4) DEDUCTIONS AND EXPENSES
Although periodic retirement payments to contract owners vary according to
the investment performance of the portfolios, such payments are not affected by
mortality or expense experience because the Company assumes the mortality and
expense risks under the contracts.
The mortality risk assumed by the Company results from the life annuity
payment option in the contracts in which the Company agrees to make annuity
payments regardless of how long a particular annuitant or other payee lives. The
annuity payments are determined in accordance with annuity purchase rate
provisions established at the time the contracts are issued. Based on the
actuarial determination of expected mortality, the Company is required to fund
any deficiency in the annuity payment reserves from its general account assets.
The expense risk assumed by the Company is the risk that the deductions for
sales and administrative expenses may prove insufficient to cover the actual
sales and administrative expenses.
The Company deducts daily from Account C a fee, which is equal on an annual
basis to 1.00 percent of the daily value of the total investments of Account C,
for assuming the mortality and expense risks except for the Equity, Fixed
Income, and Money Market portfolios of the Conseco Series Trust, the fees of
which are 0.64 percent, 0.74 percent and 0.99 percent, respectively. These fees
were $1,009,243 and $1,827,897 for the six months ended June 30, 1999, and the
year ended December 31, 1998, respectively.
Pursuant to an agreement between Account C and the Company (which may be
terminated by the Company at any time), the Company provides sales and
administrative services to Account C, as well as a minimum death benefit prior
to retirement for certain contracts. Under individual contracts and group
deferred compensation contracts, the Company may deduct a percentage of amounts
surrendered to cover sales expenses. The percentage varies up to 8.00 percent
based on the type of contract and the number of years the contract has been
held. In addition, the Company deducts units from certain contracts annually and
upon full surrender to cover an administrative fee of $15, $20, or $25. This fee
is recorded as a redemption in the accompanying Statements of Changes in Net
Assets. Under group contracts no longer being sold, the Company deducts a
percentage of the renewal contract purchase payments to cover sales and
administrative expenses and the minimum death benefit prior to retirement of the
contract owners. Sales and administrative charges were $101,290 and $597,806 for
the six months ended June 30, 1999, and the year ended December 31, 1998,
respectively.
(5) OTHER TRANSACTIONS WITH AFFILIATES
Conseco Equity Sales, Inc., an affiliate of the Company, is the principal
underwriter and performs all variable annuity sales functions on behalf of the
Company through various retail broker/dealers including Conseco Financial
Services, Inc., an affiliate of the Company.
(6) NET ASSETS
Net assets consisted of the following at June 30, 1999:
===============================================================================
Proceeds from the sales of units since organization,
less cost of units redeemed.................................... $ 59,923,017
Undistributed net investment income............................... 139,260,367
Undistributed net realized gains on sales of investments ......... 51,951,927
Net unrealized appreciation of investments........................ 39,131,843
- -------------------------------------------------------------------------------
Net assets................................................... $290,267,154
================================================================================
7
<PAGE>
================================================================================
Table of Contents
December 31, 1998
================================================================================
Great American Reserve Variable Annuity Account C Page
Statement of Assets and Liabilities as of December 31, 1998 ................ 2
Statements of Operations for the Years Ended
December 31, 1998 and 1997 ................................................ 5
Statements of Changes in Net Assets for the Years Ended
December 31, 1998 and 1997 ................................................ 5
Notes to Financial Statements .............................................. 6
Report of Independent Accountants .......................................... 8
<PAGE>
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT C
Statement of Assets and Liabilities
December 31, 1998
<TABLE>
<CAPTION>
====================================================================================================================================
Shares Cost Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets:
Investments in portfolio shares, at net asset value (Note 2):
The Alger American Fund:
Growth Portfolio .................................................... 11,149.7 $ 508,822 $ 593,389
Leveraged AllCap Portfolio .......................................... 39,844.0 962,015 1,390,555
MidCap Growth Portfolio ............................................. 4,597.4 118,610 132,726
Small Capitalization Portfolio ...................................... 54,628.7 2,256,203 2,402,023
American Century Variable Portfolios, Inc.:
International Fund .................................................. 17,811.0 134,749 135,720
Value Fund .......................................................... 21,090.5 145,345 141,939
Income and Growth Fund .............................................. 14,667.6 84,886 99,447
Berger Institutional Products Trust:
100 Fund ............................................................ 19,930.8 234,935 256,907
Growth and Income Fund .............................................. 10,470.9 151,123 174,132
Small Company Growth Fund ........................................... 9,380.0 114,894 115,186
BIAM International Fund ............................................. 0.1 1 2
Conseco Series Trust:
Asset Allocation Portfolio .......................................... 1,191,919.6 15,988,448 16,291,143
Common Stock Portfolio .............................................. 8,510,918.6 170,109,446 183,714,329
Corporate Bond Portfolio ............................................ 1,468,555.5 14,655,047 14,751,679
Government Securities Portfolio ..................................... 77,402.6 948,349 940,135
Money Market Portfolio .............................................. 5,468,639.0 5,468,639 5,468,639
The Dreyfus Socially Responsible Growth Fund, Inc. .................... 59,457.2 1,643,784 1,847,929
Dreyfus Stock Index Fund .............................................. 436,107.6 11,638,392 14,182,220
Dreyfus Variable Investment Fund:
Disciplined Stock Portfolio ......................................... 843.8 16,621 19,365
Federated Insurance Series:
High Income Bond Fund II ............................................ 51,180.6 559,449 558,892
International Equity Fund II ........................................ 14,940.2 227,873 229,930
Utility Fund II ..................................................... 49,327.1 691,854 753,226
Invesco Variable Investment Funds, Inc.:
High Yield Portfolio ................................................ 1,914.5 22,854 21,673
Industrial Income Portfolio ......................................... 1,925.8 34,526 35,840
Janus Aspen Series:
Aggressive Growth Portfolio ......................................... 108,325.8 2,148,101 2,988,707
Growth Portfolio .................................................... 164,036.6 3,145,770 3,861,423
Worldwide Growth Portfolio .......................................... 526,760.7 12,582,299 15,323,468
Lazard Retirement Series Inc.:
Small Cap Portfolio ................................................. 388.4 3,336 3,697
Lord Abbett Series Fund, Inc.:
Growth and Income Portfolio ......................................... 677.2 13,488 13,983
Mitchell Hutchins Series Trust:
Growth and Income Portfolio ......................................... 354.6 5,096 5,252
Neuberger & Berman Advisers Management Trust:
Limited Maturity Bond Portfolio ..................................... 17,670.4 243,155 244,205
Partners Portfolio .................................................. 22,810.5 429,570 431,803
Strong Variable Insurance Funds, Inc.:
Growth Fund II ...................................................... 14,719.9 231,540 235,813
Strong Opportunity Fund II, Inc. ...................................... 5,707.3 115,417 123,962
Van Eck Worldwide Insurance Trust:
Worldwide Hard Assets Fund .......................................... 18,153.3 234,575 167,010
Worldwide Bond Fund ................................................. 2,945.2 32,708 36,167
Worldwide Emerging Markets Fund ..................................... 13,168.3 112,040 93,758
Worldwide Real Estate Fund .......................................... 293.4 2,635 2,799
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets ...................................................... 267,789,073
Liabilities:
Amounts due to Conseco Variable Insurance Company ....................... 215,506
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets (Note 6) ............................................... $267,573,567
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT C
Statement of Assets and Liabilities - Continued
December 31, 1998
<TABLE>
<CAPTION>
====================================================================================================================================
UNITS UNIT VALUE REPORTED VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net assets attributable to:
Contract owners' deferred annuity reserves:
The Alger American Fund:
Growth Portfolio ............................................................... 335,852.3 $ 1.765379 $ 592,907
Leveraged AllCap Portfolio ..................................................... 479,431.7 2.898075 1,389,429
Midcap Growth Portfolio ........................................................ 85,728.9 1.546930 132,617
Small Capitalization Portfolio ................................................. 1,509,931.8 1.589518 2,400,064
American Century Variable Portfolios, Inc.:
International Fund ............................................................. 105,232.7 1.288519 135,594
Value Fund ..................................................................... 111,174.7 1.275597 141,814
Income and Growth Fund ......................................................... 91,593.4 1.084816 99,362
Berger Institutional Products Trust:
100 Fund ....................................................................... 196,341.6 1.307378 256,693
Growth and Income Fund ......................................................... 115,344.2 1.508510 173,998
Small Company Growth Fund ...................................................... 83,064.3 1.385556 115,090
BIAM International Fund ........................................................ 0.0 1.118101 0
Conseco Series Trust:
Asset Allocation Portfolio ..................................................... 7,300,113.8 2.218603 16,196,057
Common Stock Portfolio
Qualified .................................................................... 7,294,849.0 24.295266 177,230,301
Nonqualified ................................................................. 223,506.1 19.231766 4,298,417
Corporate Bond Portfolio
Qualified .................................................................... 2,455,410.8 5.738363 14,090,040
Nonqualified ................................................................. 93,115.4 5.513550 513,396
Government Securities Portfolio ................................................ 702,664.8 1.336418 939,054
Money Market Portfolio
Qualified .................................................................... 1,791,071.6 2.821406 5,053,340
Nonqualified ................................................................. 131,045.9 2.821405 369,734
The Dreyfus Socially Responsible Growth Fund, Inc. ............................... 802,406.0 2.301103 1,846,419
Dreyfus Stock Index Fund ......................................................... 5,996,869.5 2.351933 14,104,234
Dreyfus Variable Investment Fund:
Disciplined Stock Portfolio .................................................... 18,002.3 1.074802 19,349
Federated Insurance Series:
High Income Bond Fund II ....................................................... 402,613.1 1.387018 558,432
International Equity Fund II ................................................... 153,805.0 1.493697 229,738
Utility Fund II ................................................................ 428,132.7 1.757846 752,591
Invesco Variable Investment Funds, Inc.:
High Yield Portfolio ........................................................... 22,718.7 0.953146 21,654
Industrial Income Portfolio .................................................... 34,697.3 1.032042 35,809
Janus Aspen Series:
Aggressive Growth Portfolio .................................................... 1,484,764.6 2.011276 2,986,271
Growth Portfolio ............................................................... 1,722,620.7 2.239752 3,858,243
Worldwide Growth Portfolio ..................................................... 6,332,820.3 2.393977 15,160,624
Lazard Retirement Series Inc.:
Small Cap Portfolio ............................................................ 4,307.2 0.857665 3,694
Lord Abbett Series Fund, Inc.:
Growth and Income Portfolio .................................................... 13,870.3 1.007282 13,971
Mitchell Hutchins Series Trust:
Growth and Income Portfolio .................................................... 5,287.1 0.992464 5,247
Neuberger & Berman Advisers Management Trust:
Limited Maturity Bond Portfolio ................................................ 225,717.1 1.080994 243,999
Partners Portfolio ............................................................. 336,370.8 1.282632 431,440
Strong Variable Insurance Funds, Inc.:
Growth Fund II ................................................................. 145,329.2 1.622454 235,790
Strong Opportunity Fund II, Inc. ................................................. 89,350.2 1.386225 123,859
Van Eck Worldwide Insurance Trust:
Worldwide Hard Assets Fund ..................................................... 198,619.0 0.840028 166,846
Worldwide Bond Fund ............................................................ 30,830.4 1.172096 36,136
Worldwide Emerging Markets Fund ................................................ 177,923.9 0.526522 93,681
Worldwide Real Estate Fund ..................................................... 3,276.4 0.853728 2,797
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets attributable to contract owners' deferred annuity reserves ...... $265,058,731
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT C
Statement of Assets and Liabilities - Continued
December 31, 1998
<TABLE>
<CAPTION>
==================================================================================================
REPORTED
VALUE
- --------------------------------------------------------------------------------------------------
<S> <C>
Net assets attributable to contract owners' deferred annuity reserves (from page 3) $265,058,731
- --------------------------------------------------------------------------------------------------
Contract owners' annuity payment reserves:
Conseco Series Trust:
Asset Allocation Portfolio
Qualified ................................................................ 95,125
Common Stock Portfolio
Qualified ................................................................ 2,123,088
Nonqualified ............................................................. 22,287
Corporate Bond Portfolio
Qualified ................................................................ 95,748
Money Market Portfolio
Qualified ................................................................ 26,603
Dreyfus Stock Index Fund ................................................... 49,385
Janus Aspen Worldwide Growth Portfolio ..................................... 102,600
- --------------------------------------------------------------------------------------------------
Net assets attributable to contract owners' annuity payment reserves ... 2,514,836
- --------------------------------------------------------------------------------------------------
Net assets .......................................................... $267,573,567
==================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT C
Statements of Operations
For the Years Ended December 31, 1998 and 1997
<TABLE>
<CAPTION>
====================================================================================================================================
1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Investment income:
<S> <C> <C>
Dividends from investments in portfolio shares .............................................. $ 19,540,381 $ 48,081,385
Expenses:
Mortality and expense risk fees ............................................................. 1,827,897 1,556,503
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income ..................................................................... 17,712,484 46,524,882
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gains (losses) and unrealized appreciation (depreciation) of investments:
Net realized gains on sales of investments in portfolio shares .............................. 9,273,245 2,417,325
Net change in unrealized appreciation (depreciation) of investments in portfolio shares ..... 8,806,324 (14,329,631)
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments in portfolio shares ........................................ 18,079,569 (11,912,306)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations .............................................. $ 35,792,053 $ 34,612,576
====================================================================================================================================
</TABLE>
Statements of Changes in Net Assets
For the Years Ended December 31, 1998 and 1997
<TABLE>
<CAPTION>
====================================================================================================================================
1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Changes from operations:
Net investment income ....................................................................... $ 17,712,484 $ 46,524,882
Net realized gains on sales of investments in portfolio shares .............................. 9,273,245 2,417,325
Net change in unrealized appreciation (depreciation) of investments in portfolio shares ..... 8,806,324 (14,329,631)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations ................................................ 35,792,053 34,612,576
- ------------------------------------------------------------------------------------------------------------------------------------
Changes from contract owners' transactions:
Net contract purchase payments .............................................................. 25,628,081 26,160,248
Contract redemptions ........................................................................ (34,314,124) (14,213,522)
Net transfers ............................................................................... (8,796,326) 4,514,784
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from contract owners' transactions .................. (17,482,369) 16,461,510
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets .............................................................. 18,309,684 51,074,086
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, beginning of year .................................................................. 249,263,883 198,189,797
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (Note 6) ...................................................... $ 267,573,567 $ 249,263,883
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT C
Notes to Financial Statements
December 31, 1998
================================================================================
(1) General
Conseco Variable Insurance Company (formerly Great American Reserve
Insurance Company prior to its name change in October 1998) Variable Annuity
Account C ("Account C") was established in 1980 as a segregated investment
account for individual and group variable annuity contracts which are registered
under the Securities Act of 1933. It is anticipated that on May 1, 1999, a
filing will be made with the Securities and Exchange Commission to change the
name of Great American Reserve Variable Account C to Conseco Variable Account C.
Account C is registered under the Investment Company Act of 1940, as amended
(the "Act"), as a unit investment trust. Account C was originally registered
with the U.S. Securities and Exchange Commission as a diversified open-end
management investment company under the Act. Effective May 1, 1993, Account C
was restructured into a single unit investment trust which invested solely in
shares of the portfolios of the Conseco Series Trust, a diversified open-end
management investment company. Thereafter, additional investment options were
offered.
The operations of Account C are included in the operations of Conseco
Variable Insurance Company (the "Company") pursuant to the provisions of the
Texas Insurance Code. The Company is an indirect wholly owned subsidiary of
Conseco, Inc., a publicly-held specialized financial services holding company
listed on the New York Stock Exchange.
Currently, the following investment options are available (effective date
in parenthesis):
THE ALGER AMERICAN FUND
Growth Portfolio (May 1, 1997)
Leveraged AllCap Portfolio (June 1, 1995)
MidCap Growth Portfolio (May 1, 1997)
Small Capitalization Portfolio (June 1, 1995)
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
Income and Growth Fund (May 1, 1998)
International Fund (May 1, 1997)
Value Fund (May 1, 1997)
BERGER INSTITUTIONAL PRODUCTS TRUST (MAY 1, 1997)
100 Fund
Growth and Income
Fund Small Company Growth Fund
BIAM International Fund
CONSECO SERIES TRUST
Asset Allocation Portfolio
Common Stock Portfolio
Corporate Bond Portfolio
Government Securities Portfolio
Money Market Portfolio
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
(JUNE 1, 1995)
DREYFUS STOCK INDEX FUND (JUNE 1, 1995)
DREYFUS VARIABLE INVESTMENT FUND (MAY 1, 1998)
International Value Portfolio
Disciplined Stock Portfolio
FEDERATED INSURANCE SERIES (JUNE 1, 1995)
High Income Bond Fund II
International Equity Fund II
Utility Fund II
INVESCO VARIABLE INVESTMENT FUNDS, INC. (MAY 1, 1998)
High Yield Portfolio
Industrial Income Portfolio
JANUS ASPEN SERIES (JUNE 1, 1995)
Aggressive Growth Portfolio
Growth Portfolio
Worldwide Growth Portfolio
LAZARD RETIREMENT SERIES, INC. (MAY 1, 1998)
Equity Portfolio
Small Cap Portfolio
LORD ABBETT SERIES FUND, INC. (MAY 1, 1998)
Growth and Income Portfolio
MITCHELL HUTCHINS SERIES TRUST (MAY 1, 1998)
Growth and Income Portfolio
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
(MAY 1, 1997)
Limited Maturity Bond Portfolio
Partners Portfolio
STRONG VARIABLE INSURANCE FUNDS, INC.
Growth Fund II (May 1, 1997)
STRONG OPPORTUNITY FUND II, Inc. (MAY 1, 1997)
VAN ECK WORLDWIDE INSURANCE TRUST
Worldwide Bond Fund (June 1, 1995)
Worldwide Emerging Markets Fund (June 1, 1996)
Worldwide Hard Assets Fund (June 1,1995)
Worldwide Real Estate Fund (May 1, 1998)
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported increases and decreases in net assets from
operations during the reporting period. Actual results could differ from those
estimates.
(2) Summary of Significant Accounting Policies
Investment Valuation, Transactions and Income
Investments in portfolio shares are valued using the net asset value of the
respective portfolios at the end of each New York Stock Exchange business day.
Investment share transactions are accounted for on a trade date basis (the date
the order to purchase or redeem shares is executed) and dividend income is
recorded on the ex-dividend date. The cost of investments in portfolio shares
sold is determined on a first-in first-out basis. Account C does not hold any
investments which are restricted as to resale.
Net investment income and net realized gains (losses) and unrealized
appreciation (depreciation) on investments are allocated to the contracts on
each valuation date based on each contract's pro rata share of the assets of
Account C as of the beginning of the valuation date.
Federal Income Taxes
No provision for federal income taxes has been made in the accompanying
financial statements because the operations of Account C are included in the
total operations of the Company, which is treated as a life insurance company
for federal income tax purposes under the Internal Revenue Code. Net investment
income and realized gains (losses) are retained in Account C and are not taxable
until received by the contract owner or beneficiary in the form of annuity
payments or other distributions.
6
<PAGE>
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT C
Notes to Financial Statements (continued)
December 31, 1998
================================================================================
(2) Summary of Significant Accounting Policies
(Continued)
Annuity Reserves
Deferred annuity contract reserves are comprised of net contract purchase
payments less redemptions and benefits. These reserves are adjusted daily for
the net investment income and net realized gains (losses) and unrealized
appreciation (depreciation) on investments.
Annuity payment reserves for contracts under which contract owners are
receiving periodic retirement payments are computed according to the Progressive
Annuity Mortality Table and the 1983 Group Annuity Mortality Table. The assumed
net investment rate is equal to the assumed rate of accumulation. The annuity
unit values for periodic retirement payments are as follows:
December 31, December 31,
1998 1997
- --------------------------------------------------------------------------------
Conseco Series Trust:
Asset Allocation ............................ $1.043 $0.999
Common Stock
Qualified ................................. 7.308 6.600
Nonqualified .............................. 6.766 6.111
Corporate Bond
Qualified ................................. 5.012 4.934
Nonqualified .............................. 5.016 4.937
Money Market
Qualified ................................. 1.019 1.012
Dreyfus Stock Index Fund ....................... 1.097 N/A
Janus Aspen Worldwide Growth ................... 1.660 0.999
================================================================================
(3) Purchases and Sales of Investments in
Portfolio Shares
The aggregate cost of purchases of investments in portfolio shares were
$63,530,550 and $80,455,901 for the years ended December 31, 1998 and 1997,
respectively. The aggregate proceeds from sales of investments in portfolio
shares were $63,152,626 and $17,579,585 for the years ended December 31, 1998
and 1997, respectively.
(4) Deductions and Expenses
Although periodic retirement payments to contract owners vary according to
the investment performance of the portfolios, such payments are not affected by
mortality or expense experience because the Company assumes the mortality and
expense risks under the contracts.
The mortality risk assumed by the Company results from the life annuity
payment option in the contracts in which the Company agrees to make annuity
payments regardless of how long a particular annuitant or other payee lives. The
annuity payments are determined in accordance with annuity purchase rate
provisions established at the time the contracts are issued. Based on the
actuarial determination of expected mortality, the Company is required to fund
any deficiency in the annuity payment reserves from its general account assets.
The expense risk assumed by the Company is the risk that the deductions for
sales and administrative expenses may prove insufficient to cover the actual
sales and administrative expenses.
The Company deducts daily from Account C a fee, which is equal on an annual
basis to 1.00 percent of the daily value of the total investments of Account C,
for assuming the mortality and expense risks except for the Common Stock,
Corporate Bond, and Money Market portfolios of the Conseco Series Trust which
the fees are 0.64 percent, 0.74 percent and 0.99 percent, respectively. These
fees were $1,827,897 and $1,556,503 for the years ended December 31, 1998 and
1997, respectively.
Pursuant to an agreement between Account C and the Company (which may be
terminated by the Company at any time), the Company provides sales and
administrative services to Account C, as well as a minimum death benefit prior
to retirement for certain contracts. Under individual contracts and group
deferred compensation contracts, the Company may deduct a percentage of amounts
surrendered to cover sales expenses. The percentage varies up to 8.00 percent
based on the type of contract and the number of years the contract has been
held. In addition, the Company deducts units from certain contracts annually and
upon full surrender to cover an administrative fee of $15, $20, or $25. This fee
is recorded as a redemption in the accompanying Statement of Changes of Net
Assets. Under group contracts no longer being sold, the Company deducts a
percentage of the renewal contract purchase payments to cover sales and
administrative expenses and the minimum death benefit prior to retirement of the
contract owners. Sales and administrative charges were $597,806 and $226,805 for
the years ended December 31, 1998 and 1997, respectively.
(5) Other Transactions With Affiliates
Conseco Equity Sales, Inc., an affiliate of the Company, is the principal
underwriter and performs all variable annuity sales functions on behalf of the
Company through various retail broker/dealers including Conseco Financial
Services, Inc., an affiliate of the Company.
(6) Net Assets
Net assets consisted of the following at December 31, 1998:
- --------------------------------------------------------------------------------
Proceeds from the sales of units since organization,
less cost of units redeemed ................................ $ 62,371,700
Undistributed net investment income ........................... 138,040,184
Undistributed net realized gains on sales of investments ...... 45,389,205
Net unrealized appreciation of investments .................... 21,772,478
- --------------------------------------------------------------------------------
Net assets ............................................... $267,573,567
================================================================================
7
<PAGE>
Report of Independent Accountants
================================================================================
To The Board of Directors of Conseco Variable Insurance Company and Contract
Owners of Great American Reserve Variable Annuity Account C
In our opinion, the accompanying statement of assets and liabilities and
the related statements of operations and of changes in net assets present
fairly, in all material respects, the financial position of the Great American
Reserve Variable Annuity Account C (the "Account") at December 31, 1998, and the
results of its operations and the changes in its net assets for each of the two
years in the period then ended, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Account's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of portfolio shares owned at December 31, 1998 by correspondence
with the custodians, provide a reasonable basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
Indianapolis, Indiana
February 10, 1999>>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
Conseco Variable Insurance Company
In our opinion, the accompanying balance sheet and the related statements
of operations, shareholder's equity and cash flows present fairly, in all
material respects, the financial position of Conseco Variable Insurance Company
(the "Company") at December 31, 1998 and 1997, and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
1998, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Indianapolis, Indiana
March 30, 1999
F-1
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY
BALANCE SHEET
December 31, 1998 and 1997
(Dollars in millions)
ASSETS
1998 1997
---- ----
Investments:
Actively managed fixed maturities at fair value (amortized cost:
<S> <C> <C> <C> <C> <C> <C>
1998 - $1,520.5; 1997 - $1,705.2)............................................... $1,524.1 $1,734.0
Equity securities at fair value (cost: 1998 - $46.0 million; 1997 - $25.1 million). 45.7 25.4
Mortgage loans..................................................................... 110.2 146.1
Policy loans....................................................................... 79.6 80.6
Other invested assets ............................................................. 103.1 62.8
Short-term investments............................................................. 48.4 49.5
Assets held in separate accounts................................................... 696.4 402.1
---------- ----------
Total investments............................................................ 2,607.5 2,500.5
Accrued investment income.............................................................. 30.5 30.5
Cost of policies purchased............................................................. 98.0 106.4
Cost of policies produced.............................................................. 82.5 55.9
Reinsurance receivables................................................................ 22.2 21.9
Goodwill (net of accumulated amortization: 1998 - $14.7; 1997 - $13.2)................. 46.7 48.2
Other assets........................................................................... 24.3 8.3
----------- ------------
Total assets................................................................. $2,911.7 $2,771.7
======== ========
</TABLE>
(continued on next page)
The accompanying notes are an integral part
of the financial statements.
F-2
CONSECO VARIABLE INSURANCE COMPANY
BALANCE SHEET (Continued)
December 31, 1998 and 1997
(Dollars in millions, except per share amount)
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDER'S EQUITY
1998 1997
---- ----
<S> <C> <C>
Liabilities:
Insurance liabilities:
Interest sensitive products..................................................... $1,365.2 $1,522.1
Traditional products............................................................ 246.2 248.3
Claims payable and other policyholder funds..................................... 62.6 62.5
Liabilities related to separate accounts........................................ 696.4 402.1
Income tax liabilities............................................................. 37.5 44.2
Investment borrowings.............................................................. 65.7 61.0
Other liabilities.................................................................. 33.0 14.6
----------- -----------
Total liabilities.......................................................... 2,506.6 2,354.8
--------- ---------
Shareholder's equity:
Common stock and additional paid-in capital (par value $4.80 per share, 1,065,000
shares authorized, 1,043,565 shares issued and outstanding).................... 380.8 380.8
Accumulated other comprehensive income:
Unrealized gains of fixed maturity securities (net of applicable deferred
income taxes: 1998 - $.5; 1997 - $4.4)...................................... 1.0 8.2
Unrealized gains (losses) of other investments (net of applicable deferred
income taxes: 1998 - $(.9); 1997 - $.3)..................................... (1.8) .5
Retained earnings.................................................................. 25.1 27.4
----------- -----------
Total shareholder's equity................................................. 405.1 416.9
---------- ----------
Total liabilities and shareholder's equity................................. $2,911.7 $2,771.7
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
CONSECO VARIABLE INSURANCE COMPANY
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
for the years ended December 31, 1998, 1997 and 1996
(Dollars in millions)
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Revenues:
Insurance policy income.......................................... $ 73.6 $ 75.7 $ 81.4
Net investment income............................................ 198.0 222.6 218.4
Net investment gains............................................. 18.5 13.3 2.7
-------- -------- ---------
Total revenues............................................. 290.1 311.6 302.5
------- ------- -------
Benefits and expenses:
Insurance policy benefits........................................ 170.6 191.0 180.6
Amortization..................................................... 33.6 27.1 20.3
Other operating costs and expenses............................... 38.7 32.2 60.5
-------- -------- --------
Total benefits and expenses................................ 242.9 250.3 261.4
------- ------- -------
Income before income taxes................................. 47.2 61.3 41.1
Income tax expense................................................... 16.6 22.1 15.4
-------- -------- --------
Net income................................................. $ 30.6 $ 39.2 $ 25.7
======= ======= =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
CONSECO VARIABLE INSURANCE COMPANY
<TABLE>
<CAPTION>
STATEMENT OF SHAREHOLDER'S EQUITY
for the years ended December 31, 1998, 1997 and 1996
(Dollars in millions)
Common stock Accumulated other
and additional comprehensive Retained
Total paid-in capital income (loss) earnings
----- --------------- ------------- --------
<S> <C> <C> <C> <C>
Balance, December 31, 1995................................. $442.6 $380.8 $ 12.4 $ 49.4
Comprehensive income, net of tax:
Net income............................................ 25.7 - - 25.7
Change in unrealized appreciation (depreciation) of
securities (net of applicable income taxes of ($9.7)) (17.0) - (17.0) -
-------
Total comprehensive income........................ 8.7
Dividends on common stock............................... (54.4) - - (54.4)
------- ---------- ----------- ---------
Balance, December 31, 1996................................. 396.9 380.8 (4.6) 20.7
Comprehensive income, net of tax:
Net income............................................ 39.2 - - 39.2
Change in unrealized appreciation (depreciation) of
securities (net of applicable income taxes of $7.2). 13.3 - 13.3 -
--------
Total comprehensive income........................ 52.5
Dividends on common stock............................... (32.5) - - (32.5)
------- ---------- ----------- ------
Balance, December 31, 1997................................. 416.9 380.8 8.7 27.4
Comprehensive income, net of tax:
Net income............................................ 30.6 - - 30.6
Change in unrealized appreciation (depreciation) of
securities (net of applicable income taxes of $(5.1)) (9.5) - (9.5) -
--------
Total comprehensive income........................ 21.1
Dividends on common stock............................... (32.9) - - (32.9)
------- ---------- ----------- ------
Balance, December 31, 1998................................. $405.1 $380.8 $ (.8) $ 25.1
====== ====== ======== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY
STATEMENT OF CASH FLOWS
for the years ended December 31, 1998, 1997 and 1996
(Dollars in millions)
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income........................................................$ 30.6 $ 39.2 $ 25.7
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization................................................ 43.0 27.1 20.3
Income taxes................................................ (1.2) 6.7 (3.9)
Insurance liabilities....................................... 120.0 95.2 112.5
Accrual and amortization of investment income................. 1.6 .3 3.1
Deferral of cost of policies produced ....................... (35.3) (31.8) (13.2)
Investment gains.............................................. (18.5) (13.3) (2.7)
Other......................................................... (38.3) (4.6) (8.8)
--------- ---------- ------------
Net cash provided by operating activities................... 101.9 118.8 133.0
----------- -------- -----------
Cash flows from investing activities:
Sales of investments.............................................. 1,185.0 755.2 988.9
Maturities and redemptions........................................ 145.5 150.4 101.7
Purchases of investments.......................................... (1,420.7) (923.5) (1,049.6)
---------- -------- ---------
Net cash provided (used) by investing activities............ (90.2) (17.9) 41.0
----------- --------- ------------
Cash flows from financing activities:
Deposits to insurance liabilities................................. 400.4 255.9 169.8
Investment borrowings............................................. 4.7 12.6 (35.8)
Withdrawals from insurance liabilities............................ (385.0) (302.2) (267.7)
Dividends paid on common stock.................................... (32.9) (32.5) (44.5)
------------ -------- -----------
Net cash used by financing activities....................... (12.8) (66.2) (178.2)
------------ --------- ----------
Net increase (decrease) in short-term
investments............................................... (1.1) 34.7 (4.2)
Short-term investments, beginning of year............................ 49.5 14.8 19.0
------------- --------- ------------
Short-term investments, end of year..................................$ 48.4 $ 49.5 $ 14.8
============= ======== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Conseco Variable Insurance Company ("we" or the "Company") markets
tax-qualified annuities and certain employee benefit-related insurance products
through professional independent agents. Prior to its name change in October
1998, the Company was named Great American Reserve Insurance Company. Since
August 1995, the Company has been a wholly owned subsidiary of Conseco, Inc.
("Conseco"), a financial services holding company operating throughout the
United States. Conseco's life insurance subsidiaries develop, market and
administer supplemental health insurance, annuity, individual life insurance,
individual and group major medical insurance and other insurance products.
Conseco's finance subsidiaries originate, purchase, sell and service consumer
and commercial finance loans.
The following summary explains the accounting policies we use to arrive at
the more significant numbers in our financial statements. We prepare our
financial statements in accordance with generally accepted accounting principles
("GAAP"). We follow the accounting standards established by the Financial
Accounting Standards Board, the American Institute of Certified Public
Accountants and the Securities and Exchange Commission. We reclassified certain
amounts in our 1997 and 1996 financial statements and notes to conform with the
1998 presentation.
Investments
Fixed maturities are securities that mature more than one year after
issuance and include bonds, notes receivable and redeemable preferred stock.
Fixed maturities that we may sell prior to maturity are classified as actively
managed and are carried at estimated fair value, with any unrealized gain or
loss, net of tax and related adjustments, recorded as a component of
shareholder's equity. Fixed maturity securities that we intend to sell in the
near term are classified as trading and included in other invested assets. We
include any unrealized gain or loss on trading securities in net investment
gains.
Equity securities include investments in common stocks and non-redeemable
preferred stock. We carry these investments at estimated fair value. We record
any unrealized gain or loss, net of tax and related adjustments, as a component
of shareholder's equity.
Mortgage loans held in our investment portfolio are carried at amortized
unpaid balances, net of provisions for estimated losses.
Policy loans are stated at their current unpaid principal balances.
Other invested assets include trading securities and certain
non-traditional investments. Non-traditional investments include investments in
venture capital funds, limited partnerships, mineral rights and promissory
notes; we account for them using either the cost method, or for investments in
partnerships over whose operations the Company exercises significant influence,
the equity method.
Short-term investments include commercial paper, invested cash and other
investments purchased with maturities of less than three months. We carry them
at amortized cost, which approximates their estimated fair value. We consider
all short-term investments to be cash equivalents.
We defer any fees received or costs incurred when we originate investments
(primarily mortgage loans). We amortize fees, costs, discounts and premiums as
yield adjustments over the contractual lives of the investments. We consider
anticipated prepayments on mortgage-backed securities in determining estimated
future yields on such securities.
F-7
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
When we sell a security (other than a trading security), we report the
difference between our sale proceeds and its amortized cost (determined based on
specific identification) as an investment gain or loss.
We regularly evaluate all of our investments based on current economic
conditions, credit loss experience and other investee-specific developments. If
there is a decline in a security's net realizable value that is other than
temporary, we treat it as a realized loss and reduce our cost basis of the
security to its estimated fair value.
Separate Accounts
Separate accounts are funds on which investment income and gains or losses
accrue directly to certain policyholders. The assets of these accounts are
legally segregated. They are not subject to the claims that may arise out of any
other business of the Company. We report separate account assets at market
value; the underlying investment risks are assumed by the contract holders. We
record the related liabilities at amounts equal to the market value of the
underlying assets.
Cost of Policies Produced
The costs that vary with, and are primarily related to, producing new
insurance business are referred to as cost of policies produced. We amortize
these costs using the interest rate credited to the underlying policy; (I) in
relation to the estimated gross profits for universal life-type and
investment-type products; or (ii) in relation to future anticipated premium
revenue for other products.
When we sell investments backing our universal life or investment-type
product business at a gain or loss, we adjust the amortization to reflect the
change in future investment yields resulting from the sale (thereby changing the
future amortization to offset the change in yield). We also adjust the cost of
policies produced for the change in amortization that would have been recorded
if actively managed fixed maturity securities had been sold at their stated
aggregate fair value and the proceeds reinvested at current yields. We include
the impact of this adjustment in net unrealized appreciation (depreciation)
within shareholder's equity.
Each year, we evaluate the recoverability of the unamortized balance of the
cost of policies produced. We consider estimated future gross profits or future
premiums, expected mortality or morbidity, interest earned and credited rates,
persistency and expenses in determining whether the balance is recoverable.
Cost of Policies Purchased
The cost assigned to the right to receive future cash flows from contracts
existing at the date of an acquisition is referred to as cost of policies
purchased. This balance is amortized, evaluated for recoverability, and adjusted
for the impact of realized and unrealized gains (losses) in the same manner as
the cost of policies produced described above.
Goodwill
Goodwill is the excess of the amount paid to acquire the Company over the
fair value of its net assets. We amortize goodwill on the straight-line basis
over a 40-year period. We continually monitor the value of our goodwill based on
our estimates of future earnings. We determine whether goodwill is fully
recoverable from projected undiscounted net cash flows over the remaining
amortization period. If we were to determine that changes in such projected cash
flows no longer support the recoverability of goodwill over the remaining
amortization period, we would reduce its carrying value with a corresponding
charge to expense or shorten the amortization period (no such changes have
occurred).
Recognition of Insurance Policy Income and Related Benefits and Expenses on
Insurance Contracts
Generally, we recognize insurance premiums for traditional life and
accident and health contracts as earned over the
F-8
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
premium-paying periods. We establish reserves for future benefits on a net-level
premium method based upon assumptions as to investment yields, mortality,
morbidity, withdrawals and dividends. We record premiums for universal life-type
and investment-type contracts that do not involve significant mortality or
morbidity risk as deposits to insurance liabilities. Revenues for these
contracts consist of mortality, morbidity, expense and surrender charges. We
establish reserves for the estimated present value of the remaining net costs of
all reported and unreported claims.
Reinsurance
In the normal course of business, we seek to limit our exposure to loss on
any single insured or to certain groups of policies by ceding reinsurance to
other insurance enterprises. We currently retain no more than $.5 million of
mortality risk on any one policy. We diversify the risk of reinsurance loss by
using a number of reinsurers that have strong claims-paying ratings. If any
reinsurer could not meet its obligations, the Company would assume the
liability. The likelihood of a material loss being incurred as the result of the
failure of one of our reinsurers is considered remote. The cost of reinsurance
ceded totaled $21.0 million, $24.2 million and $24.6 million in 1998, 1997 and
1996, respectively. Reinsurance recoveries netted against insurance policy
benefits totaled $21.8 million, $14.9 million and $19.4 million in 1998, 1997
and 1996, respectively.
Income Taxes
Our income tax expense includes deferred income taxes arising from
temporary differences between the tax and financial reporting bases of assets
and liabilities. In assessing the realization of deferred income tax assets, we
consider whether it is more likely than not that the deferred income tax assets
will be realized. The ultimate realization of deferred income tax assets depends
upon generating future taxable income during the periods in which temporary
differences become deductible. If future income is not generated as expected,
deferred income tax assets may need to be written off (no such write-offs have
occurred).
Investment Borrowings
As part of our investment strategy, we may enter into reverse repurchase
agreements and dollar-roll transactions to increase our investment return or to
improve our liquidity. We account for these transactions as collateral
borrowings, where the amount borrowed is equal to the sales price of the
underlying securities. Reverse repurchase agreements involve a sale of
securities and an agreement to repurchase the same securities at a later date at
an agreed-upon price. Dollar rolls are similar to reverse repurchase agreements
except that, with dollar rolls, the repurchase involves securities that are only
substantially the same as the securities sold. We account for these transactions
as short-term collateralized borrowings. Such borrowings averaged approximately
$66.0 million during 1998 (compared with an average of $90.4 million during
1997) and were collateralized by investment securities with fair values
approximately equal to the loan value. The weighted average interest rate on
short-term collateralized borrowings was 4.4 percent in both 1998 and 1997. The
primary risk associated with short-term collateralized borrowings is that a
counterparty will be unable to perform under the terms of the contract. Our
exposure is limited to the excess of the net replacement cost of the securities
over the value of the short-term investments (such excess was not material at
December 31, 1998). We believe the counterparties to our reverse repurchase and
dollar-roll agreements are financially responsible and that the counterparty
risk is minimal.
Use of Estimates
When we prepare financial statements in conformity with GAAP, we are
required to make estimates and assumptions that significantly affect various
reported amounts of assets and liabilities, and the disclosure of contingent
assets and liabilities at the date of the financial statements and revenues and
expenses during the reporting periods. For example, we use significant estimates
and assumptions in calculating values for the cost of policies produced, the
cost of policies purchased, goodwill, liabilities for insurance and deposit
products, liabilities related to litigation, guaranty fund assessment accruals,
gain on sale of finance receivables and deferred income taxes. If our future
experience differs materially from these estimates and assumptions, our
financial statements could be affected.
F-9
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
Fair Values of Financial Instruments
We use the following methods and assumptions to determine the estimated
fair values of financial instruments:
Investment securities. For fixed maturity securities (including redeemable
preferred stocks) and for equity and trading securities, we use quotes from
independent pricing services, where available. For investment securities
for which such quotes are not available, we use values obtained from
broker-dealer market makers or by discounting expected future cash flows
using a current market rate appropriate for the yield, credit quality, and
(for fixed maturity securities) the maturity of the investment being
priced.
Short-term investments. We use quoted market prices. The carrying amount
for these instruments approximates their estimated fair value.
Mortgage loans and policy loans. We discount future expected cash flows for
loans included in our investment portfolio based on interest rates
currently being offered for similar loans to borrowers with similar credit
ratings. We aggregate loans with similar characteristics in our
calculations.
Other invested assets. We use quoted market prices, where available.
When quotes are not available, we assume a market value equal to carrying
value.
Insurance liabilities for investment contracts. We discount future expected
cash flows based on interest rates currently being offered for similar
contracts with similar maturities.
Investment borrowings. Due to the short-term nature of these borrowings
(terms generally less than 30 days), estimated fair values are assumed to
approximate the carrying amount reported in the balance sheet.
Here are the estimated fair values of our financial instruments:
<TABLE>
<CAPTION>
1998 1997
----------------------- ------------------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
(Dollars in millions)
<S> <C> <C> <C> <C>
Financial assets:
Actively managed fixed maturities............................ $1,524.1 $1,524.1 $1,734.0 $1,734.0
Equity securities ........................................... 45.7 45.7 25.4 25.4
Mortgage loans............................................... 110.2 119.0 146.1 154.6
Policy loans................................................. 79.6 79.6 80.6 80.6
Other invested assets........................................ 103.1 103.1 62.8 62.8
Short-term investments....................................... 48.4 48.4 49.5 49.5
Financial liabilities:
Insurance liabilities for investment contracts (1)........... 1,036.0 1,036.0 1,177.5 1,177.5
Investment borrowings........................................ 65.7 65.7 61.0 61.0
<FN>
(1) The estimated fair value of the liabilities for investment contracts was
approximately equal to its carrying value at December 31, 1998 and 1997.
This was because interest rates credited on the vast majority of account
balances approximate current rates paid on similar investment contracts
and because these rates are not generally guaranteed beyond one year. We
are not required to disclose fair values for insurance liabilities, other
than those for investment contracts. However, we take into consideration
the estimated fair values of all insurance liabilities in our overall
management of interest rate risk. We attempt to minimize exposure to
changing interest rates by matching investment maturities with amounts due
under insurance contracts.
</FN>
</TABLE>
Recently Issued Accounting Standards
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS 133") was issued in
June 1998. SFAS 133 requires all derivative instruments to be recorded on
the balance sheet at estimated fair value. Changes in the fair value of
derivative instruments are to be recorded each period either in current
earnings or other comprehensive income, depending on whether a derivative is
designated as part of a hedge transaction and, if it is, on the type of hedge
transaction. SFAS 133 is effective for year 2000. We are currently evaluating
the impact of SFAS 133; at present, we do not believe it will have a material
effect on our financial position or results of operations.
F-10
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
2. INVESTMENTS:
At December 31, 1998, the amortized cost and estimated fair value of
actively managed fixed maturities and equity securities were as follows:
<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized unrealized unrealized fair
cost gains losses value
---- ----- ------ -----
(Dollars in millions)
<S> <C> <C> <C> <C>
Investment grade:
Corporate securities................................................ $ 860.4 $20.7 $15.0 $ 866.1
United States Treasury securities and obligations of
United States government corporations and agencies................ 26.9 .8 .2 27.5
States and political subdivisions................................... 17.3 .3 - 17.6
Debt securities issued by foreign governments....................... 11.7 - .8 10.9
Mortgage-backed securities ......................................... 487.4 8.0 1.2 494.2
Below-investment grade (primarily corporate securities)................ 116.8 1.2 10.2 107.8
---------- ------- ------ ----------
Total actively managed fixed maturities........................... $1,520.5 $31.0 $27.4 $1,524.1
======== ===== ===== ========
Equity securities......................................................$ 46.0 $ .8 $ 1.1 $ 45.7
========== ======= ====== ==========
</TABLE>
At December 31, 1997, the amortized cost and estimated fair value of
actively managed fixed maturities and equity securities were as follows:
<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized unrealized unrealized fair
cost gains losses value
---- ----- ------ -----
(Dollars in millions)
<S> <C> <C> <C> <C>
Investment grade:
Corporate securities................................................ $ 955.8 $28.3 $ 5.3 $ 978.8
United States Treasury securities and obligations of
United States government corporations and agencies................ 28.0 .7 - 28.7
States and political subdivisions................................... 20.4 1.1 .1 21.4
Debt securities issued by foreign governments....................... 13.5 .1 .7 12.9
Mortgage-backed securities ......................................... 551.6 8.6 .4 559.8
Below-investment grade (primarily corporate securities)................ 135.9 1.8 5.3 132.4
---------- ------- ------- ----------
Total actively managed fixed maturities........................... $1,705.2 $40.6 $11.8 $1,734.0
======== ===== ===== ========
Equity securities......................................................$ 25.1 $ .5 $ .2 $ 25.4
========== ======= ======= ==========
</TABLE>
Net unrealized gains (losses) on actively managed fixed maturity
investments included in shareholders' equity as of December 31, 1998 and 1997,
were as follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
(Dollars in millions)
<S> <C> <C>
Net unrealized gains on actively managed fixed maturity investments.................................. $ 3.6 $ 28.8
Adjustments to cost of policies purchased and cost of policies produced.............................. (2.1) (16.2)
Deferred income tax benefit.......................................................................... (.5) (4.4)
------- --------
Net unrealized gain on actively managed fixed maturity investments........................... $ 1.0 $ 8.2
====== ========
</TABLE>
F-11
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
The following table sets forth the amortized cost and estimated fair value
of actively managed fixed maturities at December 31, 1998, by contractual
maturity. Actual maturities will differ from contractual maturities because
borrowers may have the right to call or prepay obligations with or without call
or prepayment penalties. Most of the mortgage-backed securities shown below
provide for periodic payments throughout their lives.
<TABLE>
<CAPTION>
Estimated
Amortized fair
cost value
---- -----
(Dollars in millions)
<S> <C> <C>
Due in one year or less........................................................................ $ 14.5 $ 14.5
Due after one year through five years.......................................................... 132.1 133.4
Due after five years through ten years......................................................... 249.3 245.6
Due after ten years............................................................................ 637.2 636.4
---------- ----------
Subtotal.................................................................................. 1,033.1 1,029.9
Mortgage-backed securities..................................................................... 487.4 494.2
---------- ----------
Total actively managed fixed maturities ............................................... $1,520.5 $1,524.1
======== ========
</TABLE>
Net investment income consisted of the following:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
(Dollars in millions)
<S> <C> <C> <C>
Actively managed fixed maturity securities........................................... $118.4 $133.6 $146.4
Equity securities.................................................................... 3.2 1.7 1.6
Mortgage loans....................................................................... 12.1 16.4 19.0
Policy loans......................................................................... 5.1 5.4 5.0
Other invested assets................................................................ 13.3 7.7 9.8
Short-term investments............................................................... 2.9 3.4 2.3
Separate accounts.................................................................... 44.1 55.7 35.6
-------- -------- --------
Gross investment income.......................................................... 199.1 223.9 219.7
Investment expenses.................................................................. 1.1 1.3 1.3
--------- --------- ---------
Net investment income......................................................... $198.0 $222.6 $218.4
====== ====== ======
</TABLE>
The Company had no significant fixed maturity investments and mortgage
loans that were not accruing investment income in 1998, 1997 and 1996.
F-12
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
Investment gains (losses), net of investment expenses, were included in
revenue as follows:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
(Dollars in millions)
<S> <C> <C> <C>
Fixed maturities:
Gross gains........................................................................ $ 34.0 $20.6 $16.6
Gross losses....................................................................... (12.4) (5.1) (9.2)
Other than temporary decline in fair value......................................... - (.3) (.2)
----------- -------- -------
Net investment gains from fixed maturities before expenses.................... 21.6 15.2 7.2
Other.................................................................................. .1 2.2 (.6)
---------- ------- -------
Net investment gains before expenses.......................................... 21.7 17.4 6.6
Investment expenses.................................................................... 3.2 4.1 3.9
--------- ------- -------
Net investment gains.......................................................... $ 18.5 $13.3 $ 2.7
======= ===== ======
</TABLE>
At December 31, 1998, the mortgage loan balance was primarily comprised of
commercial loans. Approximately 15 percent, 12 percent, 12 percent, 11 percent
and 8 percent of the mortgage loan balance were on properties located in
California, Michigan, Florida, Texas and Georgia, respectively. No other state
comprised greater than 8 percent of the mortgage loan balance. Noncurrent
mortgage loans were insignificant at December 31, 1998. At December 31, 1998,
our allowance for loss on mortgage loans was $.8 million.
Life insurance companies are required to maintain certain investments on
deposit with state regulatory authorities. Such assets had an aggregate carrying
value of $16.1 million at December 31, 1998.
The Company had no investments in any single entity in excess of 10 percent
of shareholder's equity at December 31, 1998, other than investments issued or
guaranteed by the United States government or a United States government agency.
3. INSURANCE LIABILITIES:
These liabilities consisted of the following:
<TABLE>
<CAPTION>
Interest
Withdrawal Mortality rate
assumption assumption assumption 1998 1997
---------- ---------- ---------- ---- ----
(Dollars in millions)
<S> <C> <C> <C> <C> <C>
Future policy benefits:
Interest-sensitive products:
Investment contracts............................ N/A N/A (C) $1,036.0 $1,177.5
Universal life-type contracts................... N/A N/A 4.8% 329.2 344.6
---------- ----------
Total interest-sensitive products............. 1,365.2 1,522.1
--------- ---------
Traditional products:
Traditional life insurance contracts............ Company (a) 7.6% 139.9 142.8
experience
Limited-payment contracts....................... None (b) 7.6% 106.3 105.5
---------- ----------
Total traditional products.................... 246.2 248.3
---------- ----------
Claims payable and other policyholder funds ........ N/A N/A N/A 62.6 62.5
Liabilities related to separate accounts............ N/A N/A N/A 696.4 402.1
---------- ----------
Total........................................... $2,370.4 $2,235.0
======== ========
F-13
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
<FN>
- -------------
(a) Principally modifications of the 1975 - 80 Basic, Select and Ultimate
Tables.
(b) Principally the 1984 United States Population Table and the NAIC 1983
Individual Annuitant Mortality Table.
(c) At December 31, 1998 and 1997, approximately 95 percent and 97 percent,
respectively, of this liability represented account balances where future
benefits are not guaranteed. The weighted average interest rate on the
remainder of the liabilities representing the present value of guaranteed
future benefits was approximately 6 percent at December 31, 1998.
</FN>
</TABLE>
4. INCOME TAXES:
Income tax liabilities were comprised of the following:
<TABLE>
<CAPTION>
1998 1997
---- ----
(Dollars in millions)
Deferred income tax liabilities (assets):
<S> <C> <C>
Investments (primarily actively managed fixed maturities).................................. $ 5.4 $ 9.8
Cost of policies purchased and cost of policies produced................................... 56.7 52.2
Insurance liabilities...................................................................... (28.2) (19.5)
Unrealized appreciation (depreciation)..................................................... (.4) 4.7
Other...................................................................................... (2.2) (4.0)
-------- ------
Deferred income tax liabilities....................................................... 31.3 43.2
Current income tax liabilities (assets)........................................................ 6.2 1.0
--------- -------
Income tax liabilities................................................................ $ 37.5 $ 44.2
======= ======
</TABLE>
Income tax expense was as follows:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
(Dollars in millions)
<S> <C> <C> <C>
Current tax provision..................................................................... $20.8 $16.3 $10.5
Deferred tax provision (benefit).......................................................... (4.2) 5.8 4.9
------ ------- -------
Income tax expense............................................................... $16.6 $22.1 $15.4
===== ===== =====
</TABLE>
A reconciliation of the income tax provisions based on the U.S. statutory
corporate tax rate to the provisions reflected in the statement of operations is
as follows:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
(Dollars in millions)
<S> <C> <C> <C>
Tax on income before income taxes at statutory rate....................................... 35.0% 35.0% 35.0%
State taxes............................................................................... 1.0 .7 1.5
Other..................................................................................... (.8) .3 1.0
----- ------ -------
Income tax expense............................................................... 35.2% 36.0% 37.5%
==== ==== ====
</TABLE>
5. OTHER DISCLOSURES:
Litigation
The Company is involved on an ongoing basis in lawsuits related to its
operations. Although the ultimate outcome of certain of such matters cannot be
predicted, none of such lawsuits currently pending against the Company is
expected, individually or in the aggregate, to have a material adverse effect
on the Company's financial condition, cash flows or results of operations.
F-14
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
Guaranty Fund Assessments
The balance sheet at December 31, 1998, includes: (i) accruals of $2.4
million, representing our estimate of all known assessments that will be levied
against the Company by various state guaranty associations based on premiums
written through December 31, 1998; and (ii) receivables of $1.9 million that we
estimate will be recovered through a reduction in future premium taxes as a
result of such assessments. These estimates are subject to change when the
associations determine more precisely the losses that have occurred and how such
losses will be allocated among the insurance companies. We recognized expense
for such assessments of $1.1 million in 1998, $1.2 million in 1997 and $1.4
million in 1996.
Related Party Transactions
The Company operates without direct employees through management and
service agreements with subsidiaries of Conseco. Fees for such services
(including data processing, executive management and investment management
services) are based on Conseco's direct and directly allocable costs plus a 10
percent margin. Total fees incurred by the Company under such agreements were
$37.8 million in 1998, $36.7 million in 1997 and $44.1 million in 1996.
During 1998 and 1997, the Company purchased $13.0 million and $11.2 million
par value, respectively, of senior subordinated notes issued by subsidiaries of
Conseco. Such notes had a carrying value of $45.5 million and $29.8 million at
December 31, 1998 and 1997, respectively, and are classified as "other invested
assets" in the accompanying balance sheet. In addition, during 1997, a
subsidiary of Conseco redeemed $16.5 million par value of such notes which were
purchased in 1996.
6. OTHER OPERATING STATEMENT DATA:
Insurance policy income consisted of the following:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
(Dollars in millions)
<S> <C> <C> <C>
Traditional products:
Direct premiums collected......................................................... $445.8 $309.6 $241.3
Reinsurance assumed............................................................... 15.6 14.9 1.7
Reinsurance ceded................................................................. (21.0) (24.2) (24.6)
------- ------- -------
Premiums collected, net of reinsurance...................................... 440.4 300.3 218.4
Less premiums on universal life and products
without mortality and morbidity risk which are
recorded as additions to insurance liabilities ................................ 400.4 255.9 169.8
------- ------- -------
Premiums on traditional products with mortality or morbidity risk,
recorded as insurance policy income...................................... 40.0 44.4 48.6
Fees and surrender charges on interest sensitive products............................. 33.6 31.3 32.8
-------- -------- --------
Insurance policy income..................................................... $ 73.6 $ 75.7 $ 81.4
======= ======= =======
</TABLE>
The five states with the largest shares of 1998 collected premiums were
Texas (17 percent), Florida (16 percent), California (13 percent), Michigan (7.1
percent) and Indiana (6.2 percent). No other state accounted for more than 5.0
percent of total collected premiums.
F-15
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
Changes in the cost of policies purchased were as follows:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
(Dollars in millions)
<S> <C> <C> <C>
Balance, beginning of year............................................................ $106.4 $143.0 $120.0
Amortization...................................................................... (21.1) (15.4) (15.3)
Amounts related to fair value adjustment of actively managed fixed maturities..... 11.8 (21.2) 36.6
Other ............................................................................ .9 - 1.7
---------- ----------- ---------
Balance, end of year.................................................................. $ 98.0 $106.4 $143.0
======= ====== ======
</TABLE>
Based on current conditions and assumptions as to future events on all
policies in force, the Company expects to amortize approximately 10 percent of
the December 31, 1998, balance of cost of policies purchased in 1999, 9 percent
in 2000, 9 percent in 2001, 8 percent in 2002 and 8 percent in 2003. The
discount rates used to determine the amortization of the cost of policies
purchased ranged from 3.6 percent to 8.0 percent and averaged 5.8 percent.
Changes in the cost of policies produced were as follows:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
(Dollars in millions)
<S> <C> <C> <C>
Balance, beginning of year............................................................ $ 55.9 $38.2 $24.0
Additions......................................................................... 35.3 31.8 13.2
Amortization...................................................................... (11.0) (10.2) (3.5)
Amounts related to fair value adjustment of actively managed fixed maturities..... 2.3 (3.9) 4.5
--------- ------- -------
Balance, end of year.................................................................. $ 82.5 $55.9 $38.2
======= ===== =====
</TABLE>
7. STATEMENT OF CASH FLOWS:
Income taxes paid during 1998, 1997, and 1996, were $17.1 million, $14.8
million and $18.1 million, respectively.
Short-term investments having original maturities of three months or less
are considered to be cash equivalents. All cash is invested in short-term
investments.
8. STATUTORY INFORMATION:
Statutory accounting practices prescribed or permitted for insurance
companies by regulatory authorities differ from generally accepted accounting
principles. The Company reported the following amounts to regulatory agencies:
<TABLE>
<CAPTION>
1998 1997
---- ----
(Dollars in millions)
<S> <C> <C>
Statutory capital and surplus.................................................. $134.0 $140.7
Asset valuation reserve........................................................ 30.9 29.2
Interest maintenance reserve................................................... 73.1 68.8
-------- --------
Total...................................................................... $238.0 $238.7
====== ======
</TABLE>
F-16
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
The Company's statutory net income was $32.7 million, $32.7 million and
$32.6 million in 1998, 1997 and 1996, respectively.
State insurance laws generally restrict the ability of insurance companies
to pay dividends or make other distributions. Approximately $32.9 million of the
Company's net assets at December 31, 1998, are available for distribution in
1999 without permission of state regulatory authorities.
F-17
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) The financial statements of Conseco Variable Insurance Company
("Company" or "Conseco Variable") and Conseco Variable Annuity
Account C are included in Part B hereof.
(b) Exhibits
(1) -- Resolution of the Board of Directors of the Company
authorizing the reorganization of Separate Account dated July 27,
1992.****
(2) -- Not Applicable.
(3) -- Form of Principal Underwriting Agreement by and among the
Company, Variable Account and Conseco Equity Sales.****
(4) -- Form of Group Variable Retirement Contract and
Certificate.****
(5) -- Application for Contracts listed at Exhibit 4.****
(6)(i) -- Articles of Incorporation of Conseco Variable.**
(6)(ii)-- By Laws of Conseco Variable.**
(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
American 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 between Great American
Reserve Insurance Company, 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.
*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. 5 to Form N-4 (File
Nos. 33-61122 and 811-04819) filed electronically on April 28, 1998.
****Incorporated by reference to Post-Effective Amendment No. 6 to Form N-4
(File Nos. 33-61122 and 811-4819) filed electronically on May 15, 1998.
ITEM 25. DIRECTORS AND OFFICERS OF CONSECO VARIABLE
The following table sets forth certain information regarding the executive
officers of Conseco Variable 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 Conseco Variable
- ----- ---------------------------
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
James S. Adams Senior Vice President and Treasurer
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, Conseco Variable Annuity Account C, Conseco Variable
Annuity Account E, Conseco Variable Annuity Account F, Conseco Variable
Account G, each being segregated asset accounts established pursuant to
Texas law by Bankers National Life Insurance Company and Conseco Variable
Insurance Company, respectively. Shares of Conseco Series Trust are also
sold to BMA Variable Life Account A of Business Men's Assurance Company of
America.
** 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
ITEM 28. INDEMNIFICATION
The Board of Directors of Conseco Variable is indemnified by Conseco
Variable 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 Conseco Variable'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):
Conseco Variable Annuity Account E
Conseco Variable Annuity Account F
Conseco Variable Annuity Account G
Conseco Fund Group
Rydex Advisor Variable Annuity Account
BMA Variable Life Account A
(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. Kovacs Secretary and Director
William T. Devanney, Jr. Senior Vice President,
Corporate Taxes
Christene H. Darnell Vice President, Management
Reporting
Donald B. Johnston Vice President, National Sales
Manager
Christine E. Monical Second Vice President and
Assistant General Counsel
<TABLE>
<CAPTION>
(c)
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>
C-6
*Fees paid by Conseco Variable 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 Conseco Variable
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. Conseco Variable 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 Conseco
Variable.
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 4th day of November, 1999.
CONSECO VARIABLE ANNUITY
ACCOUNT C
Registrant
By: Conseco Variable Insurance Company
By: /s/THOMAS J. KILIAN
--------------------------------------
Thomas J. Kilian
President
CONSECO VARIABLE INSURANCE COMPANY
Depositor
By:/s/THOMAS J. KILIAN
-------------------------------------
Thomas J. Kilian
President
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/NGAIRE E. CUNEO Director 11/4/99
- ------------------------------ --------------
Ngaire E. Cuneo
/s/THOMAS J. KILIAN Director 11/4/99
- ------------------------------ --------------
Thomas J. Kilian
/s/STEPHEN C. HILBERT Director and Chairman of the Board 11/4/99
- ------------------------------ (Principal Executive Officer) --------------
Stephen C. Hilbert
/s/ROLLIN M. DICK Director, Executive Vice President 11/4/99
- ------------------------------ and Chief Financial Officer --------------
Rollin M. Dick (Principal Financial Officer)
/s/JOHN J. SABL Director 11/4/99
- ------------------------------ --------------
John J. Sabl
/s/JAMES S. ADAMS Senior Vice President and Treasurer 11/4/99
- ------------------------------ (Chief Accounting Officer) ---------------
James S. Adams
</TABLE>
INDEX TO EXHIBITS
Exhibit No. Exhibit
- ------------- ------------
EX-99.B(9) Opinion and Consent of Counsel
EX-99.B(10) Consent of Independent Accountants
EX-99.B(13) Schedule for Computation of Performance Quotations
CONSECO VARIABLE INSURANCE COMPANY
11825 N. Pennsylvania Street
Carmel, IN 46032
(800) 888-4918
November 3, 1999
Board of Directors
Conseco Variable Insurance Company
Re: Conseco Variable Annuity Account C (Group Prospectus) Registration
Statement on Form N-4
Gentlemen and Madam:
I am Executive Vice President, General Counsel and Secretary of Conseco Variable
Insurance Company (the "Company"). At your request, I have examined or caused to
be examined the Registration Statement on Form N-4 (the "Registration
Statement") of Conseco Variable Annuity Account C (formerly Great American
Reserve Variable Annuity Account C) (Group Prospectus) (the "Registrant" or
"Account") with respect to the securities issued in connection with the Account
offering variable annuity contracts. The Registrant's Form N-4 Registration
Statement is filed pursuant to the Securities Act of 1933 (the "Act") and the
Investment Company Act of 1940 (the "1940 Act"). This opinion is being furnished
pursuant to the Act in connection with the Registration Statement. No fee is
payable because the Registrant files a declaration of indefinite registration
pursuant to Rule 24f-2 under the 1940 Act.
In rendering this opinion, I, or attorneys under my supervision (together
referred to herein as "we"), have examined and relied upon a copy of the
Registration Statement. We have also examined originals, or copies of originals
certified to our satisfaction, of such agreements, documents, certificates and
statements of government officials and other instruments, and have examined such
questions of law and have satisfied ourselves as to such matters of fact, as we
have considered relevant and necessary as a basis for this opinion. We have
assumed the authenticity of all documents submitted to us as originals, the
genuineness of all signatures, the legal capacity of all natural persons and the
conformity with the original documents of any copies thereof submitted to us for
examination.
Based on the foregoing, and subject to the qualifications and limitations
hereinafter set forth, I am of the opinion that;
1. The Account has been duly organized and is an existing separate account
pursuant to the applicable laws of the State of Texas;
2. The Account is a unit investment trust registered under the 1940 Act; and
3. The securities issued in connection with the Account offering variable
annuity contracts, when issued as described in the Registration Statement,
will be duly authorized and upon issuance will be validly issued, fully
paid and non-assessable.
I do not find it necessary for the purposes of this opinion to cover, and
accordingly I express no opinion as to, the application of the securities or
blue sky laws of the various states to the sale of the securities to be
registered pursuant to the Registration Statement. Without limiting the
generality of the foregoing, I express no opinion in connection with the matters
contemplated by the Registration Statement, and no opinion may be implied or
inferred, except as expressly set forth herein.
This opinion is limited to the laws of the State of Indiana and of the United
States of America to the extent applicable. If any of the securities included in
the Registration Statement are governed by the laws of a state other than
Indiana, I have assumed for the purposes of this opinion that the laws of such
other state are the same as those of the State of Indiana.
I hereby consent to the inclusion of the opinion as Exhibit B-9 to the
Registration Statement and to all references to me in the Registration Statement
or the Prospectus included therein.
Very truly yours,
/s/JOHN J. SABL
John J. Sabl
Executive Vice President, General Counsel and Secretary
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Post-Effective Amendment No. 8 to the
Registration Statement of Conseco Variable Annuity Account C (the "Account")
on Form N-4 (File Nos. 33-61122 and 811-4819) of:
(1) Our report dated February 10, 1999, on our audits of the financial
statements of the Account; and
(2) Our report dated March 30, 1999, on our audits of the financial
statements of Conseco Variable Insurance Company.
We also consent to the reference to our Firm under the caption "Independent
Accountants."
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Indianapolis, Indiana
November 3, 1999
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
ALGER AMERICAN LEVERAGED ALLCAP
AVERAGE ANNUAL TOTAL RETURN
06/30/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 2.318464 431.320 1998 2.359231 (0.191) 431.129 3.620184 1,560.77 90% * 5%
1997 1.758593 568.636 1997 1.799524 (0.250) 568.386 3.620184 2,057.66 90% * 5%
1996 1.565096 638.938 1996 1.564112 (0.288) 638.650 3.620184 2,312.03 90% * 5%
1995 1.174123 851.700 1995 1.186167 (0.379) 851.033 3.620184 3,080.90 90% * 5%
INCEP 1.000000 1,000.000 N/A 0.000000 0.000 999.333 3.620184 3,617.77 90% * 3%
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- -------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
(70.23) 1,490.54 (0.45) 1,490.09 49.01% 1 yr
(92.59) 1,965.07 (0.45) 1,964.62 40.16%
(104.04) 2,207.99 (0.45) 2,207.54 30.21% 3 yr
(138.64) 2,942.26 (0.45) 2,941.81 30.96%
(97.68) 3,520.09 (0.45) 3,519.64 36.11%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
ALGER AMERICAN SMALL CAPITALIZATION
AVERAGE ANNUAL TOTAL RETURN
06/30/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
1998 1.567026 638.152 1998 1.580383 (0.285) 637.867 1.792488 1,143.37 90% * 5%
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997 1.261970 792.412 1997 1.271797 (0.354) 792.058 1.792488 1,419.75 90% * 5%
1996 1.310502 763.066 1996 1.313145 (0.343) 762.723 1.792488 1,367.17 90% * 5%
1995 1.122250 891.067 1995 1.136740 (0.396) 890.671 1.792488 1,596.52 90% * 5%
INCEP 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.792488 1,792.49 90% * 3%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
(51.45) 1,091.92 (0.45) 1,091.47 9.15%
<S> <C> <C> <C> <C>
(63.89) 1,355.86 (0.45) 1,355.41 16.42%
(61.52) 1,305.65 (0.45) 1,305.20 9.28%
(71.84) 1,524.68 (0.45) 1,524.23 11.11%
(48.40) 1,744.09 (0.45) 1,743.64 14.59%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
ALGER AMERICAN GROWTH
AVERAGE ANNUAL TOTAL RETURN
06/30/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.522245 656.924 1998 1.549499 (0.290) 656.634 2.037767 1,338.07 90% * 5%
1997 1.118867 893.761 1997 1.145128 (0.393) 893.368 2.037767 1,820.48 90% * 5%
INCEP 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 2.037767 2,037.77 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(60.21) 1,277.86 (0.45) 1,277.41 27.74%
(81.92) 1,738.56 (0.45) 1,738.11 31.84%
(91.70) 1,946.07 (0.45) 1,945.62 35.95%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
ALGER AMERICAN MIDCAP GROWTH
AVERAGE ANNUAL TOTAL RETURN
06/30/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.437877 695.470 1998 1.455569 (0.309) 695.161 1.737966 1,208.17 90% * 5%
1997 1.121952 891.304 1997 1.134849 (0.397) 890.907 1.737966 1,548.37 90% * 5%
INCEP 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.737966 1,737.97 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
(54.37) 1,153.80 (0.45) 1,153.35 15.34%
(69.68) 1,478.69 (0.45) 1,478.24 21.58%
(78.21) 1,659.76 (0.45) 1,659.31 26.33%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
AMERICAN CENTURY INTERNATIONAL FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
GROUP DEFERRED
- ----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.366408 731.846 1998 1.379929 (0.326) 731.520 1.376380 1,006.85 90% * 5%
1997 1.103028 906.595 1997 1.117459 (0.403) 906.192 1.376380 1,247.26 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.376380 1,376.38 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(45.31) 961.54 (0.45) 961.09 -3.89%
(56.13) 1,191.13 (0.45) 1,190.68 9.12%
(61.94) 1,314.44 (0.45) 1,313.99 13.43%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
AMERICAN CENTURY VALUE FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/;30/99 Accum Charge
Qtr Value For $1,000 Fee (0.45) Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.295380 771.974 1998 1.314358 (0.342) 771.632 1.436181 1,108.20 90% * 5%
1997 1.110677 900.352 1997 1.132009 (0.398) 899.954 1.436181 1,292.50 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.436181 1,436.18 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(49.87) 1,058.33 (0.45) 1,057.88 5.79%
(58.16) 1,234.34 (0.45) 1,233.89 11.08%
(64.63) 1,371.55 (0.45) 1,371.10 15.68%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
AMERICAN CENTURY GROWTH AND INCOME FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99
Qtr Value For $1,000 Fee (0.45) Admin Fee Units Unit Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.009555 990.535 1998 1.020699 (0.441) 990.094 1.184794
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.184794
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Total Surrender Deduction Surrender For Return
Accum Charge Surrender For Surr Admin Admin Fee n
Value Calc Charge Charge Fee (ERV) P(1+T) = ERV
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1,173.06 90% * 5% (52.79) 1,120.27 (0.45) 1,119.82 11.98%
1,184.79 90% * 5% (53.32) 1,131.47 (0.45) 1,131.02 11.13%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY BALANCED
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee (0.45) Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 2.255894 443.283 1998 2.249463 (0.200) 443.083 2.364314 1,047.59 90% * 5%
1997 1.836615 544.480 1997 1.837575 (0.245) 544.235 2.364314 1,286.74 90% * 5%
1996 1.519705 658.022 1996 1.536353 (0.293) 657.729 2.364314 1,555.08 90% * 5%
1995 1.370019 729.917 1995 1.219212 (0.369) 729.255 2.364314 1,724.19 90% * 5%
1994 1.001024 998.977 1994 1.000886 (0.450) 997.865 2.364314 2,359.27 90% * 3%
1993 1.030160 970.723 1993 1.023806 (0.440) 968.726 2.364314 2,290.37 90% * 3%
Incep 1.000000 1,000.000 1992 0.000000 0.000 998.448 2.364314 2,360.64 90% * 3%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(47.14) 1,000.45 (0.45) 1,000.00 -0.00%
(57.90) 1,228.84 (0.45) 1,228.39 10.83%
(69.98) 1,485.10 (0.45) 1,484.65 14.08%
(77.59) 1,646.60 (0.45) 1,646.15 13.27%
(63.70) 2,295.57 (0.45) 2,295.12 18.08% 5 YRS
(61.84) 2,228.53 (0.45) 2,228.08 14.28%
(63.74) 2,296.90 (0.45) 2,296.45 14.43%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
BERGER IPT 100 FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee (0.45) Admin Fee Units Unit Value Value Calc
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.251945 798.757 1998 1.227469 (0.367) 798.390 1.433130 1,144.20 90% * 5%
1997 1.086225 920.620 1997 1.103545 (0.408) 920.212 1.433130 1,318.78 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.433130 1433.13 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(51.49) 1,092.71 (0.45) 1,092.26 9.23%
(59.35) 1,259.43 (0.45) 1,258.98 12.20%
(64.49) 1,368.64 (0.45) 1,368.19 15.57%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
BERGER IPT GROWTH & INCOME FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.361148 734.674 1998 1.371035 (0.328) 734.346 1.776363 1,304.46 90% * 5%
1997 1.083683 922.779 1997 1.103855 (0.408) 922.371 1.776363 1,638.47 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.776363 1,776.36 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(58.70) 1,245.76 (0.45) 1,245.31 24.53%
(73.73) 1,564.74 (0.45) 1,564.29 25.07%
(79.94) 1,696.42 (0.45) 1,695.97 27.61%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
BERGER IPT SMALL COMPANY FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.542732 648.201 1998 1.541514 (0.292) 647.909 1.595395 1,033.67 90% * 5%
1997 1.188424 841.451 1997 1.186069 (0.379) 841.072 1.595395 1,341.84 90% * 5%
Incep 1.000 1,000.000 N/A 0.000000 0.000 1,000.000 1.595395 1,595.40 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(46.52) 987.15 (0.45) 986.70 -1.33%
(60.38) 1,281.46 (0.45) 1,281.01 13.18%
(71.79) 1,523.61 (0.45) 1,523.16 21.43%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
BERGER IPT BIAM INTERNATIONAL
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.123845 889.802 1998 1.138610 (0.395) 889.407 1.182051 1,051.32 90% * 5%
1997 1.015330 984.901 1997 1.032246 (0.436) 984.465 1.182051 1,163.69 90% * 5%
Incep 1.000 1,000.000 N/A 0.000000 0.000 1,000.000 1.182051 1,182.05 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(47.31) 1,004.01 (0.45) 1,003.56 0.36%
(52.37) 1,111.32 (0.45) 1,110.87 5.40%
(53.19) 1,128.86 (0.45) 1,128.41 5.73%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
DREYFUS STOCK INDEX FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 2.166430 461.589 1998 2.191569 (0.205) 461.384 2.624419 1,210.86 90% * 5%
1997 1.686902 592.803 1997 1.723707 (0.261) 592.542 2.624419 1,555.08 90% * 5%
1996 1.269592 787.655 1996 1.275557 (0.353) 787.302 2.624419 2,066.21 90% * 5%
1995 1.021708 978.753 1995 1.026896 (0.438) 977.962 2.624419 2,566.58 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 2.624419 2,624.42 90% * 3%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(54.49) 1,156.37 (0.45) 1,155.92 15.59%
(69.98) 1,485.10 (0.45) 1,484.65 21.85%
(92.98) 1,973.23 (0.45) 1,972.78 25.42%
(115.50) 2,451.08 (0.45) 2,450.63 25.12%
(70.86) 2,553.56 (0.45) 2,553.11 25.81%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
DREYFUS SOCIALLY RESPONSIBLE GROWTH
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 2.116112 472.565 1998 2.140335 (0.210) 472.355 2.582219 1,219.72 90% * 5%
1997 1.635909 611.281 1997 1.674318 (0.269) 611.012 2.582219 1,577.77 90% * 5%
1996 1.275989 783.706 1996 1.281265 (0.351) 783.355 2.582219 2,022.79 90% * 5%
1995 1.035743 965.490 1995 1.042914 (0.431) 965.059 2.582219 2,491.99 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 2.582219 2,582.22 90% * 3%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(54.89) 1,164.83 (0.45) 1,164.38 16.44%
(71.00) 1,506.77 (0.45) 1,506.32 22.73%
(91.03) 1,931.76 (0.45) 1,931.31 24.53%
(112.14) 2,379.85 (0.45) 2,379.40 24.20%
(69.72) 2,512.50 (0.45) 2,512.05 25.31%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
DREYFUS DISCIPLINED STOCK FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.003977 996.039 1998 1.016103 (0.443) 995.596 1.181336 1,176.13 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.181336 1,181.34 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(52.93) 1,123.20 (0.45) 1,122.75 12.27%
(53.16) 1,128.18 (0.45) 1,127.73 10.85%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
DREYFUS INTERNATIONAL VALUE FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee (0.45) Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 0.985356 1,014.862 1998 0.999601 (0.450)1,014.412 1.030466 1,045.32 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.030466 1,030.47 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(47.04) 998.28 (0.45) 997.83 -0.22%
(46.37) 984.10 (0.45) 983.65 -1.40%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - EQUITY PORTFOLIO
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ---------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee (0.45) Admin Fee Units Unit Value Value Calc
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 24.072846 41.541 1998 23.991341 (0.019) 41.522 26.847897 1,114.78 90% * 5%
1997 18.654689 53.606 1997 18.627009 (0.024) 53.582 26.847897 1,438.56 90% * 5%
1996 14.686229 68.091 1996 14.973025 (0.030) 68.061 26.847897 1,827.29 90% * 5%
1995 10.602503 94.317 1995 10.726673 (0.042) 94.275 26.847897 2,531.09 90% * 5%
1994 8.358040 119.645 1994 8.340713 (0.054) 119.591 26.847897 3,210.77 90% * 3%
1993 8.358040 119.645 1993 8.808635 (0.051) 119.594 26.847897 3,210.85 90% * 3%
1992 7.425072 134.679 1992 7.489042 (0.060) 134.619 26.847897 3,614.24 90% * 3%
1991 6.514616 153.501 1991 6.653195 (0.068) 153.433 26.847897 4,119.35 90% * 3%
1990 6.364599 157.119 1990 6.373056 (0.071) 157.048 26.847897 4,216.41 90% * 3%
1989 5.531768 180.774 1989 5.544310 (0.081) 180.693 26.847897 4,851.23 90% * 3%
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- -------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
(50.17) 1,064.61 (0.45) 1,064.16 6.42% 1 YR
(64.74) 1,373.82 (0.45) 1,373.37 17.19%
(82.23) 1,745.06 (0.45) 1,744.61 20.38% 3 YRS
(113.90) 2,417.19 (0.45) 2,416.74 24.68%
(86.69) 3,124.08 (0.45) 3,123.63 25.58% 5 YRS
(86.69) 3,124.16 (0.45) 3,123.71 20.91%
(97.58) 3,516.66 (0.45) 3,516.21 19.68%
(111.22) 4,008.13 (0.45) 4,007.68 18.95%
(113.84) 4,102.57 (0.45) 4,102.12 16.98%
(130.98) 4,720.25 (0.45) 4,719.80 16.79% 10 YRS
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
FEDERATED HIGH INCOME BOND II
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.411900 708.265 1998 1.414375 (0.318) 707.947 1.416113 1,002.53 90% * 5%
1997 1.277513 782.771 1997 1.278677 (0.352) 782.419 1.416113 1,107.99 90% * 5%
1996 1.102327 907.172 1996 1.105616 (0.407) 906.765 1.416113 1,284.08 90% * 5%
1995 0.996023 1,003.993 1995 0.996938 (0.451)1,003.135 1.416113 1,420.55 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 999.142 1.416113 1,414.90 90% * 3%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(45.11) 957.42 (0.45) 956.97 -4.30%
(49.86) 1,058.13 (0.45) 1,057.68 2.84%
(57.78) 1,226.30 (0.45) 1,225.85 7.02%
(63.92) 1,356.63 (0.45) 1,356.18 7.91%
(38.20) 1,376.70 (0.45) 1,376.25 8.14%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
FEDERATED INTERNATIONAL EQUITY II
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.554892 643.131 1998 1.570414 (0.287) 642.844 1.583734 1,018.09 90% * 5%
1997 1.228179 814.214 1997 1.238937 (0.363) 813.851 1.583734 1,288.92 90% * 5%
1996 1.093923 914.141 1996 1.088006 (0.414) 913.727 1.583734 1,447.10 90% * 5%
1995 1.001175 998.826 1995 1.002036 (0.449) 997.963 1.583734 1,580.51 90% * 5%
Incep 1.000000 1,000.000 N/A 0 0.000 999.137 1.583734 1,582.37 90% * 3%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(45.81) 972.28 (0.45) 971.83 -2.82%
(58.00) 1,230.92 (0.45) 1,230.47 10.93%
(65.12) 1,381.98 (0.45) 1,381.53 11.37%
(71.12) 1,509.39 (0.45) 1,508.94 10.83%
(42.72) 1,539.65 (0.45) 1,539.20 11.14%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
FEDERATED UTILITY II
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.626729 614.731 1998 1.635895 (0.275) 614.456 1.801099 1,106.70 90% * 5%
1997 1.347667 742.023 1997 1.356308 (0.332) 741.691 1.801099 1,335.86 90% * 5%
1996 1.170475 854.354 1996 1.170346 (0.385) 853.969 1.801099 1,538.08 90% * 5%
1995 0.997172 1,002.836 1995 0.997036 (0.451)1,002.000 1.801099 1,804.70 90% * 5%
Incep 1.000000 1,000.000 N/A 0 0.000 999.164 1.801099 1,799.59 90% * 3%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(49.80) 1,056.90 (0.45) 1,056.45 5.64%
(60.11) 1,275.75 (0.45) 1,275.30 12.93%
(69.21) 1,468.87 (0.45) 1,468.42 13.66%
(81.21) 1,723.49 (0.45) 1,723.04 14.57%
(48.59) 1,751.00 (0.45) 1,750.55 14.70%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - FIXED INCOME PORTFOLIO
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee (0.45) Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 5.621203 177.898 1998 5.630131 (0.080) 177.818 5.619832 999.31 90% * 5%
1997 5.168622 193.475 1997 5.189702 (0.087) 193.388 5.619832 1,086.81 90% * 5%
1996 4.739172 211.007 1996 4.727581 (0.095) 210.912 5.619832 1,185.29 90% * 5%
1995 4.548169 219.869 1995 4.544560 (0.099) 219.770 5.619832 1,235.07 90% * 5%
1994 4.037471 247.680 1994 4.045607 (0.111) 247.569 5.619832 1,391.30 90% * 3%
1993 4.086452 244.711 1993 4.090337 (0.110) 244.601 5.619832 1,374.62 90% * 3%
1992 3.600620 277.730 1992 3.451300 (0.130) 277.600 5.619832 1,560.07 90% * 3%
1991 3.090912 323.529 1991 3.090219 (0.146) 323.383 5.619832 1,817.36 90% * 3%
1990 2.783370 359.277 1990 2.786065 (0.162) 359.115 5.619832 2,018.17 90% * 3%
1989 2.645789 377.959 1989 2.649161 (0.170) 377.789 5.619832 2,123.11 90% * 3%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
(44.97) 954.34 (0.45) 953.89 -4.61% 1 YR
(48.91) 1,037.90 (0.45) 1,037.45 1.86%
(53.34) 1,131.95 (0.45) 1,131.50 4.20% 3 YRS
(55.58) 1,179.49 (0.45) 1,179.04 4.20%
(37.57) 1,353.73 (0.45) 1,353.28 6.24% 5 YRS
(37.11) 1,337.51 (0.45) 1,337.06 4.96%
(42.12) 1,517.95 (0.45) 1,517.50 6.14%
(49.07) 1,768.29 (0.45) 1,767.84 7.38%
(54.49) 1,963.68 (0.45) 1,963.23 7.78%
(57.32) 2,065.79 (0.45) 2,065.34 7.52% 10 YRS
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - GOVERNMENT SECURITIES
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value FOR $1,000 Fee (0.45) Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.297590 770.659 1998 1.300047 (0.346) 770.313 1.298765 1,000.46 90% * 5%
1997 1.204026 830.547 1997 1.209767 (0.372) 830.175 1.298765 1,078.20 90% * 5%
1996 1.132612 882.915 1996 1.129650 (0.398) 882.517 1.298765 1,146.18 90% * 5%
1995 1.101184 908.113 1995 1.102656 (0.408) 907.307 1.298765 1,178.38 90% * 5%
1994 0.990315 1,009.780 1994 0.991081 (0.454)1,007.802 1.298765 1,308.90 90% * 3%
1993 1.021757 978.706 1993 1.023440 (0.440) 978.706 1.298765 1,271.11 90% * 3%
Incep 1.000000 1,000.000 0.000000 0.000 998.300 1.298765 1,296.56 90% * 3%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
(45.02) 955.44 (0.45) 954.99 -4.50% 1 YRS
(48.52) 1,029.68 (0.45) 1,029.23 1.45%
(51.58) 1,094.60 (0.45) 1,094.15 3.04% 3 YRS
(53.03) 1,125.35 (0.45) 1,124.90 2.99%
(35.34) 1,273.56 (0.45) 1,273.11 4.95% 5 YRS
(34.32) 1,236.79 (0.45) 1,236.34 3.60%
(35.01) 1,261.55 (0.45) 1,261.10 3.83%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
INVESCO HIGH YIELD FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 0.999874 1,000.126 1998 1.002851 (0.449) 999.677 1.007081 1,006.76 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.007081 1,007.08 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(45.30) 961.46 (0.45) 961.01 -3.90%
(45.32) 961.76 (0.45) 961.31 -3.32%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
INVESCO EQUITY INCOME FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 0.991493 1,008.580 1998 0.999885 (0.450)1,008.130 1.168211 1,177.71 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.168211 1,168.21 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(53.00) 1,124.71 (0.45) 1,124.26 12.43%
(52.57) 1,115.64 (0.45) 1,115.19 9.79%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
JANUS ASPEN AGGRESSIVE GROWTH
AVERAGE ANNUAL TOTAL RETURN
06/30/1999
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.765723 566.340 1998 1.770754 (0.254) 566.086 2.616436 1,481.13 90% * 5%
1997 1.385326 721.852 1997 1.408931 (0.319) 721.533 2.616436 1,887.84 90% * 5%
1996 1.412793 707.818 1996 1.411143 (0.319) 707.499 2.616436 1,851.13 90% * 5%
1995 1.055018 947.851 1995 1.075680 (0.418) 947.114 2.616436 2,478.06 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 999.263 2.616436 2,614.51 90% * 3%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(66.65) 1,414.48 (0.45) 1,414.03 41.40%
(84.95) 1,802.89 (0.45) 1,802.44 34.25%
(83.30) 1,767.83 (0.45) 1,767.38 20.90%
(111.51) 2,366.55 (0.45) 2,366.10 24.02%
(70.59) 2,543.92 (0.45) 2,543.47 25.70%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
JANUS ASPEN GROWTH
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.978626 505.401 1998 1.970871 (0.228) 505.173 2.600124 1,313.51 90% * 5%
1997 1.546648 646.560 1997 1.579124 (0.285) 646.275 2.600124 1,680.40 90% * 5%
1996 1.290030 775.176 1996 1.296957 (0.347) 774.829 2.600124 2,014.65 90% * 5%
1995 1.024821 975.780 1995 1.037548 (0.434) 974.999 2.600124 2,535.12 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 999.219 2.600124 2,598.09 90% * 3%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(59.11) 1,254.40 (0.45) 1,253.95 25.40%
(75.62) 1,604.78 (0.45) 1,604.33 26.66%
(90.66) 1,923.99 (0.45) 1,923.54 24.37%
(114.08) 2,421.04 (0.45) 2,420.59 24.73%
(70.15) 2,527.94 (0.45) 2,527.49 25.50%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
JANUS ASPEN WORLDWIDE GROWTH
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 2.370533 421.846 1998 2.386922 (0.189) 421.657 2.68599 1,132.57 90% * 5%
1997 1.835183 544.905 1997 1.848753 (0.243) 544.662 2.68599 1,462.96 90% * 5%
1996 1.453424 688.030 1996 1.456455 (0.309) 687.721 2.68599 1,847.21 90% * 5%
1995 1.043623 958.200 1995 1.057880 (0.425) 957.466 2.68599 2,571.74 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 999.266 2.68599 2,684.02 90% * 3%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(50.97) 1,081.60 (0.45) 1,081.15 8.12%
(65.83) 1,397.13 (0.45) 1,396.68 18.18%
(83.12) 1,764.09 (0.45) 1,763.64 20.82%
(115.73) 2,456.01 (0.45) 2,455.56 25.18%
(72.47) 2,611.55 (0.45) 2,611.10 26.51%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
LAZARD EQUITY FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 0.998356 1,001.647 1998 1.015564 (0.443)1,001.204 1.177689 1,179.11 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.177689 1,177.69 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
(53.06) 1,126.05 (0.45) 1,125.60 12.56%
(53.00) 1,124.69 (0.45) 1,124.24 10.56%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
LAZARD SMALL CAP FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 0.920512 1,086.352 1998 0.924987 (0.486)1,085.866 0.956521 1,038.65 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 0.956521 956.52 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
(46.74) 991.91 (0.45) 991.46 -0.85%
(43.04) 913.48 (0.45) 913.03 -7.50%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
LORD ABBETT GROWTH AND INCOME FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 0.985852 1,014.351 1998 0.992785 (0.453)1,013.898 1.150891 1,166.89 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.150891 1,150.89 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
(52.51) 1,114.38 (0.45) 1,113.93 11.39%
(51.79) 1,099.10 (0.45) 1,098.65 8.40%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
MITCHELL HUTCHINS GROWTH AND INCOME FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 0.979553 1,020.874 1998 0.992660 (0.453)1,020.421 1.020901 1,041.75 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.020901 1,020.90 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
(46.88) 994.87 (0.45) 994.42 -0.56%
(45.94) 974.96 (0.45) 974.51 -2.19%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
NEUBERGER & BERMAN LIMITED MATURITY BOND FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.066802 937.381 1998 1.068316 (0.421) 936.960 1.079175 1,011.14 90% * 5%
1997 1.013992 986.201 1997 1.016170 (0.443) 985.758 1.079175 1,063.81 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.079175 1,079.18 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(45.50) 965.64 (0.45) 965.19 -3.48%
(47.87) 1,015.94 (0.45) 1,015.49 0.77%
(48.56) 1,030.62 (0.45) 1,030.17 1.38%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
NEUBERGER & BERMAN PARTNERS FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.310904 762.832 1998 1.326494 (0.339) 762.493 1.445715 1,102.35 90% * 5%
1997 1.102080 907.375 1997 1.122642 (0.401) 906.974 1.445715 1,311.23 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.445715 1,445.72 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(49.61) 1,052.74 (0.45) 1,052.29 5.23%
(59.01) 1,252.22 (0.45) 1,251.77 11.88%
(65.06) 1,380.66 (0.45) 1,380.21 16.03%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
STRONG GROWTH II FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.476941 677.075 1998 1.478896 (0.304) 676.771 2.059111 1,393.55 90% * 5%
1997 1.121679 891.521 1997 1.140361 (0.395) 891.126 2.059111 1,834.93 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 2.059111 2,059.11 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(62.71) 1,330.84 (0.45) 1,330.39 33.04%
(82.57) 1,752.36 (0.45) 1,751.91 32.36%
(92.66) 1,966.45 (0.45) 1,966.00 36.61%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
STRONG OPPORTUNITY II FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.391675 718.559 1998 1.398000 (0.322) 718.237 1.651089 1,185.87 90% * 5%
1997 1.095441 912.874 1997 1.116490 (0.403) 912.471 1.651089 1,506.57 90% * 5%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.651089 1,651.09 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(53.36) 1,132.51 (0.45) 1,132.06 13.21%
(67.80) 1,438.77 (0.45) 1,438.32 19.93%
(74.30) 1,576.79 (0.45) 1,576.34 23.37%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
VAN ECK WORLDWIDE HARD ASSETS
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/;30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.059943 943.447 1998 1.059885 (0.425) 943.022 0.988359 932.04 90% * 5%
1997 1.251880 798.799 1997 1.258094 (0.358) 798.441 0.988359 789.15 90% * 5%
1996 1.187189 842.326 1996 1.204407 (0.374) 841.952 0.988359 832.15 90% * 5%
1995 1.011154 988.969 1995 1.015506 (0.443) 988.526 0.988359 977.02 90% * 5%
INCEP 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 0.988359 988.36 90% * 3%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(41.94) 890.10 (0.45) 889.65 -11.04%
(35.51) 753.64 (0.45) 753.19 -13.21%
(37.45) 794.70 (0.45) 794.25 -7.39%
(43.97) 933.05 (0.45) 932.60 -1.73%
(26.69) 961.67 (0.45) 961.22 -0.96%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
VAN ECK WORLDWIDE BOND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.080169 925.781 1998 1.078191 (0.417) 925.364 1.084109 1,003.20 90% * 5%
1997 1.021661 978.798 1997 1.023526 (0.440) 978.358 1.084109 1,060.65 90% * 5%
1996 0.994181 1,005.853 1996 0.985550 (0.457)1,005.396 1.084109 1,089.96 90% * 5%
1995 1.001889 998.115 1995 1.006269 (0.447) 997.668 1.084109 1,081.58 90% * 5%
INCEP 1.000000 1,000.000 N/A 0 0.000 1,000.000 1.084109 1,084.11 90% * 3%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(45.14) 958.06 (0.45) 957.61 -4.24%
(47.73) 1,012.92 (0.45) 1,012.47 0.62%
(49.05) 1,040.91 (0.45) 1,040.46 1.33%
(48.67) 1,032.91 (0.45) 1,032.46 0.80%
(29.27) 1,054.84 (0.45) 1,054.39 1.31%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
VAN ECK EMERGING MARKETS
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 0.620602 1,611.339 1998 0.630230 (0.714)1,610.625 0.764550 1,231.40 90% * 5%
1997 1.128231 886.343 1997 1.151043 (0.391) 885.952 0.764550 677.35 90% * 5%
INCEP 1.000000 1,000.000 N/A 0 0.000 1,000.000 0.764550 764.55 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
(55.41) 1,175.99 (0.45) 1,175.54 17.55%
(30.48) 646.87 (0.45) 646.42 -19.60%
(34.40) 730.15 (0.45) 729.70 -13.53%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
VAN ECK REAL ESTATE
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee ($0.45) Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 0.952484 1,049.886 1998 0.948834 (0.474)1,049.412 0.940611 987.09 90% * 5%
INCEP 1.000000 1,000.000 N/A 0 0.000 1,000.000 0.940611 940.61 90% * 5%
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(44.42) 942.67 (0.45) 942.22 -5.78%
(42.33) 898.28 (0.45) 897.83 -8.82%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
ALGER AMERICAN LEVERAGED ALLCAP
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 2.318464 431.320 1998 2.359231 0.000 431.320 3.620184 1,561.46
1997 1.758593 568.636 1997 1.799524 0.000 568.636 3.620184 2,058.57
1996 1.565096 638.938 1996 1.564112 0.000 638.938 3.620184 2,313.07
1995 1.174123 851.700 1995 1.186167 0.000 851.700 3.620184 3,083.31
INCEP 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 3.620184 3,620.18
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
1,561.46 0.00 1,561.46 56.15% 1 yr
2,058.57 0.00 2,058.57 43.48%
2,313.07 0.00 2,313.07 32.25% 3 yr
3,083.31 0.00 3,083.31 32.51%
3,620.18 0.00 3,620.18 37.05%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
ALGER AMERICAN SMALL CAPITALIZATION
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.567026 638.152 1998 1.580383 0.000 638.152 1.792488 1,143.88
1997 1.261970 792.412 1997 1.271797 0.000 792.412 1.792488 1,420.39
1996 1.310502 763.066 1996 1.313145 0.000 763.066 1.792488 1,367.79
1995 1.122250 891.067 1995 1.136740 0.000 891.067 1.792488 1,597.23
INCEP 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.792488 1,792.49
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,143.88 0.00 1,143.88 14.39%
1,420.39 0.00 1,420.39 19.18%
1,367.79 0.00 1,367.79 11.00%
1,597.23 0.00 1,597.23 12.42%
1,792.49 0.00 1,792.49 15.37%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
ALGER AMERICAN GROWTH
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.522245 656.924 1998 1.549499 0.000 656.924 2.037767 1,338.66
1997 1.118867 893.761 1997 1.145128 0.000 893.761 2.037767 1,821.28
INCEP 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 2.037767 2,037.77
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,338.66 0.00 1,338.66 33.87%
1,821.28 0.00 1,821.28 34.95%
2,037.77 0.00 2,037.77 38.89%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
ALGER AMERICAN MIDCAP GROWTH
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.437877 695.470 1998 0.992785 0.000 695.470 1.737966 1,208.70
1997 1.121952 891.304 1997 1.134849 0.000 891.304 1.737966 1,549.06
INCEP 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.737966 1,737.97
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,208.70 0.00 1,208.70 20.87%
1,549.06 0.00 1,549.06 24.46%
1,737.97 0.00 1,737.97 29.05%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
AMERICAN CENTURY INTERNATIONAL FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.366408 731.846 1998 1.379929 0.000 731.846 1.376380 1,007.30
1997 1.103028 906.595 1997 1.117459 0.000 906.595 1.376380 1,247.82
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.376380 1,376.38
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,007.30 0.00 1,007.30 0.73%
1,247.82 0.00 1,247.82 11.71%
1,376.38 0.00 1,376.38 15.88%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
AMERICAN CENTURY VALUE FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/;30/99 Accum Charge
Qtr Value For $1,000 Fee 0.00 Admin Fee Units Unit Value Value Calc
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.295380 771.974 1998 1.314358 0.000 771.974 1.436181 1,108.69
1997 1.110677 900.352 1997 1.132009 0.000 900.352 1.436181 1,293.07
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.436181 1,436.18
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,108.69 0.00 1,108.69 10.87%
1,293.07 0.00 1,293.07 13.71%
1,436.18 0.00 1,436.18 18.18%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
AMERICAN CENTURY GROWTH AND INCOME FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99
Qtr Value For $1,000 Fee 0.00 Admin Fee Units Unit Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.009555 990.535 1998 1.020699 0.000 990.535 1.184794
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.184794
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Total Surrender Deduction Surrender For Return
Accum Charge Surrender For Surr Admin Admin Fee n
Value Calc Charge Charge Fee (ERV) P(1+T) = ERV
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1,173.58 1,173.58 0.00 1,173.58 17.36%
1,184.79 1,184.79 0.00 1,184.79 15.64%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY BALANCED
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee 0.00 Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 2.255894 443.283 1998 2.249463 0.000 443.283 2.364314 1,048.06
1997 1.836615 544.480 1997 1.837575 0.000 544.480 2.364314 1,287.32
1996 1.519705 658.022 1996 1.536353 0.000 658.022 2.364314 1,555.77
1995 1.370019 729.917 1995 1.219212 0.000 729.917 2.364314 1,725.75
1994 1.001024 998.977 1994 1.000886 0.000 998.977 2.364314 2,361.90
1993 1.030160 970.723 1993 1.023806 0.000 970.723 2.364314 2,295.09
Incep 1.000000 1,000.000 1992 0.000000 0.000 1,000.000 2.364314 2,364.31
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,048.06 0.00 1,048.06 4.81%
1,287.32 0.00 1,287.32 13.46%
1,555.77 0.00 1,555.77 15.87%
1,725.75 0.00 1,725.75 14.62%
2,361.90 0.00 2,361.90 18.76% 5 YRS
2,295.09 0.00 2,295.09 14.85%
2,364.31 0.00 2,364.31 14.97%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
BERGER IPT 100 FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee 0.00 Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.251945 798.757 1998 1.227469 0.000 798.757 1.433130 1,144.72
1997 1.086225 920.620 1997 1.103545 0.000 920.620 1.433130 1,319.37
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.433130 1433.13
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,144.72 0.00 1,144.72 14.47%
1,319.37 0.00 1,319.37 14.86%
1,433.13 0.00 1,433.13 18.06%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
BERGER IPT GROWTH & INCOME FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.361148 734.674 1998 1.371035 0.000 734.674 1.776363 1,305.05
1997 1.083683 922.779 1997 1.103855 0.000 922.779 1.776363 1,639.19
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.776363 1,776.36
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,305.05 0.00 1,305.05 30.51%
1,639.19 0.00 1,639.19 28.03%
1,776.36 0.00 1,776.36 30.36%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
BERGER IPT SMALL COMPANY FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.542732 648.201 1998 1.541514 0.000 648.201 1.595395 1,034.14
1997 1.188424 841.451 1997 1.186069 0.000 841.451 1.595395 1,342.45
Incep 1.000 1,000.000 N/A 0.000000 0.000 1,000.000 1.595395 1,595.40
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- -------------------------------------------------------------------
<S> <C> <C> <C>
1,034.14 0.00 1,034.14 3.41%
1,342.45 0.00 1,342.45 15.86%
1,595.40 0.00 1,595.40 24.06%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
BERGER IPT BIAM INTERNATIONAL
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.123845 889.802 1998 1.138610 0.000 889.802 1.182051 1,051.79
1997 1.015330 984.901 1997 1.032246 0.000 984.901 1.182051 1,164.20
Incep 1.000 1,000.000 N/A 0.000000 0.000 1,000.000 1.182051 1,182.05
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,051.79 0.00 1,051.79 5.18%
1,164.20 0.00 1,164.20 7.90%
1,182.05 0.00 1,182.05 8.02%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
BERGER IPT BIAM INTERNATIONAL
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ---------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.123845 889.802 1998 1.138610 0.000 889.802 1.182051 1,051.79
1997 1.015330 984.901 1997 1.032246 0.000 984.901 1.182051 1,164.20
Incep 1.000 1,000.000 N/A 0.000000 0.000 1,000.000 1.182051 1,182.05
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,051.79 0.00 1,051.79 5.18%
1,164.20 0.00 1,164.20 7.90%
1,182.05 0.00 1,182.05 8.02%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
DREYFUS STOCK INDEX FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 2.166430 461.589 1998 2.191569 0.000 461.589 2.624419 1,211.40
1997 1.686902 592.803 1997 1.723707 0.000 592.803 2.624419 1,555.76
1996 1.269592 787.655 1996 1.275557 0.000 787.655 2.624419 2,067.14
1995 1.021708 978.753 1995 1.026896 0.000 978.753 2.624419 2,568.66
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 2.624419 2,624.42
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,211.40 0.00 1,211.40 21.14%
1,555.76 0.00 1,555.76 24.73%
2,067.14 0.00 2,067.14 27.39%
2,568.66 0.00 2,568.66 26.60%
2,624.42 0.00 2,624.42 26.66%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
DREYFUS SOCIALLY RESPONSIBLE GROWTH
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 2.116112 472.565 1998 2.140335 0.000 472.565 2.582219 1,220.27
1997 1.635909 611.281 1997 1.674318 0.000 611.281 2.582219 1,578.46
1996 1.275989 783.706 1996 1.281265 0.000 783.706 2.582219 2,023.70
1995 1.035743 965.490 1995 1.042914 0.000 965.490 2.582219 2,493.11
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 2.582219 2,582.22
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,220.27 0.00 1,220.27 22.03%
1,578.46 0.00 1,578.46 25.64%
2,023.70 0.00 2,023.70 26.49%
2,493.11 0.00 2,493.11 25.66%
2,582.22 0.00 2,582.22 26.16%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
DREYFUS DISCIPLINED STOCK FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.003977 996.039 1998 1.016103 0.000 996.039 1.181336 1,176.66
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.181336 1,181.34
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- -------------------------------------------------------------------------
<S> <C> <C>
1,176.66 1,176.66 17.67%
1,181.34 1,181.34 15.35%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
DREYFUS INTERNATIONAL VALUE FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee 0.00 Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 0.985356 1,014.862 1998 0.999601 0.000 1,014.862 1.030466 1,045.78
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.030466 1,030.47
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
1,045.78 0.00 1,045.78 4.58%
1,030.47 0.00 1,030.47 2.61%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - EQUITY PORTFOLIO
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ---------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee 0.00 Admin Fee Units Unit Value Value Calc
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 24.072846 41.541 1998 23.991341 0.000 41.541 26.847897 1,115.29
1997 18.654689 53.606 1997 18.627009 0.000 53.606 26.847897 1,439.21
1996 14.686229 68.091 1996 14.973025 0.000 68.091 26.847897 1,828.10
1995 10.602503 94.317 1995 10.726673 0.000 94.317 26.847897 2,532.21
1994 8.358040 119.645 1994 8.340713 0.000 119.645 26.847897 3,212.22
1993 8.358040 119.645 1993 8.808635 0.000 119.645 26.847897 3,212.22
1992 7.425072 134.679 1992 7.489042 0.000 134.679 26.847897 3,615.85
1991 6.514616 153.501 1991 6.653195 0.000 153.501 26.847897 4,121.18
1990 6.364599 157.119 1990 6.373056 0.000 157.119 26.847897 4,218.31
1989 5.531768 180.774 1989 5.544310 0.000 180.774 26.847897 4,853.40
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- -------------------------------------------------------------------
<S> <C> <C> <C> <C>
1,115.29 0.00 1,115.29 11.53% 1 YR
1,439.21 0.00 1,439.21 19.97%
1,828.10 0.00 1,828.10 22.27% 3 YRS
2,532.21 0.00 2,532.21 26.15%
3,212.22 0.00 3,212.22 26.29% 5 YRS
3,212.22 0.00 3,212.22 21.47%
3,615.85 0.00 3,615.85 20.16%
4,121.18 0.00 4,121.18 19.37%
4,218.31 0.00 4,218.31 17.34%
4,853.40 0.00 4,853.40 17.11% 10 YRS
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
FEDERATED HIGH INCOME BOND II
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.411900 708.265 1998 1.414375 0.000 708.265 1.416113 1,002.98
1997 1.277513 782.771 1997 1.278677 0.000 782.771 1.416113 1,108.49
1996 1.102327 907.172 1996 1.105616 0.000 907.172 1.416113 1,284.66
1995 0.996023 1,003.993 1995 0.996938 0.000 1,003.993 1.416113 1,421.77
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.416113 1,416.11
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,002.98 0.00 1,002.98 0.30%
1,108.49 0.00 1,108.49 5.28%
1,284.66 0.00 1,284.66 8.71%
1,421.77 0.00 1,421.77 9.20%
1,416.11 0.00 1,416.11 8.90%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
FEDERATED INTERNATIONAL EQUITY II
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.554892 643.131 1998 1.570414 0.000 643.131 1.583734 1,018.55
1997 1.228179 814.214 1997 1.238937 0.000 814.214 1.583734 1,289.50
1996 1.093923 914.141 1996 1.088006 0.000 914.141 1.583734 1,447.76
1995 1.001175 998.826 1995 1.002036 0.000 998.826 1.583734 1,581.87
Incep 1.000000 1,000.000 N/A 0 0.000 1,000.000 1.583734 1,583.73
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,018.55 0.00 1,018.55 1.85%
1,289.50 0.00 1,289.50 13.56%
1,447.76 0.00 1,447.76 13.13%
1,581.87 0.00 1,581.87 12.15%
1,583.73 0.00 1,583.73 11.92%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
FEDERATED UTILITY II
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.626729 614.731 1998 1.635895 0.000 614.731 1.801099 1,107.19
1997 1.347667 742.023 1997 1.356308 0.000 742.023 1.801099 1,336.46
1996 1.170475 854.354 1996 1.170346 0.000 854.354 1.801099 1,538.78
1995 0.997172 1,002.836 1995 0.997036 0.000 1,002.836 1.801099 1,806.21
Incep 1.000000 1,000.000 N/A 0 0.000 1,000.000 1.801099 1,801.10
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,107.19 0.00 1,107.19 10.72%
1,336.46 0.00 1,336.46 15.61%
1,538.78 0.00 1,538.78 15.45%
1,806.21 0.00 1,806.21 15.93%
1,801.10 0.00 1,801.10 15.51%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - FIXED INCOME PORTFOLIO
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee 0.00 Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 5.621203 177.898 1998 5.630131 0.000 177.898 5.619832 999.76
1997 5.168622 193.475 1997 5.189702 0.000 193.475 5.619832 1,087.30
1996 4.739172 211.007 1996 4.727581 0.000 211.007 5.619832 1,185.82
1995 4.548169 219.869 1995 4.544560 0.000 219.869 5.619832 1,235.63
1994 4.037471 247.680 1994 4.045607 0.000 247.680 5.619832 1,391.92
1993 4.086452 244.711 1993 4.090337 0.000 244.711 5.619832 1,375.23
1992 3.600620 277.730 1992 3.451300 0.000 277.730 5.619832 1,560.80
1991 3.090912 323.529 1991 3.090219 0.000 323.529 5.619832 1,818.18
1990 2.783370 359.277 1990 2.786065 0.000 359.277 5.619832 2,019.08
1989 2.645789 377.959 1989 2.649161 0.000 377.959 5.619832 2,124.07
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
999.76 0.00 999.76 -0.02% 1 YR
1,087.30 0.00 1,087.30 4.27%
1,185.82 0.00 1,185.82 5.85% 3 YRS
1,235.63 0.00 1,235.63 5.43%
1,391.92 0.00 1,391.92 6.84% 5 YRS
1,375.23 0.00 1,375.23 5.45%
1,560.80 0.00 1,560.80 6.57%
1,818.18 0.00 1,818.18 7.76%
2,019.08 0.00 2,019.08 8.12%
2,124.07 0.00 2,124.07 7.82% 10 YRS
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - GOVERNMENT SECURITIES
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value FOR $1,000 Fee 0.00 Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.297590 770.659 1998 1.300047 0.000 770.659 1.298765 1,000.90
1997 1.204026 830.547 1997 1.209767 0.000 830.547 1.298765 1,078.69
1996 1.132612 882.915 1996 1.129650 0.000 882.915 1.298765 1,146.70
1995 1.101184 908.113 1995 1.102656 0.000 908.113 1.298765 1,179.43
1994 0.990315 1,009.780 1994 0.991081 0.000 1,009.780 1.298765 1,311.47
1993 1.021757 978.706 1993 1.023440 0.000 978.706 1.298765 1,271.11
Incep 1.000000 1,000.000 0.000000 0.000 1,000.000 1.298765 1,298.77
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
1,000.90 0.00 1,000.90 0.09% 1 YRS
1,078.69 0.00 1,078.69 3.86%
1,146.70 0.00 1,146.70 4.67% 3 YRS
1,179.43 0.00 1,179.43 4.21%
1,311.47 0.00 1,311.47 5.57% 5 YRS
1,271.11 0.00 1,271.11 4.08%
1,298.77 0.00 1,298.77 4.33%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
INVESCO HIGH YIELD FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99\
GROUP DEFERRED
- ---------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 0.999874 1,000.126 1998 1.002851 0.000 1,000.126 1.007081 1,007.21
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.007081 1,007.08
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------------
<S> <C> <C> <C>
1,007.21 0.00 1,007.21 0.72%
1,007.08 0.00 1,007.08 0.61%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
INVESCO EQUITY INCOME FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 0.991493 1,008.580 1998 0.999885 0.000 1,008.580 1.168211 1,178.23
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.168211 1,168.21
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------------
<S> <C> <C>
1,178.23 1,178.23 17.82%
1,168.21 1,168.21 14.25%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
JANUS ASPEN AGGRESSIVE GROWTH
AVERAGE ANNUAL TOTAL RETURN
06/30/1999
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.765723 566.340 1998 1.770754 0.000 566.340 2.616436 1,481.79
1997 1.385326 721.852 1997 1.408931 0.000 721.852 2.616436 1,888.68
1996 1.412793 707.818 1996 1.411143 0.000 707.818 2.616436 1,851.96
1995 1.055018 947.851 1995 1.075680 0.000 947.851 2.616436 2,479.99
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 2.616436 2,616.44
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,481.79 0.00 1,481.79 48.18%
1,888.68 0.00 1,888.68 37.43%
1,851.96 0.00 1,851.96 22.80%
2,479.99 0.00 2,479.99 25.49%
2,616.44 0.00 2,616.44 26.57%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
JANUS ASPEN GROWTH
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.978626 505.401 1998 1.970871 0.000 505.401 2.600124 1,314.11
1997 1.546648 646.560 1997 1.579124 0.000 646.560 2.600124 1,681.14
1996 1.290030 775.176 1996 1.296957 0.000 775.176 2.600124 2,015.55
1995 1.024821 975.780 1995 1.037548 0.000 975.780 2.600124 2,537.15
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 2.600124 2,600.12
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,314.11 0.00 1,314.11 31.41%
1,681.14 0.00 1,681.14 29.66%
2,015.55 0.00 2,015.55 26.32%
2,537.15 0.00 2,537.15 26.21%
2,600.12 0.00 2,600.12 26.38%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
JANUS ASPEN WORLDWIDE GROWTH
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 2.370533 421.846 1998 2.386922 0.000 421.846 2.68599 1,133.07
1997 1.835183 544.905 1997 1.848753 0.000 544.905 2.68599 1,463.61
1996 1.453424 688.030 1996 1.456455 0.000 688.030 2.68599 1,848.04
1995 1.043623 958.200 1995 1.057880 0.000 958.200 2.68599 2,573.72
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 2.68599 2,685.99
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,133.07 0.00 1,133.07 13.31%
1,463.61 0.00 1,463.61 20.98%
1,848.04 0.00 1,848.04 22.72%
2,573.72 0.00 2,573.72 26.66%
2,685.99 0.00 2,685.99 27.39%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
LORD ABBETT GROWTH AND INCOME FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 0.985852 1,014.351 1998 0.992785 0.000 1,014.351 1.150891 1,167.41
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.150891 1,150.89
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------------------
<S> <C> <C> <C>
1,167.41 0.00 1,167.41 16.74%
1,150.89 0.00 1,150.89 12.80%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
MITCHELL HUTCHINS GROWTH AND INCOME FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 0.979553 1,020.874 1998 0.992660 0.000 1,020.874 1.020901 1,042.21
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.020901 1,020.90
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------------------
<S> <C> <C> <C>
1,042.21 0.00 1,042.21 4.22%
1,020.90 0.00 1,020.90 1.79%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
NEUBERGER & BERMAN LIMITED MATURITY BOND FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.066802 937.381 1998 1.068316 0.000 937.381 1.079175 1,011.60
1997 1.013992 986.201 1997 1.016170 0.000 986.201 1.079175 1,064.28
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.079175 1,079.18
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,011.60 0.00 1,011.60 1.16%
1,064.28 0.00 1,064.28 3.16%
1,079.18 0.00 1,079.18 3.58%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
NEUBERGER & BERMAN PARTNERS FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.310904 762.832 1998 1.326494 0.000 762.832 1.445715 1,102.84
1997 1.102080 907.375 1997 1.122642 0.000 907.375 1.445715 1,311.81
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.445715 1,445.72
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,102.84 0.00 1,102.84 10.28%
1,311.81 0.00 1,311.81 14.53%
1,445.72 0.00 1,445.72 18.54%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
STRONG GROWTH II FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.476941 677.075 1998 1.478896 0.000 677.075 2.059111 1,394.17
1997 1.121679 891.521 1997 1.140361 0.000 891.521 2.059111 1,835.74
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 2.059111 2,059.11
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,394.17 0.00 1,394.17 39.42%
1,835.74 0.00 1,835.74 35.49%
2,059.11 0.00 2,059.11 39.56%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
STRONG OPPORTUNITY II FUND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.391675 718.559 1998 1.398000 0.000 718.559 1.651089 1,186.40
1997 1.095441 912.874 1997 1.116490 0.000 912.874 1.651089 1,507.24
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.651089 1,651.09
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,186.40 0.00 1,186.40 18.64%
1,507.24 0.00 1,507.24 22.77%
1,651.09 0.00 1,651.09 26.04%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
VAN ECK WORLDWIDE HARD ASSETS
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/;30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.059943 943.447 1998 1.059885 0.000 943.447 0.988359 932.46
1997 1.251880 798.799 1997 1.258094 0.000 798.799 0.988359 789.50
1996 1.187189 842.326 1996 1.204407 0.000 842.326 0.988359 832.52
1995 1.011154 988.969 1995 1.015506 0.000 988.969 0.988359 977.46
INCEP 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 0.988359 988.36
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
932.46 0.00 932.46 -6.75%
789.50 0.00 789.50 -11.15%
832.52 0.00 832.52 -5.93%
977.46 0.00 977.46 -0.57%
988.36 0.00 988.36 -0.29%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
VAN ECK WORLDWIDE BOND
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 1.080169 925.781 1998 1.078191 0.000 925.781 1.084109 1,003.65
1997 1.021661 978.798 1997 1.023526 0.000 978.798 1.084109 1,061.12
1996 0.994181 1,005.853 1996 0.985550 0.000 1,005.853 1.084109 1,090.45
1995 1.001889 998.115 1995 1.006269 0.000 998.115 1.084109 1,082.07
INCEP 1.000000 1,000.000 N/A 0 0.000 1,000.000 1.084109 1,084.11
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,003.65 0.00 1,003.65 0.37%
1,061.12 0.00 1,061.12 3.01%
1,090.45 0.00 1,090.45 2.93%
1,082.07 0.00 1,082.07 1.99%
1,084.11 0.00 1,084.11 2.00%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
VAN ECK EMERGING MARKETS
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 0.620602 1,611.339 1998 0.630230 0.000 1,611.339 0.764550 1,231.95
1997 1.128231 886.343 1997 1.151043 0.000 886.343 0.764550 677.65
INCEP 1.000000 1,000.000 N/A 0 0.000 1,000.000 0.764550 764.55
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- ------------------------------------------------------------------
<S> <C> <C> <C>
1,231.95 0.00 1,231.95 23.19%
677.65 0.00 677.65 -17.68%
764.55 0.00 764.55 -11.65%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "C"
VAN ECK REAL ESTATE
AVERAGE ANNUAL TOTAL RETURN
06/30/99
GROUP DEFERRED
- -----------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 06/30/99 Accum Charge
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 0.952484 1,049.886 1998 0.948834 0.000 1,049.886 0.940611 987.53
INCEP 1.000000 1,000.000 N/A 0 0.000 1,000.000 0.940611 940.61
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
Surrender For Surr Admin Admin Fee n
Charge Charge Fee (ERV) P(1+T) = ERV
- -------------------------------------------------------------------------
<S> <C> <C> <C>
987.53 0.00 987.53 -1.25%
940.61 0.00 940.61 -5.11%
</TABLE>
