As Filed With the Securities and Exchange Commission on September 28, 1998
REGISTRATION NO. 33-9651
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 16
TO
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
LIFE OF VIRGINIA SEPARATE ACCOUNT II
(Exact Name of Registrant)
THE LIFE INSURANCE COMPANY OF VIRGINIA
(Name of Depositor)
6610 West Broad Street, Richmond, Virginia 23230
(Address of Principal Executive Office)
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Patricia L. Dysart, Esq.
Associate General Counsel
The Life Insurance Company of Virginia
6610 West Broad Street, Richmond, Virginia 23230
(Name and Address of Agent for Service of Process)
Copy to:
Stephen E. Roth, Esq.
Sutherland Asbill & Brennan LLP
1275 Pennsylvania Ave., N.W. Washington, D.C. 20004-2415
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It is proposed that this filing will become effective:
X immediately upon filing pursuant to paragraph (b) of Rule 485
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on May 1, 1998 pursuant to paragraph (b) of Rule 485
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60 days after filing pursuant to paragraph (a) of Rule 485
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on pursuant to paragraph (a) of Rule 485
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Title of Securities Being Registered: Interest in a Separate Account under
Flexible Premium Variable Life Insurance Policies
<PAGE>
The sole purpose of this filing is to file by EDGAR exhibits that were
previously submitted as paper documents.
EXHIBITS
(1)(a) Resolution of Board of Directors of Life of Virginia authorizing the
establishment of Separate Account II. 9/
(1)(b) Resolution of Board of Directors of Life of Virginia authorizing the
addition of Investment Subdivisions to Separate Account II. 9/
(1)(c) Resolution of Board of Directors of Life of Virginia authorizing the
establishment of Investment Subdivisions of Separate Account II which
invest in shares of Fidelity Variable Insurance Products Fund II, Asset
Manager Portfolio and Neuberger & Berman Advisers Management Trust,
Balanced Portfolio. 9/
(1)(d) Resolution of Board of Directors of Life of Virginia authorizing the
establishment of Investment Subdivisions of Separate Account II which
invest in shares of Janus Aspen Series, Growth Portfolio, Aggressive
Growth Portfolio, and Worldwide Growth Portfolio. 9/
(1)(e) Resolution of Board of Directors of Life of Virginia authorizing the
establishment of an Investment Subdivision of Separate Account II which
invests in shares of the Utility Fund of the Investment Management
Series. 9/
(1)(f) Resolution of Board of Directors of Life of Virginia authorizing the
establishment of two additional Investment Subdivisions of Separate
Account II which invest in shares of the Corporate Bond Fund of the
Insurance Management Series and the Contrafund Portfolio of the
Variable Insurance Products Fund II. 9/
(1)(g) Resolution of Board of Directors of Life of Virginia authorizing the
establishment of two additional Investment Subdivisions of Separate
Account II which invest in shares of the International Equity Portfolio
and the Real Estate Securities Portfolio of the Life of Virginia Series
Fund. 9/
(1)(h) Resolution of Board of Directors of Life of Virginia authorizing the
establishment of four additional Investment Subdivisions of Separate
Account II which invest in shares of the Alger American Growth
Portfolio and the Alger American Small Capitalization Portfolio of The
Alger American Fund, and the Balanced Portfolio and Flexible Income
Portfolio of the Janus Aspen Series. 6/
<PAGE>
(1)(i) Resolution of Board of Directors of Life of Virginia authorizing the
establishment of two additional investment subdivisions of Separate
Account 4, investing in shares of the Federated American Leaders Fund
II of the Federated Insurance Series, and the International Growth
Portfolio of the Janus Aspen Series.7/
(1)(j) Resolution of Board of Directors of Life of Virginia authorizing
additional Investment Subdivisions investing in shraes of Growth and
Income Portfolio and Growth Opportunities Portfolio of Variable
Insurance Products Fund III; Growth II Portfolio and Large Cap Growth
Portfolio of the PBHG Insurance Series Fund, Inc.; and Global Income
Fund and Value Equity Fund of GE Investments Funds, Inc. 8/
(1)(k) Resolution of Board of Directors of Life of Virginia authorizing
additional Investment Subdivisions investing in shares of Capital
Appreciation Portfolio of Janus Aspen Series. 8/
1A(2) Not Applicable
1A(3) Underwriting Agreement dated December 13, 1997 between The Life
Insurance Company of Virginia and Capital Brokerage Corporation.9/
1A(3)(a) Dealer Sales Agreement dated December 13, 1997.9/
1A(3)(c) See Exhibit 1A(3)(a)
1A(4) Not Applicable
1A(5) Policy Form, Commonwealth Three 9/
1A(5)(a) Endorsement to policy 9/
1A(6)(a) Articles of Incorporation of The Life Insurance Company of Virginia 9/
1A(6)(b) By-Laws of The Life Insurance Company of Virginia 9/
1A(7) Not Applicable
1A(8)(a) Stock Sale Agreement 9/
1A(8)(a)(i)
Amendment to Stock Sale Agreement between The Life Insurance
Company of Virginia and Life of Virginia Series Fund, Inc. 9/
<PAGE>
1A(8)(b) Fund Participation Agreement between The Life Insurance Company of
Virginia and American Life/Annuity Series. 9/
1A(8)(b)(i)
Amendment to Fund Participation Agreement between The Life Insurance
Company of Virginia and American Life/Annuity Series. 9/
1A(8)(b)(ii)
Amendment to Participation Agreement among Variable Insurance Products
Fund II, Fidelity Distributors Corporation, and The Life Insurance
Company of Virginia.7/
1A(8)(b)(iii)
Amendment to Participation Agreement among Variable Insurance Products
Fund, Fidelity Distributors Corporation, and The Life Insurance
Company of Virginia.7/
1A(8)(c) Participation Agreement among Variable Insurance Products Fund,
Fidelity Distributors Corporation, and The Life Insurance Company of
Virginia. 9/
1A(8)(d) Agreement between Oppenheimer Variable Account Funds, Oppenheimer
Management Corporation, and The Life Insurance Company of Virginia. 9/
1A(8)(d)(i)
Amendment to the Participation Agreement between Oppenheimer Variable
Account Funds, Oppenheimer Management Corporation, and The Life
Insurance Company of Virginia. 9/
1A(8)(e) Participation Agreement Among Variable Insurance Products Fund II,
Fidelity Distributors Corporation and The Life Insurance Company of
Virginia. 10/
1A(8)(f) Fund Participation Agreement between Janus Aspen Series and The Life
Insurance Company of Virginia. 9/
1A(8)(g) Fund Participation Agreement between Insurance Management Series,
Federated Securities Corporation, and The Life Insurance Company of
Virginia. 10/
1A(8)(h) Fund Participation Agreement between The Alger American Fund,
Fred Alger and Company, Inc., and The Life Insurance Company of
Virginia. 6/
1A(8)(i) Fund Participation Agreement between Variable Insurance Products Fund
III and The Life Insurance Company of Virginia. 8/
1A(8)(j) Fund Participation Agreement between PBHG Insurance Series Fund, Inc.
and The Life Insurance Company of Virginia.8/
1A(9) Not Applicable
1A(10) Application for Commonwealth Three 10/
<PAGE>
2 See Exhibit 1(A)5
3(a) Opinion and Consent of Counsel
3(b) Consent of Sutherland, Asbill and Brennan LLP 9/
3(c) Consent of Independent Auditors 9/
4 Not Applicable
5 Not Applicable
6 Opinion and Consent of Bruce E. Booker, Actuary 9/
7 Memorandum describing Life of Virginia's Issuance, Transfer,
Redemption and Exchange Procedures for Policies.7/
8 Undertaking to Guarantee performance of obligations of principal
underwriter. 9/
9 Power of Attorney dated April 2, 1996. 7/
6/ Filed September 28, 1995 with Post-Effective Amendment Number 12 to Form S-6
for Life of Virginia Separate Account II, Registration Number 33-9651.
7/ Filed May 1, 1996 with Post-Effective Amendment Number 13 to Form S-6 for
Life of Virginia Separate Account II, Registration Number 33-9651.
8/ Filed May 1, 1997 with Post-Effective Amendment Number 14 to Form S-6 for
Life of Virginia Separate Account II, Registration Number 33-9651.
9/ Filed May 1, 1998 with Post-Effective Amendment Number 15 to Form S-6 for
Life of Virginia Separate Account II, Registration Number 33-9651.
10/ Incorporated herein.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant,
Life of Virginia Separate Account II, certifies that it meets all the
requirements for effectiveness of this registration statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this amendment to
the Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, and its seal to be hereunto affixed and attested, all
in the County of Henrico in the Commonwealth of Virginia, on the 28th day of
September, 1998.
Life of Virginia Separate Account II
(Seal)The Life Insurance Company of Virginia
(Depositor)
Attest: /s/ Laura Deusebio By: /s/ Selwyn L. Flournoy, Jr.
_______________________________ ___________________________________
Selywn L.Flournoy, Jr.
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, The Life Insurance
Company of Virginia certifies that it meets the requirements for effectiveness
of this registration statement pursuant to Rule 485(b) under the Securities Act
of 1933 and has duly caused this amendment to the Registration Statement to be
signed on its behalf by the undersigned thereunto duly authorized, and its seal
to be hereunto affixed and attested, all in the County of Henrico in the
Commonwealth of Virginia on the 28 of September, 1998.
(Seal)The Life Insurance Company of Virginia
Attest: /s/ Laura Deusebio By: /s/ Selwyn L. Flournoy, Jr.
______________________________ _____________________________________
Selwyn L. Flournoy, Jr.
Senior Vice President
Given under my hand this 28th day of September, 1998 in the City/County of
Henrico, Commonwealth of Virginia.
/s/ Laura Deusebio
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Notary Public
January 30, 2000
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My Commission Expires
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
RONALD V. DOLAN Director, Chairman of the Board 9/28/98
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Ronald V. Dolan
/s/ SELWYN L. FLOURNOY, JR. Director, Senior Vice President 9/28/98
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Selwyn L. Flournoy, Jr.
LINDA L. LANAM Director, Senior Vice President 9/28/98
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Linda L. Lanam
ROBERT D. CHINN Director, Senior Vice President 9/28/98
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Robert D. Chinn
VICTOR C. MOSES Director 9/28/98
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Victor C. Moses
GEOFFREY S. STIFF Director 9/28/98
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Geoffrey S. Stiff
By /s/ SELWYN L. FLOURNOY, JR. , pursuant to Power of Attorney executed on
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April 16, 1997.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
EXHIBITS
1A(8)(e) Participation Agreement Among Variable Insurance Products Fund II,
Fidelity Distributors Corporation and The Life Insurance
Company of Virginia
1A(8)g) Fund Participation Agreement between Janus Aspen Series and The Life
Insurance Company of Virginia
1A(5) Policy Form
1A(10) Application for Commonwealth Three
EXHIBIT (8) (e)
Participation Agreement among The Life Insurance Company of Virginia, Variable
Insurance Products Fund II and Fidelity Distributors Corporation
<PAGE>
PARTICIPATION AGREEMENT
AMONG
VARIABLE INSURANCE PRODUCTS FUND II,
FIDELITY DISTRIBUTORS CORPORATION
and
THE LIFE INSURANCE COMPANY OF VIRGINIA
THIS AGREEMENT, made and entered into as of this 15th day of
July, 1989 by and among THE LIFE INSURANCE COMPANY OF VIRGINIA, (hereinafter the
"Company"), a Virginia corporation, on its own behalf and on behalf of each
segregated asset account of the Company set forth on Schedule C hereto as may be
amended from time to time (each such account hereinafter referred to as the
"Account"), and the VARIABLE INSURANCE PRODUCTS FUND II, an unincorporated
business trust organized under the laws of the Commonwealth of Massachusetts
(hereinafter the "Fund") and FIDELITY DISTRIBUTORS CORPORATION (hereinafter the
"Underwriter"), a Massachusetts corporation.
WHEREAS, the Fund engages in business as an open-end
management investment company and is available to act as the investment vehicle
for separate accounts established for variable life insurance policies and
variable annuity contracts (collectively, the "Variable Insurance Products") to
be offered by insurance companies which have entered into participation
agreements substantially identical to this Agreement (hereinafter "Participating
Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into
several series of shares, each designated a "Portfolio" and representing the
interest in a particular managed portfolio of securities and other assets; and
WHEREAS, the Fund has obtained an order from the Securities
and Exchange Commission, dated September 17, 1986 (File No. 812-6422), granting
Participating Insurance Companies and variable annuity and variable life
insurance separate accounts exemptions from the provisions of sections 9(a),
13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended,
(hereinafter the "1940 Act") and Rules 6e-2(b) (15) and 6e-3(T) (b) (15)
thereunder, to the extent necessary to permit shares of the Fund to be sold to
and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated life insurance companies (hereinafter the
"Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management
investment company under the 1940 Act and its shares are registered under the
Securities Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, Fidelity management & Research Company (the
"Adviser") is duly registered as an investment adviser under the federal
Investment Advisers Act of 1940 and any applicable state securities law; and
<PAGE>
WHEREAS, the Company has registered or will register certain
variable life and variable annuity contracts under the 1033 Act; and
WHEREAS, each Account is duly organized, validly existing
segregated asset account, established by resolution of the Board of Directors of
the Company on the data shown for such Account on Schedule C hereto, to set
aside and invest assets attributable to the aforesaid variable life and annuity
contracts; and
WHEREAS, the Company has registered or will register each
Account as a unit investment trust under the 1940 Act; and
WHEREAS, the Underwriter is registered as a broker dealer with
the Securities 2nd Exchange Commission under the Securities Exchange Act of
1934, as amended, (hereinafter the "1934 Act"), and is a member in good standing
of the National Association of Securities Dealers, Inc. (hereinafter "NASD");
and
WHEREAS, to the extent permitted by applicable insurance laws
and regulations, the Company intends to purchase shares in the Portfolios on
behalf of each Account to fund certain of the aforesaid variable life and
variable annuity contracts and the Underwriter is authorized to sell such shares
to unit investment trusts such as each Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the
Company, the Fund and the Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Underwriter agrees to sell to the Company those
shares of the Fund which each Account orders, executing such orders on a daily
basis at the net asset value next computed after receipt by the Fund or its
designee of the order for the shares of the Fund. For purposes of this Section
1.1, the Company shall be the designee of the Fund for receipt of such orders
from each Account and receipt by such designee shall constitute receipt by the
Fund; provided that the Fund receives notice of such order by 9:30 a.m. Boston
time on the next following Business Day. "Business Day" shall mean any day on
which the New York Stock Exchange is open for trading and on which the Fund
calculates its net asset value pursuant to the rules of the Securities and
Exchange Commission.
1.2. The Fund agrees to make its shares available indefinitely
for purchase at the applicable net asset value per share by the Company and its
Accounts on those days on which the Fund calculates its net asset value pursuant
to rules of the Securities and Exchange Commission and the Fund shall use
reasonable efforts to calculate such net asset value on each day which the New
York Stock Exchange is open for trading. Notwithstanding the foregoing, the
Board of Trustees of the Fund (hereinafter the "Trustees") may refuse to sell
shares of any Portfolio to any person, or suspend or terminate the offering of
shares of any Portfolio if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of the Trustees
acting in good faith and in light of their fiduciary duties under federal and
any applicable state laws, necessary in the best interests of the shareholders
of such Portfolio.
<PAGE>
1.3. The Fund and the Underwriter agree that shares of the
Fund will be sold only to Participating Insurance Companies and their separate
accounts. No shares of any Portfolio will be sold to the general public.
1.4. The Fund and the Underwriter will not sell Fund shares to
any insurance company or separate account unless an agreement containing
provisions substantially the same as Articles I, III, V, VII and Sections 2.5
and 2.12 of Article II of this agreement is in effect to govern such sales.
1.5. The Fund agrees to redeem for cash, on the Company's
request, any full or fractional shares of the Fund held by the Company,
executing such requests on a daily basis at the net asset value next computed
after receipt by the Fund or its designee of the request for redemption. For
purposes of this Section 1.5, the Company shall be the designee of the Fund for
receipt of requests for redemption from each Account and receipt by such
designee shall constitute receipt by the Fund; provided that the Fund receives
notice of such request for redemption on the next following Business Day.
1.6. The Company agrees to purchase and redeem the shares of
each Portfolio offered by the then current prospectus of the Fund and in
accordance with the provisions of such prospectus. The Company agrees that all
net amounts available under the variable life and variable annuity contracts
with the form number(s) which are listed on Schedule A attached hereto and
incorporated herein by this reference, as such Schedule A may be amended from
time to time hereafter by mutual written agreement of all the parties hereto,
(the "Contracts") shall be invested in the Fund, in such other funds advised by
the Adviser as may be mutually agreed to in writing by the parties hereto, or in
the Company's general account, provided that such amounts may also be invested
in an investment company other than the Fund if (a) such other investment
company, or series thereof, has investment objectives or policies of all the
Portfolios of the Fund; or (b) the Company gives the Fund and the Underwriter 45
days written notice of its intention to make such other investment company
available as a funding vehicle for the Contracts; or (c) such other investment
company was available as a funding vehicle for the Contracts prior to the date
of this Agreement and the Company so informs the Fund and Underwriter prior to
their signing this Agreement; or (d) the Fund or Underwriter consents to the use
of such other investment company.
1.7. The Company shall pay for Fund shares on the next
Business Day after an order to purchase Fund shares is made in accordance with
the provisions of Section 1.1 hereof. Payment shall be in federal funds
transmitted by wire. For purpose of Section 2.10 and 2.11, upon receipt by the
Fund of the federal funds so wired, such funds shall cease to be the
responsibility of the Company and shall become the responsibility of the Fund.
1.8. Issuance and transfer of the Fund's shares will be by
book entry only. Stock certificates will not be issued to the Company or any
Account. Shares ordered from the Fund will be recorded in an appropriate title
for each Account or the appropriate subaccount of each Account.
<PAGE>
1.9. The Fund shall furnish same day notice (by wire or
telephone, followed by written confirmation) to the Company of any income,
dividends or capital gain distributions payable on the Fund's shares. The
Company hereby elects to receive all such income dividends and capital gain
distributions as re payable on the Portfolio shares in additional shares of that
Portfolio. The Company reserves the right to revoke this election and to receive
all such income dividends and capital gain distributions in cash. The Fund shall
notify the Company of the number of shares so issued as payment of such
dividends and distributions.
1.10. The Fund shall make the net asset value per share for
each Portfolio available to the Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated and shall use its
best efforts to make such net asset value per share available by 7 p.m. Boston
time.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that the Contracts
are or will be registered under the 1933 Act; that the Contracts will be issued
and sold in compliance in all material respects with all applicable Federal and
State laws and that the sale of the Contracts shall comply in all material
respects with state insurance suitability requirements. The Company further
represents and warrants that it is an insurance company duly organized and in
good standing under applicable law and that it has legally and validly
established each Account prior to any issuance or sale thereof as a segregated
asset account under Section 38.2-3113 of the Virginia Insurance Code and has
registered or, prior to any issuance or sale of the Contracts, will register
each Account as a unit investment trust in accordance with the provisions of the
1940 Act to serve as a segregated investment account for the Contracts.
2.2. The Fund represents and warrants that Fund shares sold
pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sold in compliance with the laws of the State of
Virginia and all applicable federal and state securities laws and that the Fund
is and shall remain registered under the 1940 Act. The Fund shall amend the
Registration Statement for its shares under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous offering of its
shares. The Fund shall register and qualify the shares for sale in accordance
with the laws of the various states only if an to the extent deemed advisable by
the Fund or the Underwriter.
2.3. The Fund represents that it is currently qualified as a
Regulated Investment Company under Subchapter M of the Internal Revenue code of
1986, as amended, (the "Code") and that it will make every effort to maintain
such qualification (under Subchapter M or any successor or similar provision)
and that it will notify the Company immediately upon having a reasonable basis
for believing that it has ceased to so qualify or that it might not so qualify
in the future.
2.4. The Company represents that the Contracts are currently
treated as endowment, annuity or life insurance contracts, under applicable
provisions of the Code and that it will make every effort to maintain such
treatment and that it will notify the Fund and the Underwriter immediately upon
having a reasonable basis for believing that the Contracts have ceased to be so
treated or that they might not be so treated in the future.
<PAGE>
2.5. The Fund currently does not intend to make any payments
to finance distribution expenses pursuant to Rule 12b-1 under the 1940 Act or
otherwise, although it may make such payments in the future. The Fund has
adopted a "no fee" or "defensive" Rule 12b-1 Plan under which it makes no
payments for distribution expenses. To the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have a
board of trustees, a majority of whom are not interested persons of the Fund,
formulate and approve any plan under Rule 12b-1 to finance distributions
expenses.
2.6. The Fund makes no representation as to whether any aspect
of its operations (including, but not limited to, fees and expenses and
investment policies) complies with the insurance laws or regulations of the
various states accept that the Fund represents that the Fund's investment
policies, fees and expenses are and shall at all times remain in compliance with
the laws of the State of Virginia and the Fund and the Underwriter represent
that their respective operations are and shall at all times remain in material
compliance with the laws of the State of Virginia to the extent required to
perform this Agreement.
2.7. The Underwriter represents and warrants that it is a
member in good standing of the NASD and is registered as a broker-dealer with
the SEC. The Underwriter further represents that it will sell and distribute the
Fund shares in accordance with the laws of the State of Virginia and all
applicable state and federal securities laws, including without limitation the
1933 Act, the 1934 Act, and the 1940 Act.
2.8. The Fund represents that it is lawfully organized and
validly existing under the laws of the Commonwealth of Massachusetts and that it
does and will comply in all material respects with the 1940 Act.
2.9. The Underwriter represents and warrants that the Adviser
is and shall remain duly registered in all material respects under all
applicable federal and state securities laws and that the Adviser shall perform
its obligations for the Fund in compliance in all material respects with the
laws of the State of Virginia and any applicable state and federal securities
laws.
2.10. The Fund and Underwriter represent and warrant that all
of their directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the Fund are
and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimal coverage as required currently by Section 17g-(1) of the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid Bond
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
2.11. The Company represents and warrants that all of its
directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the are and
shall continue to be at all times covered by a blanket fidelity bond or similar
coverage for the benefit of the Fund, in an amount not less than the minimal
coverage as required currently by Section 270.17g-1 of the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid Bond shall
include coverage for larceny and embezzlement and shall be issued by a reputable
bonding company.
<PAGE>
2.12. The Company represents and warrants that it will not
purchase Fund shares with Account assets derived from the sale of Contracts to
deferred compensation plans with respect to service for state and local
governments which qualify under Section 457 of the federal Internal Revenue
Code, as may be amended. The Company may purchase Fund shares with Account
assets derived from any sale of a Contract to any other type of tax-advantaged
employee benefit plan; provided however that such plan has no more than 500
employees who are eligible to participate at the time of the first such purchase
hereunder by the Company of Fund shares derived from the sale of such Contract.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. The Underwriter shall provide the Company (at the
Company's expense) with as many copies of the Fund's current prospectus as the
Company may reasonably request. If requested by the Company in lieu thereof, the
Fund shall provide such documentation (including a final copy of the new
prospectus as set in type at the Fund's expense) and other assistance as is
reasonably necessary in order for the Company once each year (or more frequently
if the prospectus for the Fund is amended) to have the prospectus for the
Contracts and the Fund's prospectus printed together in one document (such
printing to be at the Company's expense).
3.2. The Fund's prospectus shall state that the Statement of
Additional information for the Fund is available from the Underwriter (or in the
Fund's discretion, the Prospectus shall state that such Statement is available
from the Fund), and the Underwriter (or the Fund), at its expense, shall print
and provide such Statement free of charge to the Company and to any owner of a
Contract or prospective owner who requests such Statement.
3.3. The Fund, at its expense, shall provide the Company with
copies of its proxy material, reports to stockholders and other communications
to stockholders in such quantity as the Company shall reasonably require for
distributing to Contract owners.
3.4. If and to the extent required by law the Company
shall: (i) solicit voting instructions from Contract
Owners; (ii) vote the Fund shares in accordance with
instructions received from Contract owners; and (iii)
vote Fund shares for which no instructions have been
received in the same proportion as Fund shares of such
portfolio for which instructions have been received: so
long as and to the extent that the Securities and
Exchange Commission continues to interpret the Investment
Company Act to required pass-through voting privileges
for variable contract owners. The Company reserves the
right to vote Fund shares held in any segregated asset
account in its own right, to the extent permitted by law.
Participating Insurance Companies shall be responsible
for assuring that each of their separate accounts
participating in the Fund calculates voting privileges in
a manner consistent with the standards set forth on
Schedule B attached hereto and incorporated herein by
this reference, which standards will also be provided to
the other Participating Insurance Companies.
<PAGE>
3.5. The Fund will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Fund will either provide
for annual meetings or comply with Section 16(c) of the 1940 Act (although the
Fund is not one of the trusts described in Section 16(c) of that Act) as well as
with Sections 16 (a) and, if and when applicable, 16(b). Further, the Fund will
act in accordance with the securities and Exchange Commission's interpretation
of the requirements of Section 16(a) with respect to periodic elections of
trustees and with whatever rules the commission may promulgate with respect
thereto.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be
furnished, to the Fund or its designee, each piece of sales literature or other
promotional material in which the Fund or its investment adviser or the
Underwriter is named, at least fifteen Business Days prior to its use. The
Underwriter will use its best efforts to review materials within a shorter time
period as the Company will have requested in a letter accompanying such
material. No such material shall be used if the Fund or its designee object to
such use within fifteen Business Days after receipt of such material.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus for the
Fund shares, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for the Fund,
or in sales literature or other promotional material approved by the Fund or its
designee or by the Underwriter, except with the permission of the Fund or the
Underwriter or the designee of either.
4.3. The Fund, Underwriter, or its designee shall furnish, or
shall cause to be Furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company and/or its
separate account(s), is named at least fifteen Business Days prior to its use.
No such material shall be used if the Company or its designee object to such use
within fifteen Business Days after receipt of such material.
4.4. The Fund and the Underwriter shall not give any
information or make any representations on behalf of the Company or concerning
the Company, each Account, or the Contracts other than the information or
representations contained in a registration statement or prospectus for the
Contracts, as such registration statement and prospectus may be amended or
supplemented from time to time, or in published reports for each Account which
are in the public domain or approved by the Company for distribution to Contract
owners, or in sales literature or other promotional material approved by the
Company or its designee, except with the permission of the Company.
<PAGE>
4.5. The fund will provide to the Company at least one
complete copy of all registration statements, prospectuses, Statements of
Additional Information, reports, proxy statements, sales literature and other
promotional materials, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the Fund or its
shares, contemporaneously with the filing of such document with the Securities
and Exchange Commission or other regulatory authorities.
4.6. The Company will provide to the Fund at least one
complete copy of all registration statements, prospectuses, Statements of
Additional Information, reports, solicitations for voting instructions, sales
literature and other promotional materials, applications for exemptions,
requests for no action letters, and all amendments to any of the above, that
relate to the Contracts or each account, contemporaneously with the filing of
such document with the Securities and Exchange Commission.
4.7. For purposes of this Article IV, the phrase "sales
literature or other promotional material" includes, but is not limited to,
advertisements (such as material published, or designed for use in, a newspaper,
magazine, or other periodical, radio, television, telephone or tape recording,
videotape display, signs for billboards, motion pictures, or other public
media), sales literature (i.e., any written communication distributed or made
generally available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts, reprints or
excerpts of any other advertisement, sales literature, or published article),
educational or training materials or other communications distributed or made
generally available to some or all agents or employees, and registration
statements, prospectuses, Statements of Additional Information, shareholder
reports, and proxy materials.
ARTICLE V. Fees and Expenses
5.1. The Fund and Underwriter shall pay no fee or other
compensation to the Company under this agreement, except that if the Fund or any
Portfolio adopts and implements a plan pursuant to Rule 12b-1 to finance
distribution expenses, then the Underwriter may make payments to the company or
to the underwriter for the Contracts if and in amounts agreed to by the
Underwriter in writing and such payments will be made out of existing fees
otherwise payable to the Underwriter, past profits of the Underwriter or other
resources available to the Underwriter. No such payments shall be made directly
by the Fund. Currently, no such payments are contemplated.
5.2. All expenses incident to performance by the Fund under
this Agreement shall be paid by the Fund. The Fund shall see to it that all its
shares are Registered and authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Fund, in
accordance with applicable state laws prior to their sale. The Fund shall bear
the expenses for the cost of registration and qualification of the Fund's
shares, preparation and filing of the Fund's prospectus and registration
statement, proxy materials and reports, setting the prospectus in type, setting
in type and printing the proxy materials and reports to shareholders (including
the costs of printing a prospectus that constitutes an annual report), the
preparation of all statements and notices required by any federal or state law,
all taxes on the issuance or transfer of the Fund's shares.
<PAGE>
5.3. The Company shall bear the expenses of printing and
distributing the Fund's prospectus to owners of Contracts issued by the Company
and of distributing the Fund's proxy materials and reports to such Contract
owners.
ARTICLE VI. Diversification
6.1. The Fund will at all times invest money from the
Contracts in such a manner as to ensure that the Contracts will be treated as
variable contracts under the Code and the regulations issued thereunder. Without
limiting the scope of the foregoing, the Fund will at all times comply with
Section 817 (h) of the Code and Treasury Regulation $1.817-5, relating to the
diversification requirements for variable annuity, endowment, or life insurance
contracts and any amendments or other modifications to such Section or
Regulations.
ARTICLE VII. Potential Conflicts
7.1. The Board of Trustees of the Fund (the "Board") will
monitor the Fund for the existence of any material irreconcilable conflict
between the interests of the contract owners of all separate accounts investing
in the Fund. An irreconcilable material conflict may arise for a variety of
reasons, including: (a) an action by any state insurance regulatory authority;
(b) a change in applicable federal or state insurance, tax, or securities laws
or regulations, or a public ruling, private letter ruling, no-action or
interpretative letter, or any similar action by insurance, tax, or securities
regulatory authorities; (c) an administrative or judicial decision in any
relevant proceeding; (d) the manner in which the investments of any Portfolio
are being managed; (e) a difference in voting instructions given by variable
annuity contract and variable life insurance contract owners; or (f) a decision
by an insurer to disregard the voting instructions of contract owners. The Board
shall promptly inform the Company if it determines that an irreconcilable
material conflict exists and the implications thereof.
7.2. The Company will report any potential or existing
conflicts of which it is aware to the Board. The Company will assist the Board
in carrying out its responsibilities under the Shared Funding Exemptive Order,
by providing the Board with all information reasonably necessary for the Board
to consider any issues raised. This includes, but is not limited to, an
obligation by the Company to inform the Board whenever contract owner voting
instructions are disregarded.
7.3. If it is determined by a majority of the Board, or a
majority of its disinterested trustees, that a material irreconcilable conflict
exists, the Company and other Participating Insurance Companies shall, at their
expense and to the extent reasonably practicable (as determined by a majority of
the disinterested trustees), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1),
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, or
submitting the question whether such segregation should be implemented to a vote
of all affected Contract owners and, as appropriate, segregating the assets of
any appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2), establishing a new
registered management investment company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a
decision by the Company to disregard contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company may be required, at the Fund's election, to withdraw the Account's
investment in the Fund and terminate this agreement; provided, however that such
withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of the
disinterested members of the Board. Any such withdrawal and termination must
take place within six (6) months after the Fund gives written notice that this
provision is being implemented, and until the end of that six month period the
Underwriter and Fund shall continue to accept and implement orders by the
Company for the purchase (and redemption) of shares and the Fund.
7.5. If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to the Company
conflicts with the majority of other state regulators, then the Company will
withdraw the affected Account's investment in the Fund and terminate this
Agreement within six months after the Board informs the Company in writing that
it has determined that such decision has created an irreconcilable material
conflict; provided, however, that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable conflict
as determined by a majority of the disinterested members of the Board. Until the
end of the foregoing six month period, the Underwriter and Funds shall continue
to accept and implement orders by the Company for the purchase and redemption)
of shares of the Fund.
7.6. For purposes of Sections 7.3 through 7.6 of this
Agreement, a majority of the disinterested members of the Board shall determine
whether any proposed action adequately remedies any irreconcilable material
conflict, but in no event will the Fund be required to establish a new funding
medium for the Contracts. The Company shall not be required by Section 7.3 to
establish a new funding medium for the contracts if an offer to do so has been
declined by vote of a majority of Contract owners materially adversely affected
by the irreconcilable material conflict. In the event that the Board determines
that any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the Fund
and terminate this Agreement within six (6) months after the Board informs the
Company in writing of the foregoing determination, provided, however, that such
withdrawal and termination shall be limited to the extent required by any such
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
<PAGE>
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are
amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision
of the Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Shared funding
Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies,
as appropriate, shall take such steps as may be necessary to comply with Rules
6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such
rules are applicable; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of
this Agreement shall continue in effect only to the extent that terms and
conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification By The Company
8.1(a). The Company agrees to indemnify and hold harmless the
Fund and each of its Trustees and officers and each person, if any, who controls
the Fund within the meaning of Section 15 of the 1933 Act (collectively, the
("Indemnified parties" for purposes of this Section 8.1) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Company) or litigation (including legal and other
expenses), to which the Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of the Fund's shares or the Contracts
and:
(i) arise out of or are based upon any untrue
statements or alleged untrue statements of any
material fact contained in the Registration
Statement or prospectus for the Contracts or
contained in the Contracts or sales literature for
the Contracts (or any amendment or supplement to
any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to
state therein a material fact required to be
stated therein or necessary to make the statements
therein not misleading, provided that this
agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or
such alleged statement or omission was made in
reliance upon and in conformity with information
furnished to the Company by or on behalf of the
Fund for use in the Registration Statement or
prospectus for the Contracts or in the Contracts
or sales literature (or any amendment or
supplement) or otherwise for use in connection
with the sale of the Contracts or Fund shares; or
(ii) arise out of or a result of statements or
representative (other than statements or
representatives contained in the Registration
Statement, prospectus or sales literature of the
Fund not supplied by the Company, or persons under
its control) or wrongful conduct of the Company or
persons under its control, with respect to the
sale or distribution of the Contracts or Fund
Shares; or
(iii) arise out of any untrue statement
or alleged untrue statement of a material fact
contained in a Registration Statement, prospectus,
or sales literature of the Fund or any amendment
thereof or supplement thereto or the omission or
alleged omission to state therein a material fact
required to be stated therein or necessary to make
the statements therein not misleading if such a
statement or omission was made in reliance upon
information furnished to the Fund by or on behalf
of the Company; or
(iv) arise as a result of any
failure by the Company to provide the services and
furnish the materials under the terms of this
Agreement; or
(v) arise out of or result from any
material breach of any representation and/or
warranty made by the Company in this Agreement or
arise out of or result from any other material
breach of this Agreement by the Company, as
limited by and in accordance with the provisions
of Sections 8.1(b) and 8.1(c) hereof.
<PAGE>
8.1(b). The Company shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise by
subject by reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations or duties
under Agreement or to the Fund, whichever is applicable.
8.1(c). The Company shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Company in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Company shall be entitled to participate,
at its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
8.1(d) The Indemnified Parties will promptly notify the Company
of the commencement of any litigation or proceedings against them in connection
with the issuance or sale of the Fund Shares or the Contracts or the operation
of the Fund.
8.2. Indemnification by the Underwriter
8.2(a) The Underwriter agrees to indemnify and hold harmless
the Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section
8.2) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Underwriter)
or litigation (including legal and other expenses) to which the Indemnified
Parties may become subject under any statute, at common law or otherwise,
insofar as such losses, claims damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale
or acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact
contained in the Registration Statement or prospectus or
sales literature of the Fund (or any amendment or
supplement to any of the foregoing), or arise out of or
are based upon the omission or the alleged omission to
state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with
information furnished to the Underwriter or Fund by or on
behalf of the Company for use in the registration
Statement or prospectus for the Fund or in sales
literature (or any amendment or supplement) or otherwise
for use in connection with the sale of the Contracts or
Fund shares: or (ii) arise out of or as a result of
statements or representatives (other than statements or
representations contained in the Registration Statement,
prospectus or sales literature for the Contracts not
supplied by the Underwriter or persons under its control)
or wrongful conduct of the Fund, Adviser or Underwriter
or persons under their control, with respect to the sale
or distribution of the Contracts or Fund shares: or (iii)
arise out of any untrue statement or alleged untrue
statement of a material fact contained in a Registered
Statement, or sales literature covering the Contracts, or
any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make
the statement or statements therein not misleading, if
such statement or omission was made in reliance upon
information furnished to the Company by or on behalf of
the Fund; or (iv) arise as a result of any failure by the
Fund to provide the services and furnish the materials
under the terms of this Agreement (including a failure,
whether unintentional or in good faith or otherwise, to
comply with the diversification requirements specified in
Article VI of this Agreement); or (v) arise out of or
result from any material breach of any representation
and/or warranty made by the Underwriter in this Agreement
or arise out of or result from any other material breach
of this Agreement by the Underwriter; as limited by and
in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.
<PAGE>
8.2(b) The Underwriter shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to the Company or each Account, whichever is applicable.
8.2(c) The Underwriter shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Underwriter in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Underwriter will be entitled to
participate, at its own expense, in the defense thereof. The Underwriter also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Underwriter to such party
of the Underwriter's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and the Underwriter will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.2(d) The Company agrees promptly to notify the Underwriter of
the commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the Contracts
or the operation of each Account.
8.3. Indemnification By the Fund
8.3(a) The Fund agrees to indemnify and hold harmless the
Company, and each of its directors and officers and each
person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section 8.3) against any and all
losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Fund) or
litigation (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute, at
common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect
thereof) or settlements result from the gross negligence, bad
faith or willful misconduct of the Trustees or any member
thereof, are related to the operations of the Fund and:
(i) arise as a result of any failure by the Fund to
provide the services and furnish the materials under the
terms of this Agreement (including a failure to comply
with the diversification requirements specified in
Article VI of this Agreement); or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Fund; as limited by and in
accordance with the provisions of Sections
8.3(b) and 8.3(c) hereof
.
8.3(b) The Fund shall not be liable under
this indemnification provision with respect to any
losses, claims, damages, liabilities or litigation to
which an Indemnified Party would otherwise by subject by
reason of such Indemnified Party's willful misfeasance,
bad faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of obligations and
duties under this Agreement or to be Company, the Fund,
the Underwriter or each Account, whichever is applicable.
<PAGE>
8.3(c) The Fund shall not be liable under this
indemnification provision with respect to any claim made
against an Indemnified Party unless such Indemnified
Party shall have notified the Fund in writing within a
reasonable time after the summons or other first legal
process giving information of the nature of the claim
shall have been served upon such Indemnified Party (or
after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to
notify the Fund of any such claim shall not relieve the
Fund from any liability which it may have to the
Indemnified Party against whom such action is brought
otherwise than on account of this indemnification
provision. In case any such action is brought against the
Indemnified Parties, the Fund will be entitled to
participate, at its own expense, in the defense thereof.
The Fund also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in
the action. After notice from the Fund to such party of
the Fund's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Fund will not
be liable to such party under this Agreement for any
legal or other expenses subsequently incurred by such
party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.3(d) The Company and the Underwriter agree promptly to
notify the Fund of the commencement of any litigation or
proceedings against it or any of its
respective officers or directors in connection with this
Agreement, the issuance or sale of the Contracts, with
respect to the operation of either Account, or the sale
or acquisition of shares of the Fund.
<PAGE>
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions
hereof interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
9.2. This Agreement shall be subject to the provisions of the
1933, 1934, and 1940 acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
Securities and Exchange commission may grant (including, but not limited to, the
Shared Funding Exemptive Order) and the terms hereof shall be interpreted and
construed in accordance therewith.
therewith.
ARTICLE X. Termination
10.1 This Agreement shall terminate:
(a) at the option of any party upon one year advance written
notice to the other parties; or
(b) at the option of the Company to the extent that shares of
Portfolios are not reasonably available to meet the
requirements of the Contracts as determined by the Company,
provided however, that such termination shall apply only to
the Portfolio(s) not reasonably available. Prompt notice of
the election to terminate for such cause shall be furnished by
the Company; or
(c) at the option of the Fund in the event that formal
administrativeproceedings are instituted against the Company
by the National Association of Securities Dealers, Inc.
("NASD"), the Securities and Exchange Commission, the
Insurance Commissioner or any other regulatory body regarding
the Company's duties under this Agreement or related to the
sale of the Contracts, with respect to the operation of any
Account, or the purchase of the Fund shares, provided,
however, that the Fund determines in its sole judgment
exercised in good faith, that any such administrative
proceedings will have a material adverse effect upon the
ability of the Company to perform its obligations under this
Agreement; or
(d) at the option of the Company in the event that formal
administrative proceedings are instituted against the Fund or
Underwriter by the NASD, the Securities and Exchange
Commission, or any state securities or insurance department or
any other regulatory body, provided, however, that the Company
determines in its sole judgment exercised in good faith, that
any such administrative proceedings will have a material
adverse effect upon the ability of the Fund or Underwriter to
perform its obligations under this Agreement; or
(e) with respect to any Account, upon requisite vote of the
Contract owners having an interest in such Account (or any
subaccount) to substitute the shares of another investment
company for the corresponding Portfolio shares of the Fund in
accordance with the terms of the Contracts for which those
Portfolio shares had been selected to serve as the underlying
investment media. The Company will give 30 days' prior written
notice to the Fund of the date of any proposed vote to replace
the Fund's shares; or
(f) at the option of the Company, in the event any of the
Fund's shares are not registered, issued or sold in accordance
with applicable state and/or federal law or such law precludes
the use of such shares as the underlying investment media of
the Contracts issued or to be issued by the Company; or
(g) at the option of the Company, if the Fund ceases to
qualify as a Regulated Investment Company under Subchapter M
of the Code or under any successor or similar provision, or if
the Company reasonably believes that the Fund may fail to so
qualify; or
<PAGE>
(h) at the option of the Company, if the fund fails to meet
the diversification requirements specified in Article VI
hereof; or
(i) at the option of either the fund or the Underwriter, if
(1) the Fund or the Underwriter, respectively, shall
determine, in their sole judgment reasonably exercised in good
faith, that the Company has suffered a material adverse change
in its business or financial condition or is the subject of
material adverse publicity and such material adverse change or
material adverse publicity will have a material adverse impact
upon the business and operations of either the Fund or the
Underwriter, (2) the Fund or the Underwriter shall notify the
Company in writing of such determination and its intent to
terminate this Agreement, and (3) after considering the
actions taken by the Company and any other changes in
circumstances since the giving of such notice, such
determination of the Fund or the Underwriter shall continue to
apply on the sixtieth (60th) day following the giving of such
notice, which sixtieth day shall be the effective date of
termination; or
(j) at the option of the, Company, if (1) the Company shall
determine, in its sole judgment reasonably exercised in good
faith, that either the Fund or the Underwriter has suffered a
material adverse change in its business or financial condition
or is the subject of material adverse publicity and such
material adverse change or material adverse publicity will
have a material adverse impact upon the business and
operations of the Company, (2) the Company shall notify the
Fund and the Underwriter in writing of such determination and
its intent to terminate the Agreement, and (3) after
considering the actions taken by the Fund and/or the
Underwriter and any other charges in circumstances since the
giving of such notice, such determination shall continue to
apply on the sixtieth (60th) day following the giving of such
notice, which sixtieth day shall be the effective date of
termination; or
(k) at the option of either the Fund or the Underwriter, if
the Company gives the Fund and the Underwriter the written
notice specified in Section 1.6(b) hereof and at the time such
notice was given there was no notice of termination
outstanding under any other provision of this Agreement;
provided, however any termination under this Section 10.1(k)
shall be effective forty five (45) days after the notice
specified in Section 1.6(b) was given.
<PAGE>
10.2 It is understood and agreed that the right of any party
hereto to terminate this Agreement pursuant to Section 10.1(a) may be exercised
for any reason or for not reason.
10.3 Notice Requirement No termination of this Agreement shall
be effective unless and until the party terminating this
Agreement gives prior written notice to all other parties to this Agreement of
its intent to terminate which notice shall set forth the basis for such
termination. Furthermore, (a) In the event that any termination is based upon
the provisions of Article VII, or the provision of Section 10.1(a), 10.1(i),
10.1(j) or 10.1(k) of this Agreement, such prior written notice shall be given
in advance of the effective date of termination as required by such provisions;
and (b) In the event that any termination is based upon the provisions of
Section 10.1(c) or 10.1(d) of this Agreement, such prior written notice shall be
given at least ninety (90) days before the effective date of termination.
10.4 Effect of Termination. Notwithstanding any termination of
this Agreement, the Fund and the Underwriter shall at the
option of the Company, continue to make available additional shares of the Fund
pursuant to the terms and conditions of this Agreement, for all Contracts in
effect on the effective date of termination of this Agreement (hereinafter
referred to as "Existing Contracts"). Specifically, without limitation, the
owners of the Existing Contracts or the Company, whichever shall have the legal
authority to do so, shall be permitted to reallocate investments in the Fund,
redeem investments in the Fund and/or invest in the Fund upon the making of
additional purchase payments under the Existing Contracts. The parties agree
that this Section 10.4 shall not apply to any terminations under Article VII and
the effect of such Article VII terminations shall be governed by Article VII of
this Agreement.
10.5 The Company shall not redeem Fund shares attributable to
the Contracts (as opposed to Fund shares attributable to the Company's assets
held in either account) except (i) as necessary to implement Contract Owner
initiated transactions, or (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"). Upon request, the
Company will promptly furnish to the Fund and the Underwriter the opinion of
counsel for the Company (which counsel shall be reasonably satisfactory to the
Fund and the Underwriter) to the effect that any redemption pursuant to clause
(ii) above is a Legally Required Redemption. Furthermore, except in cases where
permitted under the terms of the Contracts, the Company shall not prevent
Contract Owners from allocating payments to a Portfolio that was otherwise
available under the Contracts without first giving the Fund or the Underwriter
90 days notice of its intention to do so.
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by registered
or certified mail to the other party at the address of such party set forth
below or at such other address as such party may from time to time specify in
writing to the other party.
If to the Fund:
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer
If to the Company:
<PAGE>
6610 West Broad Street, P. O. Box 27601
Richmond, Va. 23261
Attention: William D. Baldwin, Senior Vice President
If to the Underwriter:
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer
ARTICLE XII. Miscellaneous
12.1 All persons dealing with the Fund must look solely to the
property of the Fund for the enforcement of any claims against the Fund as
neither the Trustees, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Fund.
12.2 Subject to the requirements of legal process and
regulatory authority, each party hereto shall treat as confidential the names
and addresses of the owners of the Contracts and all information reasonably
identified as confidential in writing by any other party hereto and, except as
permitted by this Agreement, shall not disclose, disseminate or utilize such
names and address and other confidential information until such time as it may
come into the public domain without the express written consent of the affected
party.
12.3 The captions in this Agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise effect their construction or effect.
12.4 This Agreement may be executed simultaneously in two or
more counterparts, each of which taken together shall constitute one and the
same instrument.
12.5 If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
12.6 Each party hereto shall cooperate with each other party
and all appropriate governmental authorities (including without limitation the
Securities and Exchange Commission, the NASD and state insurance regulators) and
shall permit such authorities reasonable access to its books and records in
connection with any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby. Notwithstanding the generality of the
foregoing, each party hereto further agrees to furnish the California Insurance
Commissioner with any information or reports in connection with services
provided under this Agreement which such Commissioner may request in order to
ascertain whether the variable life insurance operations of the Company are
being conducted in a manner consistent with the California Variable Life
Insurance Regulations and any other applicable law or regulations.
12.7 The Fund and Underwriter agree that to the extent any
advisory or other fees received by the Fund, the Underwriter or the Adviser are
determined to be unlawful in legal or administrative proceedings under the 1973
NAIC model variable life insurance regulation in the states of California,
Colorado, Maryland or Michigan, the Underwriter shall indemnify and reimburse
the Company for any out of pocket expenses and actual damages the Company has
incurred as a result of any such proceeding;
<PAGE>
provided however that the provisions of Section 8.2(b) of this
and 8.2(c) shall apply to such indemnification and reimbursement obligation.
Such indemnification and reimbursement obligation shall be in addition to any
other indemnification and reimbursement obligations of the Fund and/or the
Underwriter under this Agreement.
12.8 The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
Company:
THE LIFE INSURANCE COMPANY OF VIRGINIA
By its authorized officer.
SEAL By: William D. Baldwin
Title: Senior Vice President
Date: August 21, 1989
Fund:
VARIABLE INSURANCE PRODUCTS FUND II
By its authorized officer,
SEAL By: J. Garry Burkhead
Title: Senior Vice President
Date:
FIDELITY DISTRIBUTORS CORPORATION
By its authorized officer,
SEAL By: Roger
Title:
Date:
<PAGE>
Schedule A
Contracts
Flexible Premium Variable Deferred Annuity Form P1098A 8/87
Flexible Premium Variable Life Policy Form P1097A 1/87
Flexible Premium Variable Life Insurance Form P1096A 1/87
<PAGE>
Schedule C
Accounts
Name of Account Date of Resolution of Company's Board which
Established the Account
Life of Virginia Separate Account III February 10, 1987
Life of Virginia Separate Account II
Life of Virginia Separate Account 4 February 10, 1987
<PAGE>
EXHIBIT (8) (g)
Participation Agreement
<PAGE>
FUND PARTICIPATION AGREEMENT
This AGREEMENT is made this 2ND day of November,1994, by and
between The Life Insurance Company of Virginia (the "Insurer"), a life insurance
company domiciled in Virginia, on its behalf and on behalf of the segregated
asset accounts of the Insurer listed on Exhibit A to this Agreement (the
"Separate Accounts"); Insurance Management Series (the "Fund"), a Massachusetts
business trust; and Federated Securities Corp. (the "Distributor"), a
Pennsylvania corporation.
W I T N E S S E T H
WHEREAS, the Fund is registered with the Securities and
Exchange Commission ("SEC") as an open-end management investment company under
the Investment Company Act of 1940, as amended ("1940 Act") and the Fund is
authorized to issue separate classes of shares of beneficial interests
("shares"), each representing an interest in a separate portfolio of assets
known as a "portfolio" and each portfolio has its own investment objective,
policies, and limitations; and
WHEREAS, the Fund is available to offer shares of one or more
of its portfolios to separate accounts of insurance companies that fund variable
annuity contracts ("Variable Contracts") and to serve as an investment medium
for Variable Contracts offered by insurance companies that have entered into
participation agreements substantially similar to this agreement ("Participating
Insurance Companies"), and the Fund will be made available in the future to
offer shares of one or more of its portfolios to separate accounts of insurance
companies that fund variable life insurance policies (at which time such
policies would also be "Variable Contracts" hereunder), and
<PAGE>
WHEREAS, the Fund is currently comprised of five separate
portfolios, and other portfolios may be established in the future; and
WHEREAS, the Fund has obtained an order from the SEC dated
December 29, 1993 (File No. 812-8620), granting Participating Insurance
Companies and variable annuity and variable life insurance separate accounts
exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the
1940 Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent
necessary to permit shares of the Fund to be sold to and held by variable
annuity and variable life insurance separate accounts of life insurance
companies that may or may not be affiliated with one another (hereinafter the
"Shared Funding Exemptive Order"); and
WHEREAS,the Distributor is registered as a broker-dealer with
the SEC under the Securities Exchange Act of 1934, as amended ("1934 Act"), and
is a member in good standing of the National Association of Securities Dealers,
Inc. ("NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws
and regulations, the Insurer wishes to purchase shares of one or more of the
Fund's portfolios on behalf of its Separate Accounts to serve as an investment
medium for Variable Contracts funded by the Separate Accounts, and the
Distributor is authorized to sell shares of the Fund's portfolios;
NOW, THEREFORE, in consideration of the foregoing and the
mutual promises and covenants hereinafter set forth, the parties hereby agree as
follows:
<PAGE>
ARTICLE I. Sale of Fund Shares
1.1 The Distributor agrees to sell to the Insurer those shares of the
portfolios offered and made available by the fund and identified on Exhibit B
("Portfolios") that the Insurer orders on behalf of its Separate Accounts, and
agrees to execute such orders on each day on which the Fund calculates its net
asset value pursuant to rules of the SEC ("business day") at the net asset value
next computed after receipt and acceptance by the Fund or its agent of the order
for the shares of the Fund.
1.2 The Fund agrees to make available on each business day shares of the
Portfolios for purchase at the applicable net asset value per share by the
Insurer on behalf of its Separate Accounts; provided, however, that they Board
of Trustees of the Fund may refuse to sell shares of any Portfolio to any
person, or suspend or terminate the offering of shares of any Portfolio, if such
action is required by law or by regulatory authorities having jurisdiction or
is, in the sole discretion of the Trustees, acting in good faith and in light of
the Trustees' fiduciary duties under applicable law, necessary in the best
interests of the shareholders any Portfolio.
1.3 The Fund and the Distributor agree that shares of the Portfolios of the
Fund will be sold only to Participating Insurance Companies, their separate
accounts, and to the extent permitted by the Shared Funding Exemptive Order,
other persons consistent with each Portfolio being adequately diversified
pursuant to Section 817(h) of the Internal Revenue Code of 1986, as amended
("Code"), and the regulations thereunder. No shares of any Portfolio will be
sold directly to the general public to the extent not permitted by applicable
tax law.
1.4 The Fund and the Distributor will not sell shares of the Portfolios to
any insurance company or separate account unless an agreement containing
provisions substantially the same as the provisions in Article IV of this
Agreement is in effect to govern such sales.
<PAGE>
1.5 Upon receipt of a request for redemption in proper form from the
Insurer, the Fund agrees to redeem any full or fractional shares of the
Portfolios held by the Insurer, ordinarily executing such requests on each
business day at the net asset value next computed after receipt and acceptance
by the Fund or its agent of the request for redemption, except that the Fund
reserves the right to suspend the right of redemption, consistent with Section
22(e) of the 1940 Act and any rules thereunder. Such redemption shall be paid
consistent with applicable rules of the Sec and procedures and policies of the
Fund as described in the current prospectus.
1.6 For the purposes of Sections 1.2 and 1.5, the Insurer shall be the agent
of the Fund for the limited purpose of receiving and accepting purchase and
redemption orders from each Separate Account and receipt of such orders by 4:00
p.m. Eastern time by the Insurer shall be deemed to be receipt by the Fund for
purposes of Rule 22c-1 of the 1940 Act; provided that the Fund receives notice
of such orders on the next following business day prior to 4:00 p.m. Eastern
time on such day, although the Insurer will use its best efforts to provide such
notice by 12:00 noon Eastern time.
1.7 The Insurer agrees to purchase and redeem the shares of each Portfolio
in accordance with the provisions of the current prospectus for the Fund.
1.8 The Insurer shall pay for shares of the Portfolio on the next business
day after it places an order to purchase shares of the Portfolio. Payment shall
be in federal funds transmitted by wire.
1.9 Issuance and transfer of shares of the Portfolios will be by book entry
only unless otherwise agreed by the Fund. Stock certificates will not be issued
to the Insurer or the Separate Accounts unless otherwise agreed by the Fund.
Shares ordered from the Fund will be recorded in an appropriate title for the
Separate Accounts or the appropriate subaccounts of the Separate Accounts.
<PAGE>
1.10 The Fund shall furnish same day notice (by wire or telephone, followed
by written confirmation) to the Insurer of any income dividends or capital gain
distributions payable on the shares of the Portfolios. The Insurer hereby elects
to reinvest in the Portfolio's shares and to receive such dividend and
distributions in additional shares of that Portfolio. The Insurer reserves the
right to revoke this election in writing and to receive all such dividends and
distributions in cash. The Fund shall notify the Insurer of the number of shares
so issued as payment of such dividends and distributions.
1.11 The Fund shall instruct its recordkeeping agent to advise the Insurer
on each business day of the net asset value per share for each Portfolio as soon
as reasonably practical after the net asset value per share is calculated and
shall use its best efforts to make such net asset value per share available by
7:00 p.m. Eastern time.
ARTICLE II. Representations and Warranties
2.1 The Insurer represents and warrants that it is an insurance company duly
organized and in good standing under applicable law and that it is taxed as an
insurance company under Subchapter L of the Code.
2.2 The Insurer represents and warrants that it has legally and validly
established each of the Separate Accounts as a segregated asset account under
the Virginia Insurance Code, and that each of the Separate Accounts is a validly
existing segregated asset account under applicable federal and state law.
<PAGE>
2.3 The Insurer represents and warrants that the Variable Contracts issued
by the Insurer or interests in the Separate Accounts under such Variable
contracts (1) are or, prior to issuance, will be registered as securities under
the Securities Act of 1933 ("1933 Act") or, alternatively, (2) are not
registered because they are properly exempt from registration under the 1933 Act
or will be offered exclusively in transactions that are properly exempt from
registration under the 1933 Act.
2.4 The Insurer represents and warrants that each of the Separate Accounts
(1) has been registered as a unit investment trust in accordance with the
provisions of the 1940 Act or, alternatively, (2) has not been registered in
proper reliance upon an exclusion from registration under the 1940 Act.
2.5 The Insurer represents that it believes, in good faith, that the
Variable Contracts issued by the Insurer are currently treated as annuity
contracts or life insurance policies (which may include modified endowment
contracts), whichever is appropriate, under applicable provisions of the Code.
2.6 The Fund represents and warrants that it is duly organized as a business
trust under the laws of the Commonwealth of Massachusetts, and is in good
standing under applicable law.
2.7 The Fund represents and warrants that the shares of the Portfolios are
duly authorized for issuance in accordance with applicable law and that the fund
is registered as an open-end management investment company under the 1940 Act.
2.8 The Fund represents that it believes, in good faith, that the Portfolios
currently comply with the diversification provisions of Section 817(h) of the
Code and the regulations issued thereunder relating to the diversification
requirements for variable life insurance policies and variable annuity
contracts.
2.9 The Distributor represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with SEC.
<PAGE>
ARTICLE III. General Duties
3.1 The Fund shall take all such actions as are necessary to permit the sale
of the shares of each Portfolio to the Separate Accounts, including maintaining
its registration as an investment company under the 1940 Act, and registering
the shares of the Portfolios sold to the Separate Accounts under the 1933 Act
for so long as required by applicable law. The Fund shall amend its Registration
Statement filed with the SEC under the 1933 Act and the 1940 Act from time to
time as required in order to effect the continuous offering of the shares of the
Portfolios. The Fund shall register and qualify the shares for sale in
accordance with the laws of the various states to the extent deemed necessary by
the Fund or the Distributor.
3.2 The Fund shall make every effort to maintain qualification of each
Portfolio as a Regulated Investment Company under Subchapter M of the Code (or
any successor or similar provision) and shall notify the Insurer immediately
upon having a reasonable basis for believing that a Portfolio has ceased to so
qualify or that it might not so qualify in the future.
3.3 The Fund shall make every effort to enable each Portfolio to comply with
the diversification provisions of Section 817(h) of the Code and the regulations
issued thereunder relating to the diversification requirements for variable life
insurance policies and variable annuity contracts and any prospective amendments
or other modifications to Section 817 or regulations thereunder, and shall
notify the Insurer immediately upon having a reasonable basis for believing that
any Portfolio has ceased to comply.
3.4 The Insurer shall take all such actions as are necessary under
applicable federal and state law to permit the sale of the Variable Contracts
issued by the Insurer, including registering each Separate Account as an
investment company to the extent required under the 1940 Act, and registering
the Variable Contracts or interests in the Separate Accounts under the Variable
Contracts to the extent required under the 1933 Act, and obtaining all necessary
approvals to offer the Variable Contracts from state insurance commissioners
<PAGE>
3.5 The Insurer shall make every effort to maintain the treatment of the
Variable Contracts issued by the Insurer as annuity contracts or life insurance
policies, whichever is appropriate, under applicable provisions of the code, and
shall notify the Fund and the Distributor immediately upon having a reasonable
basis for believing that such Variable Contracts have ceased to be so treated or
that they might not be so treated in the future.
3.6 The Insurer shall offer and sell the Variable Contracts issued by the
Insurer in accordance with applicable provisions of the 1933 Act, the 1934 Act,
the 1940 Act, the NASD Rules of Fair Practice, and state law respecting the
offering of variable life insurance policies and variable annuity contracts.
3.7 The Distributor shall sell and distribute the shares of the Portfolios
of the Fund in accordance with the applicable provisions of the 1933 Act, the
1934 Act, the 1940 Act, the NASD Rules of Fair Practice, and state law.
3.8 During such time as the Fund engages in Mixed Funding or Shared Funding,
a majority of the Board of Trustees of the Fund shall consist of persons who are
not "interested persons" of the Fund ("disinterested Trustees"), as defined by
Sections 2(a)(19) of the 1940 Act and the rules thereunder, and as modified by
any applicable orders of the SEC, except that if this provision of this Section
3.8 is not met by reason of the death, disqualification, or bona fide
resignation of any Trustee or Trustees, then the operation of this provision
shall be suspended (a) for a period of 45 days if the vacancy or vacancies may
be filled by the fund's Board; (b) for a period of 60 days if a vote of
shareholders is required to fill the vacancy or vacancies; or (c) for such
longer period as the SEC may prescribe by order upon application.
3.9 The Insurer and its agents will not in any way recommend any proposal or
oppose or interfere with any proposal submitted by the Fund at a meeting of
owners of Variable Contracts or shareholders of the Fund, and will in no way
recommend, oppose, or interfere with the solicitation of proxies for fund shares
held by Contact Owners, without the prior written consent of the Fund, which
consent may be withheld in the Fund's sole discretion.
3.10 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities having jurisdiction (including without
limitation, the SEC, the NASD, and state insurance regulators) and shall permit
such authorities reasonable access to its books and records in connection with
any investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
3.11 The Insurer shall have the right, at all reasonable times, to inspect,
audit and copy all records of the Fund and/or the Distributor that pertain to
the Fund's or the Distributors performance of its obligations under this
Agreement.
<PAGE>
ARTICLE IV. Potential Conflicts
4.1 During such time as the Fund engages in Mixed Funding or Shared Funding
, the parties hereto shall comply with the conditions in this Article IV.
4.2 The fund's Board of Trustees shall monitor the Fund for the existence of
any material irreconcilable conflict (1) between the interests of owners of
variable annuity contracts and variable life insurance policies, and (2) between
the interests of owners of Variable Contracts ("Variable Contract Owners")
issued by different Participating Life Insurance Companies that invest in the
fund. A material irreconcilable conflict may arise for a variety of reasons,
including; (a) an action by any state insurance regulatory authority; (b) a
change in applicable federal or state insurance, tax, or securities laws or
regulations, or a public ruling, private letter ruling, no-action or
interpretive letter, or any similar action by insurance, tax, or securities
regulatory authorities; (c) an administrative or judicial decision in any
relevant proceeding; (d) the manner in which the investments of any Portfolio of
the Fund are being managed; (e) a difference in voting instructions given by
variable annuity and variable life insurance contract owners; or (f) a decision
by a Participating Insurance company to disregard the voting instructions of
Variable Contract Owners.
<PAGE>
4.3 The Insurer agrees that it shall report any potential or existing
conflicts of which it is aware to the Fund's Board of Trustees. The Insurer will
be responsible for assisting the Board of Trustees of the Fund in carrying out
its responsibilities under the Mixed and Shared Funding Exemptive Order, or, if
the Fund is engaged in Mixed Funding or Shared Funding in reliance on Rule
6e-3(T), or any other regulation under the 1940 Act, the Insurer will be
responsible for assisting the Board of Trustees of the Fund in carrying out its
responsibilities under such regulation, by providing the Board with all
information reasonably necessary for the Board to consider any issues raised.
This includes, but is not limited to, an obligation by the Insurer to inform the
Board whenever Variable Contract Owner voting instructions are disregarded. The
Insurer shall carry out its responsibility under this Section 4.3 with a view
only to the interests of the Variable Contract Owners.
4.4 The Insurer agrees that in the event that it is determined by a majority
of the Board of Trustees of the Fund or a majority of the Fund's disinterested
Trustees that a material irreconcilable conflict exists, the Insurer shall, at
its expenses and to the extent reasonable practicable (as determined by a
majority of the disinterested Trustees of the Board of the fund), take whatever
steps are necessary to remedy or eliminate the irreconcilable material conflict,
up to and including: (1) withdrawing the assets allocable to some or all of the
Separate Accounts from the Fund or any Portfolio and reinvesting such assets in
a different investment medium, including another portfolio of the Fund, or
submitting the question as to whether such segregation should be implemented to
a vote of all affected Variable Contract Owners and, as appropriate, segregating
the assets of any appropriate group (i.e., annuity contract owners or life
insurance contract owners of contracts issued by one or more Participating
Insurance Companies), that votes in favor of such segregation, or offering to
the affected Variable contract Owners the option of making such a change; and
(2) establishing a new registered management investment company or managed
separate account. If a material irreconcilable conflict arises because of the
Insurer's decision to disregard Variable Contract Owners' voting instructions
and that decision represents a minority position or would preclude a majority
vote, the Insurer shall be required, at the Fund's election, to withdraw the
Separate Accounts' investment in the Fund, provided, however, that such
withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of the
disinterested Trustees, and no charge or penalty will be imposed as a result of
such withdrawal. These responsibilities shall be carried out with a view only to
the interests of the Variable Contract Owners. A majority of the disinterested
Trustees of the Fund shall determine whether or not any proposed action
adequately remedies any material irreconcilable conflict, but in no event will
the Fund or its investment adviser or the Distributor be required to establish a
new funding medium for any Variable Contract. The Insurer shall not be required
by this Section 4.4 to establish a new funding medium for any Variable Contract
if any offer to do so has been declined by vote of a majority of Variable
Contract Owners materially adversely affected by the material irreconcilable
conflict.
<PAGE>
4.5 The Insurer, at least annually, shall submit to the Fund's Board of
Trustees such reports, materials, or data as the Board reasonably may request so
that the Trustees of the fund may fully carry out the obligations imposed upon
the board by the conditions contained in the application for the Mixed and
Shared Funding Exemptive Order and said reports, materials, and data shall be
submitted more frequently if deemed appropriate by the Board.
4.6 All reports of potential or existing conflicts received by the Fund's
Board of Trustees, and all Board action with regard to determining the existence
of a conflict, notifying Participating Insurance Companies of a conflict, and
determining whether any proposed action adequately remedies a conflict, shall be
properly recorded in the minutes of the Board of Trustees of the Fund or other
appropriate records, and such minutes or other records shall be made available
to the SEC upon request.
4.7 The Board of Trustees of the Fund shall promptly notify the Insurer in
writing of its determination of the existence of an irreconcilable material
conflict and its implications.
ARTICLE V. Prospectuses and Proxy Statements; Voting
5.1 The Insurer shall distribute such prospectuses, proxy statements and
periodic reports of the Fund to the owners of Variable Contracts issued by the
Insurer as required to be distributed to such Variable Contract Owners under
applicable federal or state law. All mailing costs incurred as a result of
Insurer's actions under this Section 5.1 shall be borne by the Insurer.
5.2 The Distributor shall provide the Insurer with as many copies of the
current prospectus of the Fund as the Insurer may reasonably request. If
requested by the Insurer in lieu thereof, the Fund shall provide such
documentation (including a final copy of the Fund's prospectus as set in type or
in camera-ready copy) and other assistance as is reasonable necessary in order
for the Insurer to either print a stand-alone document or print together in one
document the current prospectus for the Variable Contracts issued by the Insurer
and the current prospectus for the Fund, or a document combining the fund
prospectus with prospectuses of other funds in which the Variable Contracts may
be invested. The fund shall bear the expense of printing copies of its current
prospectus that will be distributed to existing Variable Contract Owners. The
Insurer shall bear all mailing expenses, and the Fund or Distributor shall bear
all printing expenses, incurred in connection with actions taken under this
Section 5.2.
5.3 The Fund and the Distributor shall provide, at the Fund's expense,such
copies of the fund's current Statement of Additional Information ("SAI") as may
reasonably be requested, to the Insurer and to any owner of a Variable Contract
issued by the Insurer who requests such SAI.
5.4 The Fund, at its expense, shall provide the Insurer with copies of its
proxy materials, periodic reports to shareholders, and other communications to
shareholders in such quantity as the Insurer shall reasonably require for
purposes of distributing to owners of Variable Contracts issued by the Insurer.
The Fund shall provide the Insurer with copies of its periodic reports to
shareholders and other communications to shareholders in such quantity as the
Insurer shall reasonably request for use in connection with offering the
Variable Contracts issued by the Insurer. If requested by the Insurer in lieu
thereof, the Fund shall provide such documentation (including a final copy of
the Fund's proxy materials, periodic reports to shareholders, and other
communications to shareholders, as set in type or in camera-ready copy) and
other assistance as reasonably necessary in order for the Insurer to print such
shareholder communications for distribution to owners of Variable Contracts
issued by the Insurer. The Insurer shall bear all mailing expenses, and the fund
or Distributor shall bear all printing expenses, incurred in connection with
actions taking under this Section 5.4
<PAGE>
5.5 For so long as the SEC interprets the 1940 ACT to require pass-through
voting by Participating Insurance Companies whose Separate Accounts are
registered as investment companies under the 1940 ACT, the Insurer shall vote
shares of each Portfolio of the Fund held in a Separate Account or a subaccount
thereof, whether or not registered under the 1940 ACT, at regular and special
meetings of the Fund in accordance with instructions timely received by the
Insurer (or its designated agent) from owners of Variable Contracts funded by
such Separate Account or subaccount thereof having a voting interest in the
Portfolio. The Insurer shall vote shares of a Portfolio of the Fund held in a
Separate Account or a subaccount thereof that are attributable to the Variable
Contracts as to which no timely instructions are received, as well as shares
held in such Separate Account or subaccount thereof that are not attributable to
the Variable Contracts and owned beneficially by the Insurer (resulting from
charges against the Variable Contracts or otherwise), in the same proportion as
the votes cast by owners of Variable Contracts funded by that Separate Account
or subaccount thereof having a voting interest in the Portfolio from whom
instructions have been timely received. The Insurer shall vote shares of each
Portfolio of the Fund held in its general account, if any, in the same
proportion as the votes cast with respect to shares of the Portfolio held in all
Separate Accounts of the Insurer or subaccounts thereof, in the aggregate.
5.6 During such time as the Fund engages in Mixed Funding or Shared Funding,
the Fund shall disclose in its prospectus that (1) the Fund is intended to be a
funding vehicle for variable annuity and variable life insurance contracts
offered by various insurance companies, (2) material irreconcilable conflicts
possibly may arise, and (3) the Board of Trustees of the Fund will monitor
events in order to identify the existence of any material irreconcilable
conflicts and to determine what action, if any, should be taken in response to
any such conflict. The fund hereby notifies the Insurer that prospectus
disclosure may be appropriate regarding potential risks of offering shares of
the Fund to separate accounts funding both variable annuity contracts and
variable life insurance policies and to separate accounts funding Variable
Contracts of unaffiliated life insurance companies.
ARTICLE VI. Sales Material and Information
6.1 The Insurer shall furnish, or shall cause to be furnished, to the Fund
or its designee, each piece of sales literature or other promotional material in
which the Fund (or any Portfolio thereof) or its investment adviser or the
Distributor is named at least 15 days prior to the anticipated use of such
material, and no such sales literature or other promotional material shall be
used unless the Fund and the Distributor or the designee of either approve the
material or do not respond with comments on the material within 10 days from
receipt of the material.
<PAGE>
6.2 The Insurer agrees that neither it nor any of its affiliates or agents
shall give any information or make any representations or statements on behalf
of the Fund or concerning the Fund other than the information or representations
contained in the Registration Statement or prospectus for the Fund shares, as
such registration statement and prospectus may be amended or supplemented from
time to time, or in reports or proxy statements for the Fund, or in sales
literature or other promotional material approved by the Fund or its designee
and by the Distributor or its designee, except with the permission of the Fund
or its designee and the Distributor or its designee.
6.3 The Fund or the Distributor or the designee of either shall furnish to
the Insurer or its designee, each piece of sales literature or other promotional
material in which the Insurer or its Separate Accounts are named at least 15
days prior to the anticipated use of such material, and no such material shall
be used unless the Insurer or its designee approves the material or does not
respond with comments on the material within 10 days from receipt of the
material.
6.4 The Fund and the Distributor agree that each and the affiliates and
agents of each shall not give any information or make any representations on
behalf of the Insurer or concerning the Insurer, the Separate Accounts, or the
Variable Contracts issued by the Insurer, other than the information or
representations contained in a registration statement or prospectus for such
Variable Contracts, as such registration statement and prospectus may be amended
or supplemented from time to time, or in reports for the Separate Accounts or
prepared for distribution to owners to such Variable Contracts, or in sales
literature or other promotional material approved by the Insurer or its
designee, except with the permission of the Insurer.
6.5 The Fund will provide to the Insurer at least one complete copy of the
Mixed and Shared Funding Exemptive Application and any amendments thereto, all
prospectuses, Statements of Additional Information, reports, proxy statements
and other voting solicitation materials, and all amendments and supplements to
any of the above, that relate to the Fund or its shares, promptly after the
filing of such documents with the SEC or other regulatory authorities.
6.6 The Insurer will provide to the Fund all prospectuses (which shall
include an offering memorandum if the Variable Contracts issued by the Insurer
or interests therein are not registered under the 1933 Act), Statements of
Additional Information, reports, solicitations for voting instructions relating
to the Fund, and all amendments or supplements to any of the above that relate
to the Variable Contracts issued by the Insurer or the Separate Accounts which
utilize the fund as an underlying investment medium, promptly after the filing
of such document with the SEC or other regulatory authority.
<PAGE>
6.7 For the purposes of this Article VI, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use, in a newspaper, magazine or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, motion pictures, computerized
media, or other public media), sales literature (i.e., any written communication
distributed or made generally available to customers or the public, including
brochures, circulars, research reports, market letters, form letters, seminar
texts, reprints or excerpts or any other advertisement, sales literature, or
published article), educational or training materials or other communications
distributed or made general available to some or all agents or employees.
ARTICLE VII. Indemnification
7.1 Indemnification by the Insurer
7.1(a) The Insurer agrees to indemnify and hold harmless the Fund,
each of its Trustees and officers, any affiliated person of the Fund within the
meaning of Section 2(a)(3) of the 1940 Act, and the Distributor (collectively,
the "Indemnified Parties" for purposes of this Section 7.1) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Insurer) or litigation expenses (including legal and
other expenses), to which the Indemnified Parties may become subject under any
statute or regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or litigation expenses are related to the sale or
acquisition of the Fund's shares or the Variable Contracts issued by the Insurer
and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement or prospectus (which shall include an
offering memorandum) for the Variable Contracts issued by the
Insurer or sales literature for such Variable Contracts (or any
amendment or supplement to any of the foregoing), or arise out of
or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party
if such statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with
information furnished to the Insurer by or on behalf of the Fund
for use in the registration statement or prospectus for the
Variable Contracts issued by the Insurer or sales literature (or
any amendment or supplement) or otherwise for use in connection
with the sale of such Variable Contracts or Fund shares; or
(ii) arise out of or as a result of any statement or
representation (other than statements or representations contained
in the registration statement, prospectus or sales literature of
the Fund not supplied by the Insurer or persons under its control)
or wrongful conduct of the Insurer or any of its affiliates,
employees or agents with respect to the sale or distribution of
the Variable Contract issued by the Insurer or the Fund shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, or sales literature of the Fund or any
amendment thereof or supplement thereto or the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading
if such a statement or omission was made in reliance upon
information furnished to the Fund by or on behalf the Insurer; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Insurer in this
Agreement or arise out of or result from any other material breach
of this Agreement by the Insurer;except to the extent provided in
Sections 7.1(b) and 7.1(c) hereof.
<PAGE>
7.1(b) The Insurer shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
expenses to which an Indemnified Party would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of the
Indemnified Party's duties or by reason of the Indemnified Party's reckless
disregard of obligations or duties under this Agreement or to the Fund.
7.1(c) The Insurer shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Party shall have notified the Insurer in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon such Indemnified Party (or after such
Party shall have received notice of such service on any designated agent), but
failure to notify the Insurer of any such claim shall not relieve the Insurer
from any liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification provision.
In case any such action is brought against the Indemnified Parties, the Insurer
shall be entitled to participate, at its own expense, in the defense of such
action. The Insurer also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from the
Insurer to such party of the Insurer's election to assume the defense thereof,
the Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Insurer will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
7.1(d) The Indemnified Parties shall promptly notify the Insurer
of the commencement of any litigation or proceedings against them in connection
with the issuance or sale of the Fund shares or the Variable Contracts issued by
the Insurer or the operation of the Fund.
7.2 Indemnification By the Distributor
7.2(a) The Distributor agrees to indemnify and hold harmless the
Insurer, its affiliated principal underwriter of the Variable Contracts, and
each of their directors and officers and any affiliated person of the Insurer
within the meaning of Section 2(a)(3) of the 1940 Act (collectively, the
"Indemnified Parties" for purposes of this Section 7.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Distributor) or litigation expenses (including legal
and other expenses) to which the Indemnified Parties may become subject under
any statute or regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or litigation expenses are related to the sale or
acquisition of the Fund's shares or the Variable Contracts issued by the Insurer
and:
<PAGE>
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement or prospectus or sales literature of the
Fund (or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance upon and
in conformity with information furnished to the Distributor or the
Fund or the designee or either by or on behalf of Insurer for use
in the registration statement or prospectus for the Fund or in
sales literature (or any amendment or supplement) or otherwise for
use in the registration statement or prospectus for the Fund or in
sales literature (or any amendment or supplement) or otherwise for
use in connection with the sale of the Variable Contracts issued
by the Insurer or Fund shares; or
(ii) arise out of or as a result of any statement or
representations (other than statements or representations
contained in the registration statement, prospectus or sales
literature for the Variable Contracts not supplied by the
Distributor or any employees or agents thereof) or wrongful
conduct of the Fund or Distributor, or the affiliates, employees,
or agents of the Fund or the Distributor with respect to the sale
or distribution of the Variable Contracts issued by the Insurer or
Fund shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, or sales literature covering the Variable
Contracts issued by the Insurer, or any amendment thereof or
supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statement or statements therein not misleading, if
such statement or omission was made in reliance upon information
furnished to the Insurer by or on behalf of the Fund; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by Distributor in this
Agreement or arise out of or result from any other material breach
of this Agreement by the Distributor;except to the extent provided
in Sections 7.2(b) and 7.2(c) hereof.
7.2(b) The Distributor shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation expenses to which an Indemnified Party would otherwise
be subject by reason of willful misfeasance, bad faith, or gross negligence in
the performance of the Indemnified Party's duties or by reason of the
Indemnified Party's reckless disregard of obligations or duties under this
Agreement or to the Insurer or the Separate Accounts.
<PAGE>
7.2(c) The Distributor shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Party shall have notified the Distributor in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified party (or after such Party shall have received notice of such
service on any designated agent), but failure to notify the Distributor of any
such claim shall not relieve the Distributor from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Distributor will be entitled to
participate, at its own expense, in the defense thereof. The Distributor also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Distributor to such party
of the Distributor's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and the Distributor will not be liable to such party under this Agreement for
any legal or other expense subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
7.2(d) The Insurer shall promptly notify the Distributor of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Variable Contracts
issued by the Insurer or the operation of the Separate Accounts.
7.3 Indemnification by the Fund
7.3(a) The fund agrees to indemnify and hold harmless
the Insurer, its affiliated principal underwriter of the Variable Contracts, and
each of their directors and officers and any affiliated person of the Insurer
within the meaning of Section 2(a)(3) of the 1940 Act (collectively, the
"Indemnified Parties" for purposes of this Section 7.3) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Fund) or litigation expenses (including legal and
other expenses) to which the Indemnified Parties may become subject under any
statue or regulation, at common law or otherwise, insofar as such losses, claims
damages, liabilities or litigation expenses are related to the sale or
acquisition of the Fund's shares or the Variable Contracts issued by the Insurer
and:
(i) arise out of or are based upon any untruee statement or alleged untrue
statement of any material fact contained in the registration statement or
prospectus or sales literature of the Fund (or any amendment or supplement to
any of the foregoing), or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the Distributor or the Fund
or the designee of either by or on behalf of the Insurer for use in the
registration statement or prospectus for the fund or in sales literature (or any
amendment or supplement) or otherwise for use in connection with the sale of the
Variable Contracts issued by the Insurer or Fund shares; or
<PAGE>
(ii) arise out of or as a result of any statement or
representation (other than statements or representations contained
in registration statement prospectus or sales literature for the
Variable Contracts not supplied by the Distributor or any
employees or agents thereof) or wrongful conduct of the Fund, or
the affiliates, employees, or agents of the Fund, with respect to
the sale or distribution of the Variable Contracts issued by the
Insurer or Fund shares; or
(iii) arise out any untrue statement or alleged untrue statement
of a material fact contained in a registration statement,
prospectus or sales literature covering the Variable Contracts
issued by the Insurer, or any amendment thereof or supplement
thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statement or statements therein not misleading, if such
statement or omission was made in reliance upon information
furnished to the Insurer by or on behalf of the Fund; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Fund:except to the extent provided in Sections
7.3(b) and 7.3(c) hereof.
7.3(b) The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
expenses to which an Indemnified Party would otherwise by subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of
Indemnified Party's duties or by reason of the Indemnified Party's reckless
disregard of obligations or duties under this Agreement or to the Insurer or the
Separate Accounts.
7.3(c) The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such party shall have notified the Fund in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon such Indemnified Party (or after such
Party shall have received notice of such service on any designated agent), but
failure to notify the fund of any such claim shall not relieve the Fund from any
liability which it may have to the Indemnified party against whom such action is
brought otherwise than on account of this indemnification provision. In case any
such action is brought against the Indemnified Parties, the Fund will be
entitled to participate, at its own expense, in the defense thereof. The Fund
also shall be entitled to assume the defense thereof, with counsel satisfactory
to the party named in the action. After notice from the fund to such party of
the Fund's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Fund will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
<PAGE>
7.3(d) The Insurer shall promptly notify the Fund of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Variable Contracts
issued by the Insurer or the sale of the Fund's shares.
ARTICLE VIII. Applicable Law
8.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Pennsylvania.
8.2 This Agreement shall be subject to the provisions of the 1933, 1934,
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, the Mixed and Shared Funding Exemptive Order),
and the terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE I. Termination
9.1 This Agreement shall terminate:
(a) at the option of any party upon 180 days advance written
notice to the other parties; or
(b) at the option of the Insurer is shares of the Portfolios are
not reasonably available to meet the requirements of the Variable Contracts
issued by the Insurer, as determined by the Insurer, and upon prompt notice by
the Insurer to the other parties; or
(c) at the option of the Fund or the Distributor upon institution
of formal proceedings against the Insurer or its agent by the NASD, the SEC, or
any state securities or insurance department or any other regulatory body
regarding the Insurer's duties under this Agreement or related to the sale of
the Variable Contracts issued by the Insurer, the operation of the Separate
Accounts, or the purchase of the Fund shares; or
(d) at the option of the Insurer upon institution of formal
proceedings against the fund or the Distributor by the NASD, the SEC, or any
state securities or insurance department or any other regulatory body; or
(e) upon requisite vote of the Variable Contract Owners having an
interest in the Separate Accounts (or any subaccounts thereof) to substitute the
shares of another investment company for the corresponding shares of the Fund or
a Portfolio in accordance with the terms of the Variable Contracts for which
those shares had been selected or serve as the underlying investment media; or
(f) in the event any of the shares of a Portfolio are not
registered, issued or sold in accordance with applicable state and/or federal
law, or such law precludes the use of such shares as the underlying investment
media of the Variable Contracts issued or to be issued by the Insurer; or
(g) by any party to the Agreement upon a determination by a
majority of the Trustees of the Fund, or a majority of its disinterested
Trustees, that an irreconcilable conflict, as described in Article IV hereof,
exists; or
(h) at the option of the Insurer if the Fund or a Portfolio fails
to meet the requirements under Subchapter M of the code for qualification as a
Regulated Investment Company specified in Section 3.2 hereof or the
diversification requirements in Section 3.3 hereof.
<PAGE>
9.2 Each party to this Agreement shall promptly notify the other parties
to the Agreement of the institution against such party of any such formal
proceedings as described in Sections 9.1(c) and (d) hereof. The Insurer shall
give 60 days prior written notice to the Fund of the date of any proposed vote
of Variable Contract Owners to replace the Fund's shares as described in Section
9.(e) hereof.
9.3 Except as necessary to implement Variable Contract Owner initiated
transactions, or as required by state insurance laws or regulations, the Insurer
shall not redeem Fund shares attributable to the Variable Contracts issued by
the Insurer (as opposed to Fund shares attributable to the Insurer's assets held
in the Separate Accounts), and the Insurer shall not prevent Variable Contract
Owners from allocating payments to a Portfolio, until 60 days after the Insurer
shall have notified the Fund or Distributor of its intention to do so.
9.4 Notwithstanding any termination of this Agreement, the Fund
and the distributor shall at the option of the Insurer continue to make
available additional shares of the fund pursuant to the terms and conditions of
this Agreement for all Variable Contracts in effect on the effective date of
termination of this Agreement (hereinafter referred to as "Existing Contracts").
Specifically, without limitation, based upon instructions from the owners of the
Existing Contracts, the Separate Accounts shall be permitted to reallocate
investments in the Portfolios of the Fund and redeem investments in the
Portfolios, and shall be permitted to invest in the Portfolios in the event that
owners of the Existing Contracts make additional purchase payments under the
Existing Contracts. If this Agreement terminates, the parties agree that
Sections 3.10, 7.1, 7.2, 7.3, 8.1, and 8.2, and, to the extent that all or a
portion of the assets of the Separate Accounts continue to be invested in the
Fund or any Portfolio of the Fund, Articles I, II, and IV and Sections 5.5 and
5.6 will remain in effect after termination.
ARTICLE X. Notices
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Fund:
Insurance Management Series
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
Attn: John W. McGonigle
If to the Distributor:
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
Attn: John W. McGonigle
If to the Insurer:
The Life Insurance Company of Virginia
6610 West Broad Street
P. O. Box 27601
Richmond, Virginia 23261
Attn: John J. Palmer
<PAGE>
ARTICLE XI: Miscellaneous
11.1 The Fund and the Insurer agree that if and to the extent Rule 6e-2 or
Rule 6e-3(T) under the 1940 Act is amended or if Rule 6e-3 is adopted in final
form, to the extent applicable, the Fund and the Insurer shall each take such
steps as may be necessary to comply with the Rule as amended or adopted in final
form.
11.2 A copy of the Fund's Agreement and Declaration of Trust is on file
with the Secretary of the Commonwealth of Massachusetts and notice is hereby
given that any agreements that are executed on behalf of the Fund by any Trustee
or officer of the Fund are executed in his or here capacity as Trustee or
officer and not individually. The obligations of this Agreement shall only be
binding upon the assets and property of the Fund and shall not be binding upon
any Trustee, officer or shareholder of the Fund Individually.
11.3 Nothing in this Agreement shall impede the Fund's Trustees or
shareholders of the shares of the Fund's Portfolios from exercising any of the
rights provided to such Trustees or shareholders in the Fund's Agreement and
Declaration of Trust, as amended, a copy of which will be provided to the
Insurer upon request.
11.4 Administrative services to Variable Contract Owners shall be the
responsibility of Insurer. Insurer, on behalf of its separate accounts will be
the sole shareholder of record of Fund shares. Fund and Distributor recognize
that they will derive a substantial savings in administrative expense by virtue
of having a sole shareholder rather than multiple shareholders. In consideration
of the administrative savings resulting from having a sole shareholder rather
than multiple shareholders, Distributor agrees to pay to Insurer an amount
computed at an annual rate of.25 of 1% of the average daily net asset value of
shares held in subaccounts for which Insurer provides administration services.
Distributor's payments to Insurer are for administrative services only and do
not constitute payment in any manner for investment advisory services.
11.5 It is understood that the name "Federated" or any derivative thereof
or logo associated with that name is the valuable property of the Distributor
and its affiliates, and that the Insurer has the right to use such name (or
derivative or logo) only so long as this Agreement is in effect. Upon
termination of this Agreement the Insurer shall forthwith cease to use such name
(or derivative or logo).
11.6 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise their construction or effect.
11.7 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
11.8 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
11.9 This Agreement may not be assigned by any party to the Agreement
Except with the written consent of the other parties to the Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
INSURANCE MANAGEMENT
SERIES
ATTEST: BY:
--------------------- -----------------------
Name: S. Elliott Cohan Name: John W. McGonigle
--------------------- ---------------------
Title: Assistant Secretary Title: Vice President
---------------------- ---------------------
FEDERATED SECURITIES CORP.
ATTEST: BY:
---------------------- ---------------------
Name: S. Elliott Cohan Name: John W. McGonigle
---------------------- ----------------------
Title: Secretary Title: Vice President
---------------------- ---------------
THE LIFE INSURANCE COMPANY
OF VIRGINIA
ATTEST: BY:
-------------------- ---------------------
Name: Margaret H. Doyle Name: Thomas Barefield
-------------------- ---------------------
Title: Executive Assistant Title:Sr. Vice President
--------------------- ---------------------
<PAGE>
Exhibit A
Life of Virginia Separate Account II
Life of Virginia Separate Account III
Life of Virginia Separate Account 4
<PAGE>
EXHIBIT B
Fund Name Date
Utility Fund November 2, 1994
Corporate Bond Fund November 2, 1994
<PAGE>
EXHIBIT 1A(5)
Policy Form, Commonwealth Three
<PAGE>
FLEXIBLE PREMIUM VARIABLE
THE INSURANCE POLICY
- ------------------------------------------------------------------------------
* Life insurance proceeds payable at the insured's death prior to the maturity
date.
* Adjustable death benefit
* Flexible premiums payable for the insured's life until maturity date * Some
benefits reflect investment results * No dividends
LIFE OF
VIRGINIA
To the Policyowner:
Please read your policy carefully. This policy is a legal contract between you
and the company. You, the owner, have rights and benefits described in this
policy. We will pay the cash value, if any, to you on the maturity date if the
insured is living on that date. The insured is named below. The beneficiary is
as named in the attached application, unless later changed. We will pay the life
insurance proceeds on this policy when we receive due proof that the insured
died while this policy was in effect.
This is a Flexible Premium Variable Life Insurance Policy. You may
increase or decrease the specified amount. We will allocate net premiums to the
Separate Account named in the policy data pages.
THIS POLICY'S CASH VALUE IN THE SEPARATE ACCOUNT IS BASED ON THE INVESTMENT
EXPERIENCE OF THAT ACCOUNT, AND MAY INCREASE OR DECREASE DAILY. IT IS NOT
GUARANTEED AS TO DOLLAR AMOUNT. THE AMOUNT OF DEATH BENEFIT OR THE DURATION OF
THE DEATH BENEFIT MAY VARY UNDER THE CONDITIONS DESCRIBED ON PAGES 6, 9 AND 10.
THE MAXIMUM LOAN VALUE IS NINETY PERCENT OF THE SURRENDER VALUE.
Refund Privilege. You may return this policy to our home office or to our agency
within 10 days after its delivery for a refund. If authorized by state law, the
amount of the refund will equal the sum of all charges deducted from premiums
paid, plus the net premiums allocated to the Separate Account adjusted by
investment gains and losses. Otherwise the amount of the refund will equal the
gross premiums paid.
For The Life Insurance Company of Virginia
Daniel T. Cox Paul E. Rutledge III
CHAIRMAN PRESIDENT
<PAGE>
- --------------------------------------------------------------------------------
THE LIFE INSURANCE
COMPANY OF VIRGINIA
6610 West Broad Street, Richmond, Va. 23230
FORM P1096A 1/87
- --------------------------------------------------------------------------------
OWNER THE INSURED
INSURED JOHN DOE MALE 35 AGE NEAREST BIRTHDAY
POLICY NUMBER T00000001 STANDARD RATING CLASS
POLICY DATE APRIL 1, 1992 APRIL 1, 2052 MATURITY DATE
MONTHLY ANNIVERSARY DAY 1
PLAN FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
$100,000 INSURED'S SPECIFIED AMOUNT INCLUDING THE CASH VALUE
POLICY DATA
SCHEDULE OF BENEFITS SCHEDULE OF PREMIUMS
AMOUNT PAYABLE
LIFE INSURANCE NON-SMOKER
PLANNED PERIODIC PREMIUM $381.24 ANNUALLY
NET PREMIUM FACTOR: 92.50% (THE NET PREMIUM FACTOR REFLECTS THE DEDUCTION
OF 5% OF EACH PREMIUM RECEIVED FOR SALES LOAD AND 2.5% OF EACH PREMIUM RECEIVED
FOR PREMIUM TAX) INITIAL MONTHLY ADMINISTRATIVE CHARGE: $5.00 DEFERRED SALES
CHARGE: 45.0% OF FIRST YEAR PREMIUM PAID, MAXIMUM $292.50 INITIAL CONTINGENT
DEFERRED ISSUE CHARGE: $300.00 INCREASE CHARGE PER $1,000: $1.50 PER $1000,
MAXIMUM $300 PER INCREASE
TRANSFER CHARGE: $10.00
MAXIMUM POLICY LOAN INTEREST RATE: 8.00% PER ANNUM PAYABLE IN ARREARS
MINIMUM SPECIFIED AMOUNT $50,000
NOTE: MATURITY DATE SHOWN IS THAT ELECTED BY THE OWNER. IT IS POSSIBLE THAT
COVERAGE WILL EXPIRE PRIOR TO THE MATURITY DATE SHOWN WHERE EITHER NO PREMIUMS
ARE PAID FOLLOWING PAYMENT OF THE INITIAL PREMIUM OR SUBSEQUENT PREMIUMS ARE
INSUFFICIENT TO CONTINUE COVERAGE TO SUCH DATE.
<PAGE>
OWNER THE INSURED
INSURED JOHN DOE MALE 35 AGE NEAREST BIRTHDAY
POLICY NUMBER T00000001 STANDARD RATING CLASS
POLICY DATE APRIL 1, 1992 APRIL 1, 2052 MATURITY
MONTHLY ANNIVERSARY DAY 1
PLAN FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
$100,000 INSURED'S SPECIFIED AMOUNT INCLUDING THE CASH VALUE
POLICY NUMBER: T00000001
<PAGE>
SEPARATE ACCOUNT II
INVESTMENT SUBDIVISIONS ARE INVESTED IN
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
FID MONEY MARKET MONEY MARKET PORTFOLIO
FID HIGH INCOME HIGH INCOME PORTFOLIO
FID EQUITY-INCOME EQUITY-INCOME PORTFOLIO
FID GROWTH GROWTH PORTFOLIO
FID OVERSEAS OVERSEAS PORTFOLIO
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
ASSET MANAGER PORTFOLIO
LIFE OF VIRGINIA SERIES FUND, INC.
LOV MONEY MARKET MONEY MARKET PORTFOLIO
LOV BOND BOND PORTFOLIO
LOV COMMON STOCK COMMON STOCK PORTFOLIO
LOV TOTAL RETURN TOTAL RETURN PORTFOLIO
NEUBERGER & BERMAN
ADVISERS MANAGEMENT TRUST
N&B BALANCED BALANCED PORTFOLIO
OPPENHEIMER VARIABLE ACCOUNT FUNDS
OPP MONEY OPPENHEIMER MONEY FUND
OPP HIGH INCOME OPPENHEIMER HIGH INCOME FUND
OPP BOND OPEENHEIMER BOND FUND
OPP CAP APPRECIATION OPPENHEIMER CAPITAL APPRECIATION FUND
OPP GROWTH OPPENHEIMER GROWTH FUND
OPP MULTI STRATEGIES OPPENHEIMER MULTIPLE STRATEGIES FUND
YOU MAY ALLOCATE YOUR PREMIUMS AND CASH VALUE TO AS MANY AS SEVEN INVESTMENT
SUBDIVISIONS.
CONSULT YOUR PROSPECTUS FOR INVESTMENT DETAILS.
POLICY NUMBER: T00000001
<PAGE>
TABLE OF MAXIMUM PREMIUMS
MAXIMUM MAXIMUM
DURATION PREMIUM DURATION PREMIUM
1 15,007.97 31 41.268.44
2 15,007.97 32 42,599.68
3 15,007.97 33 43,930.92
4 15,007.97 34 45,262.16
5 15,007.97 35 46,593.40
6 15,007.97 36 47,924.64
7 15,007.97 37 49,255.88
8 15,007.97 38 50,587.12
9 15,007.97 39 51,918.36
10 15.007.97 40 53,249.60
11 15,007.97 41 54,580.84
12 15,974.88 42 55,912.08
13 17,306.12 43 57,243.32
14 18,637.36 44 58,574.56
15 19,968.60 45 59,905.80
16 21,299.84 46 61,237.04
17 22,631.08 47 62,568.28
18 23,961.32 48 63,899.52
19 25,293.56 49 65,230.76
20 26,624.80 50 66,562.00
21 27,956.04 51 67,893.24
22 29,287.28 52 69,224.48
23 30,618.52 53 70,555.72
24 31,949.76 54 71,886.96
25 33,281.00 55 73,218.20
26 34,612.24 56 74,549.44
27 35,943.48 57 75,880.67
28 37,274.72 58 77,211.92
29 38,605.96 59 78,543.16
30 39,937.20 60 79,874.40
POLICY NUMBER: T00000001
<PAGE>
TABLE OF CONTINUATION AMOUNTS
POLICY CONTINUATION POLICY CONTINUATION POLICY CONTINUATION
MONTH AMOUNT MONTH AMOUNT MONTH AMOUNT
1 31.77 41 1,302.57 81 2,573.37
2 63.54 42 1,334.34 82 2,605.14
3 95.31 43 1,366.11 83 2,636.91
4 127.08 44 1,397.88 84 2,668.68
5 158.85 45 1,429.65 85 2,700.45
6 190.62 46 1,461.42 86 2,732.22
7 222.39 47 1,493.19 87 2,763.99
8 254.16 48 1,524.96 88 2,795.76
9 285.93 49 1,556.73 89 2,827.53
10 317.70 50 1,588.50 90 2,859.30
11 349.47 51 1,620.27 91 2,891.07
12 381.24 52 1,652.04 92 2,922.84
13 413.01 53 1,683.81 93 2,954.61
14 444.78 54 1,715.58 94 2,986.38
15 476.55 55 1,747.35 95 3,018.15
16 508.32 56 1,779.12 96 3,049.92
17 540.09 57 1,810.89 97 3,081.69
18 571.86 58 1,842.66 98 3,113.46
19 603.63 59 1,874.43 99 3,145.23
20 635.40 60 1,906.20 100 3,177.00
21 667.17 61 1,937.97 101 3,208.77
22 698.94 62 1,969.74 102 3,240.54
23 730.71 63 2,001.51 103 3,272.31
24 762.48 64 2,033.28 104 3,304.08
25 794.25 65 2,065.05 105 3,335.85
26 826.02 66 2,096.82 106 3,367.62
27 857.79 67 2,128.59 107 3,399.39
28 889.56 68 2,160.36 108 3,431.16
29 921.33 69 2,192.13 109 3,462.93
30 953.10 70 2,223.90 110 3,494.70
31 984.87 71 2,255.67 111 3,526.47
32 1,016.64 72 2,287.44 112 3,558.24
33 1,048.41 73 2,319.21 113 3,590.01
34 1,080.18 74 2,350.98 114 3,621.78
35 1,111.95 75 2,382.75 115 3,653.55
36 1,143.72 76 2,414.52 116 3,685.32
37 1,175.49 77 2,446,29 117 3,717.09
38 1,207.26 78 2,478.06 118 3,748.86
39 1,239.03 79 2,509.83 119 3,780.63
40 1,270.80 80 2,541.60 120 3,812.40
CONTINUATION AMOUNTS ARE DESCRIBED IN THE CONTINUATION AMOUNT AND
CONTINUATION PERIOD PROVISION ON PAGE 7.
POLICY NUMBER: T00000001
<PAGE>
TABLE OF GUARANTEED MAXIMUM INSURANCE RATES
PER $1,000
AGE LIFE MONTHLY
RATE
35 .140960
36 .147640
37 .156830
38 .166850
39 .178540
40 .191070
41 .206110
42 .221150
43 .238700
44 .256260
45 .277170
46 .299750
47 .324010
48 .349960
49 .379270
50 .41O260
51 .447130
52 .489890
53 .537710
54 .593110
55 .654440
56 .722550
57 .794930
58 .873270
59 .961820
60 1.060610
61 1.170520
62 1.205950
63 1.439210
64 1.601550
65 1.781290
66 1.975130
67 2.185740
68 2.412410
69 2.660440
CONTINUED
POLICY NUMBER T00000001
<PAGE>
TABLE OF GUARANTEED MAXIMUM INSURANCE RATES CONTINUED
PER $1,000
AGE LIFE
MONTHLY
RATE
70 2.941300
71 3.260560
72 3.630930
73 4.058390
74 4.541260
75 5.062740
76 5.621820
77 6.213870
78 6.833240
79 7.496160
80 8.229660
81 9.054450
82 9.997080
83 11.073320
84 12.267120
85 13.555910
86 14.917870
87 16.344120
88 17.808410
89 19.332670
90 20.941680
91 22.667940
92 24.576770
93 26.764070
94 29.637350
<PAGE>
TABLE OF CONTENTS
POLICY DATA 3
TABLE OF GUARANTEED MAXIMUM INSURANCE RATES 4
INTRODUCTION 5
THE OWNER AND THE BENEFICIARY 7
PREMIUM PAYMENTS 7
LIFE INSURANCE PROCEEDS 9
THE SEPARATE ACCOUNTS 10
CASH VALUE BENEFITS 12
LOAN BENEFITS 14
OPTIONAL PAYMENT PLANS 15
GENERAL INFORMATION 19
A COPY OF THEAPPLICATION AND ANY RIDERS AND ENDORSEMENTS FOLLOW PAGE 19.
WORD INDEX
ANNUAL STATEMENT 19
BENEFICIARY 7
BENEFICIARY CHANGE 7
CASH VALUE 12
CHANGING EXISTING COVERAGE 10
CONTESTING THE POLICY 19
CONTINUATION AMOUNT 8
COST OF INSURANCE 13
DEFERRED SALES CHARGE 12
GRACE PERIOD 8
LIFE INSURANCE PROCEEDS 9
MISSTATEMENT OF AGE OR SEX 19
MONTHLY DEDUCTION 12
NOTICES 19
OPTIONAL PAYMENT PLUS 15
OWNER 7
OWNERSHIP CHANGE 7
POLICY AS COLLATERAL 7
POLICY DEBT 15
POLICY LOAN 14
PREMIUMS 7
REINSTATEMENT 8
THE SEPARATE ACCOUNT 10
SUICIDE 19
SURRENDER 13
SURRENDER VALUE 13
TRANSFERS 12
UNIT VALUE 11
<PAGE>
INTRODUCTION
This is a flexible premium variable life insurance policy. The first premium
payment is due on the policy date. Subsequent premiums may be paid at any time
while this policy is in effect before the maturity date. In return for these
premiums and the insurance application, we provide certain benefits.
The policy provides life insurance proceeds. Proceeds can be paid in a lump sum
or under an Optional Payment Plan.
during the insured's life, the policy has a cash value. This cash value, less
any outstanding policy debt, is in the Separate Account, which is described on
page 10 of this policy. This cash value is the basis for certain benefits you
can use:
* before the insured's death; or
* at maturity
We can provide you with a projection of illustrative future life insurance and
cash value proceeds. To receive the projection, send a written request to our
home office. You must send a $25 service fee with your request. This projection
will assume:
* amounts of insurance;
* coverage options;
* future premium payments you specify; and
* other assumptions specified by you or by us.
The Policy and Its Parts
Policy means this policy with the attached application, any supplemental
applications, and any riders and endorsements. We will not use any statement in
an application to deny a claim unless a copy of such application was attached to
this policy at the time of issue or upon subsequent increases in coverage.
The policy is a legal contract. It is the entire contract between you and us. An
agent cannot change this contract. Any change to it must be in writing and
approved by us. Only our President or one of our Vice-Presidents can give our
approval. READ YOUR POLICY CAREFULLY.
<PAGE>
Dates Used in the Policy
The basic policy goes into effect on the policy date. Policy years and
anniversaries are measured from this date.
A change in coverage will go into effect on the monthly anniversary day after
the date we approve the supplemental application. The monthly anniversary day is
shown in the policy data pages.
The maturity date is the date we pay any cash value less outstanding policy
debt, if the insured is living. This date is as shown in the policy data pages
unless later changed. You may request that we pay the cash value in a lump sum,
or under an Optional Payment Plan.
You can change the maturity date. To make a change, send a written request along
with the policy to our home office. We must receive these by the maturity date
then in effect. The requested maturity date must be:
* on a policy anniversary;
* at least one year from the date we receive your request;
* after the 10th policy year; and
* not after the policy anniversary nearest the insured's
95th birthday.
Age
Age on the policy date or on a policy anniversary means the insured's age on his
or her nearest birthday.
Attained age means the insured's age on the policy date plus the number of years
since the policy date.
When This Policy Will Terminate
All coverage under this policy will terminate when:
* you request that coverage terminate and you return this
policy;
* the insured dies;
* this policy matures; or
* the grace period ends without sufficient premium being paid.
<PAGE>
Exchange Provision
During the first 24 policy months, you have the right to exchange this policy
for a permanent fixed benefit policy. We will not require evidence of
insurability. If you decide to make an exchange, we will notify you of the
policies available for exchange and the procedures to follow. You may elect to
have the amount of the new policy be either (a) or (b) where:
(a) is the life insurance proceeds on the date of exchange,
and
(b) is the life insurance proceeds minus the cash value on
the date of exchange.
The new policy will have the same policy date, sex, issue age and premium class
as this policy. The new policy will include such riders and incidental benefits
as were included in this policy, if such riders and incidental benefits are
available with the new policy.
The exchange is subject to an equitable adjustment in payments and cash values
to reflect variances, if any, in the payments and cash values under the existing
policy and the new policy.
THE OWNER AND THE BENEFICIARY
The Owner
You have rights in the policy during the insured's lifetime. The policy names
you or someone else as the insured. If you are not the insured, you should name
a contingent owner who will become the owner if you die before the insured. If
you die before the insured and there is no contingent owner, ownership passes to
your estate.
Unless a payment plan is chosen, the proceeds payable on the maturity date or on
surrender will be paid to you in a lump sum.
The Beneficiary
You can name primary and contingent beneficiaries. Your original beneficiary
choice is shown in the attached application.
Unless a payment plan is chosen, the proceeds payable at the insured's death
will be paid in a lump sum to the primary beneficiary. If the primary
beneficiary dies before the insured, the proceeds will be paid to the contingent
beneficiary. If no beneficiary survives the insured, the proceeds will be paid
to you or your estate.
You may name more than one primary or contingent beneficiary. If you do, the
proceeds will be paid in equal shares to the survivors in the appropriate
beneficiary class, unless you have requested otherwise.
Changing the Owner or Beneficiary
During the insured's life, you can change the owner. You can also change the
beneficiary during the insured's life if you reserve this right.
How to Change the Owner or Beneficiary. To make a change, send a written request
to our home office. The request and the change must be in a form satisfactory to
us and must be received by us. The change will take effect as of the date you
sign the request. The change will be subject to any payment we make before we
record the change.
<PAGE>
Using the Policy as Collateral for a Loan
This policy can be assigned as collateral security. We must be notified in
writing if you assign the policy. Any payment we make before we record the
assignment at our home office will not be affected. We are not responsible for
the validity of an assignment. Your rights and the rights of a beneficiary may
be affected by an assignment.
PREMIUM PAYMENTS
This policy's first premium is due on the policy date.
Any premium payments after the first premium may be made under a periodic plan
at any time while this policy is in effect.
Periodic Plan. You may request that we send reminders of your planned periodic
premium. You may choose to pay annually, semi-annually, or quarterly. The
minimum premium is $20. We can also arrange for pre-authorized monthly payments
from your bank account or similar facility. The minimum pre-authorized monthly
payment is $15.
You can change the frequency of payments or the amount of a premium by sending a
written request to our home office.
Unscheduled Payments. You can make an unscheduled premium payment at any time
while this policy is in effect if there is no policy debt. Each unscheduled
payment must be at least $250.
Maximum Premiums. There is a table of Maximum Premiums in the policy data pages.
We will not accept that portion of a premium that causes the total of all
premiums paid to date to exceed the maximum premium. We will return that portion
to you.
On any date, Net Total Premium means the total of all premiums paid to that
date, less (a) divided by (b), where;
(a) is any outstanding policy debt, plus the sum of any
partial surrenders to date; and
(b) is the Net Premium Factor.
The Net Premium Factor is shown in the policy data pages.
When and Where to Pay Premiums
Each premium is payable in advance. Pay each premium to our home office.
Allocation of Net Premiums
The net premium is the premium paid, multiplied by the Net Premium Factor shown
in the policy data pages. You may allocate the net premiums to one or more
Investment Subdivisions of the Separate Account. The portion of each net premium
allocated to any particular Investment Subdivision must be at least 10%.
We will initially allocate net premiums to the Money Market Investment
Subdivision. Upon receipt in our home office of a signed Policy Delivery
Receipt, cash value in that Investment Subdivision will be transferred to the
other Investment Subdivisions of the Separate Account in accordance with the net
premium allocation percentages shown in the application. For any premium
received after we receive the signed Policy Delivery Receipt, the net premium
will be allocated in accordance with the net premium allocation percentages
shown in the application. You may change the allocation of later premiums at any
time, without charge, simply by sending written notice to us at our home office.
The allocation will apply to premiums received after we record the change.
The Refund Privilege is described on the policy cover.
<PAGE>
Continuation Amount
If, during the first ten policy years, the cash value of this policy, less any
policy debt, becomes less than the surrender charge, this policy will remain in
effect if the Net Total Premium is at least equal to the continuation amount for
the number of months that this policy has been in force. The continuation amount
for each of the first 120 policy months is shown in the policy data pages.
There are not continuation amounts after the 120th policy month.
Grace Period.
During the first ten policy years, if (1) the surrender value on a monthly
anniversary day is insufficient to cover the monthly deduction due on that
monthly anniversary day, and (2) the continuation amount has not been paid, we
will allow a 61-day grace period to pay to premium sufficient to keep the policy
in effect.
On or after the tenth policy anniversary, if the surrender value on a monthly
anniversary day is insufficient to cover the monthly deduction due on that
monthly anniversary day, we will allow a 61-day grace period to pay a premium
sufficient to keep the policy in effect.
If a sufficient premium is not paid by the end of the grace period, this policy
will terminate without value. We will mail you notice of the sufficient premium.
The monthly deduction is described in the Cash Value Benefits section.
Coverage continues during the grace period. If the insured dies during the grace
period, the proceeds will be reduced by any overdue deferred sales charges and
monthly deductions.
How the Policy Can be Reinstated
During the insured's life, this policy can be reinstated if it terminated
because a grace period ended without sufficient premium being paid. Any
reinstatement must be done within 3 years from the end of the grace period.
We will not reinstate this policy if it has been surrendered for payment of its
cash value.
To reinstate, send evidence satisfactory to us that the insured is insurable.
The policy will be reinstated on the date we approve the reinstatement. You will
also have to pay a premium as described below. You may pay a larger amount if
you wish.
Any policy debt which existed at the end of the grace period will be reinstated
if it is not paid.
When this policy is reinstated, you will have to pay an amount which equals (1)
plus (2) minus (3) where:
(1) is the minimum premium to keep the policy in force from
the first day of the grace period to the date of
reinstatement; and
(2) is an amount sufficient to keep this policy in effect for
two months after the date of reinstatement; and
(3) is the sum of the monthly deductions that would have been
made during the period between termination and
reinstatement divided by the Net Premium Factor.
On the date of reinstatement, the cash value will equal(a) plus (b) minus (c)
minus (d), where:
(a) is the cash value on the first day of the grace period;and
(b) is the premium paid to reinstate multiplied by the Net Premium Factor;and
(c) is the sum of any deferred sales charge deductions which would have been
made if the policy had remained continuously in effect; and
(d) is any decrease in the contingent deferred underwriting charge from the
first day of the grace period to the date of reinstatement.
<PAGE>
On the date of reinstatement, the cash value less an outstanding policy debt
will be allocated to the Investment Subdivisions of the Separate Account. Unless
you tell us otherwise, that cash value will be allocated to the Investment
Subdivisions in the same manner as net premiums.
If this policy is reinstated, the surrender charge will be as though this policy
had been in effect continuously from its original policy date.
LIFE INSURANCE PROCEEDS
Life insurance proceeds are payable if the insured dies while this policy is in
effect.
How We Determine Proceeds
Proceeds are based on the Specified Amount shown in the policy data pages. There
are two Benefit Options.
Option A. The Specified Amount is in addition to the cash value. Life insurance
proceeds will be based on the larger of:
* the Specified Amount plus the cash value on the date of
death; or
* the cash value on the date of death, multiplied by
the corridor percentage.
Option B. The Specified Amount includes the cash value. Life insurance proceeds
will be based on the larger of:
* the Specified Amount on the date of death; or
* the cash value on the date of death, multiplied by the
corridor percentage.
The corridor percentage depends on the attained age of the insured on the date
of death.
<TABLE>
<CAPTION>
Attained Corridor Attained Corridor Attained Corridor Attained Corridor
Age Percentage Age Percentage Age Percentage Age Percentage
--- ---------- --- ---------- --- ---------- --- ----------
<S> <C> <C> <C> <C> <C> <C>
40 or 50 185% 61 128% 72 111%
younger 250% 51 178 62 126 73 109
41 243 52 171 63 124 74 107
42 236 53 164 64 122 75 105
43 229 54 157 65 120 through
44 222 55 150 66 119 90
45 215 56 146 67 118 91 104
46 209 57 142 68 117 92 103
47 203 58 138 69 116 93 102
48 197 59 134 70 115 94 101
49 191 60 130 71 113 95 100
</TABLE>
Actual Amount of Proceeds. The actual amount of proceeds will depend on;
* the life insurance proceeds determined as above;
* the use of the cash value during the insured's life;
* any partial surrenders;
* any additional insurance provided by a rider;
* any increase or decrease in existing coverage;
* the insured's suicide during the first two policy years; and
* a misstatement of the insured's age or sex.
<PAGE>
Interest on Proceeds. Life insurance proceeds that are paid in one lump sum will
include interest from the date of death to the date of payment. Interest will be
paid at a rate set by us, or by law if greater. Interest will not be paid beyond
one year or any longer time set by law.
Change in Existing Coverage
After the policy has been in effect for one year, you can increase or decrease
the Specified Amount. To make a change, send a written request along with the
policy to our home office.
Decrease in Specified Amount. Any decrease will become effective on the monthly
anniversary day after the date we receive the request. The decrease will first
apply to coverage provided by the most recent increase, then to the next most
recent increases successively, then to the coverage under the original
application.
During the first five policy years, we can limit the amount of any decrease. The
Specified Amount can never by less than the Minimum Specified Amount shown on
the policy pages. We will not permit a decrease if the charge for a full
surrender is greater than the cash value, less any outstanding policy debt.
Increase in Specified Amount. You must; apply for an increase on a supplemental
application. You will have to submit evidence satisfactory to us that the
insured is insurable. Any approved increase will become effective on the date
shown in the supplemental policy data page, provided that there is sufficient
cash value to cover the deduction of the first month's cost of increased
insurance.
Change in Benefit Options
If Option A is in effect, you can request that it be changed to Option B. The
Specified Amount after the change will equal the sum of (1) plus (2), where;
(1) is the Specified Amount immediately prior to the change; and
(2) is the cash value immediately prior to the change.
If Option B is in effect, you can request that it be changed to Option A. This
will decrease the Specified Amount by the amount of cash value on the date your
request becomes effective. A change in benefit options will become effective on
the monthly anniversary day after the date we receive your request in our home
office.
THE SEPARATE ACCOUNT
The Separate Account named in the policy data pages will be used to support the
operation of this policy and certain other variable life insurance policies we
may subsequently offer. We will not allocate assets to the Separate Account to
support the operation of any contracts or policies that re not variable life
insurance.
We own the assets in the Separate Account. However, these assets are not part of
our general account. Income, gains and losses, whether or not realized, from
assets allocated to the Separate Account will be credited to or charged against
the account without regard to our other income, gains or losses.
<PAGE>
The Separate Account is registered with the Securities and Exchange Commission
as a unit investment trust under the Investment Company Act of 1940. The
Separate Account is also subject to laws of the Commonwealth of Virginia which
regulate the operations of insurance companies incorporated in Virginia. The
investment policy of the Separate Account will not be changed without the
approval of the Insurance Commissioner of the Commonwealth of Virginia. The
approval process is on file with the Insurance Commissioner of the state in
which this policy was delivered.
The Separate Account is divided into Investment Subdivisions. The Investment
Subdivisions are named in the policy data pages. We reserve the right to remove
any Investment Subdivisions of the Separate Account, or to add new Investment
Subdivisions. Each Investment Subdivision in the Separate Account will invest in
shares of a designated portfolio of Life of Virginia Series Fund, Inc., a series
type of mutual fund. You determine the percentage of net premiums which will be
allocated to each Investment Subdivision.
The policyowner will share only in the income, gains and losses of the
Investment Subdivisions to which his net premium payment have been allocated.
That portion of the assets of the Separate Account which equals the reserves and
other policy liabilities of the policies which are supported by the Separate
Account will not be charged with liabilities arising from any other business we
conduct. We have the right to transfer to our general account any assets of the
Separate Account which are in excess of such reserves and other policy
liabilities.
We also have the right, subject to compliance with applicable law, to make
additions to, deletions from, or substitutions for the shares of a mutual fund
portfolio that re held by the Separate Account or that the Account may purchase.
We reserve the right to eliminate the shares of an eligible portfolio of Life of
Virginia Series Fund, Inc. and to substitute shares of another portfolio of Life
of Virginia Series fund, Inc. or another mutual fund portfolio, if the shares of
the portfolio are no longer available for investments, or if in our judgement
further investment in the portfolio should become inappropriate in view of the
purposes of the Separate Account. In the event of any
substitution or change, we may, by appropriate endorsement, make such changes in
this and other policies as may be necessary or appropriate to reflect the
substitution or change.
We also reserve the right to transfer assets of the Separate Account, which we
determine to be associated with the class of policies to which this policy
belongs to another separate account. If this type of transfer is made, the term
"the Separate Account", as used in this policy, shall then mean the separate
account to which the assets were transferred.
<PAGE>
When permitted by law, we also reserve the right to:
(a) deregister the Separate Account under the Investment Company Act of 1940;
(b) manage the Separate Account under the direction of a committee;
(c) restrict or eliminate any voting rights of policyowners, or other persons
who have voting rights as to the Separate Account; and
(d) combine the Separate Account with other separate accounts.
We will value the assets of the Separate Account each business day.
If you object to a material change in the investment policy of the Separate
Account or any Investment Subdivision, you have the right to exchange this
policy for a fixed benefit policy. No evidence of insurability will be required.
We will notify you of the options available, and the procedures to follow if you
decide to make an exchange. You must make an exchange within sixty days after
the change in investment policy becomes effective. There will always by one
policy available for exchange.
Unit Value
Each Investment Subdivisions has a Unit Value. When premiums or other amounts
are transferred into an Investment Subdivision, a number of Units are purchased
based on the subdivision's Unit Value as of the end of the valuation period
during which the transfer is made. Likewise, when amounts are transferred out of
an Investment Subdivision, Units are redeemed in a similar manner.
For each Investment subdivision, the Unit Value for the first valuation period
was $10.00. The Unit Value for each subsequent period is the Net Investment
Factor for the period, multiplied by the Unit Value for the immediately
preceding period. The Unit Value for a valuation period applies to each day in
the period.
Each valuation period includes a business day and any non-business day or
consecutive non-business days immediately following it. Assets are valued at the
close of the business day. A business day is any day the New york Stock Exchange
is open for trading, or any day in which here is a material change in the value
of the assets in the Separate Account.
Each Investment Subdivision has its own Net Investment Factor. In the following
definition, "assets" refers to the assets in each Investment Subdivisions. "Any
amount charged against the Separate Account" refers to those amounts that are
allocated to each Investment Subdivision.
The Net Investment Factory for a valuation period is (a) divided by (b), minus
(c), where: (a) is (1) the value of the assets at the end of the preceding
valuation period, plus (2) the investment income and capital gains, realized or
unrealized, credited to those assets at the end of the valuation period for
which the net investment factor is being determined, minus (3) the capital
losses, realized or unrealized, charged against those assets during the
valuation period, minus (4) any amount charged against the Separate Account for
taxes, or any amount we set aside during the valuation period as a provision for
taxes attributable to the operation or maintenance of the Separate Account; and
(b) is the value of the assets at the end of the preceding valuation period; and
(c) is a charge no greater than .0019246% for each day in the valuation period.
This corresponds to .70% per year for mortality and expense risks.
<PAGE>
We will value the assets in the Separate Account at their fair market value in
accordance with accepted accounting practices and applicable laws and
regulations.
Transfers
You may transfer amounts among the Investment Subdivisions of the Separate
Account by sending a written request to us at our home office. The transfer will
be effective as of the end of the valuation period during which we receive your
request at our home office. You cannot make more than twelve transfers each
calendar year. The first transfer in each calendar year will be made without a
transfer charge. Thereafter, each time amounts are transferred a transfer charge
will be imposed. This transfer charge is shown in the policy data pages. When we
make transfers, the cash value on the date of the transfer will not be affected
by the transfer except to the extent of the transfer charge. The transfer charge
will be taken from the amount transferred.
CASH VALUE BENEFITS
How We Determine Cash Value
The cash value of the policy is equal to (1) the cash value allocated to the
Investment Subdivisions of the Separate Account, plus (2) the cash value held to
secure policy debt.
On the later of the policy date or the date the first premium is received, the
cash value in each Investment Subdivision is the portion of the net premium
which has been paid and allocated to that Investment subdivision, less the
portion of the first monthly deduction allocated to the cash value in that
Investment Subdivision.
At the end of each valuation period after such date, the cash value allocated to
each Investment Subdivision of the Separate Account is (1) plus (2) plus (3)
minus (4) minus (5), where:
(1) is the cash value allocated to the Investment
Subdivision at the end of the preceding
valuation period, multiplied by the Investment Subdivision's Net Investment
Factor for the current period:
(2) is net premium payments received during the current valuation period and
which are allocated to the Investment Subdivision:
(3) is any other amounts transferred into the Investment Subdivision during the
current valuation period:
(4) is any partial surrenders made from the Investment Subdivision during the
current valuation period:
(5) is cash value transferred out of the Investment Subdivision during the
current valuation period.
<PAGE>
In addition, whenever a valuation period includes the monthly anniversary
day,the cash value at the end of such period is reduced by the monthly deduction
allocated to the cash value in the Investment Subdivision for that monthly
anniversary day. If the valuation period includes the first monthly anniversary
day in policy years two through ten, the cash value at the end of such period is
also reduced by 1/9 of the Deferred Sales Charge allocated to the cash value in
the Investment Subdivision.
Deferred Sales Charge
At the beginning of each of policy years two through ten, 1/9 of the Deferred
Sales Charge is deducted from the cash value allocated to the Separate Account.
The Deferred Sales Charge is shown in the policy data pages.
The deferred sales charge deduction will be allocated among the Investment
Subdivisions of the Separate Account in the same manner that monthly deductions
are being allocated.
Monthly Deduction
The monthly deduction is a charge made each policy month against the cash value
allocated to the Separate Account. It is determined by adding the cost of
insurance, the cost of additional benefits provided by rider, and the Monthly
Administrative Charge. The monthly deduction for the month when an increase in
the Specified Amount becomes effective will include the increase Charge per
$1000 for each $1000 of increase.
The Initial Monthly Administrative Charge is shown in the policy data pages. We
can charge a higher amount in the future, but it will never exceed two times the
initial amount.
The Increase Charge per $1000 is shown in the policy data pages.
The monthly deduction for a policy month will be allocated among the Investment
Subdivisions of the Separate Account in the same proportion that the policy's
cash value in each Investment Subdivision bears to the total cash value in all
Investment subdivisions at the beginning of the policy month. Other allocation
methods may be available upon request.
Cost of Insurance
The cost of insurance is calculated on each monthly anniversary day. First, we
divide the life insurance proceeds by 1.0032737, and then subtract the cash
value. We divide the result by 1000 and multiply that result by the applicable
Cost of Insurance Rate or rates. If Option B is in effect, and the Specified
Amount has increased, the cash value is first considered part of the initial
Specified Amount. If the cash value is more than the Initial Specified Amount,
it will be considered part of the increased Specified Amounts resulting form
increases in the order of the increases.
Cost of Insurance Rate. The monthly rate is based on the insured's sex, attained
age, policy duration and risk class. The risk class (and therefore the rates
will be determined separately for the initial Specified Amount and for any
increase in the Specified Amount that requires evidence of insurability. The
rates are determined by us according to our expectations of future experience.
We can change the rates from time to time, but they will never be more than the
maximum rates shown in the Table of Guaranteed Maximum insurance Rages. A change
in rates will apply to all persons of the same age, sex and risk class and whose
policies have been in effect for the same length of time.
<PAGE>
Insufficient Cash Value
On a monthly anniversary day, if the cash value less the surrender charge and
less any policy debt is not enough to cover the monthly deduction for that
monthly anniversary day, the Grace Period provision will apply.
Continuation of Coverage
If periodic premium payments are not made as planned, this policy and any riders
will remain in effect as long as the cash value less the surrender charge and
less any policy debt covers the monthly deduction. But in any case, the policy
will not continue beyond the maturity date and a rider will not continue beyond
its termination date.
Surrender
You can make a full or partial surrender of this policy by sending a written
request and the policy to our home office. a surrender must take place:
* during the insured's life; and
* before the maturity date.
Amount Payable on Surrender. The amount payable on surrender of this policy is
the cash value on the date we receive your request for surrender in our home
office less any policy debt and less any surrender charge that applies. The
amount payable is the Surrender Value.
Surrender Charge. The amount of surrender charge will be the sum of the
contingent deferred issue charge and the uncollected deferred sales charge. The
contingent deferred issue charge is (a) time (b) where:
(a) is the initial contingent deferred issue charge shown in
the policy data pages; and
(b) is 1 during the first five policy years, and decreases by
.2 at the beginning of each policy years six through ten.
During the first two policy years, the uncollected deferred sales charge
assessed as a surrender charge will never exceed (a) minus (b) where:
(a) is the maximum sales load allowed by the Securities and
Exchange Commission in the event of surrender in the first
two policy years; and
(b) is the total of sales charges preciously deducted from
premiums and cash values.
There will be no surrender charge during the tenth and later policy years.
At surrender, the total of charges will never be greater than the cash value,
less any outstanding policy debt.
<PAGE>
Partial Surrender. You can make a partial surrender of this policy. A partial
surrender cannot be less than $500. A partial surrender cannot exceed the lesser
of:
* the surrender value, less $500; or
* the available loan amount.
We generally will reduce both the cash value and the life insurance proceeds by
the amount of any partial surrender. We will not permit a partial surrender if
it would reduce the Specified Amount to less than the minimum shown in the
policy data pages. A partial surrender will not be permitted during the first
policy year if the Specified Amount includes the cash value.
You may tell us how to allocate the partial surrender among the Investment
Subdivisions of the Separate Account. If you do not, the partial surrender will
be allocated among each Investment Subdivision in the same proportion that the
policy's cash value in each Investment Subdivision bears to the total cash value
in all Investment Subdivisions on the date we receive the request in our home
office.
We will deduct a charge from the amount of each partial surrender. This charge
will equal the lesser of (i) $25, or (ii) 2% of the amount of the partial
surrender.
Receiving the Surrender Value
The surrender value is payable in one lump sum or under an Optional Payment
Plan.
Postponement of Payments
We will usually pay any amounts payable as a result of surrender, partial
surrenders or policy loans within seven days after we receive written request in
our home office, in a form satisfactory to us. We will usually pay any life
insurance proceeds within seven days after we receive due proof of death.
Payment of any amount payable on surrender, partial surrender, policy loan or
life insurance proceeds may be postponed whenever:
* the New York Stock Exchange is closed other than customer
week-end and holiday closings, or trading on the New York
Stock Exchange is restricted as determined by the Securities
and Exchange commission; or
* the Securities and Exchange Commission by order permits
postponement for the protection of policyowners; or
* an emergency exits, as determined by the Securities and
Exchange Commission, as a result of which disposal of
securities is not reasonably practicable or it is not
reasonably practicable to determine the value of the net
assets of the Separate Account.
<PAGE>
We have the right to defer payment which is derived from any amount recently
paid to us by check or draft, until we are satisfied the check or draft has been
paid by the bank on which it is drawn.
LOAN BENEFITS
This policy has loan benefits that are described below. The amount of
outstanding loans plus accrued interest is called policy debt. Any outstanding
policy debt will be deducted from proceeds payable at the insured's death, on
maturity, or on surrender.
Making a Policy Loan
After the first policy anniversary, you may obtain a policy loan from us. This
policy is the only security required. The maximum loan amount is 90% of the
surrender value on the date of the loan. The available loan amount is the
maximum loan amount less any outstanding policy debt.
The maximum interest rate on policy loans is shown in the policy data pages.
Subject to this maximum, we can change the interest rate. We cannot increase the
rate more than once each year nor more than 1% each year. We will send notice of
any change to you and any assignee of record at our home office. We will send
notice at least 40 days before we increase the rate on any existing policy
loans.
Interest accrues daily. It is due and payable on each policy anniversary. Any
interest not paid when due becomes part of the policy loan and bears interest.
When a policy loan is made, an amount of cash value sufficient to secure the
loan is transferred out of the Separate Account and into out general account.
You may tell us how to allocate that cash value among the Investment
Subdivisions of the Separate Account. If you do not, that cash value will be
allocated among each Investment Subdivision in the same proportion that the
policy's cash value in each Investment Subdivision bears to the total cash value
in all Investment Subdivisions on the date we make the loan. An amount of cash
value equal to any loan interest we also be so transferred if the interest is
not paid when due.
Cash value in the general account will earn interest daily at an annual rate of
4%. On each monthly anniversary day, the interest earned since the preceding
monthly anniversary day will be transferred into the Separate Account. Unless
you tell us otherwise, this interest will be allocated to the Investment
subdivisions in the same manner as net premiums.
If the policy debt exceeds the cash value less any applicable surrender
charges,you must pay the excess. We will send you a notice or the amount you
must pay. If you do not pay this amount within 61 days after we send notice, the
policy will terminate without value. We will send the notice to you and to any
assignee at our home office.
Any loan transaction will permanently affect the values of this policy.
<PAGE>
Repaying Policy Debt
You can repay policy debt in part or in full any time during the insured's life
while this policy is in effect. When a loan repayment is made, cash value in the
general account related to that payment will be transferred into the Separate
Account. You may tell us how to allocate this cash value among each Investment
Subdivision of the Separate Account. If you do not, we will allocate that amount
among the Investment Subdivisions in the same proportion that net premiums are
being allocate.
OPTIONAL PAYMENT PLANS
Life insurance proceeds, cash value at surrender or benefits at maturity will be
paid in one lump sum. Subject to the rules stated below, any part of the
proceeds can be left with us and paid under a payment plan. any amount left with
us will be transferred to our general account. During the insured's life, you
can choose a plan. A beneficiary can choose a plan if you have not chosen one at
the insured's death.
There are several important payment plan rules:
* The payee under a plan cannot be a corporation, association
or fiduciary.
* If you change a beneficiary, your plan selection will no
longer be in effect unless you request that it continue.
* A choice or change of a plan must be sent in writing to our
home office.
* The proceeds applied under a plan must be at least $10,000.
* The amount of each payment under a plan must be at least
$50.
* Payments under Plans 1, 2, 3 or 5 will begin on the date of
the insured's death, on surrender,or on the policy's
maturity date. Payments under Plan 4 will begin at the end
of the first interest period after the date proceeds are
otherwise payable.
Plan 1. Income for a Fixed Period. We will make equal periodic payments for a
fixed period, not longer than 30 years. Payments can be annual, semi-annual,
quarterly or monthly. Payments will be made according to the table below.
Guaranteed amounts payable under this plan will earn interest at 3% compounded
yearly. We may increase the interest and the amount of any payment. If the payee
dies, the amount of the remaining guaranteed payments will be discounted to the
date of the payee's death at a yearly rate of 3%. Discounted means we will
deduct the amount of interest each remaining payment would have earned had it
not been paid out early. The discounted amount will be paid in one sum to the
payee's estate unless otherwise provided.
<PAGE>
<TABLE>
<CAPTION>
Plan 1 Table
Monthly payment rates for each $1,000 of proceeds under Plan 2.
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Years
Payable 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
- ----------------===================================================================================================-------
Monthly Payment $84.47 $42.86 $28.99 $22.06 $17.91 $15.14 $13.16 $11.68 $10.53 $9.61 $8.86 $8.24 $7.71 $7.26 $6.87
- ----------------===================================================================================================-------
- --------------------------------------------------------------------------------------------------------------------------
Years
Payable 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
- --------------------------------------------------------------------------------------------------------------------------
Monthly Payment $6.53 $6.23 $5.96 $5.73 $5.51 $5.32 $5.15 $4.99 $4.84 $4.71 $4.59 $4.47 $4.37 $4.27 $4.18
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
Annual, semi-annual or quarterly payments are determined by multiplying the
monthly payment by 11.838, 5.963 or 2.992, respectively.
Plan 2. Life Income. We will make equal monthly payments for a guaranteed
minimum period. If the payee lives longer than the minimum period, payments will
continue for this or her life. The minimum period can be 10, 15 or 20 years.
Payments will be according to the table below. Guaranteed amounts payable under
this plan will earn interest at 3% compounded yearly. We may increase the
interest rate and the amount of any payment. If the payee dies before the end of
the guaranteed period, the amount of remaining payments for the minimum period
will be discounted at a yearly rate of 3%. The discounted amounts will be paid
in one sum to the payee's estate unless otherwise provided.
<TABLE>
<CAPTION>
Plan 2 Table
Monthly payment Rates for each $1,000 of proceeds under Plan 2.
- ------------------------------------------------------------------------------------------------------------------------------------
Age of
Age of Payee Payee
Nearest Nearest
Birthday Male Payee Female Payee Birthday Male Payee Female Payee
- ------------------------------------------------------------------------------------------------------------------------------------
10 Years 15 Years 20 Years 10 Years 15 Years 20 Years 10 Years 15 Years 20 Years 10 Years 15 Year 20 Years
Certain Certain Certain Certain Certain Certain Certain Certain Certain Certain Certain Certain
- ----- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
20 $3.04 $3.03 $3.03 $2.95 $2.95 $2.95 54 $4.81 $4.68 $4.49 $4.37 $4.31 $4.22
25 3.15 3.15 3.14 3.05 3.04 3.04 55 4.92 4.76 4.55 4.46 4.39 4.29
30 3.30 3.30 3.29 3.17 3.16 3.16 56 5.03 4.85 4.62 4.56 4.48 4.36
35 3.49 3.48 3.46 3.32 3.31 3.30 57 5.15 4.95 4.69 4.66 4.57 4.43
40 3.73 3.71 3.68 3.50 3.49 3.48 58 5.27 5.04 4.76 4.77 4.66 4.50
45 4.04 4.00 3.93 3.75 3.73 3.70 59 5.39 5.14 4.82 4.88 4.76 4.58
50 4.43 4.35 4.23 4.06 4.02 3.97 60 5.53 5.24 4.89 5.00 4.86 4.65
51 4.52 4.43 4.29 4.13 4.09 4.03 61 5.67 5.34 4.95 5.13 4.96 4.73
52 4.62 4.51 4.36 4.20 4.16 4.09 62 5.81 5.45 5.01 5.26 5.07 4.80
53 4.71 4.59 4.42 4.29 4.23 4.15 63 5.96 5.55 5.07 5.40 5.18 4.87
- ----- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------- --------- -------- ------------ ------------------ ------------------------------------------------------
Age of
Payee Age of Payee
Nearest Nearest
Birthday Male Payee Female Payee Birthday Male Payee Female Payee
- ------------------------------------------------------------------------------------------------------------------------------------
10 Years 15 Years 20 Years 10 years 15 Years 20 Years 10 Years 15 Years 20 Years 10 Years 15 Years 20 Years
Certain Certain Certain Certain Certain Certain Certain Certain Certain Certain Certain Certain
- ------------------ --------- -------- ---------- ------------------ -------------------------------------------------------------
<S> <C>
75
64 $6.12 $5.66 $5.13 $5.55 $5.29 $4.95 76 $8.13 $6.63 $5.49 $7.52 $6.44 $5.45
65 6.28 5.76 5.18 5.71 5.41 5.02 77 8.31 6.68 5.49 7.72 6.51 5.47
66 6.45 5.87 5.23 5.86 5.52 5.08 78 8.48 6.72 5.50 7.92 6.58 5.48
67 6.63 5.97 5.28 6.02 5.63 5.14 79 8.63 6.75 5.50 8.12 6.64 5.49
68 6.81 6.07 5.32 6.19 5.74 5.19 80 8.78 6.78 5.51 8.31 6.69 5.50
69 6.99 6.16 5.36 6.37 5.85 5.24 81 8.91 6.81 5.51 8.49 6.74 5.50
70 7.18 6.26 5.39 6.55 5.96 5.29 82 9.03 6.82 5.51 8.66 6.77 5.51
71 7.37 6.34 5.42 6.73 6.06 5.33 83 9.14 6.84 5.51 8.82 6.80 5.51
72 7.56 6.42 5.44 6.93 6.16 5.37 84 9.23 6.85 5.51 8.96 6.82 5.51
73 7.76 6.50 5.46 7.12 6.26 5.40 85 9.31 6.86 5.51 9.09 6.84 5.51
74 7.95 6.57 5.47 7.32 6.35 5.43 & over 9.38 6.86 5.51 9.20 6.85 5.51
- ------------------ --------- -------- ------------ ------------------ ------------------------------------------------------------
</TABLE>
Values for ages not shown will be furnished upon request.
Plan 3. Income of a Definite Amount. We will make equal periodic payments of a
definite amount. Payments can be annual, semi-annual, quarterly or monthly. The
amount paid each year must be at least $120 for each $1,000 of proceeds.
Payments will continue until the proceeds are exhausted. The last payment will
equal the amount of any unpaid proceeds. Unpaid proceeds will earn interest at
3% compounded yearly. We may increase the interest rate. If we do, the payment
period will be extended. If the payee dies, the amount of the remaining proceeds
with earned interest will be paid in one sum to his or her estate unless
otherwise provided.
Plan 4. Interest Income. We will make periodic payments of interest earned from
the proceeds left with us. Payments can be annual, semi-annual, quarterly or
monthly, and will begin at the end of the first period chosen. Proceeds left
under this plan will earn interest at 3% compounded yearly. We may increase the
interest rate and the amount of any payment. If the payee dies, the amount of
remaining proceeds and any earned but unpaid interest will be paid in one sum to
his or her estate unless otherwise provided.
Plan 5. Joint Life and Survivor Income. We will make equal monthly payments to
two payees for a guaranteed minimum of 10 years. Each payee must be at lease 35
years old when payments begin. The guaranteed amount payable under this plan
will earn interest at 3% compounded yearly. We may increase the interest rate
and the amount of any payment. Payments will continue as long as either payee is
living. If both payees die before the end of the minimum period, the amount of
the remaining payments for the 10 year period will be discounted at a yearly
rate of 3%. The discounted amount will be paid in one sum to the survivor's
estate unless otherwise provided.
<PAGE>
<TABLE>
<CAPTION>
Plan 5 Table
Monthly payment rates for each $1,000 of proceeds under Plan 5.
- ----------------------------------------------------------------------------------------------
Male Age
Nearest
Birthday Female Age Nearest Birthday
---------------------- -----------------------------------------------------------
35 40 45 50 55 60 65 70 75 80 85 & Over
- --------------------------------- -----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
35 $3.13 $3.21 $3.28 $3.34 $3.38 $3.42 $3.45 $3.47 $3.48 $3.48 $3.49
40 3.18 3.28 3.38 3.47 3.55 3.61 3.66 3.69 3.71 3.72 3.73
45 3.22 3.34 3.47 3.60 3.72 3.82 3.90 3.96 4.00 4.02 4.03
50 3.25 3.39 3.55 3.72 3.90 4.05 4.19 4.29 4.36 4.40 4.42
55 3.27 3.43 3.62 3.83 4.06 4.29 4.50 4.66 4.78 4.86 4.90
60 3.29 3.46 3.66 3.91 4.19 4.50 4.81 5.07 5.28 5.42 5.49
65 3.30 3.48 3.70 3.97 4.30 4.69 5.11 5.50 5.84 6.09 6.22
70 3.30 3.49 3.72 4.01 4.38 4.83 5.36 5.90 6.42 6.83 7.07
75 3.31 3.50 3.73 4.04 4.42 4.92 5.54 6.22 6.93 7.54 7.93
80 3.31 3.50 3.74 4.05 4.45 4.97 5.64 6.41 7.27 8.07 8.61
85 & over 3.31 3.50 3.74 4.05 4.46 4.99 5.69 6.51 7.45 8.36 9.01
- --------------------------------- -----------------------------------------------------------
</TABLE>
Figures for intermediate ages, for two males or two females will be furnished
upon request.
Plan 6. Single Premium Endowment at Age 95. You may surrender this policy at any
time during the insured's life and request in writing to apply the surrender
value to purchase a Single Premium Endowment at Age 95 Policy on the life of the
insured.
The maximum policy amount you can purchase without evidence of insurability is:
* the life insurance proceeds under this policy on the date of surrender, less
* the cash value on the date of surrender, plus
* the amount applied as the premium for the new policy.
An additional amount can be purchased if we receive evidence satisfactory to us
that the insured is insurable. The most that can be applied as the premium for
the new policy is this policy's surrender value.
The policy date of the new policy will be the date coverage under this policy
ends. The single premium will be based on our rates then in effect. The single
premium for a standard risk class will not be more than that shown in the Table
of Guaranteed Single Premium Rates. These guaranteed single premiums are based
on the Commissioners' 1980 Standard Ordinary Smoker and Nonsmoker Mortality
Table with interest at 4% compounded yearly.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF GUARANTEED SINGLE PREMIUM RATES
(Males, Non-Smoker, Standard Rating Class)
- --------------------------------- -------------------- ----------------- ----------
Attained Rate Attained Rate Attained Rate Attained Rate Rate
Age Per Age per Age Per Age per Age per
$1,000 $1,000 $1,000 $1,000 $1,000
- ---------------------------- ------------- -----------------------------------------
<S> <C>
21 148.18 36 241.17 51 394.23 66 602.62 81 805.55
22 152.66 37 249.45 52 406.72 67 617.30 82 816.97
23 157.35 38 258.00 53 419.47 68 631.96 83 828.06
24 162.26 39 266.81 54 432.48 69 646.60 84 838.76
25 167.42 40 275.89 55 445.70 70 661.21 85 849.07
26 172.83 41 285.24 56 459.15 71 675.74 86 859.03
27 178.49 42 294.86 57 472.79 72 690.14 87 868.79
28 184.41 43 304.76 58 486.64 73 704.32 88 878.56
29 190.59 44 314.94 59 500.70 74 718.18 89 888.66
30 197.03 45 325.40 60 514.93 75 731.65 90 899.49
31 203.74 46 336.15 61 529.33 76 744.74 91 911.64
32 210.70 47 347.18 62 543.87 77 757.45 92 925.95
33 217.92 48 358.50 63 558.51 78 769.84 93 943.75
34 225.41 49 370.12 64 573.21 79 781.96 94 967.19
35 233.16 50 382.03 65 587.92 80 793.87
- ------------------------------------------- ------------------------ ----------------
</TABLE>
TABLE CONTINUED ON NEXT PAGE
<PAGE>
<TABLE>
<CAPTION>
TABLE OF GUARANTEED SINGLE PREMIUM RATES
(Males, Smoker, Standard Rating Class)
- --------------------------------------------- ------------------ -----------------------------------
Attained Rate per Attained Rate per Attained Rate per Attained Rate per Attained Rate per
Age $1000 Age $1000 Age $1000 Age $1000 Age $1000
- ---------------------------------------- ------------------ -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
0 96.15 19 171.72 38 313.33 57 541.06 76 778.35
1 96.14 20 177.02 39 323.57 58 554.28 77 788.40
2 99.00 21 182.51 40 334.04 59 567.55 78 798.08
3 102.05 22 187.87 41 344.74 60 580.88 79 807.52
4 105.23 23 193.49 42 355.65 61 594.24 80 816.77
5 108.57 24 199.37 43 366.77 62 607.60 81 825.84
6 112.10 25 205.55 44 378.09 63 620.89 82 834.73
7 115.81 26 212.04 45 389.62 64 634.06 83 843.38
8 119.72 27 218.86 46 401.32 65 647.07 84 851.72
9 123.83 28 225.97 47 413.23 66 659.89 85 859.77
10 128.12 29 233.41 48 425.34 67 672.54 86 867.64
11 132.69 30 241.14 49 437.65 68 685.04 87 875.53
12 137.22 31 249.17 50 450.14 69 697.43 88 883.72
13 141.96 32 257.48 51 462.82 70 709.72 89 892.37
14 146.78 33 266.09 52 475.65 71 721.88 90 901.94
15 151.65 34 274.98 53 488.61 72 733.85 91 913.06
16 156.57 35 284.16 54 501.65 73 745.56 92 926.63
17 161.53 36 293.61 55 514.75 74 756.91 93 944.02
18 166.57 37 303.35 56 527.89 75 767.87 94 967.24
- ---------------------------------------- ------------------ --------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
(Females, Non-Smoker, Standard Rating Class)
- --------------------- ---------------------------------------- -------------------- --------------------
Attained Rate per Attained Rate per Attained Rate per Attained Rate per Attained Rate per
Age $1000 Age $1000 Age $1000 Age $1000 Age $1000
- --------------------- ---------------------------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
21 130.58 36 215.17 51 349.93 66 544.99 81 774.98
22 134.90 37 222.54 52 360.96 67 559.91 82 789.19
23 139.39 38 230.12 53 372.26 68 575.00 83 803.07
24 144.04 39 237.93 54 383.80 69 590.33 84 816.53
25 148.86 40 245.95 55 395.61 70 605.91 85 829.59
26 153.87 41 254.19 56 407.68 71 621.70 86 842.28
27 159.06 42 262.65 57 420.03 72 637.65 87 854.74
28 164.45 43 271.33 58 432.69 73 653.64 88 867.13
29 170.03 44 280.24 59 445.70 74 669.55 89 879.72
30 175.82 45 289.41 60 459.06 75 685.21 90 892.88
31 181.81 46 298.83 61 472.77 76 700.71 91 907.13
32 188.03 47 308.51 62 486.80 77 715.96 92 923.26
33 194.47 48 318.46 63 501.09 78 730.99 93 942.50
34 201.14 49 328.68 64 515.58 79 745.83 94 966.88
35 208.04 50 339.17 65 530.22 80 760.50
- --------------------- ---------------------------------------- -------------------- --------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(Females, Smoker, Standard Rating Class)
- -------------------- ------------------- ------------------- -------------------- -------------------
Attained Rate per Attained Rate per Attained Rate per Attained Rate per Attained Rate per
Age $1000 Age $1000 Age $1000 Age $1000 Age $1000
- -------------------- ------------------- ------------------- -------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
0 77.29 19 138.97 38 260.04 57 454.21 76 718.86
1 77.66 20 143.64 39 268.57 58 466.48 77 732.71
2 79.95 21 148.47 40 277.28 59 479.05 78 746.29
3 82.39 22 153.38 41 286.17 60 491.96 79 759.68
4 84.94 23 158.47 42 295.21 61 505.20 80 772.93
5 87.62 24 163.76 43 304.41 62 518.71 81 786.01
6 90.42 25 169.23 44 313.79 63 532.44 82 798.89
7 93.36 26 174.91 45 323.36 64 546.27 83 811.50
8 96.43 27 180.78 46 333.13 65 560.25 84 823.78
9 99.64 28 186.86 47 343.11 66 574.06 85 835.61
10 103.00 29 193.16 48 353.29 67 588.04 86 847.20
11 106.50 30 199.68 49 363.69 68 602.13 87 858.54
12 110.13 31 206.40 50 374.32 69 616.45 88 870.00
13 113.88 32 213.36 51 385.14 70 630.99 89 881.69
14 117.76 33 220.55 52 396.18 71 645.77 90 894.20
15 121.75 34 227.99 53 407.42 72 660.67 91 907.91
16 125.86 35 235.65 54 418.83 73 675.54 92 923.63
17 130.09 36 243.57 55 430.42 74 690.26 93 942.61
18 134.46 37 251.70 56 442.21 75 704.71 94 966.88
- -------------------- ------------------- ------------------- -------------------- -------------------
</TABLE>
<PAGE>
GENERAL INFORMATION
Limits on Contesting This Policy
We rely on statements in the application for this policy. In the absence of
fraud, they are considered representations and not warranties. We can contest
this policy or an increase in Specified Amount if:
* any material misrepresentation of fact was made in the
application or in a supplemental application; and
* a copy of that application was attached to this policy
when issued or was made a part of the policy when a
change in coverage went into effect.
With respect to the original Specified Amount, we will not contest this policy
after it has been in effect during the insured's life for two years from the
policy date. With respect to increases in the Specified Amount, we will not
contest an increase in the Specified Amount after that increase has been in
effect during the insured's life for two years from the effective date of the
increase. This provision does not apply to riders that provide disability
benefits.
Misstatement of Age or Sex
If the insured's age or sex was misstated in an application, life insurance
proceeds and benefits will be adjusted. The adjusted life insurance proceeds
will be the sum of (a) and (b), where:
* a is the cash value; and
* is the life insurance proceeds, reduced by the cash value,
and multiplied by the ratio of (1) the monthly cost of
insurance actually applied, to (2) the monthly cost of
insurance that should have been applied at the insured's
true age or sex.
All amounts are those in effect, with respect to the insured, in the policy
month of the insured's death.
Suicide
If the insured commits suicide, while sane or insane, within two years of the
policy date, we will limit the proceeds. The limited amount will equal all
premiums paid on the policy less outstanding policy debt and partial surrenders.
If the insured commits suicide, while sane or insane, within two years after an
increase in the Specified Amount was effective, we will limit the proceeds
payable with respect to the increase.
The proceeds thus limited will equal the total monthly deductions made with
respect to the increase plus the Increase Charge per $1000 applicable to that
increase.
<PAGE>
Annual Statement
Within 30 days after each policy anniversary, we will send you an annual
statement. The statement will show the amount of life insurance proceeds payable
under the policy, the cash value, the surrender value, and policy debt as of the
policy anniversary. The statement will also show premiums paid and charges made
during the policy year.
Nonparticipating
This policy does not participate in our divisible surplus. No dividends are
payable.
Written Notice
Any written notice to us should be sent to our home office at 6610 West Broad
Street, Richmond, Virginia 23230. Please include the policy number and the
insured's full name.
Any notice we send to you will be sent to your address shown in the application.
You should request an address change form if you move.
Calculation of Values
Our calculations of cost of insurance rates are based on the Commissioners' 1980
Standard Ordinary smoker and Nonsmoker Mortality Table.
If the Net Investment Factor is always equivalent to an effective annual
interest rate of 4%, the cash values in this policy will always at least equal
the cash values required of an equivalent general account policy by the law
where this policy was delivered. A detailed statement of how we calculate the
values in this policy has been filed with the insurance department where this
policy was delivered.
<PAGE>
ENDORSEMENT
The policy is hereby amended by items 1, 2, 3, and 4 listed in this endorsement.
1. The Allocation of Net Premiums provision of the policy is deleted and
replaced by the following:
Allocation of Net Premiums
The net premium is the premium paid, multiplied by the Net Premium Factor
shown in the policy data pages. You may allocate the net premiums to one or
more Investment Subdivisions of the Separate Account. The portion of each
net premium allocated to any particular Investment Subdivision must be at
least 10%.
We will initially allocate net premiums to the LOV Money Market Investment
Subdivision. Upon receipt at our home office of a form satisfactory to us,
signed by the policyowner, indicating that the policyowner has received and
accepted the policy, the cash value in that Investment Subdivision will be
transferred to the other Investment Subdivisions of the Separate Account in
accordance with the net premium allocation percentages. For any premium
received after we receive the signed form, the net premium will be allocated
in accordance with the written instructions of the policyowner. You may
change the allocation of later premiums at any time, without charge, simply
by sending written notice to us at our home office. The allocation will
apply to premiums received after we record the change. The Refund Privilege
is described on the policy cover.
2. The SEPARATE ACCOUNT section of the policy is amended as follows.
The following paragraph is deleted:
The Separate Account is divided into Investment Subdivisions. The Investment
Subdivisions are named in the policy data pages. We reserve the right to
remove any Investment Subdivision of the Separate Account, or to add new
Investment Subdivision. Each Investment Subdivision in the Separate Account
will invest in shares of a designated portfolio of Life of Virginia Series
Fund, Inc., a series type of mutual fund. You determine the percentage of
net premiums which will be allocated to each Investment Subdivision.
The above deleted paragraph is replaced by the following paragraph:
The Separate Account is divided into Investment Subdivisions. The Investment
Subdivisions are named in the policy data pages. We reserve the right to
remove any Investment Subdivision of the Separate Account, or to add new
Investment Subdivisions. Each Investment Subdivision in the Separate Account
will invest in shares of a mutual fund, or of a portfolio of a series type
of mutual fund named in the data pages. You determine the percentage of net
premiums which will be allocated to each Investment Subdivision.
<PAGE>
3. The SEPARATE ACCOUNT section of the policy is also amended as follows.
The following paragraph is deleted:
We also have the right, subject to compliance with applicable law, to make
additions to, deletions from, or substitutions for the shares of a mutual
fund portfolio that are held by the Separate Account or that the Account may
purchase. We reserve the right to eliminate the shares of an eligible
portfolio of Life of Virginia Series Fund, Inc. and to substitute shares of
another portfolio of Life of Virginia Series fund, Inc. or another mutual
fund portfolio, if the shares of the portfolio are no longer available for
investments, or if in our judgement further investment in the portfolio
should become inappropriate in view of the purposes of the Separate Account.
In the event of any substitution or change, we may, by appropriate
endorsement, make such changes in this and other policies as may be
necessary or appropriate to reflect the substitution or change.
The above deleted paragraph is replaced by the following paragraph:
We also have the right, subject to compliance with applicable law, to make
additions to, deletions from , or substitutions for the shares of a mutual
fund portfolio that are held by the Separate Account or that the Account may
purchase. We reserve the right to eliminate the shares of any portfolio
named in the data pages and to substitute shares of another portfolio, if
the shares of the portfolio are not longer available for investments, or if
in our judgement further investment in the portfolio should become
inappropriate in view of the purposes of the Separate Account. In the event
of any substitution or change, we may, by appropriate endorsement, make such
changes in this and any other policies as may be necessary or appropriate to
reflect the substitution or change.
4. The SEPARATE ACCOUNT section of the policy is also amended as follows.
The provision, Transfers is deleted and replaced with the following:
Transfers
You may transfers amounts among the Investment Subdivisions of the Separate
Account by sending a written request to our home office. However, we reserve
the right to refuse to execute any transfer if any of the Investment
Subdivisions that would be affected by the transfer are unable to purchase
or redeem shares of the mutual fund in which the Investment Subdivision
invests.
The transfer will be effective as of the end of the valuation period during
which we receive your request at our home office. You can not make more than
twelve transfers each calendar year. The first transfer in each calendar
year will be made without a transfer charge. Thereafter, each time amounts
are transferred, a transfer charge will be imposed. This transfer charge is
shown in the policy data pages. When we make transfers, the cash value on
the date of the transfer will not be affected by the transfer except to the
extent of the transfer charge. The transfer charge will be taken from the
amount transferred.
For the Life Insurance Company of Virginia, Paul E. Rutledge, III
President
<PAGE>
EXHIBIT 1A(10)
Application for Commonwealth Three Policy
<PAGE>
NOTICE TO THE PROPOSED INSURED
- ------------------------------
All premium checks should be made payable to the Life Insurance Company of
Virginia.
Please notify the Company if you do not receive your policy or if a refund of
your money is not made within six weeks from the date of this receipt.
This receipt shall be void if the premium payment was made by check or draft and
the bank does not honor it upon presentation.
- --------------------------------------
The Life Insurance
Company of Virginia
LIFE OF 6610 West Broad Street
VIRGINIA Richmond, Virginia 23230
APPLICATION
FOR VARIABLE LIFE OF
LIFE INSURANCE VIRGINIA
- ---------------------------------------------------
THE AMOUNT OR DURATION OF THE DEATH BENEFIT MAY INCREASE OR DECREASE DEPENDING
ON THE INVESTMENT RETURN OF THE MUTUAL FUND.
<PAGE>
THE CASH VALUE MAY INCREASE OR DECREASE DEPENDING ON THE INVESTMENT RETURN OF
THE MUTUAL FUNDS.
13058 12/87
THESE NOTICES MUST ALWAYS BE GIVE TO THE PROPOSED INSURED/OWNER/APPLICANT
INVESTIGATIVE CONSUMER REPORT NOTICE
In compliance with federal and state laws, this it to inform you that as part of
our procedure for processing your insurance application, an investigative
consumer report may be prepared. The information for the report is obtained
through personal interviews with your neighbors, friends, or others with whom
you are acquainted. The report includes information as to your character,
general reputation, personal characteristics and mode of living. You may request
to be interviewed for the consumer report. You may, upon written request, be
informed whether or not the report was ordered, and if so , the name and address
of the consumer reporting agency which made the report. Upon proper
identification, you have the right to inspect and/or receive a copy of the
report from the consumer reporting agency. You have the right to make a written
request to us within a reasonable period of time to receive additional detailed
information about the nature and scope of the investigation. Write to:
Underwriting Department, The Life Insurance Company of Virginia, 6610 West Broad
Street, Richmond, Virginia 23230.
MEDICAL INFORMATION BUREAU DISCLOSURE NOTICE
The information given in your application may be available to other insurance
companies to which you make application for life or health insurance coverage or
to which a claim is submitted.
The information you provide will be treated as confidential except that The Life
Insurance Company of Virginia or its reinsurer may, however, make a brief report
to the Medical Information Bureau (MIB), a nonprofit membership organization of
life insurance companies which operates an information exchange in behalf of its
member. Upon request by another insurance company member to which you have
applied for life or health insurance coverage and to which a claim is submitted,
the MIB will supply such company with the information it may have in its files.
Upon receipt of a request from you, the MIB will arrange disclosure of any
information it may have in your file (medical information will be disclosed only
to your attending physician). If you question the accuracy of information in the
MIB;s file, you may contact the MIB and seek a correction in accordance with the
procedures set forth in the Federal Fair Credit Reporting Act. The address of
the MIB's information office is Box 105, Essex Station, Boston, Massachusetts
02111 telephone number (617)426-3660. The Life Insurance Company of virginia or
its reinsurer may also release information in its file to other life insurance
companies to which you may apply for it or health insurance, or to which a claim
for benefits may be submitted.
<PAGE>
NOTICE OF INSURANCE INFORMATION PRACTICES
GIVE THIS NOTICE TO THE PROPOSED INSURED/OWNER/APPLICANT IN THE STATES OF
ARIZONA, CALIFORNIA, CONNECTICUT, GEORGIA, ILLINOIS, MONTANA, NEW JERSEY, NORTH
CAROLINA, OREGON & VIRGINIA.
1. Personal information may be collected from persons other than the
individual or individuals proposed for coverage.
2. Such information, as well as other personal
or privileged information subsequently
collected, may be discussed to third parties
in certain circumstances, without
authorization.
3. A right of access and correction exists with
respect to all personal information
collected.
4. A more complete notice describing our
information practices in detail will be
furnished to you upon request.
THE LIFE INSURANCE COMPANY OF VIRGINIA-CONDITIONAL RECEIPT
Give this receipt to the Applicant when payment is made. Do not remove
otherwise.
NOT VALID FOR MORE THAN $250,000 TOTAL BENEFITS PER PERSON PROPOSED FOR
INSURANCE.
NOT VALID FOR SUBSTANDARD RISKS.
NO INSURANCE WILL BECOME EFFECTIVE PRIOR TO POLICY DELIVERY UNLESS EACH
CONDITION SPECIFIED BELOW IS SATISFIED. NO PERSON IS AUTHORIZED TO CHANGE OR
WAIVE ANY OF THESE CONDITIONS.
- --------------------------------------------------------------------------------
NO PREMIUM WILL BE COLLECTED WHEN
AMOUNT APPLIED FOR IS OVER $250,000.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ALL PREMIUM CHECKS MUST BE MADE PAYABLE TO THE COMPANY.
DO NOT MAKE CHECK PAYABLE TO THE AGENT OR LEAVE THE PAYEE BLANK.
- --------------------------------------------------------------------------------
I have received $_________ in connection with an application for life insurance
bearing the same number as this receipt if each of the following three
conditions is satisfied fully, then, subject to the Maximum Amount Limitation
described below, insurance as provided by the term and conditions of the policy
applied for will become effective on the Effective Date.
(1). The payment received with the application must equal the minimum initial
premium required for the plan(s) and amounts(s) of insurance applied for and the
mode of premium payment selected; and
(2). All medical examinations and tests required under the Company's initial
application requirements must be completed and the reports of those medical
examinations and tests must be received at the Company's Home Office within 60
days after the date of this receipt; and
(3) All persons proposed for insurance must be on the Effective Date, as defined
below, insurable at standard premium rates for the plan(s) and amount(s)
insurance requested in the application;
"Effective Date" means the latest of (a) the date of completion of the
application, (b) the date of completion of all medical exams and tests required
by the Company or (c) if the applicant requests a policy date which is later
than the date of this receipt, the policy date requested by the applicant.
Minimum amount Limitation: Under this receipt the maximum amount of insurance is
limited to $250,000 per person proposed for insurance.
<PAGE>
Refund of Payment: If one or more of the above conditions 1, 2 or 3 have not
been satisfied fully, the Company's liability to a refund of the amount paid
That refund will be made to Premium Payor.
Dated at on . 19
-------------------- --------------- -- ---------------------------
City, State Month,day Licensed Resident Agent/Broker
THIS RECEIPT SHALL BE VOID IF ALTERED OR MODIFIED CR NO.
<TABLE>
<CAPTION>
THE LIFE INSURANCE COMPANY OF VIRGINIA
Application for Life Insurance--Part 1
<S> <C> <C> <C> <C> <C> <C>
1a. PROPOSED INSURED b. Date of Birth 3a. PAYOR(Always complete) b. Relationship
Last name First Name M.I. Month Day Year Last Name First Name M.I. to Prop.Ins.
c. State/Country of Birth
d. Age e. Sex f. Marital Status g. Maiden Name c. Billing address (Always complete if different from 1j. or 4d.)
No. & St.
City, State Zip
h. S.S./Tax ID no. L. Phone ( ) 4a. OWNER(if no other than the Prop.Ins.)(Indicate if joint ownership is intended)
Last Name First Name M.I.
j. Residence address How long at this address: b. Sex c. Social Security/Tax ID no.
No. & St.
City, State Zip
2a. OCCUPATION Job title-duties(Be specific) Years d. Address
No. & St.
City, State Zip
b. Employed by and kind of business Time employed there 5. CONTINGENT OWNER (if any)
Last Name First Name M.I.
c. Business address Phone no.( )
No & St
City, State Zip
6a. Plan of Insurance b. Amount
c. Optional Benefits
____ ADB ____ DISABILITY RIDER
d. DEATH BENEFIT OPTIONS (Elect One)
____ Specified amount plus cash value (Option A)
____ Specified amount including cash value (Option B)
e. RIDER AMOUNTS
1. Additional Prop. Insured 2. Children
$ _______________ $ ________________
f. POLICY DATE REQUESTED
- ------------------------------------
g. PREMIUM MODE
___ Monthly Bank Draft ___ Salary Savings ___ Gov. Allotment
___ Single Premium ___ Annually ___ Semiannually
___ Quarterly
h. PLANNED PERIODIC PREMIUM i. PAID WITH APPLICATION
REQUESTED (per mode elected in g.)
$ _________________________ $ _______________________
A COMPLETED PREMIUM ALLOCATION FORM MUST BE SUBMITTED WITH EACH APPLICATION.
7. SUITABILITY YES NO
a. HAVE YOU RECEIVED PROSPECTUSES DATED WITHIN 13 MONTHS OF THE DATE OF THIS
APPLICATION FOR THE SEPARATE ACCOUNT AND ALL MUTUAL FUNDS APPLICABLE TO
THE POLICY APPLIED FOR? ___ ___
b. DO YOU UNDERSTAND THAT:
1. THE AMOUNT OR DURATION OF THE DEATH BENEFIT INCREASE OR DECREASE
DEPENDING ON THE INVESTMENT RETURN OF THE MUTUAL FUNDS? ___ ___
2. THE CASH VALUE MAY INCREASE OR DECREASE DEPENDING ON THE INVESTMENT
RETURN OF THE MUTUAL FUNDS? ___ ___
3. THE INITIAL PREMIUM WILL BE ALLOCATED TO THE LOV MONEY MARKET
INVESTMENT SUBDIVISION UNTIL YOU RETURN A FORM INDICATING RECEIPT AND
ACCEPTANCE OF THE POLICY? ___ ___
c. DO YOU BELIEVE THAT THIS POLICY WILL MEET YOUR INSURANCE NEEDS AND FINANCIAL
OBJECTIVES?
d. 1. What is the Owner's net worth? $ _____________
2. Annual Income? $ _____________
8. BENEFICIARY OF PROPOSED INSURED (Give name, relationship, and age)
PRIMARY NAME RELATIONSHIP AGE
ADDRESS NO. & ST. CITY STATE ZIP
CONTINGENT NAME RELATIONSHIP AGE
BENEFICIARIES MAY BE CHANGED AT ANY TIME BY THE OWNER UNLESS MADE
IRREVOCABLE BY CHECKING THIS BOX: ___________________
</TABLE>
<PAGE>
I have read this application and I agree that all the answers to the questions
in Parts 1, 1A, II and IV, including any information and answers entered by the
agent, and any required medical examinations, are complete, true and correct to
the best of my knowledge and belief. No information has been furnished which is
not recorded in those answers. I also agree that:
1. The answers to those questions, together with this agreement, are the
basis for issuing any policy.
2. No one, except the President, the Secretary, or a Vice President of the
Company can make or change any contract of insurance.
3. Except as otherwise provided in the Conditional Receipt, insurance does
not take a effect until I pay the full first premium and the policy is
delivered to me while all persons proposed for insurance are insurable
under the Company's published underwriting rules.
4. To the extent permitted by law, I waive all rights that control the
disclosure of medical information. I acknowledge receipt of a notice
concerning an investigative consumer report and a notice about
disclosure of medical information.
Dated at _________ on _____________ 19__ ___________
City, State Month, day Proposed Insured
________________________________________________________________________________
Witness(Agent/Broker) Applicant(Give title if Co.officer) Payer Add'l Proposed
Insured
13058 12/87 NO. SEE QUESTIONS ON REVERSE AND AUTHORIZATION ON PAGE 3
<PAGE>
APPLICATION FOR LIFE INSURANCE-PART 1(Continuation)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
HAS ANY PERSON PROPOSED FOR INSURANCE (IF "YES", GIVE DETAILS IN QUESTION 11 AND IDENTIFY PERSON BY NAME)
- ---------------------------------------------- ---------------------- ----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
a.Ever used alchohol or other YES NO h. Had a driver's license Yes No
drugs to a degree that required suspended or revoked or been
treatment or advice form convicted in the last
physician, licensed 3 yrs. of a moving violation,
practioner, or any organization or of driving while impaired
which helps those who have an or intoxicated? Give license
alcohol or drug problem? no.
i. Knowledge of future travel
b. An application for life or health residence outside the
insurance now pending or planned with this United States or Canada?
or any other company?
j. Ever been convicted of a
c. Intentions of replacing life insurance or felony?
annuities (including group) inforce with this
or any other company? If replacement is
intended, list the policy number(s) and the
name(s) of the company(ies)in question 11.
d. Been declined, postponed, rated, offered k. Had a test result
modified policy, or a policy with an extra premium, confirming exposure
by any company in connection with life, health or to the
accident insurance? AIDS, (Acquired
Immune Deficiency
Syndrome) virus, or
been told that he/she
has AIDS,
ARC, (AIDS Related
Complex), or been
counseled or treated
for Aids, ARC or
any other
immunological
disorder?
e. Applied and/or received 10. HAS THE PROPOSED INSURED
disability or hospitalization EVER smoked cigarettes?
benefits from any source in __ Yes __ No
the last 5 years, or left used tobacco in other forms?
occupation for more than one __ Yes __ No
month because of health? If the answer to either
question is "Yes". COMPLETE
TOBACCO USER QUESTIONAIRE
ON PAGE 4
- --------------------------------------------- ---------------------- ------------- ------------------------------- -------------
f. Participated in or have intentions of 11. GIVE DETAILS HERE OF ANY
participating in any type of land, water or PART OF QUESTION 9 ANSWERED "YES"
air vehicle racing, parachuting, hand/kite
gliding or skin/scuba diving? If identify part and person if
yes, complete Avocation supplement more than one proposed
F-6014. insured.
- ---------------------------------------------- ---------------------- ------------- ------------------------------- ------------
g. Flown in past 3 years, or have intentions
of flying, other than as fare paying
scheduled airline passenger? If Yes,
Complete Aviation
Questionnaire on Page 4.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
NONMEDICAL DECLARATIONS-PART II
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------- ---------------------------------------------
b. Any weight loss in the past year? Yes No
1a. Height and Weight of Proposed Insured: ft. lbs. If "Yes" lbs.
------ ------ ------- ----
- ------------------------------------------------------------------------------------------------------------------------------------
2a. Full name and address of Proposed
insured's personal physician. b. Date of last consultation c. Reason for, findings and treatment.
- ------------------------------------------------------------------------------------------------------------------------------------
3. HAS ANY PERSON PROPOSED FOR INSURANCE EVER HAD (Circle all disorder or
impairments, give details in no. 4 and identify person)
- ------------------------------------------------------------------------------------------------------------------------------------
f. Cirrhosis, hepatitis, YES NO
ulcer, colitis,
a. To be admitted to a hospital or any other YES NO diverticulitis, ileitis, or
health care facility,or an operation, disorder of the liver, gall
observation, diagnostic tests or treatment bladder, pancreas, stomach or
of any illness? intestines?
- ------------------------------------------------------------------------------------------------------------------------------------
b. A medical examination or been treated by YES NO h. Anemia, leukemia or other YES NO
any physician or specialist, or had an blood disorder?
X-Ray, EKG or other medical or diagnostic
test done within the past 5 years?
- ------------------------------------------------------------------------------------------------------------------------------------
c. Mental or emotional disorder, nervous
breakdown, convulsions, epilepsy, paralysis i. Prostate or testicular
or any other disorder of the brain or disease, disease of the
nervous system? uterus, ovaries or breasts?
- ------------------------------------------------------------------------------------- ---------------------------------------------
d. Chest pain, shortness of breath, heart
murmur, high blood pressure, stroke, j. Disorder of the urinary
irregular heart beat, or any other disease tract or kidneys, sugar,
or disorder of the heart or arteries? albumin or blood in the urine?
- ------------------------------------------------------------------------------------- ---------------------------------------------
e. Arthritis, gout, or any bone, joint, k. Asthma, bronchitis,
muscle or skin disorder? emphysema or lung disorder?
- ------------------------------------------------------------------------------------- ---------------------------------------------
f. Cirrhosis, hepatitis, ulcer, colitis,
diverticulitis, ileitis, or disorder of the
liver, gall bladder, pancreas, stomach or l. Disease or impairment of
intestines? sight, speech or hearing?
- ---------------------------------------------- ---------------------- ------------- ---------------------------------------------
g. Diabetes, cancer, tumors or disease of m. Any other health
any glands? impairment or medically
treated condition within the
past 5 years?
- ------------------------------------------------------------------------------------------------------------------------------------
4. GIVE COMPLETE DETAILS OF ANY PART OF QUESTION 3 ANSWERED "YES" (Identify person by name)
- ---------------------------------------------- ------------------------------------- ---------------------------------------------
Name and address of physician, specialist,
Nature of disorder. Frequency of practitioner, hospital, medical institution
Part attacks and treatment Date and Duration or facility.
- ---------------------------------------------- ------------------------------------- ------------------------------- ------------
</TABLE>
THE LIFE INSURANCE COMPANY OF VIRGINIA/6610 WEST BROAD STREET, RICHMOND,
VIRGINIA 23230
13058 12/87
<PAGE>
AGENT'S REPORT-PART III (Complete fully in all cases)
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Agency/Brokerage Agent/Broker Agent/Broker
and Code (Print) and Code (Print) and Code (Print)
- ------------------------------------------------------------------------------------------------------------------------------------
1a. Previous residence address of Proposed Insured From to
No.& St. City, State Zip
- ------------------------------------------------------------------------------------------------------------------------------------
b. Previous business address of Proposed Insured-How long employed? Phone no. ( )
No. & St. City, State Zip
- ------------------------------------------------------------------------------------------------------------------------------------
Family Age if Living Age at death Present health/cause of death Insurance In Force
History Prob. Ins. Add'l Prop. Ins. Add'l Prop. Insured (Juvenile Only)
Ins. Ins. Add'l Insured
- ------------------------------------------------------------------------------------------------------------------------------------
Father $
- -------------------------------------------------------------------------------- --------------------------------------------------
Mother $
- ------------------------------------------------------------------------------------------------------------------------------------
No. Living No. Dead If dead, age and
cause of death
- ------------------------------------------------------------------------------------------------------------------------------------
Brothers $
- -------------------------------------------------------------------------------- --------------------------------------------------
Sisters $
- ------------------------------------------------------------------------------------------------------------------------------------
3. List all insurance in force on the Proposed Insured. Give company name and
amount.
- ------------------------------------------------------------------------------------------------------------------------------------
4. If this application is to be issued on Monthly Bank Draft basis, and added to an established account, give the insured's name
and policy number.
- ------------------------------------------------------------------------------------------------------------------------------------
5. Do you have knowledge or reason to believe that replacement of insurance is involved? Yes No If, "yes,"
explain and submit a completed replacement from where required. ------- -------
- ------------------------------------------------------------------------------------------------------------------------------------
6. If we need to ask questions about this application, who can best answer them?
Home phone ( ) Work phone ( ) Best time to call AM/PM
---------------------- --------------------------- ----------------------
- ------------------------------------------------------------------------------------------------------------------------------------
7. Primary Purpose of Sale:
Business Estate Planning Personal
A. Split Dollar* G. Liquidity L. Total Needs Analysis
---- ---- -----
B. Deferred Compensation H. Estate Conservation M. Survivor needs
---- ---- -----
C. Executive Bonus I. Gift N. Mortgage Protection
---- ---- -----
D. Key Employee J. Charitable Gift O. Education
---- ---- -----
E. Business Buy-Out K. Other P. Retirement
---- ---- -----
F. Secure Credit Q. Other
---- -----
*If split dollar: Endorsement Coll. Assign. ER Pay All P.S. 58 Offset
------- -------- ----- -----
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
STATEMENT
I represent that: (1) ___ I have personally seen (*) ___ I have not personally
seen (**) all the persons proposed for insurance; (2) I have truly and
accurately recorded on this application the information as supplied by the
Proposed Insured, the Additional Proposed Insured and/or the Owner/Applicant;
(3) to the best of my knowledge and belief there is nothing adversely affecting
the insurability of any of the persons proposed for insurance other than as
indicated in this application, and (4) where required, the abbreviated notice
regarding our insurance practices, or an request, the full Notice of Information
Practices, was given on or before the date the application was signed.
<TABLE>
<S> <C>
_________ _______________________________ __________________________________________
Date Licensed Resident Agent (print) Licensed Resident Agent/Broker (signature)
</TABLE>
(Each child proposed for coverage within the last 10 days) Explain:
_____________________________
Agent's/Broker's phone ( )
____________________________________________ _________________________
Agent's/Broker's Social Security Tax ID No.: Agent's/Broker's address:
AUTHORIZATION TO OBTAIN, RELEASE AND DISCLOSE INFORMATION
I authorize any physician, medical professional, hospital, clinic, medical care
institution, insurer or reinsurer, the Medical Information Bureau, consumer
reporting Agency, employer, relative, friend or neighbor to disclose to The Life
Insurance Company of Virginia and/or its reinsurers, medical and other
information pertaining to me or any of my minor children who are to be insured.
The information that may be disclosed includes information relating to
employment, other insurance coverage, past and present physical, mental, drug
and/or alcohol conditions, character, habits avocations, finances, general
reputation, credit and other personal characteristics. I understand that The
Life Insurance Company of Virginia will collect this information for the purpose
of determining eligibility for insurance. I also understand that The Life
Insurance Company of Virginia may review this information in connection with
claims that are later submitted to it. I agree that this authorization will be
valid for two and one-half years from the date it is signed. I know that I have
a right to receive a copy of this authorization upon request. I agree that a
photographic copy of this authorization is as valid as the original. If an
investigative consumer report is prepared in connection with my application,
I request to be interviewed in connection with that report.
Dated at on 19
----------- --------------- ----- ----------------------------------
City, State Month, day Proposed Insured
- --------------------------------------------------------------------------------
Witness(Agent/Broker) Parent of child under 15 years Payor Add'l
Proposed Insured
<PAGE>
APPLICATION FOR LIFE INSURANCE-PART IV
TOBACCO USER QUESTIONNAIRE
COMPLETE IF QUESTION 11. PART 1, OR QUESTION 2, PART 1A WAS ANSWERED "YES"
<TABLE>
<S> <C>
1.
- -----------------------------------------------------------------------------------------------
CIGARETTE SMOKING DATE STARTED DATE STOPPED PACKS PER DAY FILTERED UNFILTERED
- -----------------------------------------------------------------------------------------------
PROPOSED INSURED
- -----------------------------------------------------------------------------------------------
ADD'L PROPOSED INSURED
- -----------------------------------------------------------------------------------------------
</TABLE>
2. If the amount of cigarette smoking was different at anytime from what is
shown above, give date, amount and approximate period of time smoking was done
at that frequency.
Proposed Insured: ________________________________________________________
Additional Proposed Insured: _____________________________________________
<TABLE>
<S> <C>
3.
- ------------------------- ------------- ------------- ------------------------------------------
OTHER TOBACCO USE DATE STARTED DATE STOPPED DAILY AMOUNT NAME OF FORM
- ------------------------- ------------- ------------- ------------------------------------------
PROPOSED INSURED
- ------------------------- ------------- ------------- ------------------------------------------
ADD'L PROPOSED INSURED
- ------------------------- ------------- ------------- ------------------------------------------
</TABLE>
AVIATION QUESTIONNAIRE
1. Name of person to whom information applies:
- ------------------------------------------------------------------------------
<TABLE>
<S> <C>
2.
- ------------------------------------------------------------------------------------------------------------------------------------
Hours Flown
- -------------------------------------------------- ------------------------ ----------------------------- -----------------------
Type of Flying Past 12 mo. 1 - 2 years ago Next 12 mo.
- -------------------------------------------------- ------------------------ ----------------------------- -----------------------
Pilot-Military, Military Reserve
- -------------------------------------------------- ------------------------ ----------------------------- -----------------------
Pilot-Civilian
- -------------------------------------------------- ------------------------ ----------------------------- -----------------------
Crew Member
- -------------------------------------------------- ------------------------ ----------------------------- -----------------------
</TABLE>
3. Type of pilot's certificate held and year issued:
- ----------------------------------------------------------------------------
4. Total solo hours flown as pilot:
- ----------------------------------------------------------------------------
5. Date of most recent flight:
- ----------------------------------------------------------------------------
<PAGE>
6. What types and kind of planes do you fly?
- -----------------------------------------------------------------------------
7. Describe under DETAILS the purpose and nature of flying you do.
- ----------------------------------------------------------------------------
8. Do you make or contemplate making flights as a pilot or crew member
originating or terminating outside the continental United States?
___ Yes ____ No If "Yes", give details below in no. 9.
- ------------------------------------------------------------------------------
9. DETAILS
- ----------------------------------------------------------------------------
10. If rateable, please issue policy
____ including aviation coverage at appropriate extra premium.
____ incorporating an Aviation Exclusion Rider (no aviation coverage).
DIABETES QUESTIONNAIRE-DO NOT COMPLETE IN CONNECTICUT
1. Name of person to whom information applies:
- ---------------------------------------------------------------------------
<TABLE>
<S> <C>
2.
- -------------------------------------------------------------------------------------------------------------------------
Name and address of physician first consulted for 3. Name and address of physician now providing medical supervision,
diagnosed diabetes, and date of visit. and date of last visit.
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
4. Present Weight: ____ lbs. b. Weight one year ago: ____ lbs.
<PAGE>
5. What treatment do you use: Yes No
a. Diet Only?
---- ----
b. Insulin?
---- ----
Type and number of Units
-------------------------
c. Oral medication?
---- ----
1. Name
-------------------------
2. Number of tablets
-------------------------
6. Have you been treated for: Yes No
a. Insulin Reactions
---- ----
b. Diabetic Coma?
---- ----
Give name of physician, health care facility and dates in DETAILS.
-------------------------
7. Have you ever had: Yes No
a. Any eye trouble
---- ----
b. Heart trouble?
---- ----
c. High blood pressure?
---- ----
d. Kidney trouble
(albuminuria, etc.)?
---- ----
e. Neuritis or neuralgia?
---- ----
Give Name of Physician, health care facility and dates in DETAILS.
8. Regarding urine tests Yes No
a. Do you regularly
test your urine for sugar?
---- ----
b. Results (please check):
---- ----
Usually ___ Negative ___ trace ___ more than trace
c. Date of last test
-------------------------
d. Result of last test
-------------------------
9. Regarding blood tests Yes No
a. Have you had any
blood sugar test
done by a doctor or at
home?
---- ----
b. Date
-------------------------
c. Result
-------------------------
d. Do you test blood
sugar at home?
---- ----
- ------------------------------------------------------------------------
Details
<PAGE>
APPLICATION FOR LIFE INSURANCE-PART 1A
<TABLE>
<CAPTION>
1a.
<S> <C>
ADDITIONAL PROPOSED INSURED b. Date of Birth c. State/Country d. Age e. Sex f. Marital g. Maiden
Last Name First Name of birth Status name
M.I.
____________________________________________________________________________________________________________________________________
h. Height and Weight l. Weight Loss in Past Year, if any: j. Relationship to k. Social Security/Tax ID. No.
______ft.______in. _________lbs. ________________________lbs Proposed Insured
____________________________________________________________________________________________________________________________________
i. Present residence address (if different from Proposed Insured) Telephone No. ( )
No. & St. City, State Zip
____________________________________________________________________________________________________________________________________
m. Employed by Kind of Business Job title-duties (Be Specific)
____________________________________________________________________________________________________________________________________
2. Has the Additional Proposed insured ever smoked cigarettes? ___Yes ___No; ever used tobacco in other forms? ___Yes ___No
If the answer to either question is "Yes", COMPLETE TOBACCO USER QUESTIONNAIRE ON PAGE 4.
3.
____________________________________________________________________________________________________________________________________
BENEFICIARY OF ADDITIONAL PROPOSED INSURED (Complete only for universal life
plans with A1 Rider)
____________________________________________________________________________________________________________________________________
PRIMARY: NAME Relationship Age CONTINGENT: NAME Relationship Age
____________________________________________________________________________________________________________________________________
4.
____________________________________________________________________________________________________________________________________
Beneficiary may be changed at any time by the Owner unless made irrevocable by checking this box: _____
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
a. Full Name and Address: b. Date of Last Consultation c. Reason for, findings and treatment
____________________________________________________________________________________________________________________________________
5.
____________________________________________________________________________________________________________________________________
a. CHILDREN PROPOSED FOR INSURANCE* b. Date of Birth c. State/country d. Age e. Sex f. Relationship g. Height (______ft.
of birth to Prop. Ins.** ___in.____Weight***
____________________________________________________________________________________________________________________________________
1.
____________________________________________________________________________________________________________________________________
2.
____________________________________________________________________________________________________________________________________
3.
____________________________________________________________________________________________________________________________________
4.
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
No Insurance will be provided on a child before **Indicate if other than natural child. (Stepchild, adopted, etc.)
age 15 days or after the child's 18th birthday. ***Indicate in pounds any weight loss in past year.
A child who is a full time student and who has not yet NOTE: If more than 4 children in family, use space below.
attained his/her 22nd birthday may become an insured child.
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
h. Has the name of any child under age 18 been omitted? i. If less than one year old, give birth weight: _____lbs
_____ Yes (Explain)
Was the birth considered premature?
_____ No
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
j. Is any child listed not living at the same address with the Proposed Insured? ________ Yes (Explain) ________ No
____________________________________________________________________________________________________________________________________
6.
____________________________________________________________________________________________________________________________________
Is any child listed in question no. 5, but who has not yet attained his/her 22nd birthday, enrolled as a full time student in a
secondary or post secondary school? ______ Yes _____ No
Name(s) of child(ren) and to learning institution(s):
____________________________________________________________________________________________________________________________________
</TABLE>
USE THIS SPACE TO EXPAND ON ANY QUESTION FROM PARTS 1, 1A, II & IV. IDENTIFY
PART, QUESTION AND PERSON PROPOSED FOR INSURANCE. THIS PAGE WILL BE A PART OF
THE CONTRACT WHEN USED.
<PAGE>
13058 12/87
COMMONWEALTH III
PREMIUM ALLOCATION FORM
Indicate how you wish your premium initially allocated by entering a percentage
of at least 10% for any fund selected. The percentages entered must total 100%
and you may invest in as many as seven different investment subdivisions at any
time.
NOTE: Your premium will be placed in the Life of Virginia Money Market
subdivision until this allocation form and the Policy Delivery and Acceptance
letter is completed and returned to Life of Virginia.)
SEPARATE ACCOUNT II
INVESTMENT SUBDIVISIONS
AMERICAN FUNDS GROUP FIDELITY FUNDS
Cash Management ________ % Money Market ________ %
High-Yield ________ % High-Income ________ %
Growth-Income ________ % Equity-Income ________ %
Growth ________ % Growth ________ %
Gov't Guar. Securities ________ % *Overseas ________ %
LIFE OF VIRGINIA FUNDS OPPENHEIMER FUNDS
Common Stock ________ % Money ________ %
Bond ________ % High-Income ________ %
Money Market ________ % Bond ________ %
Total Return ________ % Capital Appreciation ________ %
________ % Growth ________ %
Multiple Strategies ________ %
State regulations prohibit Maryland policyowners from allocating more than 25%
of their funds to the Fidelity Overseas Portfolio.
___________________________________
Policyowner's Signature
___________________________________
Co-Owner's Signature
___________________________________
Date
- ------------------------------------------------------------------------------
Consult your policy and fund prospectuses for investment details.
<PAGE>
VARIABLE PRODUCTS DEPARTMENT
The Life Insurance Company of Virginia
6610 W. Broad St., Richmond, Va. 23230
Telephone: 804-281-6907
