[Letterhead of GE Life and Annuity Assurance Company]
As Filed with the Securities and Exchange Commission on February 5, 1999
Registration No. 333-41031
Securities and Exchange Commission
Washington, DC 20549
Post-Effective Amendment No. 2
Form S-6
For Registration Under The Securities Act Of 1933
Of Securities Of Unit Investment Trust
Registered On Form N-8b-2
GE Life & Annuity Separate Account II
(Exact name of trust)
GE Life and Annuity Assurance Company
(Name of depositor)
6610 West Broad Street
Richmond, Virginia 23230
(Complete address of depositor's principal executive offices)
Name and complete address of agent for service: copy to:
Patricia L. Dysart, Esq. Stephen E. Roth, Esq.
GE Life and Annuity Assurance Company Sutherland Asbill & Brennan LLP
6610 West Broad Street 1275 Pennsylvania Ave., N.W.
Richmond, Virginia 23230 Washington, DC 20004-2415
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b) of Rule 485
__ on May 1, 1998 pursuant to paragraph (b) of Rule 485
X_ 60 days after filing
pursuant to paragraph (a) of Rule 485
_on ___________ pursuant to paragraph (a)of Rule 485
Securities Being Offered: Flexible Premium Variable Life Insurance Policies
<PAGE>
PART I
<PAGE>
GE Life & Annuity Separate Account II
Prospectus For The
Flexible Premium Variable Deferred Annuity Policy
Policy Form P1250CR 10/97
issued by:
GE Life and Annuity Assurance Company
6610 West Broad Street
Richmond, Virginia 23230
This prospectus describes an individual flexible premium variable life insurance
policy offered by GE Life and Annuity Assurance Company ("we," "us," "our," or
the "Company"). The Policy provides life insurance protection, premium
flexibility, and the ability to change death benefits.
You can elect one of two Death Benefit Options under the Policy. Under Option A,
your Life Insurance Proceeds will equal the greater of (1) the Specified Amount
plus the Policy's Account Value, or (2) the Account Value multiplied by the
applicable corridor percentage. Under Option B, the Life Insurance Proceeds will
equal the greater of (1) the Specified Amount, or (2) the Account Value
multiplied by the applicable corridor percentage. We guarantee that your Life
Insurance Proceeds will at least equal the Specified Amount so long as your
Policy is in force.
You direct your premiums to the Investment Subdivisions of Separate Account II.
Each Investment Subdivision invests in shares of the Funds. We list the Funds,
and their currently available portfolios below.
Janus Aspen Series:
Growth Portfolio, Aggressive Growth Portfolio, International Growth
Portfolio, Worldwide Growth Portfolio, Balanced Portfolio, Flexible Income
Portfolio, Capital Appreciation Portfolio
Variable Insurance Products Fund:
VIP Equity-Income Portfolio, VIP Overseas Portfolio, VIP Growth
Portfolio Variable Insurance Products Fund II:
VIP II Asset Manager Portfolio, VIP II Contrafund Portfolio
Variable Insurance Products Fund III:
VIP III Growth & Income Portfolio, VIP III Growth Opportunities
Portfolio GE Investments Funds, Inc.:
S&P 500 Index Fund, Money Market Fund, Total Return Fund, International
Equity Fund, Real Estate Securities Fund, Global Income Fund, Value Equity
Fund, Income Fund, U.S. Equity Fund
Oppenheimer Variable Account Funds:
Oppenheimer Bond Fund, Oppenheimer Aggressive Growth Fund, Oppenheimer
Growth Fund, Oppenheimer High Income Fund, Oppenheimer Multiple Strategies
Fund
Federated Insurance Series:
Federated American Leaders Fund II, Federated Utility Fund II, Federated
High Income Bond Fund II
The Alger American Fund:
<PAGE>
Alger American Growth Portfolio, Alger American Small Capitalization
Portfolio
PBHG Insurance Series Fund, Inc.
PBHG Growth II Portfolio and PBHG Large Cap Growth Portfolio
Goldman Sachs Variable Insurance Trust:
Goldman Sachs Growth and Income Fund and Goldman Sachs Mid Cap Equity Fund
Salomon Brothers Variable Series Fund:*
Salomon Investors Fund, Salomon Total Return Fund, Salomon Strategic Bond
Fund
*Not available in all states and may not be available in all markets.
Your Policy provides for a Surrender Value. The amount of your
Surrender Value will depend upon the investment performance of the portfolio(s)
you select. You bear the investment risk of investing in Separate Account II.
You may cancel your Policy during the free-look period. Please note
that replacing your existing insurance coverage with the Policy might not be to
your advantage.
The Securities and Exchange Commission has not approved these
securities or determined if this Prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
Neither the U.S. Government nor any governmental agency insures or
guarantees your investment in the Policy.
This Prospectus contains information about Separate Account II that you
should know before investing. Please read this Prospectus carefully before
investing and keep it for future reference.
The date of this Prospectus is ___ __, 1999
<PAGE>
TABLE OF CONTENTS
Page
DEFINITIONS.............................................................
POLICY SUMMARY..........................................................
RISK SUMMARY............................................................
FUND ANNUAL EXPENSE TABLE...............................................
Other Policies.....................................................
GE LIFE AND ANNUITY ASSURANCE COMPANY...................................
State Regulation...................................................
SEPARATE ACCOUNT II.....................................................
Changes to Separate Account II.....................................
THE FUNDS...............................................................
Investment Subdivisions............................................
Balanced Funds.....................................................
Aggressive Growth Funds............................................
Growth Funds.......................................................
Growth and Income Funds............................................
Corporate Bond Funds...............................................
High Yield Bond Funds..............................................
Speciality Funds...................................................
Diversified Bond funds.............................................
Global Stock Funds.................................................
Money Market Funds.................................................
Your Right to Vote Portfolio Shares................................
CHARGES AND DEDUCTIONS..................................................
Premium Charge.....................................................
Mortality and Expense Risk Charge..................................
Monthly Deduction..................................................
Cost of Insurance..................................................
Surrender Charge...................................................
Partial Surrender Processing Fee...................................
Transfer Charge....................................................
Other Charges......................................................
Reduction of Charges for Group Sales...............................
THE POLICY..............................................................
Applying for a Policy..............................................
Owner..............................................................
Beneficiary........................................................
Changing the Beneficiary...........................................
Canceling a Policy.................................................
PREMIUMS................................................................
General............................................................
Tax Free Exchanges (1035 Exchanges)................................
Periodic Premium Plan..............................................
Minimum Premium Payment............................................
Allocating Premiums................................................
HOW YOUR ACCOUNT VALUE VARIES...........................................
Account Value......................................................
Surrender Value....................................................
Investment Subdivision Values......................................
Unit Values........................................................
TRANSFERS...............................................................
General............................................................
Dollar-Cost Averaging..............................................
Portfolio Rebalancing..............................................
Powers of Attorney.................................................
DEATH BENEFITS..........................................................
Amount of Death Benefit Payable ...................................
Death Benefit Options..............................................
Changing the Death Benefit Option..................................
Accelerated Benefit Rider..........................................
Changing the Specified Amount......................................
SURRENDERS AND PARTIAL WITHDRAWALS......................................
Surrenders.........................................................
Partial Surrenders.................................................
Effect of Partial Surrenders on Life Insurance Proceeds............
LOANS...................................................................
General............................................................
Preferred Policy Debt..............................................
Interest Rate Charged..............................................
Repayment of Policy Debt...........................................
Effect of Policy Loans ............................................
LAPSE...................................................................
Premium to Prevent Lapse...........................................
Your Policy will Remain in Effect During the Grace Period..........
Requesting Payments................................................
PAYMENTS AND TELEPHONE TRANSACTIONS.....................................
Requesting Payments................................................
Telephone Transactions.............................................
TAX CONSIDERATIONS......................................................
Tax Status of the Policy...........................................
Tax Treatment of Policy - General..................................
Special Rules for Modified Endowment Contracts.....................
Taxation of the Company............................................
Income Tax Withholding.............................................
Other Considerations...............................................
OTHER POLICY INFORMATION................................................
Exchange Privilege.................................................
Optional Payment Plans.............................................
Dividends..........................................................
Incontestability...................................................
Suicide Exclusion..................................................
Misstatement of Age or Sex.........................................
Written Notice.....................................................
Trustee............................................................
Other Changes......................................................
Reports............................................................
Change of Owner....................................................
Supplemental Benefits..............................................
Using the Policy as Collateral.....................................
Reinsurance........................................................
Legal Proceedings..................................................
ADDITIONAL INFORMATION..................................................
Sale of the Policies...............................................
Legal Matters......................................................
Year 2000 Readiness Disclosure.....................................
Experts............................................................
KPMG\Peat Marwick LLP..............................................
Actuarial matters..................................................
Financial Statements...............................................
Executive Officers and Directors...................................
Other Information..................................................
HYPOTHETICAL ILLUSTRATIONS..............................................
This prospectus does not constitute an offering in any jurisdiction in which
such offering may not be lawfully made.
<PAGE>
DEFINITIONS
We have tried to make this Prospectus as understandable as possible. However, in
explaining how the Policy works, we have had to use certain terms that have
special meanings. We define these terms below.
Account Value -- Account Value is the total amount under the Policy in each
Investment Subdivision and the General Account.
Age -- The age on the Insured's birthday nearest the Policy Date or a Policy
Anniversary.
Attained Age -- The Insured's Age on the Policy Date plus the number of full
years since the Policy Date.
Beneficiary -- The person or entity you designate to receive the death benefit
payable at the death of the Insured.
Continuation Amount -- A cumulative amount set forth on the Policy data pages
for each month of the Continuation Period representing the minimum Net Total
Premium required to keep the Policy in force during the Continuation Period.
Continuation Period -- The number of Policy years during which the Policy will
not lapse if the Net Total Premium is at least equal to the Continuation Amount
for the number of Policy Months that the Policy has been in force.
Eligible Proceeds -- Total Proceeds subject to a maximum of $250,000 from all
our policies or certificates covering the Insured.
Fund -- Any open-end management investment company or unit investment trust in
which Separate Account II invests.
General Account -- Assets of GE Life and Annuity other than those allocated to
Separate Account II or any of our other separate accounts.
Home Office -- Our offices at 6610 West Broad Street, Richmond, Virginia 23230,
1-804-281-6000.
Insured -- The person upon whose life we issue the Policy.
Investment Subdivision -- A subdivision of Separate Account II, the assets of
which invest exclusively in a corresponding Fund.
Life Insurance Proceeds -- The amount payable upon the death of the Insured. We
will reduce the Life Insurance Proceeds by outstanding Policy Debt and past due
charges, if any, to determine the death benefit payable under the Policy.
<PAGE>
GE Life and Annuity -- GE Life and Annuity Assurance Company.
Monthly Anniversary Day -- The same day in each month as the Policy Date.
Net Premium -- The portion of each premium you allocate to one or more
Investment Subdivisions.
Net Premium Factor -- The factor we use in determining the Net Premium which
represents a deduction from each premium paid.
Net Total Premium -- On any date, Net Total Premium equals 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.
Optional Payment Plan -- A plan under which Life Insurance Proceeds or Surrender
Value proceeds can be used to provide a series of periodic payments to you or a
Beneficiary.
Owner -- The Owner of the Policy. "You" or "your" refers to the Owner. You may
also name Contingent Owners.
Planned Periodic Premium -- A level premium amount scheduled for payment at
fixed intervals over a specified period of time.
Policy -- The Policy with any attached application(s), any riders, and
endorsements.
Policy Date -- The date we issue the Policy and the date the Policy becomes
effective. We measure Policy Years and Anniversaries from the Policy Date.
Policy Debt -- The amount of outstanding loans plus accrued interest.
Policy Month -- A one-month period beginning on a Monthly Anniversary Day and
ending on the day immediately preceding the next Monthly Anniversary Day.
Separate Account II -- GE Life & Annuity Separate Account II, the segregated
asset account of GE Life and Annuity to which you allocate Net Premiums.
Specified Amount -- An amount we use in determining the insurance coverage on an
Insured's life.
Surrender Value -- The amount we pay you when you surrender the Policy.
<PAGE>
Total Proceeds -- Life Insurance Proceeds plus any additional term insurance on
a terminally ill Insured added to the Policy by rider, not including the
Children's Insurance Rider. Total proceeds will not include any proceeds payable
under the Accidental Death Benefit Rider or any proceeds payable under the
Policy or any additional term insurance rider on the Insured that would expire
within 24 months of the date we receive proof of terminal illness. We will not
adjust Total Proceeds for any Policy Debt, but we will make adjustments for
Total Proceeds for any misstatement of age or sex of a terminally ill Insured.
Unit Value -- A unit of measure we use to calculate the Account Value for each
Investment Subdivision.
Valuation Day -- For each Investment Subdivision, each day on which the New York
Stock Exchange is open for business except for days that the Investment
Subdivision's corresponding Fund does not value its shares.
Valuation Period -- The period that starts at the close of regular trading on
the New York Stock Exchange on any Valuation Day and continues to the end of the
next Valuation Day.
<PAGE>
Policy Summary
- -------------------------------------------------------------------------------
PREMIUMS
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
o You select a premium payment plan. You are not required to pay premiums
according to the plan, but may vary frequency and amount, within limits, and can
skip planned premiums. See Periodic Premium Plan.
- -------------------------------------------------------------------------------
o Premium amounts depend on the Insured's Age, sex (where applicable), risk
class, Specified Amount selected, and any supplemental benefit riders. See
Premiums.
- -------------------------------------------------------------------------------
o You may make unscheduled premium payments, within limits. See Premiums.
- -------------------------------------------------------------------------------
o Under certain circumstances, you may have to pay extra premiums to prevent
lapse. See Premium to Prevent Lapse.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
DEDUCTION FROM PREMIUMS
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
o Currently, we deduct an 8% premium charge (10% maximum) from each premium
before we place it in an Investment Subdivision. We refer to the premium minus
the charges as a Net Premium. We do not assess a premium charge against the
policy loan portion of a premium received from the rollover of a life insurance
policy. See Premium Charge.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
ALLOCATION OF NET PREMIUMS
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
o You allocate your Net Premiums among up to seven of the Investment
Subdivisions of Separate Account II. We will place any premiums received prior
to 1) the date we approve the application and 2) the date we receive all the
forms we need to issue the Policy in a non-interest bearing cash account. For
states that require the refund of premiums during the free look period, we will
allocate Net Premiums to the Money Market Investment Subdivision for 15 days,
then to Investment Subdivisions you designate. See Net Premium Allocations for
rules and limits.
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
o The Investment Subdivisions invest in corresponding portfolios of the
following Funds:
- -------------------------------------------------------------------------------
<PAGE>
- ----------------------------------------------------------- -------------------
Janus Aspen Series Oppenheimer Variable Account Funds
Growth Portfolio Oppenheimer Bond Fund
Aggressive Growth Portfolio Oppenheimer Aggressive Growth
International Growth Portfolio Fund
Worldwide Growth Portfolio Oppenheimer Growth Fund
Balanced Portfolio Oppenheimer High Income Fund
Flexible Income Portfolio Oppenheimer Multiple Strategies
Capital Appreciation Portfolio Fund
Variable Insurance Products Fund Federated Insurance Series
VIP Equity-Income Portfolio Federated American Leaders
VIP Overseas Portfolio Fund II
VIP Growth Portfolio Federated Utility Fund II
Variable Insurance Products Fund II Federated High Income Bond
VIP II Asset Manager Portfolio Fund II
VIP II Contrafund Portfolio The Alger American Fund
Variable Insurance Products Fund III Alger American Growth Portfolio
VIP III Growth & Income Portfolio Alger American Small
VIP III Growth Opportunities Portfolio Capitalization Portfolio
GE Investments Funds, Inc. PBHG Insurance Series Fund, Inc.
S&P Index Fund PBHG Growth II Portfolio
Money Market Fund PBHG Large Cap Growth Portfolio
Total Return Fund Goldman Sachs Variable
International Equity Fund Insurance Trust
Real Estate Securities Fund Growth and Income Fund
Global Income Fund Mid Cap Equity Fund
Value Equity Fund Salomon Brothers Variable
Income Fund Series Fund
U.S. Equity Fund Investors Fund
Total Return Fund
Strategic Bond Fund
See Investment Subdivisions.
- ----------------------------------------------------------- -------------------
- -------------------------------------------------------------------------------
DEDUCTION FROM ASSETS
- -------------------------------------------------------------------------------
o Each Fund deducts management fees and other expenses from its assets.
- -------------------------------------------------------------------------------
o We deduct a daily mortality and expense risk charge at a current effective
annual rate of 0.70% (maximum effective annual rate of 0.70%) from assets in the
Investment Subdivisions.
- -------------------------------------------------------------------------------
o We make a monthly deduction from your Account Value for (1) the cost of
insurance, (2) a current monthly policy charge of $15 in the first Policy Year
($15 per month maximum in the first Policy Year) and $6 per month thereafter
($12 per month maximum after the first Policy Year), and (3) supplemental
benefit charges. The monthly deduction will also include the increase charge for
the first month following an increase in the Specified Amount.
<PAGE>
- -------------------------------------------------------------------------------
ACCOUNT VALUE
- -------------------------------------------------------------------------------
o Account Value equals the total amount in each Investment Subdivision and
the General Account.
- -------------------------------------------------------------------------------
o Account Value serves as the starting point for calculating certain values
under a Policy, such as the Surrender Value and the Life Insurance Proceeds.
Account Value varies from day to day to reflect investment experience of the
Investment Subdivisions, charges deducted and other Policy transactions (such as
Policy loans, transfers and partial surrenders). See How Your Account Value
Varies.
- -------------------------------------------------------------------------------
o You can transfer Account Value among the Investment Subdivisions. A $10
transfer processing fee applies to each transfer made after the first transfer
in a Policy Month. See Transfers for rules and limits. Policy loans reduce the
amount available for allocations and transfers.
- -------------------------------------------------------------------------------
o There is no minimum guaranteed Account Value. During the Continuation Period,
the Policy will lapse if the Surrender Value is too low to cover the monthly
deduction and the Net Total Premium is less than the Continuation Amount. After
the Continuation Period, the Policy will lapse if the Surrender Value is to low
to cover the monthly deduction. See Premium to Prevent Lapse.
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------- -----------------------------------------------------
CASH BENEFITS DEATH BENEFITS
<S> <C>
o You may take a Policy loan for up to 90% of Account o The minimum Specified Amount available is $100,000.
Value less any Surrender Charges, and less any Policy
Debt. See Loans.
o You may choose from two death benefit options:
o You may partially surrender your Policy. The minimum Option A (greater of Specified Amount plus Account
partial surrender amount is $599, and a fee equal to the Value, or a specified percentage of Account Value);
lesser of $25 or 2% of the amount of the partial surrender or Option B (greater of Specified Amount, or a
will apply to each Partial Surrender. If you select Option specified percentage of Account Value). See
B, you may only make a partial surrender after the first Death Benefits.
Policy year. See Partial Surrender.
Surrender. o A death benefit is payable as a lump sum or under
a variety of payment options.
o You can surrender your Policy at any time for its
Surrender Value (Account Value minus Policy Debt and o You may change the Specified Amount and the death
minus any applicable surrender charge). A surrender benefit option. See Change in Existing Coverage
charge will apply during the first 15 Policy Years. and Changing the Death Benefit Option for rules
See Full Surrender and Surrender Charge. and limits.
o You may choose from a variety of payment options. See o During the Continuation Period, the death benefit
Requesting Payments. guarantee keeps the Policy in force regardless of
the sufficiency of Surrender Value so long as Net
Total Premium is at least equal to the
Continuation Amount. See Death Benefit Guarantee.
- ----------------------------------------------------------- -----------------------------------------------------
</TABLE>
<PAGE>
Risk Summary
- -------------------------------------------------------------------------------
Investment Risk
Your Account Value is subject to the risk that investment
performance will be Risk unfavorable and that your Account Value
will decrease. Because we continue to deduct charges from Account
Value, if investment results are sufficiently unfavorable, the
Surrender Value of your Policy may fall to zero. In that case,
the Policy will lapse without value and insurance coverage will
no longer be in effect, unless you make an additional payment
sufficient to prevent a lapse during the 61-day grace period.
However, your Policy will not lapse during the Continuation
Period, even if your Surrender Value is too low to cover the
monthly deduction, so long as the Net Total Premium is at least
equal to the Continuation Amount. On the other hand, if
investment experience is sufficiently favorable and you have kept
the Policy in force for a substantial time, you may be able to
draw upon Account Value, through partial surrenders and Policy
loans.
- -------------------------------------------------------------------------------
Risk of Lapse
If the Surrender Value of your Policy is too low to pay the
Monthly Deduction and loan charges when due (and, during the
Continuation Period, the Net Total Premium is less than the
Continuation Amount), the Policy will be in default and a grace
period will begin. There is a risk that if withdrawals, loans,
and monthly deductions reduce your Surrender Value to too low an
amount and/or if the investment experience of your selected
Investment Subdivisions is unfavorable, then your Policy could
lapse. In that case, you will have a 61-day grace period to make
a sufficient payment. If you do not make a sufficient payment
before the grace period ends, your Policy will end without value,
insurance coverage will no longer be in effect, and you will
receive no benefits. After lapse, you may reinstate your Policy
within three years subject to certain conditions.
Tax Risks
We intend for the Policy to satisfy the definition of a "life
insurance contract" under section 7702 of the Internal Revenue
Code of 1986, as amended (the "Code"). In general, earnings under
the Policy will not be taxed until a distribution is made from
the Policy. In addition, death benefits generally will be
excludable from income. In the case of a Policy that is
considered a "modified endowment contract," special rules apply
and a 10% penalty tax may be imposed on distributions, including
loans. You should consult a qualified tax advisor in all tax
matters involving your Policy.
Limits on Partial Surrenders
The Policy permits you to take partial surrenders. However, if
you selected Option B, you may only make partial surrenders after
the first Policy year.
The minimum partial surrender amount is $500, and we will assess
a processing fee on the surrender.
Partial surrenders will reduce your Account Value and Life
Insurance Proceeds. Federal income taxes and a penalty tax may
apply to partial surrenders.
Effects of Policy Loans
A Policy loan, whether or not repaid, will affect Account Value
over time because we subtract the amount of the loan from the
Investment Subdivisions as collateral. We then credit a fixed
interest rate to the loan collateral. As a result, the loan
collateral does not participate in the investment results of the
Investment Subdivisions. The longer the loan is outstanding, the
greater the effect is likely to be. Depending on the investment
results of the Investment Subdivisions, the effect could be
favorable or unfavorable. A Policy loan also reduces the death
benefit proceeds.
A Policy loan could make it more likely that a Policy would
terminate. There is a risk if the loan reduces your Surrender
Value to too low an amount and investment experience is
unfavorable, that the Policy will lapse, resulting in adverse tax
consequences. You must submit a sufficient payment during the
grace period to avoid the Policy's termination without value and
the end of insurance coverage.
Comparison with other
insurance policies
The Policy is similar in many ways to universal life. As with
universal life insurance:
o the Owner pays premiums for insurance coverage on the
Insured;
o the Policy provides for the accumulation of Surrender
Value that is payable if the Owner surrenders the Policy
during the Insured's lifetime;
o and the Surrender Value may be substantially lower than
the premiums paid.
However, the Policy differs from universal life insurance in
that it permits you to place your premium in the Investment
Subdivisions. The amount and duration of life insurance
protection and of the Policy's Account Value will vary with
the investment performance of Investment Subdivisions.
The Surrender Value of your Policy may decrease if the
investment performance of the Investment Subdivisions to
which you allocate Account Value is sufficiently adverse. If
the Surrender Value becomes insufficient to cover charges
when due and the Continuation Period is not in effect, the
Policy will lapse without value after a grace period.
<PAGE>
FUND ANNUAL EXPENSE TABLE
This table describes the Fund fees and expenses during the time that you own the
Policy. These fees and expense are shown as a percentage of net assets for the
year ended December 31, 1998. The prospectus for each Fund contains more detail
concerning a Fund's fees and expenses.
Fee and expenses will be included in a subsequent post-effective amendment.
<TABLE>
<CAPTION>
Total Annual
Fund Management Fees Other Expenses Expenses
<S> <C>
Balanced
Janus Aspen Balanced Portfolio
VIP II Asset Manager Portfolio
Salomon Brothers Total Return Fund*
GE Total Return Fund
Oppenheimer Multiple Strategies Fund
Aggressive Growth
Janus Aspen Aggressive Growth Portfolio
Oppenheimer Aggressive Growth Fund
Alger American Small Capitalization Portfolio
Growth
Janus Aspen Growth Portfolio
Janus Aspen Capital Appreciation Portfolio
Alger American Growth Portfolio
VIP II Contrafund Portfolio
VIP Growth Portfolio
Oppenheimer Growth Fund VIP III
Growth Opportunities Portfolio
Goldman Sachs Mid Cap Equity Fund
GE Value Equity Fund
PBHG Growth II Portfolio
PBHG Large Cap Growth Portfolio
Growth & Income
Federated American Leaders Fund II
GE US Equity Fund
Goldman Sachs Growth & Income Fund
Salomon Brothers Investors Fund*
VIP Equity-Income Portfolio
VIP III Growth & Income Portfolio
GE S&P 500 Index Fund
International Stock
Janus Aspen International Growth Portfolio
VIP Overseas Portfolio
GE International Equity Fund
Corporate Bond
Oppenheimer Bond Fund
Salomon Brothers Strategic Bond Fund*
GE Income Fund
High Yield Bond
Oppenheimer High Income Fund
Federated High Income Bond Fund
Specialty
Federated Utility Fund II
GE Real Estate Securities Fund
Diversified Bond
Janus Aspen Flexible Income Portfolio
Global Stock
Janus Aspen Worldwide Growth Portfolio
International Bond
GE Global Income Fund
Money Market
GE Money Market Fund
</TABLE>
*These funds are not currently available in all states or all markets.
The expense information regarding the Funds was provided by those Funds. We have
not independently verified this information. We cannot guarantee that the
reimbursements provided by certain of the Funds will continue.
Other Policies
We offer other variable life insurance policies which also invest in the same
portfolios of the Funds. These policies may have different charges that could
affect the value of the Investment Subdivisions and may offer different benefits
more suitable to your needs. To obtain more information about these policies,
contact your agent, or call (800) 352-9910.
GE LIFE AND ANNUITY ASSURANCE COMPANY
We are a stock life insurance company operating under a charter granted by the
Commonwealth of Virginia on March 21, 1871. We are principally engaged in the
offering of life insurance and annuity policies. We are admitted to do business
in 49 states and the District of Columbia. Our principal offices are at 6610
West Broad Street, Richmond, Virginia 23230. Before January 1, 1999, our name
was The Life Insurance Company of Virginia.
<PAGE>
General Electric Capital Assurance Corporation ("GE Capital Assurance" ) owns
eighty percent of our capital stock. GE Financial Assurance Holdings, Inc. owns
the remaining 20%. GE Capital Assurance and GE Financial Assurance Holdings,
Inc. are indirect wholly owned subsidiaries of General Electric Capital
Corporation ("GE Capital"). GE Capital, a New York corporation, is a diversified
financial services company whose subsidiaries consist of specialty insurance,
equipment management, and commercial and consumer financing businesses. GE
Capital's ultimate parent, General Electric Company, founded more than one
hundred years ago by Thomas Edison, is the world's largest manufacturer of jet
engines, engineering plastics, medical diagnostic equipment and large electric
power generation equipment.
GNA Corporation, a direct wholly-owned subsidiary of GE Financial Assurance
Holdings, Inc., directly owns the stock of Capital Brokerage Corporation (the
principal underwriter for the Policies and a broker/dealer registered with the
U.S. Securities and Exchange Commission).
State Regulation
We are subject to regulation by the State Corporation Commission of the
Commonwealth of Virginia. We file an annual statement with the Virginia
Commissioner of Insurance on or before March 1 of each year covering our
operations and reporting on our financial condition as of December 31 of the
preceding year. Periodically, the Commissioner of Insurance examines our
liabilities and reserves and those of Separate Account II and certifies their
adequacy, and a full examination of our operations is conducted by the State
Corporation Commission, Bureau of Insurance of the Commonwealth of Virginia, at
least every five years.
We are also subject to the insurance laws and regulation of other states within
which we are licensed to operate.
SEPARATE ACCOUNT II
We established GE Life & Annuity Separate Account II ("Separate Account II") as
a separate investment account on August 21, 1986. Separate Account II currently
has forty Investment Subdivisions available under the Policy. Each Investment
Subdivision invests exclusively in shares representing an interest in a separate
corresponding portfolio of one of the eleven Funds described below.
The assets of Separate Account II belong to us. However, we may not charge the
assets in Separate Account II attributable to the Policies with liabilities
arising out of any other business which we may conduct. If Separate Account II's
assets exceed the required reserves and other liabilities, we may transfer the
excess to our General Account. Income and both realized and unrealized gains or
losses from the assets of Separate Account II are credited to or charged against
Separate Account II without regard to the income, gains or losses arising out of
any other business we may conduct.
Separate Account II is registered with the SEC as a unit investment trust under
the Investment Company Act of 1940 (the "1940 Act") and meets the definition of
a separate account under the federal securities laws. Registration with the SEC
does not involve supervision of the management or investment practices or
policies of Separate Account II by the SEC.
<PAGE>
Changes to Separate Account II
Separate Account II may include other Investment Subdivisions that are not
available under the Policy. We may substitute another investment subdivision or
insurance company separate account under the Policy if, in our judgment,
investment in a Investment Subdivision should no longer be possible or becomes
inappropriate to the purposes of the Policies, or if investment in another
investment subdivision or insurance company separate account is in the best
interest of Owners. No substitution may take place without notice to Owners and
prior approval of the SEC and insurance regulatory authorities, to the extent
required by the 1940 Act and applicable law.
We may also, where permitted by law;
o create new separate accounts;
o combine separate accounts, including Separate Account II;
o add new Investment Subdivisions or remove Investment Subdivisions from
Separate Account II;
o make the Investment Subdivisions available under other policies we
issue;
o deregister Separate Account II under the 1940 Act; and
o operate Separate Account II under the direction of committee or in
another form.
THE FUNDS
You decide the Investment Subdivisions to which you direct Net Premiums. You may
change your allocation without penalty or charges. There is a separate
Investment Subdivision which corresponds to each portfolio of a Fund offered in
this Policy.
Each Fund is registered with the Securities and Exchange Commission as an
open-end management investment company under the 1940 Act. The assets of each
portfolio are separate from other portfolios of a Fund and each portfolio has
separate investment objectives and policies. As a result, each portfolio
operates as a separate portfolio and the investment performance of one portfolio
has no effect on the investment performance of any other portfolio.
Before choosing an Investment Subdivision to allocate your Net Premiums and
Account Value, carefully read the prospectus for each Fund, along with this
Prospectus. We summarize the investment objectives of each portfolio below.
There is no assurance that any of the portfolios will meet these objectives.
<PAGE>
The investment objectives and policies of certain portfolios are similar to the
investment objectives and policies of other portfolios that may be managed by
the same investment adviser or manager. The investment results of the
portfolios, however, may be higher or lower than the results of such other
portfolios. There can be no assurance, and no representation is made, that the
investment results of any of the portfolios will be comparable to the investment
results of any other portfolio, even if the other portfolio has the same
investment adviser or manager, or if the other portfolio has a similar name.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment Subdivision Investment Objective Adviser (and Sub-
Adviser, as applicable)
- --------------------------------------- ---------------------------------------------------------------- -------------------------
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Balanced Funds
- --------------------------------------- ---------------------------------------------------------------- --------------------------
<S> <C>
Janus Aspen Series Long term growth of capital, consistent with the preservation Janus Capital
Balanced Portfolio of capital and balanced by current income. Normally invests Corporation
40-60% of its assets in securities selected primarily for
their growth potential and 40-60% of its assets in securities
selected primarily for their income potential.
- -------------------------------------- ---------------------------------------------------------------- --------------------------
Fidelity Variable Insurance High total return with reduced risk over the long-term by Fidelity Management &
Products Fund II allocating assets among domestic and foreign stocks, bonds and Research Company
VIP II Asset Manager Portfolio short-term fixed income instruments.
- --------------------------------------- ---------------------------------------------------------------- --------------------------
Salomon Brothers Variable Primarily invests in a broad variety of securities, Salomon Brothers
Series Funds including stocks, fixed-income securities and short-term Asset Management
Total Return Fund obligations. Inc
(currently not available in
California and may not be available
in all markets)
- --------------------------------------- ---------------------------------------------------------------- -------------------------
GE Investments Funds Objective of providing highest total return, composed of GE GE Investment
Total Return Fund current income and capital appreciation, as is Management, Incorporated
consistent with Management prudent investment risk by
investing in common stock, bonds Incorporated and
money market instruments, the proportion of each being
continuously determined by the investment adviser.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Oppenheimer Variable Total investment return (which includes current income and OppenheinerFunds, Inc,
Account Funds capital appreciation in the values of itsshares) from
Multiple Strategies Fund investments in common stocks and other equity securities,
bonds and other debt securities, and "money market" securities.
- ----------------------------------------------------------------------------------------------------------------------------------
Aggressive Growth Funds
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Janus Aspen Series Non-diversified portfolio achieving long-term growth of Janus Capital Corporation
Aggressive Growth Portfolio capital by normally investing at least 50% of its equity
assets in securities issued by medium-sized companies.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Oppenheimer Variable Account Funds Achieves capital appreciation by investing in "growth-type" OppenheimerFunds, Inc.
Aggressive Growth Fund companies. Before May 1, 1998 this fund was known as Capital
Appreciation Fund.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
The Alger American Fund Long-term capital appreciation. Except during temporary Fred Alger Management, Inc.
Alger American Small defensive periods, the portfolio invests at least 65% of its
Capitalization Portfolio total assets in equity securities of companies that, at the
time of purchase of the securities, have total market
capitalization within the range of companies included in the
Russell 2000 Growth Index or the S&P Small Cap 600 Index,
updated quarterly. Both indexes are broad indexes of small
capitalization stocks. The portfolio may invest up to 35% of
its total assets in equity securities of companies that, at
the time of purchase, have total market capitalization outside
this combined range and in excess of that amount (up to
100% of its assets) during temporary defensive periods.
- ---------------------------------------------------------------------------------------------------------------------------------
Growth Funds
- ---------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Long-term capital growth consistent with the preservation of Janus Capital Corporation
Growth Portfolio capital and pursues its objective by investing in common
stocks of companies of any size. Emphasizes larger, more
established issuers.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Janus Aspen Series Long-term growth of capital by investing primarily in common Janus Capital Corporation
Capital Appreciation Portfolio stocks of companies of any size.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
The Alger American Fund Long-term capital appreciation. Except during temporary Fred Alger Management. Inc.
Alger American Growth Portfolio defensive periods, this portfolio invests at least 65% of its
total assets in equity securities of companies that, at the
time of purchase have a total market capitalization of $1
billion or greater.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Fidelity Variable Insurance Capital appreciation by investing mainly in equity securities Fidelity
Products Fund II of companies believed to be undervalued or out-of-favor. Management &
VIP II Contrafund Portfolio Research Company
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Fidelity Variable Insurance Capital appreciation by normally purchasing common stocks, Fidelity
Products Fund although its investments are not restricted to any one type of Management &
VIP Growth Portfolio security. Capital appreciation may also be found in other Research Company
types of securities, including bonds and preferred stocks.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Oppenheimer Variable Capital appreciation normally through purchases in common OppenheimerFunds, Inc.
Account Funds stocks, although its investments are not restricted to any one
Growth Portfolio type of security. Capital appreciation may also be found in
other types of securities including bonds and preferred stocks.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Fidelity Variable Insurance Capital growth by investing primarily in common stock and Fidelity
Products Fund III securities convertible to common stock. Management &
VIP III Growth Opportunities Research Company
Portfolio
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Goldman Sachs Variable Long-term capital appreciation, primarily through equity Goldman Sachs Asset
Insurance Trust securities of companies with public stock market Management
Mid Cap Equity Fund capitalization between $500 million and $10 billion at the
time of investment.
- --------------------------------------- ---------------------------------------------------------------- --------------------------
GE Investments Funds Provides long term growth of capital appreciation by GE Investment Management
Value Equity Fund investing primarily in common stock and other Incorporated
equity securities of companies undervalued by the market and (Subadvised by NWQ
offer above-average Incorporated growth potential. Investment Management
Company)
- --------------------------------------- ---------------------------------------------------------------- --------------------------
PBHG Insurance Series Fund, Inc. Capital Appreciation by investing at east 65% Pilgrim Baxter &
PBHG Growth II Portfolio of total assets in the equity securities of small and medium Associates, Ltd.
sized growth companies (market capitalization of up to $4
billion) that, in the adviser's opinion, have an outlook
for strong earnings growth and the potential for significant
capital appreciation..
- --------------------------------------- ---------------------------------------------------------------- -------------------------
PBHG Insurance Series Fund, Inc. Long-term growth of capital by investing primarily in the Pilgrim Baxter &
PBHG Large Cap Growth Portfolio equity securities of large capitalization companies (market Associates, Ltd.
capitalization of greater than $1 billion) that, in the
adviser's opinion, have an outlook for
strong growth in earnings and potential
for capital appreciation.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Growth and Income Funds
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Federated Insurance Series Long-term growth of capital and a secondary objective of Federated Advisors
American Leaders Fund II providing income. Seeks to achieve its objective by
investing, under normal circumstances, at least 65% of its
total assets in common stock of "blue chip" companies.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
GE Investments Funds Long-term growth of capital through investments primarily in GE Investment Management
U.S. Equity Fund equity securities of U.S. companies. Incorporated
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Goldman Sachs Variable Long-term capital growth and growth of income, primarily Goldman Sachs Asset
Insuranced Trust through equity securities that, in the management team's Management
Growth and Income Fund view, offer favorable capital appreciation and/or Fund
dividend-paying ability.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Salomon Brothers Variable Series Long-term growth of capital with current income Salomon Brothers
Investors Fund as a secondary Salomon Brothers Funds objective, primarily Asset Management Inc
(currently not available in through investments in common stocks of well-known
California and many not be
available in all markets)
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Fidelity Variable Insurance Reasonable income by investing primarily in income-producing Fidelity
Products Fund equity securities. In choosing these securities, the portfolio Management &
VIP Equity-Income Portfolio will also consider the potential for capital appreciation. The Research Company
portfolio's goal is to achieve a yield, which exceeds the
composite yield on the securities comprising the
Standard & Poor's Composite Index of 500 Stocks.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Fidelity Variable Insurance High total return through a combination of current income and Fidelity
Products Fund III capital appreciation by investing mainly in equity securities. Management &
VIP III Growth & Income Research Company
Portfolio
- --------------------------------------- ---------------------------------------------------------------- -------------------------
GE Investments Funds Provides capital appreciation and accumulation of income GE Investment Management
S&P 500 (1) Index Fund that corresponds to the investment return of the Standard & Incorporated
Poor's Incorporated (Subadvised by 500 Composite Stock Price (Subadvised by State
Index through investment in common State Street Global Street Global Advisors)
stocks traded on the New York Stock Exchange and the
American Advisors) Stock Exchange,and to a limited extent,
in the over-the-counter markets.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
- --------
1"Standard & Poor's," "S&P," and "S&P 500" are trademarks of
The Mc-Graw Hill Companies, Inc. and have been licensed for use by GE
Investment Management Incorporated. The S&P 500 Index Fund is not
sponsored, endorsed, sold or promoted by Standard & Poor's, and
Standard & Poor's makes no representation or warranty, express or
implied, regarding the advisability of investing in this Fund or the
Policy.
- ----------------------------------------------------------------------------------------------------------------------------------
International Stock Funds
- --------------------------------------- ---------------------------------------------------------------- --------------------------
Janus Aspen Series Long-term growth of capital primarily through investments in Janus Capital Corporation
International Growth Portfolio common stocks of issuers located outside the united States.
The portfolio normally invests at least 65% of its total
assets in securities of issuers from at least five different
countries, excluding the United States.
- ------------------------------------- ------------------------------------------------------------ ---------------------------
Fidelity Variable Insurance Long-term growth of capital through investments in Fidelity Management &
Products Fund foreign securities and provides a means for investors to Research Company
VIP Overseas Portfolio diversify their own portfolios by participating in companies
economies outside of the United States.
- ----------------------------------------------------------------------------------------------------------------------------------
GE Investments Funds Long-term capital appreciation by investing primarily in GE Investment Management
International Equity Fund equity and equity-related securities of companies that are Incorporated
organized outside of the U.S. or whose securities are
principally traded outside the U.S.
- ----------------------------------------------------------------------------------------------------------------------------------
Corporate Bond Funds
- ----------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds High level of current income and capital growth when OppenheimerFunds Inc.
Bond Fund consistent with its primary objective. Under normal
conditions this fund will invest at least 65% of its
total assets in investment grade debt securities.
- ------------------------------------- ------------------------------------------------------------ --------------------------------
Salomon Brothers Variable Series High level of current income with capital Salomon Brothers
Funds appreciation as a secondary objective, through a Asset Management Inc
Strategic Bond Fund globally diverse portfolio of fixed-income investments,
(currently not available in including lower-rated fixed income securities commonly
California and may not be known as junk bonds.
available in all markets)
- ----------------------------------------------------------------------------------------------------------------------------------
GE Investments Funds Maximum income consistent with prudent investment GE Investment
Income Fund management and preservation of capital by investing Management Incorporated.
Incorporated primarily in income-bearing debt securities
and other income bearing instruments.
- ---------------------------------------------------------------------------------------------------------------------------------
High Yield Bond Funds
- --------------------------------------------------------------------------------------------------------------------------------
Opppenheimer Variable High current income from investments in high yield fixed OppenheimerFunds, Inc.
Account Funds income securities, including unrated securities or high
High Income Fund risk securities in lower rating categories. These
securities may be considered speculative. This Fund may
have substantial holdings of lower-rated debt securities
or "junk" bonds. The risks of investing in junk
bonds are described in the prospectus for the
Oppenheimer Variable Account Funds, which should be
read carefully before investing.
- ----------------------------------------------------------------------------------------------------------------------------------
Federated Insurance Series High current income by investing primarily in a Federated Advisers
High Income Bond Fund II diversified portfolio of professionally managed
fixed-income securities. The fixed income securities
in which the Fund intends to invest are lower-rated
corporate debt obligations, commonly referred to as "junk
bonds." The risks of these securities are described in
the prospectus for the Federated Insurance Series,
which should be read carefully before investing.
- ----------------------------------------------------------------------------------------------------------------------------------
Specialty Funds
- ---------------------------------------------------------------------------------------------------------------------------------
Federated Insurance High current income and moderate capital appreciation by Federated Advisers
Utility Fund II investing primarily in equity and debt securities of
utility companies.
- ---------------------------------------------------------------------------------------------------------------------------------
GE Investments Funds Maximum total return through current income and capital GE Investment Management
Real Estate Securities Fund appreciation by investing primarily in securities of U.S. Incorporated
issuers that are principally engaged in or related to the
real estate industry including those that own significant
real estate assets. The portfolio will not invest directly
in real estate
- ---------------------------------------------------------------------------------------------------------------------------------
Diversified Bond Funds
- ---------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Maximum total return consistent with preservation of Janus Capital
Flexible Income Portfolio capital. Total return is expected to result from a Corporation
combination of income and capital appreciation.
The portfolio pursues its objective primarily by
investing in any type of income-producing securities.
This portfolio may have substantial holdings of
lower-rated debt securities or "junk" bonds. The
risks of investing in junk bonds are described in the
prospectus for Janus Aspen Series, which should be read
carefully before investing.
- ----------------------------------------------------------------------------------------------------------------------------------
Global Stock Funds
- ----------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Long-term capital growth in a manner consistent with the Janus Capital
Worldwide Growth Portfolio preservation of capital by investing in a diversified Corporation
portfolio of common stocks of foreign and domestic issuers
of all sizes. Normally invests in at least five different
countries including the United States.
- ----------------------------------------------------------------------------------------------------------------------------------
International Bond Funds
---------------------------------------------------------------------------------------------------------------------------------
Innvestments Funds High total return, emphasizing current income and, to a GE Investment
Global Income Fund lesser extent, capital appreciation. Seeks to achieve Management
objectives by investing primarily in income-bearing debt Incorporated
securities and other income-bearing instruments of U.S.
and foreign issuers
- ----------------------------------------------------------------------------------------------------------------------------------
Money Market Funds
- ----------------------------------------------------------------------------------------------------------------------------------
GE Investments Funds Highest level of current income as is consistent with high GE Investment
GE Investment Money Market Fund liquidity and safety of principal by investing Management, Incorporated
in high quality quality money market securities.
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Shares of the Funds are not sold directly to the general public. They are sold
to us, and may be sold to other insurance companies, for investment of the
assets of the investment subdivisions established by those insurance companies
to fund variable annuity and variable life insurance policies or to retirement
plans.
<PAGE>
When a Fund sells shares in any of its portfolios both to variable annuity and
to variable life insurance separate accounts, it engages in mixed funding. When
a Fund sells shares in any of its portfolios to separate accounts of
unaffiliated life insurance companies, it engages in shared funding.
Each Fund may engage in mixed and shared funding. Therefore, due to differences
in redemption rates or tax treatment, or other considerations, the interests of
various shareholders participating in a Fund could conflict. A Fund's Board of
Directors will monitor for the existence of any material conflicts, and
determine what action, if any, should be taken. See the Prospectuses for the
Funds.
We have entered into agreements with either the investment adviser or
distributor of each of the Funds under which the adviser or distributor pays us
a fee ordinarily based upon an annual average percentage of the average
aggregate net amount we have invested on behalf of Account 4 and other separate
accounts. These percentages differ, and some investment advisers or distributors
pay us a greater percentage than other advisors or distributors. These
agreements reflect administrative services we provide.
Your Right to Vote Portfolio Shares
Even though we are the legal owner of the portfolio shares held in the
Investment Subdivisions, and have the right to vote on all matters submitted to
shareholders of the portfolios, we will vote our shares only as you instruct, so
long as such action is required by law.
Before a vote of a portfolio's shareholders occurs, you will receive voting
materials from us. We will ask you to instruct us on how to vote and to return
your proxy to us in a timely manner. You will have the right to instruct us on
the number of portfolio shares that corresponds to the amount of Account Value
you have in that portfolio.
If we do not receive voting instructions on time from some owners, we will vote
those shares in the same proportion as the timely voting instructions we
receive. Should federal securities laws, regulations and interpretations change,
we may elect to vote portfolio shares in our own right. If required by state
insurance officials, or if permitted under federal regulations, we may disregard
certain owner voting instructions. If we ever disregard voting instructions, we
will send you a summary in the next annual report to Owners advising you of the
action and the reasons we took such action.
<PAGE>
CHARGES AND DEDUCTIONS
This section describes the charges and deductions we make under the Policy to
compensate for the services and benefits we provide, costs and expenses we
incur, and risks we assume. The services and benefits we provide include:
o the cash and death benefits under the Policy;
o investment options, including Net Premium allocations, dollar-cost
averaging and portfolio rebalancing programs;
o administration of various elective options under the Policy; and
o the distribution of various reports to Owners.
The costs and expenses we incur include:
o those associated with underwriting applications;
o increases in Specified Amount, and riders;
o various overhead and other expenses associated with providing the
services and benefits provided by the Policy;
o sales and marketing expenses; and other costs of doing
business, such as federal, state and local premium and other
taxes and fees.
The risks we assume include:
o that insureds may live for a shorter period of time than
estimated, resulting in the payment of greater death benefits
than expected; and
o that the costs of providing the services and benefits under
the Policies will exceed the charges deducted.
We may profit from any charges deducted, such as the mortality and expense risk
charge. We may use any such profits for any purpose, including payment of
distributions expenses.
<PAGE>
Premium Charge
We currently deduct an 8% charge (10% maximum) from each premium before placing
the resulting Net Premium in the Investment Subdivisions. We will not assess
premium charge against the policy loan portion of a premium received from the
rollover of a life insurance policy.
Mortality and Expense Risk Charge
We currently deduct a daily charge from assets in the Investment Subdivisions
attributable to the Policies at an effective annual rate of 0.70% of net assets.
We will not increase this charge for the duration of your Policy.
This charge is factored into the net investment factor.
The mortality risk we assume is the risk that Insureds may live for a shorter
period of time than estimated and, therefore, a greater amount of Death Benefit
Proceeds than expected will be payable. The expense risk we assume is that
expenses incurred in issuing and administering the Policies will be greater than
estimated and, therefore, will exceed the expense charge limits set by the
Policies.
Monthly Deduction
We make a monthly deduction on the Policy Date and each Monthly Anniversary Day
from Account Value. The monthly deduction for each Policy consists of:
o the cost of insurance charge (discussed below);
o a current monthly policy charge of $15 in the first Policy
Year ($15 per month maximum in the first Policy Year) and $6
per month thereafter ($12 per month maximum after the first
Policy Year); and
o any charges for additional benefits added by riders to the Policy (see
Supplemental Benefits).
If an increase in Specified Amount becomes effective, there will be a one-time
charge (per increase) of $1.50 per $1,000 of increase included in the monthly
deduction (it can not exceed $300 per increase). See Changing the Specified
Amount.
Cost of Insurance
The cost of insurance is a significant charge under your Policy because it is
the primary charge for the death benefit we provide you. The cost of insurance
charge depends on a number of factors (Age, gender, Policy duration, and risk
class) that cause the charge to vary from Policy to Policy and from Monthly
Anniversary Day to Monthly Anniversary Day.
<PAGE>
We calculate the cost of insurance on each Monthly Anniversary Day based on your
net amount at risk. We determine your net amount at risk by the following
formula:
Life Insurance Proceeds
1.0032737 - Account Value
To determine your cost of insurance for a particular Policy Month, we divide
your net amount at risk by 1000 and multiply that result by the applicable cost
of insurance rate. If Option B is in effect, and the Specified Amount has
increased, we first consider the Account Value part of the initial Specified
Amount. If the Account Value is more than the initial Specified Amount, we will
consider it part of the increased Specified Amount resulting from increases in
the order of the increases.
We first determine your cost of insurance based on your initial Specified
Amount. After that, any increase in your Specified Amount that requires evidence
of insurability will cause us to recalculate your cost of insurance rate.
We guarantee that the cost the cost of insurance rates we charge will never
exceed the maximum rates shown your Policy. These rates are based on the
Commissioners' 1980 Standard Ordinary Mortality Table, and depend on our
expectation of future experience with respect to mortality, expenses,
persistency, and taxes. The rates we currently charge are, at most ages, lower
than the maximum permitted under the Policies. A change in rates will apply to
all persons of the same Age, sex (where appropriate), and risk class and whose
Policies have been in effect for the same length of time.
Surrender Charge
If you fully surrender your Policy during the surrender charge period, we will
deduct a surrender charge. We calculate the surrender charge by multiplying a
factor times the lowest Specified Amount in effect before the surrender, divided
by 1000. The factor depends on the issue Age, sex (where applicable), and risk
class of the Insured. The surrender charge remains level for the first five
Policy Years and then decreases each Policy month to zero over the next 10
Policy Years or at Age 95, whichever is earlier. We will deduct the surrender
charge before we pay Surrender Value.
The chart below lists the minimum and maximum surrender charges per Policy Year.
Your surrender charge will depend on the applicable factor and the Policy Year
in which you surrender your policy.
<PAGE>
Minimum Surrender Charge Factors Maximum Surrender Charge Factors
by Policy Year by Policy Year
Rate Per $1000 Rate Per $1000
Policy Year of Specified Amount Policy Year of Specified Amount
1 $4.09 1 $51.36
2 4.09 2 51.36
3 4.09 3 51.36
4 4.09 4 51.36
5 4.09 5 51.36
6 3.68 6 46.22
7 3.27 7 41.08
8 2.86 8 35.95
9 2.45 9 30.81
10 2.04 10 25.68
11 1.63 11 20.54
12 1.22 12 15.40
13 0.81 13 10.27
14 0.40 14 5.13
15 0 15 0
If you decrease the Specified Amount to less than the lowest Specified Amount
that had previously been in effect (other than as a result of partial surrenders
or changes in Death Benefit Options), you will also incur a surrender charge.
The amount of surrender charge will equal the charge for a full surrender
multiplied by the ratio of (a) to (b), where:
(a) is the lowest Specified Amount that was in effect before the
current decrease, minus the Specified Amount after the current
decrease; and
(b) is the lowest Specified Amount that was in effect before
the current decrease.
We disclose the surrender charges on the data pages to your Policy. Upon
request, we will illustrate the surrender charges that apply to your Policy.
We do not assess a surrender charge for partial surrenders, but do assess a
processing fee.
Partial Surrender Processing Fee
We deduct a partial surrender processing fee on partial surrenders you make. The
fee equals the lesser of $25 or 2% of the amount surrendered.
<PAGE>
Transfer Charge
We assess a $10 transfer charge for each transfer after the first transfer you
make in any calendar month. We take this charge from the amount you transfer.
For purposes of assessing this fee, we consider each transfer request one
transfer, regardless of the number of Investment Subdivisions affected by the
transfer.
Other Charges
If you request a projection of future life insurance under the Policy and Policy
values, we reserve the right to charge a maximum fee of $25 for the cost of
preparing the projection.
Reduction of Charges for Group Sales
We may reduce charges and/or deductions for sales of the Policies to a trustee,
employer or similar entity representing a group or to members of the group where
such sales result in savings of sales or administrative expenses. We will base
these discounts on the following:
1. The size of the group. Generally, the sales expenses for each
individual owner for a larger group are less than for a
smaller group because more Policies can be implemented with
fewer sales contacts and less administrative cost.
2. The total amount of premium payments to be received from a
group. Per Policy sales and other expenses are generally
proportionately less on larger premium payments than on
smaller ones.
3. The purpose for which the Policies are purchased. Certain
types of plans are more likely to be stable than others. Such
stability reduces the number of sales contacts and
administrative and other services required, reduces sales
administration and results in fewer Policy terminations. As a
result, our sales and other expenses are reduced.
4. The nature of the group for which the Policies are being
purchased. Certain types of employee and professional groups
are more likely to continue Policy participation for longer
periods than are other groups with more mobile membership. If
fewer Policies are terminated in a given group, our sales and
other expenses are reduced.
5. Other Circumstances. There may be other circumstances of which
we are not presently aware, which could result in reduced
sales expenses.
<PAGE>
If, after we consider the factors listed above, we determine that a group
purchase would result in reduced sales expenses, we may reduce the charges
and/or deductions for each group. Reductions in these charges and/or deductions
will not be unfairly discriminatory against any person, including the affected
Owners and all other owners of Policies funded by Separate Account II.
THE POLICY
Applying for a Policy
To purchase a Policy, you must complete an application and submit it to us at
our Home Office. You also must pay an initial premium of a sufficient amount.
See Premiums, below. You can submit your initial premium with your application
or at a later date. Coverage generally becomes effective as of the Policy Date.
Generally, we will issue a Policy covering an Insured up to Age 85 if evidence
of insurability satisfies our underwriting rules. Required evidence of
insurability may include, among other things, a medical examination of the
Insured. We may, in our sole discretion, issue a Policy covering an Insured over
Age 85. We may reject an application for any lawful reason.
If you do not pay the full first premium with your application, the insurance
will become effective on the Effective Date. This date is the date that you pay
your premium and that we deliver your Policy. All persons proposed for insurance
must be insurable on the Policy Date.
If you pay the full first premium with your application, we may give you a
conditional receipt. This means that, subject to our underwriting requirements
and subject to a maximum limitation, your insurance will become effective on the
Effective Date we specified in the Conditional Receipt. This Effective Date will
be the latest of (i) the date of completion of the application, (ii) the date of
completion of all medical exams and tests we require, and (iii) the policy date
you requested when that date is later than the date you completed your
application.
Owner
You have rights in the Policy during the Insured's lifetime. If you die before
the Insured and there is no contingent Owner, ownership will pass to your
estate.
Beneficiary
You designate the primary Beneficiaries and contingent Beneficiaries when you
apply for the Policy. You may name one or more primary Beneficiaries or
contingent Beneficiaries. We will pay the proceeds in equal shares to the
survivors in the appropriate Beneficiary class, unless you request otherwise.
Unless an optional payment plan is chosen, we will pay the death proceeds in a
lump sum to the primary Beneficiary(ies). If the primary Beneficiary(ies) dies
before the Insured, we will pay the proceeds to the contingent Beneficiary(ies).
If there is no surviving Beneficiary(ies) we will pay the proceeds to you or
your estate.
<PAGE>
Changing the Beneficiary
If you reserve the right, you may also change the Beneficiary during the
Insured's life. To make this change, please write our Home Office. The request
and the change must be in a form satisfactory to us and we must actually
receive the request. The change will take effect as of the date you signed the
request.
Canceling a Policy
You may cancel a Policy during the "free-look period" by returning it to us at
our Home Office, or to the agent who sold it. The free-look period expires 10
days after you receive the Policy. The free-look period is longer if required by
state law. If you decide to cancel the Policy during the free-look period, we
will treat the Policy as if it had never been issued. Within seven calendar days
after we receive the returned Policy, we will refund an amount equal to the sum
of:
o the total amount of monthly deductions made and any other
charges imposed on amounts allocated to the Investment
Subdivisions; plus
o the value of amounts allocated to the Investment Subdivisions
on the date we (or our agent) receive the returned Policy.
If any state law prohibits the calculation above, we will refund the total of
all premiums paid for the Policy.
PREMIUMS
General
The premium amounts sufficient to fund a Policy depend on a number of factors,
such as the Age, sex (where appropriate), and risk class of the proposed
Insured, the desired Specified Amount, any supplemental benefits, and investment
performance of the Investment Subdivisions. We will usually credit your initial
premium payment to the Policy on the Policy Date. We will credit any subsequent
premium payment to the Policy on the Valuation Day we receive it at our Home
Office. After you pay the initial premium, you may make unscheduled premium
payments in any amount and at any time subject to certain restrictions.
The total premiums you pay may not exceed guideline premium limitations for life
insurance set forth in the Code. We may reject any premium, or any portion of a
premium, that would result in the Policy being disqualified as life insurance
under the Code. We will refund any rejected premium along with any interest it
accrued. For your convenience, we will monitor Policies and will attempt to
notify you on a timely basis if your Policy is in jeopardy of becoming a MEC
under the Code. See Tax Considerations.
We reserve the right to limit the number and amount of any unscheduled premium
payment.
<PAGE>
Tax Free Exchanges (1035 Exchanges)
We will accept as part of your initial premium money from one contract that
qualified for a tax-free exchange under Section 1035 of the Code. If you
contemplate such an exchange, you should consult a competent tax advisor to
learn the potential tax effects of such a transaction.
Certain Internal Exchanges
If you replace an existing GE Life and Annuity Assurance Company fixed permanent
policy with this Policy, we may waive some or all of the surrender charge on the
fixed permanent policy, provided that: 1) the fixed permanent policy has a
positive surrender value at the time of the exchange; and 2) the entire account
value in the fixed permanent policy is rolled over into the Policy.
If you qualify, the maximum amount of surrender charge we will waive on the
fixed permanent policy is equal to: Surrender Charge (new) + .08 Account Value,
where Surrender Charge (new) is the initial (first policy month) surrender
charge of this Policy and Account Value is the account value of the fixed
permanent policy at the time of the exchange. Please contact us for more
details.
Periodic Premium Plan
When you apply for a Policy, you may select a periodic premium payment plan. You
may choose to send the premiums directly to us either annually, semi-annually,
or quarterly. You can also arrange for annual, semi-annual, quarterly or monthly
premium payments paid via automatic deduction from your bank account or any
other similar account we accept. You are not required to pay premiums in
accordance with this premium plan; you can pay more or less than planned or skip
a planned premium payment entirely. You can change the amount of planned
premiums and payment arrangements, or switch between frequencies, whenever you
want by providing satisfactory instructions to our Home Office. This change will
be effective upon our receipt of the instructions. Depending on the Account
Value at the time of an increase in the Specified Amount and the amount of the
increase requested, a change in your periodic premium payments may be advisable.
See Change in Existing Coverage.
Minimum Premium Payment
Generally, the minimum amount of premium we will accept in connection with a
periodic premium payment plan is $20 ($15 for payments made via automatic
deduction from your bank or similar account). Even if you pay the minimum
premium amount, your Policy may lapse. See Premium to Prevent Lapse. For
purposes of the minimum premium payment requirements, we deem any payment to be
a planned periodic premium if we receive it within 30 days (before or after) of
the scheduled date for a planned periodic premium payment and the percentage
difference between the planned amount and the actual payment amount is not more
than 10%. We will deem all other premium payments to be unscheduled premium
payments.
<PAGE>
Allocating Premiums
When you apply for a Policy, you specify the percentage of your Net Premium we
allocate to each Investment Subdivision. You may only direct your Net Premiums
and Account Value to seven Investment Subdivisions at any given time. You can
change the allocation percentages at any time by writing or calling our Home
Office. The change will apply to all premiums we receive with or after we
receive your instructions. Net Premium allocations must be in percentages
totaling 100%, and each allocation percentage must be a whole number.
Prior to 1) the date we approve your application and 2) the date we receive all
necessary forms to issue your policy, we will place any premiums you pay in a
non-interest bearing cash account. Once we have approved the application and
have received all the necessary forms, and once we have received the entire
initial premium, we will allocate your Net Premium during the free look period
as specified below.
During the free look period, we generally will allocate Net Premiums to the
Investment Subdivisions based on the Net Premium allocation percentages you
specified in your application. However, for states requiring the refund of
premiums during the free look period, we will allocate all Net Premiums to the
Investment Subdivision investing in the Money Market Fund of GE Investments
Funds. Fifteen days following this allocation, we will transfer the Account
Value to the Investment Subdivisions based on the Net Premium allocation
percentages you selected. See How Your Account Value Varyies.
HOW YOUR ACCOUNT VALUE VARIES
Account Value
The Account Value is the entire amount we hold under your Policy for you. The
Account Value serves as a starting point for calculating certain values under a
Policy. It is the sum of the Account Value in each Investment Subdivision and
the Account Value held in the General Account to secure Policy Debt. See Loan
Benefits. We determine Account Value first on your Policy Date and after that on
each Valuation Day. Your Account Value will vary to reflect the performance of
the Investment Subdivisions to which you have allocated amounts and also will
vary to reflect Policy Debt, charges, transfers, partial surrenders, Policy loan
interest, and Policy loan repayments. Your Account Value may be more or less
than the premiums you paid.
Surrender Value
The Surrender Value on a Valuation Day is the Account Value reduced by both any
surrender charge that we would deduct if you surrendered the Policy that day and
any Policy Debt.
Investment Subdivision Values
On any Valuation Day, the value of an Investment Subdivision equals the number
of Investment Subdivision units we credit to the Policy multiplied by the Unit
Value for that day. When you make allocations to an Investment Subdivision,
either by Net Premium allocation, transfer of Account Value, transfer of loan
interest from the General Account, or repayment of a Policy loan, we credit your
Policy with units in that Investment Subdivision. We determine the number of
units by dividing the amount allocated, transferred or repaid to the Investment
Subdivision by the Investment Subdivision's Unit Value for the Valuation Day
when we effect the allocation, transfer or repayment.
<PAGE>
The number of units we credit to a Policy will decrease whenever we take the
allocated portion of the monthly deduction, a Policy loan or a partial surrender
is taken from the Investment Subdivision, an amount is transferred from the
Investment Subdivision, a partial surrender is taken from the Investment
Subdivision, or an Owner surrenders the Policy.
Unit Values
An Investment Subdivision's Unit Value varies to reflect the investment
experience of the underlying Fund, and may increase or decrease from one
Valuation Day to the next. We arbitrarily set the unit value for each Investment
Subdivision at $10 when we established the Investment Subdivision.
The net investment factor for a Valuation Period is (a) divided by (b), minus
(c), where:
(a) is the result of:
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 in the Investment Subdivision at the end of
the preceding Valuation Period; and
(c) is a charge no greater than .0024769% for each day in the Valuation Period.
This corresponds to .90% per year.
.
TRANSFERS
General
You may transfer Account Value among the Investment Subdivisions at any time
after the end of the free look period. Transfer requests may be made in writing
or in any other form acceptable to us. A transfer will take effect as of the end
of the Valuation Period during which we receive your request at our Home Office.
We may defer transfers under the same conditions that we may delay paying
proceeds. See Requesting Payments. Currently, there is no limit on the number of
transfers among the Investment Subdivisions, but we reserve the right to limit
the number of transfers to twelve each calendar year. We reserve the right to
modify, restrict, suspend or eliminate the transfer privileges, including
telephone transfer privileges, at any time, for any reason.
Sometimes, we may not not honor your transfer request. We may not honor your
transfer request:
(i) if any Investment Subdivision that would be affected by the transfer is
unable to purchase or redeem shares of the Fund in which the Investment
Subdivision invests;
(ii) if the transfer is a result of more than one trade involving the same
Investment Subdivision within a 30 day period; or
(iii) if the transfer would adversely affect any unit values; and
(iv) if the transfer would adversely affect any Fund affected by the
transfer.
We also may not honor transfers made by third parties holding multiple powers of
attorney. (See Powers of Attorney.)
When thinking about a transfer of Account Value, you should consider the
inherent risk involved. Frequent transfers based on short-term expectations may
increase the risk that you will make a transfer at an inopportune time.
<PAGE>
Dollar-Cost Averaging
The dollar-cost averaging program permits you to systematically transfer on a
monthly or quarterly basis a set dollar amount from the Investment Subdivision
investing in the Money Market portfolio of the GE Investments Funds (the "Money
Market Investment Subdivisions") to any combination of other Investment
Subdivisions (as long as the total number of Investment Subdivisions used does
not exceed the maximum number allowed under the Policy). The dollar-cost
averaging method of investment is designed to reduce the risk of making
purchases only when the price of units is high, but you should carefully
consider your financial ability to continue the program over a long enough
period of time to purchase Units when their value is low as well as when it is
high. Dollar-cost averaging does not assure a profit or protect against a loss.
You may participate in the dollar-cost averaging program by selecting the
program on your application, completing a dollar-cost averaging agreement, or
calling our Home Office. To use the dollar-cost averaging program, you must
transfer at least $100 from the Money Market Investment Subdivision to any other
Investment Subdivision. Once elected, dollar-cost averaging remains in effect
from the date we receive your request until the value of the Investment
Subdivision from which transfers are being made is depleted, or until you cancel
the program by written request or by telephone if we have your telephone
authorization on file.
There is no additional charge for dollar-cost averaging, and we do not consider
a transfer under this program a transfer for purposes of assessing a transfer
charge, nor for calculating any limit on the maximum number of transfer we may
impose for a calendar year. We reserve the right to discontinue or modify the
dollar-cost averaging program at any time and for any reason.
Portfolio Rebalancing
Once you allocate your money among the Investment Subdivisions, the performance
of each Investment Subdivision may cause your allocation to shift. You may
instruct us to automatically rebalance (on a quarterly, semi-annual or annual
basis) your Account Value to return to the percentages specified in your
allocation instructions. You may elect to participate in the portfolio
rebalancing program at any time by completing the portfolio rebalancing
agreement. Your percentage allocations must be in whole percentages and be at
least 1% per allocation. Subsequent changes to your percentage allocations may
be made at any time by writing or calling our Home Office. Once elected,
portfolio rebalancing remains in effect from the date we receive your request
until you instruct us to discontinue portfolio rebalancing. There is no
additional charge for using portfolio rebalancing, and we do not consider a
portfolio rebalancing transfer a transfer for purposes of assessing a transfer
charge, nor for calculating any limit on the maximum number of transfers we may
impose for a calendar year. We reserve the right to discontinue or modify the
portfolio rebalancing program at any time and for any reason. Portfolio
rebalancing does not guarantee a profit or protect against a loss.
<PAGE>
Powers of Attorney
As a general rule and as a convenience to you, we allow the use of powers of
attorney whereby you give a third party the right to effect transfers on your
behalf. However, when the same third party possesses powers of attorney executed
by many Owners, the result can be simultaneous transfers involving large amounts
of Account Value. Such transfers can disrupt the orderly management of the Funds
underlying the Policy, can result in higher costs to Owners, and are generally
not compatible with the long-range goals of Owners. We believe that such
simultaneous transfers effected by such third parties are not in the best
interests of all shareholders of the Funds underlying the Policies, and the
managements of those Funds share this position.
Therefore, to the extent necessary to reduce the adverse effects of simultaneous
transfers made by third parties holding multiple powers of attorney, we may not
honor such powers of attorney and have instituted or will institute procedures
to assure that the transfer requests that we receive have, in fact, been made by
the Owners in whose names they are submitted. These procedures will not,
however, prevent Owners from making their own transfer requests.
DEATH BENEFITS
As long as the Policy remains in force, we will pay the death benefit upon
receipt at our Home Office of satisfactory proof of the Insured's death. See
Requesting Payments. We will pay the death benefit to the Beneficiary.
Amount of Death Benefit Payable
The amount of death benefit payable equals:
o the Life Insurance Proceeds determined under the Death Benefit Option
in effect on the date of the Insured's death;
o plus any supplemental death benefits provided by rider;
o minus any Policy Debt on that date; and, if the date of death occurred
during a grace period,
o minus the premium that would have been required to keep the Policy in
force.
Under certain circumstances, we may further adjust the amount of the death
benefit payable. See Incontestability and Misstatement of Age or Sex.
Death Benefit Options
There are two death benefits available under the Policy. Under Option A, the
Life Insurance Proceeds equals the greater of:
<PAGE>
o the Specified Amount plus the Account Value, or
o the applicable corridor percentage of the Account Value as
determined using the table of percentages shown below.
Under Option B, the Life Insurance Proceeds equals the greater of:
o the Specified Amount, or
o the applicable corridor percentage of the Account Value as
determined using the table of percentages shown below.
Under both options, we determine the Specified Amount and Account Value on the
date of the Insured's death. The percentage is 250% to Age 40 and declines after
that as the Insured's Attained Age increases. If the table of percentages
currently in effect becomes inconsistent with any federal income tax laws and/or
regulations, we reserve the right to change the table.
<TABLE>
<CAPTION>
Table of Percentages of Account Value
<S> <C>
Corridor Corridor Corridor
Attained Age Percentage Attained Age Percentage Attained Age Percentage
------------ ---------- ------------ ---------- ------------ ----------
0-40 250% 54 157% 68 117%
41 243% 55 150% 69 116%
42 236% 56 146% 70 115%
43 229% 57 142% 71 113%
44 222% 58 138% 72 111%
45 215% 59 134% 73 109%
46 209% 60 130% 74 107%
47 203% 61 128% 75 - 90 105%
48 197% 62 126% 91 104%
49 191% 63 124% 92 103%
50 185% 64 122% 93 102%
51 178% 65 120% 94+ 101%
52 171% 66 119%
53 164% 67 118%
</TABLE>
Under Option A, the Life Insurance Proceeds will vary directly with the
investment performance of the Account Value. Under Option B, the Life Insurance
Proceeds ordinarily will not change until the applicable percentage amount of
the Account Value exceeds the Specified Amount or you change the Specified
Amount.
Changing the Death Benefit Option
<PAGE>
You select the Death Benefit Option when you apply for the Policy. However, you
may change the Option on your Policy at any time by writing to our Home Office.
The effective date of the change will be the Monthly Anniversary Day after we
receive the request for the change. We will send you revised Policy schedule
pages reflecting the new Option and the effective date of the change. If you
request a change from Option A to Option B, we will increase the Specified
Amount by the Account Value on the effective date of the increase. If you
request a change from Option B to Option A, we will decrease the Specified
Amount after the change by the Account Value on the effective date of the
change. A change in Death Benefit Option will affect the cost of insurance
charges.
Accelerated Benefit Rider
Provided the Accelerated Benefit Rider is approved in your state, you may elect
an accelerated benefit if the Insured is terminally ill. The Accelerated Death
Benefit Rider provides you with access to a portion of the death benefit during
the Insured's lifetime, if the Insured is diagnosed with a terminal illness. For
purposes of determining if an accelerated benefit is available, we define
terminal illness as a medical condition resulting from bodily injury, or
disease, or both:
o which has been diagnosed by a licensed physician;
o which diagnosis is supported by clinical, radiological, laboratory o
other evidence which is satisfactory to us; and
o which a licensed physician certifies is expected to result in death
within 12 months from the date of such certification.
Any request for payment of an accelerated benefit must be in a form satisfactory
to us, and any payment of an accelerated benefit requires satisfactory proof of
a terminal illness and is subject to our administrative procedures as well as
the conditions set forth in the Accelerated Benefit Rider.
The accelerated benefit equals the Eligible Proceeds:
o discounted for the life expectancy of the Insured at the rate of
interest charged for Policy loans;
o less the product of the ratio of the Eligible Proceeds to the
Total Proceeds and the amount of the single premium required
to keep the Policy in effect for the life expectancy of the
Insured assuming current cost of insurance rates, current
expense charges, and the interest rate stated; and
o less the product of the ratio of the Eligible Proceeds to the
Total Proceeds and the Policy Debt on the date of the
accelerated benefit payment.
If the Eligible Proceeds equal the Life Insurance Proceeds otherwise payable on
the death of the Insured, then our payment of the accelerated benefit will
result in termination of all insurance coverage under the Policy.
<PAGE>
If the Eligible Proceeds are less than the Life Insurance Proceeds otherwise
payable on the death of the Insured, then the Policy will continue with the
Specified Amount, Account Value, Policy Debt and any additional term rider
coverage on such Insured reduced by the ratio of Eligible Proceeds to Total
Proceeds.
We will waive any surrender charge for the resulting decrease in Specified
Amount as well as the minimum Specified Amount requirement under the Policy.
Other rider benefits will continue without reduction.
Changing the Specified Amount
After a Policy has been in effect for one year, you may increase or decrease the
Specified Amount. To make a change, you must send a written request and the
Policy to our Home Office. Any change in the Specified Amount may affect the
cost of insurance rate and the net amount at risk, both of which may change your
cost of insurance. See Monthly Deduction and Cost of Insurance.
Any change in the Specified Amount will affect the maximum premium limitation.
If a decrease in the Specified Amount causes the premiums to exceed new lower
limitations required by federal tax law, we will withdraw the excess from
Account Value and refund it to you so that the Policy will continue to meet
these requirements. We will withdraw the Account Value that we refund from each
Investment Subdivision in the same proportion that the Account Value in that
Investment Subdivision bears to the total Account Value in all Investment
Subdivisions under the Policy at the time of the withdrawal (i.e. on a pro-rata
basis).
Any decrease in the Specified Amount 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 Continuation Period, we will not allow a decrease unless
the Account Value less any Policy Debt is greater than the surrender charge. The
Specified Amount following a decrease can never be less than the minimum
Specified Amount for the Policy when we issued it. A decrease may cause us to
assess a surrender charge and may require us to pay excess Account Value.
To apply for an increase, you must complete a supplemental application and
submit evidence of insurability satisfactory to us. Any approved increase will
become effective on the date shown in the supplemental Policy data page. Please
note that an increase will not become effective if the Policy's Surrender Value
is too low to cover the monthly deduction for the Policy Month following the
increase.
If there is an increase in Specified Amount, there will be a one-time charge
(per increase) of $1.50 per $1,000 of increase to cover underwriting and
administrative costs associated with the increase. This charge will be included
in the monthly deduction for the month the increase becomes effective. This
charge will never exceed $300 per increase.
An increase in Specified Amount will increase the Continuation Amounts.
A change in your Specified Amount may have federal tax consequences. See Tax
Considerations.
SURRENDERS AND PARTIAL WITHDRAWALS
<PAGE>
Surrenders
You may cancel and surrender your Policy at any time before the Insured dies.
The Policy will terminate on the Valuation Day we receive your request.
We will pay you the Surrender Value in a lump sum unless you make other
arrangements. You will incur a surrender charge if you surrender your Policy
during the first 15 Policy years. A surrender may have adverse tax consequences.
(See Tax Considerations.)
Partial Surrenders
You may make partial surrender at any time under your Policy if you elected
Option A. If you elected Option B, you only may make partial surrenders after
the first Policy year. The minimum partial surrender amount is $500.
We will assess a processing fee for each partial surrender. The amount of the
partial surrender will equal the amount you requested to surrender plus the
processing fee.
When you request a partial surrender, you can direct how we deduct the surrender
from your Account Value. If you provide no directions, we will deduct the
partial surrender proportionately from the Investment Subdivisions in which you
are invested.
Effect of Partial Surrenders on Life Insurance Proceeds
A partial surrender will reduce both the Account Value and the Life Insurance
Proceeds by the amount of the partial surrender.
LOANS
General
You may borrow up to 90% of the difference between:
o your Account Value at the end of the Valuation Period during which we
received your loan request, and
o any surrender charges on the date of the loan.
You may request Policy loans by writing or calling our Home Office.
<PAGE>
When we make a loan, we transfer an amount equal to the loan proceeds from your
Account Value in Separate Account II to our General Account and hold it as
"collateral" for the loan. If you do not direct an allocation for this transfer,
we will make it on a pro-rata basis from each Investment Subdivision in which
you have invested. We will pay interest at an annual rate of 4% to that portion
of the collateral that excludes Preferred Policy Debt (see below).
When you repay a loan, we transfer an amount equal to the repayment from our
General Account to Separate Account II and allocate it as you directed when you
repaid the loan. If you provide no directions, we will allocate the amount
according to your standing instructions for Net Premium allocations.
Preferred Policy Debt
We will designate a portion of Policy loans taken or existing on or after the
Preferred Loan Availability Date (as shown on the Policy data pages) as
Preferred Policy Debt. In Policy Years 11 through 20, Preferred Policy Debt will
be that portion of Policy Debt which equals the difference between the Account
Value and the sum of all premium payments made. After the 20th Policy Year,
Preferred Policy Debt will be that portion of Policy Debt which equals 130% of
the difference between the Account Value and the sum of all premium payments
made. We redetermine the amount of Preferred Policy Debt each Policy Month.
We currently credit interest at an annual rate of 6% to that portion of Account
Value transferred to the General Account which equals the Preferred Policy Debt.
We reserve the right to change, at our sole discretion, the interest rate we
credit to the amount of Account Value we transferred to the General Account. We
guarantee that Preferred Policy Debt will earn at least a minimum annual
interest rate of 4%.
Interest Rate Charged
We will charge interest daily on any outstanding Policy loan at an effective
annual rate of 6%. Interest is due and payable at the end of each Policy Year
while a Policy loan is outstanding. If, on any Policy Anniversary, you have not
paid interest accrued since the last Policy Anniversary, we add the amount of
the interest to the loan and this becomes part of your outstanding Policy Debt.
We transfer the interest due from each Investment Subdivision on a pro-rata
basis.
Repayment of Policy Debt
You may repay all or part of your Policy Debt at any time while the Insured is
living and the Policy is in force. We will treat any payments by you other than
planned periodic premiums first as the repayment of any outstanding Policy Debt.
We will treat the portion of the payment in excess of any outstanding Policy
Debt as an unscheduled premium payment. We will first apply any repayment to
reduce the portion of Policy Debt that is not Preferred Policy Debt.
You must send Loan repayments to our Home Office. We will credit the repayments
as of the date we receive them. We do not treat a Policy loan repayment as a
premium payment, and a loan repayment is not subject to the current 8% premium
charge.
<PAGE>
Effect of Policy Loans
A Policy loan affects the Policy, because we reduce the death benefit proceeds
and Surrender Value under the Policy by the amount of any outstanding loan plus
interest you owe on the loan. Repaying the loan causes the death benefit
proceeds and Surrender Value to increase by the amount of the repayment. As long
as a loan is outstanding, we hold an amount equal to the loan as collateral.
This amount is not affected by Separate Account II's investment performance.
Amounts transferred from Separate Account II as collateral will affect the value
in the Separate Account II because we credit such amounts with an interest rate
we declare rather than a rate of return reflecting the investment performance of
Separate Account II.
There are risks involved in taking a Policy loan, a few of which include the
potential for a Policy to lapse if projected earnings, taking into account
outstanding loans, are not achieved. A Policy loan may also have possible
adverse tax consequences that could occur if a Policy lapses with loans
outstanding. See Tax Considerations.
We will notify you if the sum of your loans plus any interest you owe on the
loans is more than the Surrender Value, or if during the Continuation Period,
the sum of your loans plus any interest you owe on the loans is more than the
Surrender Value, and the Net Total Premium is less than the Continuation Amount.
If you do not submit a sufficient payment within 61 days from the date of the
notice, your Policy may lapse.
LAPSE
Premium to Prevent Lapse
Generally, if the Surrender Value of your Policy is too low to cover the monthly
deduction and loan charges, a Policy will be in default and a grace period will
begin. In that case, we will mail you notice of the additional premium necessary
to prevent your Policy from lapsing. You will have a 61-day grace period from
the date we mail the notice to make the required premium payment.
However, your Policy will not lapse during the Continuation Period, even if your
Surrender Value is too low to cover the monthly deduction, so long as the Net
Total Premium is at least equal to the Continuation Amount. At the end of the
Continuation Period, you may, however, have to make an additional premium
payment to keep the Policy in force.
<PAGE>
Your Policy will Remain in Effect During the Grace Period
If the Insured should die during the grace period before you pay the required
premium, the death benefit will still be payable to the Beneficiary, although we
will reduce the amount of the Life Insurance Proceeds by the amount of premium
that would have been required to keep the Policy in force. If you have not paid
the required premium before the grace period ends, your Policy will lapse. It
will have no value and no benefits will be payable. However, you may reinstate
your policy under certain circumstances.
Reinstatement
If you have not surrendered your Policy, you may reinstate your Policy within
three years after lapse, subject to compliance with certain conditions,
including the payment of a necessary premium and submission of satisfactory
evidence of insurability. See your Policy for further information.
Any termination and subsequent reinstatement of the Policy will reduce the
Continuation Amounts.
PAYMENTS AND TELEPHONE TRANSACTIONS
Requesting Payments
You may send your written requests for payment to our Home Office or give them
to one of our authorized agents. We will ordinarily pay any Life Insurance
Proceeds, loan proceeds or surrender or partial surrender proceeds in a lump sum
within seven days after receipt at our Home Office of all the documents required
for such a payment. Other than the Life Insurance Proceeds, which we determine
as of the date of the Insured's death, the amount we pay is as of the date our
Home Office receives all required documents. We may pay your Life Insurance
Proceeds in a lump sum or under an optional payment plan. See Optional Payment
Plans.
Any Life Insurance Proceeds that we pay in one lump sum will include interest
from the date of death to the date of payment. We will pay interest at a rate we
set, or a rate set by law if greater. The minimum interest rate which we may pay
is 2.5%. We will not pay interest beyond one year or any longer time set by law.
We will reduce Life Insurance Proceeds by any outstanding Policy Debt and any
due and unpaid charges and increased by any benefits added by rider.
We may delay making a payment or processing a transfer request if:
o the disposal or valuation of Separate Account II's assets is
not reasonably practicable because the New York Stock Exchange
is closed for other than a regular holiday or weekend, trading
is restricted by the SEC, or the SEC declares that an
emergency exists; or
<PAGE>
o the SEC by order permits postponement of payment to protect
our Policy Owners. We also may defer making payments
attributable to a check that has not cleared the bank on which
it is drawn.
Telephone Transactions
You may make certain requests under the Policy by telephone provided you sent us
written authorization at our Home Office. These include requests for transfers,
partial surrenders, Policy loans, changes in premium allocation designations,
dollar-cost averaging changes and changes in the portfolio rebalancing program.
Our Home Office will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. Such procedures may include, among
others, requiring some form of personal identification prior to acting upon
instructions received by telephone, providing written confirmation of such
transactions, and/or tape recording of telephone instructions. Your request for
telephone transactions authorizes us to record telephone calls. If we do not
follow reasonable procedures, we may be liable for any losses due to
unauthorized or fraudulent instructions. However, if we follow reasonable
procedures, we will not be liable for any losses due to unauthorized or
fraudulent instructions.
TAX CONSIDERATIONS
Federal Tax Matters
Introduction
This part of the Prospectus discusses the Federal income tax treatment of the
Policy. The Federal income tax treatment of the Policy is complex and sometimes
uncertain. The Federal income tax rules may vary with your particular
circumstances.
This discussion is general and is not intended as tax advice. It does not
address all of the Federal income tax rules that may affect you and your Policy.
This discussion also does not address other Federal tax consequences, or state
or local tax consequences, associated with a Policy. As a result, you should
always consult a tax adviser about the application of tax rules to your
individual situation.
Tax Status of the Policy
Section 7702 of the Internal Revenue Code (the "Code") establishes a statutory
definition of life insurance for Federal tax purposes. This tax rule limits the
amount of premiums that may be paid. An increase or decrease in the Policy's
Specified Amount may change the premium limit. We believe that the Policy meets
the statutory definition of life insurance. However, certain additional
requirements must be satisfied in order for a Policy to be treated as life
insurance for Federal tax purposes, including:
<PAGE>
o The investments of Separate Account II must be "adequately diversified"
in accordance with Internal Revenue Service ("IRS") regulations; and
o The Owner's right to choose particular investments for a Policy must
be limited.
Investments in Separate Account II must be diversified. For a Policy to be
treated as a life insurance contract for Federal income tax purposes, the
investments of a separate account such as Separate Account II must be
"adequately diversified." The IRS has issued regulations that prescribe
standards for determining whether the investments of Separate Account II are
adequately diversified. If Separate Account II fails to comply with these
diversification standards, the Owner could be required to pay tax currently on
the excess of the Account Value over the purchase payments for the Policy. We do
not control the investments of the Funds (although the control of certain Funds
is exercised by an affiliated company). However, we expect that the Funds will
comply with the IRS regulations so that Separate Account II will be considered
"adequately diversified."
Restrictions on the extent to which a Policy owner can direct the investment of
Account Values. Federal income tax law limits a Policyholder's right to choose
particular investments for the Policy. The U.S. Treasury Department stated in
1986 that it expected to issue guidance clarifying those limits, but it has not
yet done so. Thus, the nature of the limits is currently uncertain. As a result,
a Policyholder's right to allocate Account Values among the portfolios may
exceed those limits. If so, the Policyholder would be treated as the owner of
the assets of Separate Account II and thus subject to current taxation on the
income and gains from those assets.
We do not know what limits the Treasury Department may set forth in any guidance
that the Treasury Department may issue or whether any such limits will apply to
existing Policies. We therefore reserve the right to modify the Policy without
the Policyholders' consent to attempt to prevent the tax law from considering
Policy owners as the owners of the assets of Separate Account Il.
The following discussion assumes that the Policy will qualify and be treated as
a life insurance contract for Federal tax purposes.
Tax Treatment of Policies - General
Death benefits and surrenders: The Policies should receive the same Federal
income tax treatment as fixed benefit life insurance. This treatment generally
has the following tax results:
o Death Benefit proceeds are excludable from gross income of the
Beneficiary under section 101 of the Code.
o The Policy owner is not taxed on increases in the Account Value until
there is a partial or full surrender.
<PAGE>
o If the Policy is not a "modified endowment contract" (as discussed
below), a partial or full surrender under a Policy will not be included
in your income except to the extent it exceeds the total premiums paid
for the Policy (reduced by any amounts previously withdrawn which were
not treated as income).
Special rule for certain cash distributions in the first 15 policy years.- If
cash is distributed during the first 15 policy years in connection with certain
reductions in benefits under a Policy (e.g, decreases in the Specified Amount),
all or part of the cash distributed may be includible in income to the extent of
gain in the Policy. Such income inclusion will also occur, in certain
circumstances, with respect to cash distributions made in anticipation of
reductions in benefits under the Policy.
Considerations where Insured lives past mortality table: If the Insured survives
beyond the end of the Commissioners' 1980 Standard Ordinary Mortality Table,
there may be a question about the taxation of death benefit proceeds and whether
the Policy owner will be in constructive receipt of the Account Value. Because
we continue to charge for the insurance risk beyond age 100 (unless state law
prevents us from doing so), we believe that the proceeds will continue to be
protected from taxation. Therefore, we have no current plans to withhold or
report taxes in this situation.
Loans: If the Policy is not a "modified endowment contract" (as discussed
below), a loan received under a Policy will be treated as your indebtedness. So
long as the Policy remains in force, no part of a Policy loan will be included
in your income. Upon complete surrender, if the amount received plus the Policy
Debt exceeds the total premiums paid (less any premiums treated as previously
withdrawn by you), the excess generally will be treated as ordinary income.
Generally, interest paid on Policy loans will not be tax deductible, except in
the case of certain loans under a Policy covering a "key person." A tax adviser
should be consulted before taking any policy loan.
Optional payment plans: If proceeds payable upon death of the Insured are paid
under one of the optional payment plans, the payments generally will be treated
in part as being attributable to the death benefit (which is excludable from
income) and in part as interest accruing after the death (which is includible in
the Beneficiary's income). However, if such proceeds are paid under optional
payment Plan 4 (interest income), the interest will be includible in the
Beneficiary's income as it accrues. Also, if proceeds are applied under optional
payment Plan 3 (income of a definite amount) and the Beneficiary is at an
advanced age at such time (e.g, age 80 or older), it is possible that payments
would be treated in a manner similar to that under Plan 4.
<PAGE>
Loss of interest deduction where Policies are held by or for the benefit of
certain non-natural persons. In the case of Policies issued after June 8, 1997,
to a non-natural taxpayer (such as a corporation or a trust), or held for the
benefit of such an entity, interest which is otherwise deductible may no longer
be deductible by the entity, regardless of whether the interest relates to debt
used to purchase or carry the Policy. An exception to this rule is provided for
certain life insurance contracts which cover the life of an individual who is a
20 percent owner, or an officer, director, or employee of, a trade or business.
Entities that are considering purchasing the Policy, or entities that will be
beneficiaries under a Policy, should consult a tax advisor.
Other considerations: The right to exchange the Policy for a permanent fixed
benefit policy (see "Exchange Privilege"), the right to change Owners (see
"Change of Owner"), and changes reducing future death benefits may have tax
consequences depending on the circumstances of such exchange or change.
Federal estate and state and local estate, inheritance and other tax
consequences of ownership or receipt of Policy proceeds depend on the
circumstances of each Owner or Beneficiary.
Special Rules for Modified Endowment Contracts
Definition of a "modified endowment contract:" Special rules apply to a Policy
classified as a "modified endowment contract." A Policy will be classified as a
modified endowment contract:
o If premiums are paid more rapidly than the rate defined by a "7-Pay
Test." This test applies a cumulative limit on the amount of payments
that can be made into a Policy in order to avoid modified endowment
contract treatment. (We will provide you guidance as to the amount of
premium payments that may be paid if you wish to avoid treatment of the
Policy as a modified endowment contract.)
o If the Policy is received in exchange for a policy classified as a
modified endowment contract, regardless of whether it meets the 7-Pay
Test.
Tax treatment of modified endowment contracts: If a Policy is classified as a
modified endowment contract, the following special rules apply:
o Loans (including unpaid interest thereon) from a Policy will be
considered distributions.
o Distributions (including partial surrenders, loans and loan interest,
assignments and pledges) will be taxed first as distributions of income
from the Policy (to the extent that the Account Value of the Policy,
before reduction by any surrender charge or loan, exceeds the total
premiums paid less any previous untaxed withdrawals), and then as a
non-taxable recovery of premium.
o A penalty tax of 10% will be imposed on distributions includible in
income (including complete and partial surrenders, loans and loan
interest, assignments and pledges) unless such distributions are made:
(1) after you attain age 591/2,
(2) because you have become disabled, within the meaning of the
tax law, or
(3) as substantially equal annuity payments over your life or life
expectancy (or over the joint lives or life expectancies of
you and your beneficiary, within the meaning of the tax law).
<PAGE>
Modified endowment contracts issued by our affiliates: All life insurance
contracts which are treated as modified endowment contracts and which are issued
by us or any of our affiliates with the same person designated as the owner
within the same calendar year will be aggregated and treated as one contract for
purposes of determining any tax on distributions.
Interpretative issues: The modified endowment contract provisions of Federal tax
laws are complex and are open to considerable variation in interpretation. You
should consult your tax advisor before making any decisions regarding increases
or decreases in or additions to coverage or distributions from your Policy.
Taxation of the Company
Because of our current status under the Code, we do not expect to incur any
Federal income tax liability on the income or gains in Separate Account II.
Based upon this expectation, no charge is being made currently to Separate
Account II for Federal income taxes. If, however, we determine that such taxes
may be incurred, we may assess a charge for those taxes.
We may also incur state and local taxes (in addition to premium taxes for which
a deduction from premiums is currently made) in several states. At present,
these taxes are not significant. If there is a material change in state or local
tax laws, charges for such taxes attributable to Separate Account II may be
made.
Income Tax Withholding
We will withhold and remit to the IRS a part of the taxable portion of each
distribution made under a Policy unless the distributee notifies us at or before
the time of the distribution that he or she elects not to have any amounts
withheld. You are responsible for payment of all taxes and early distribution
penalties, regardless of whether you request that no taxes be withheld or if we
do not withhold a sufficient amount of taxes. You may also be required to pay
penalties under the estimated tax rules, if your withholding and estimated tax
payments are insufficient to satisfy your total tax liability. You may therefore
want to consult a tax advisor.
Other Considerations
Any person concerned about the tax implications of ownership of a Policy should
consult a competent tax advisor. The above discussion is based on our
understanding of present Federal income tax laws as they are currently
interpreted by the IRS. No representation is made as to the likelihood of
continuation of these current laws and interpretations. It should be further
understood that the foregoing discussion is not exhaustive and that special
rules not described in this prospectus may be applicable in certain situations.
Moreover, no attempt has been made to consider any applicable state or other tax
laws.
OTHER POLICY INFORMATION
<PAGE>
Exchange Privilege
During the first 24 Policy Months, you may convert the Policy to a permanent
fixed benefit Policy. If you object to a material change in the investment
Policy of Separate Account II or the Investment Subdivisions, you also may
convert the Policy to a permanent fixed benefit Policy within 60 days after the
change. In either case, you may elect either the same death benefit or the same
net amount at risk as the existing Policy at the time of conversion. We will
base premiums on the same Age at issue and risk classification of the Insured as
the existing Policy. The conversion will be subject to an equitable adjustment
in payments and Account Value to reflect variances, if any, in the payments and
Account Value under the existing Policy and the new Policy. See your Policy for
further information.
Optional Payment Plans
The Policy currently offers the following five optional payment plans as
alternatives to the payment of a death benefit or Surrender Value in a lump sum:
Plan 1--Income for a Fixed Period. We will make periodic payments for a
fixed period not longer than 30 years. Payments can be annual, semi-annual,
quarterly or monthly.
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 his or her life. The minimum period can be 10, 15 or
20 years.
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.
Plan 4--Interest Income. We will make periodic payments of interest
earned from the proceeds. Payments can be annual, semi-annual, quarterly or
monthly and will begin at the end of the first period chosen.
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 least 35 years old when payments begin.
You may select an optional payment plan in your application or by writing our
Home Office. We will transfer any amount left with us for payment under an
optional payment plan to our General Account. Payments under an optional payment
plan will not vary with the investment performance of Separate Account II
because they are forms of fixed-benefit annuities. See Tax Treatment of Policy
Proceeds. Certain conditions and restrictions apply to payments received under
an optional payment plan. For further information, review your Policy or contact
one of our authorized agents.
<PAGE>
Dividends
The Policy is non-participating. We will not pay dividends on the Policy.
Incontestability
The Policy limits our right to contest the Policy as issued or as increased,
except for material misstatements contained in the application or a supplemental
application, after it has been in force during the Insured's lifetime for a
minimum period, generally for two years from the Policy Date or effective date
of the increase.
This provision does not apply to riders that provide disability benefits.
Suicide Exclusion
If the Insured commits suicide while sane or insane within two years of the
Policy Date, we will limit the Life Insurance Proceeds we pay under the Policy
to all premiums paid, less outstanding Policy Debt and less amounts paid upon
partial surrender of the Policy.
If the Insured commits suicide while sane or insane more than two years after
the Policy Date but within two years after the effective date of an increase in
the Specified Amount, we will limit the proceeds we pay with respect to the
increase to the cost of insurance applied to the increase.
Misstatement of Age or Sex
We will adjust the Life Insurance Proceeds if you misstated the Insured's Age or
sex in your application.
Written Notice
You should send any written notice to us at our Home Office. The notice should
include the Policy number and the Insured's full name. We will send any notice
to the address shown in the application unless an appropriate address change
form has been filed with us.
Trustee
If you name a trustee as the Owner or Beneficiary of the Policy and the trustee
subsequently exercises ownership rights or claims benefits thereunder, we will
have no obligation to verify that a trust is in effect or that the trustee is
acting within the scope of his/her authority. Payment of Policy benefits to the
trustee will release us from all obligations under the Policy to the extent of
the payment. When we make a payment to the trustee, we will have no obligation
to ensure that such payment is applied according to the terms of the trust
agreement.
Other Changes
<PAGE>
At any time we may make such changes in the Policy as are necessary to assure
compliance at all times with the definition of life insurance prescribed by the
Code;
o to make the Policy, our operations, or the operation of
Separate Account II to conform with any law or regulation
issued by any government agency to which they are subject; or
o to reflect a change in the operation of Separate Account II, if
allowed by the Policy.
Only the President or Vice President of GE Life & Annuity has the right to
change the Policy. No agent has the authority to change the Policy or waive any
of its terms. An officer of GE Life & Annuity must sign all endorsements,
amendments, or riders to be valid.
Reports
We maintain records and accounts of all transactions involving the Policy,
Separate Account II and Policy Debt. Within 30 days after each Policy
Anniversary, we will send you a report showing information about your Policy.
The report will show:
o the amount of Life Insurance Proceeds,
o the Account Value in each Investment Subdivision, the Surrender Value
and Policy Debt.
o premiums paid and charges made during the Policy Year.
We also will send you an annual and a semi-annual report for each Fund
underlying an Investment Subdivision to which you have allocated Account Value,
as required by the 1940 Act. In addition, when you pay premiums (other than by
pre-authorized checking account deduction), or if you take out a Policy loan,
make transfers or make partial surrenders, you will receive a written
confirmation of these transactions.
Change of Owner
You may change the Owner of the Policy by sending a written request on a form
satisfactory to us to our Home Office while the Insured is alive and the Policy
is in force. The change will take effect the date you sign the written request,
but the change will not affect any action we have taken before we receive the
written request.
A change of Owner does not change the Beneficiary designation.
Supplemental Benefits
<PAGE>
These are several Supplemental benefits available that you may add to your
Policy. We will deduct monthly charges for these benefits from your Account
Value as part of the monthly deduction. See Monthly Deduction.
Examples of these benefits include:
o term insurance on a spouse or children;
o additional death benefits if the Insured dies in an accident, and
o waiver of either the monthly deduction or a stipulated amount
if the Insured becomes disabled as defined in the rider.
Additional rules and limits apply to these supplemental benefits. Please ask
your authorized GE Life & Annuity agent for further information or contact our
Home Office.
Using the Policy as Collateral
You can assign the Policy as collateral security. You must notify us in writing
if you assign the Policy. Any payments we made before the assignment will not be
affected. We are not responsible for the validity of an assignment. An
assignment may affect your rights and the rights of the Beneficiary.
Reinsurance
We intend to reinsure a portion of the risks assumed under the Policies.
Legal Proceedings
GE Life & Annuity, like all other companies, is involved in lawsuits, including
class action lawsuits. In some class action and other lawsuits involving
insurance companies, substantial damages have been sought and/or material
settlement payments have been made. Although the outcome of any litigation
cannot be predicted with certainty, GE Life & Annuity believes that at the
present time there are no pending or threatened lawsuits that are reasonably
likely to have a material adverse impact on it or Separate Account II.
<PAGE>
ADDITIONAL INFORMATION
Sale of the Policies
Our licensed life insurance agents sell the Policies. These agents are also
registered representatives of Capital Brokerage Corporation Securities
Corporation, the principal underwriter of the Policies, or of broker-dealers who
have entered into written sales agreements with the principal underwriter.
Capital Brokerage Corporation, a Washington Corporation, located at 6630 W.
Broad Street, Richmond, Virginia 23230, is registered with the SEC under the
Securities Exchange Act of 1934 as a broker-dealer and is a member of the
National Association of Securities Dealers, Inc. Capital Brokerage Corporation
also serves as principal underwriter for other variable life insurance and
variable annuity policies we issue. However, Capital Brokerage Corporation has
not retained any amounts for acting as principal underwriter of these other
policies.
Our writing agents receive commissions based on a commission schedule and rules.
First-year commissions depend on the Insured's Age, risk class, and the size of
the Policy. In the first Policy Year, the agent will receive a commission of up
to 95% of the maximum commissionable premium plus up to 5% of premiums paid in
excess of the maximum commissionable premium. In renewal years, the agent
receives up to 8.5% of the premiums paid. We may pay a trail commission equal to
an annual rate of 0.25% of Account Value of the Policies.
Legal Matters
The legal matters in connection with the Policy described in this prospectus
have been passed on by Patricia L. Dysart, Associate General Counsel and
Assistant Vice President of GE Life & Annuity. Sutherland Asbill & Brennan LLP
of Washington, D.C. has provided advice on matters relating to the federal
securities laws.
Year 2000 Readiness Disclosure
<PAGE>
Like all financial services providers, we utilize computer systems that may be
affected by Year 2000 date data processing issues and we also rely on service
providers, including banks, custodians, administrators, and investment managers
that also may be affected. We are engaged in a process to evaluate and develop
plans to have our computer systems and critical applications ready to process
Year 2000 date data. We also are confirming that our service providers are also
so engaged. The resources that are being devoted to this effort are substantial.
Further, we anticipate that we will spend approximately $2 million to $5 million
dollars on this conversion. Remedial actions include inventorying our computer
systems, applications and interfaces, assessing the impact of Year 2000 date
data on them, developing a range of solutions specific to particular situations
and implementing appropriate solutions. Some systems, applications and
interfaces will be replaced or upgraded to new software or new releases or
existing software which are Year 2000 ready. It is difficult to predict with
precision whether the amount of resources ultimately devoted, or the outcome of
these efforts, will have any negative impact on us and Separate Account II.
However, as of the date of this prospectus, we do not anticipate that Owners
will experience negative effects on their investment, or on the services
provided in connection therewith, as a result of Year 2000 transition
implementation. Our target dates for completion of these activities depend upon
the particular situation. Our goal is to be substantially Year 2000 ready for
critical applications on or about mid-1999, but there can be no assurance that
we will be successful, or that interaction with other service providers will not
impair our services at that time.
If we are not successful in our Year 2000 transition, or implementation, or if
interaction with other service providers is impaired, it is possible that we
could encounter difficulty and/or delays in calculating unit values, redeeming
shares, delivering account statements and providing other information,
communication and servicing to our policy owners. In light of our current
efforts to address this issue we do not consider the likelihood of such
occurrences to be very high.
Experts
KPMG\ Peat Marwick LLP
The consolidated balance sheets of The Life Insurance Company of Virginia, now
GE Life and Annuity Assurance Company, and subsidiaries as of December 31, 1998
and 1997, and the related consolidated statements of income, stockholders'
equity and cash flows for the year ended December 31, 1998 and December 31,
1997, and the statements of assets and liabilities of Separate Account II as of
December 31, 1998 and the related statements of operations and changes in net
assets for each of the two years then ended have been included herein and in the
registration statement in reliance upon the reports of KPMG Peat Marwick LLP,
independent certified public accountants, appearing elsewhere herein, and upon
the authority of such firm as experts in accounting and auditing.
Actuarial Matters
Actuarial matters included in this prospectus have been examined by Bruce E.
Booker, an actuary of GE Life & Annuity, whose opinion we filed as an exhibit to
the registration statement.
Financial Statements
You should distinguish the consolidated financial statements of Life of
Virginia, now GE Life and Annuity, and subsidiaries included in this prospectus
from the financial statements of Separate Account II. Please consider the
financial statements of Life of Virginia only as bearing on our ability to meet
our obligations under the Policies. You should not consider the financial
statements of Life of Virginia and subsidiaries as affecting the investment
performance of the assets held in Separate Account II.
Financial Statements will be added by a subsequent post-effective amendment.
Executive Officers and Directors. We are managed by a board of directors. The
following table sets forth the name, address and principal occupations during
the past five years of each of our executive officers and directors.
Name and Position(s)
With GE Life & Annuity* Principal Occupations Last Five Years
Ronald V. Dolan ** Director, Chairman of the Board, GE
Life & Annuity since 1997 President and
Chief Executive Officer of First Colony
Life Insurance Company 1992-1997;
President, First Colony Corporation since 1985.
Pamela S. Schutz** President, GE Life & Annuity since 7/98;
President of The Harvest Life Insurance Company
5/97-7/98; President, GE Capital 2/78-5/97
Selwyn L. Flournoy, Jr.** Director, GE Life & Annuity since 5/89; Senior
Vice President, GE Life & Annuity, since 1980.
Chief Financial Officer 1980-1998.
Robert D. Chinn** Director, GE Life & Annuity since 1997;
Senior Vice President--Agency, GE Life
& Annuity, since 1/92; Vice President, GE
Life & Annuity, since 1985.
Elliott Rosenthal Senior Vice President--Investment
Products since 1997, Vice President and Senior
Investment Actuary, 1/95--4/97; Investment
Actuary, 1/82--2/95.
Victor C. Moses Director, GE Life & Annuity, since 5/96.
Director of GNA since April 1994. Senior Vice
President, Business Development, and Chief
Actuary of GNA since May, 1993. Senior Vice
President and Chief Financial Officer of
GNA, 1991-1993. Vice President and Chief
Actuary of GNA, 1983-1991. Senior Vice
President, Controller and Treasurer
CNA Investors Trust, 1992-1993.
Geoffrey S. Stiff Vice President and Director, GE Life &
Annuity, since 5/96. Director of GNA since
April 1994. Senior Vice President, Chief
Financial Officer and Treasurer
of GNA since May 1993. Vice President, Chief
Financial Officer and Director of Employers
Reinsurance Corporation 1987-1993.Senior Vice
President, Controller and Treasurer of
GNA Investors Trust since 1993.
- ------------------
* Prior to 1999, GE Life & Annuity was known as Life of Virginia.
** Messrs. Dolan, Flournoy, Chinn and Ms. Schutz members of our Executive
Committee.
<PAGE>
The principal business address of each person listed, unless otherwise
indicated, is GE Life and Annuity Assurance Company, 6610 W. Broad Street,
Richmond, Virginia 23230.
The principal business address for Mr. Dolan is First Colony Life
Insurance Company, 700 Main Street, Post Office 1280, Lynchburg, VA 24505-1280.
The principal business address for Mr. Moses is GNA Corporation, Two
Union Square, 601 Union Street, Seattle, WA 98101.
Other Information
A Registration Statement has been filed with the SEC, under the Securities Act
of 1933 as amended, for the Policies being offered here. This Prospectus does
not contain all the information in the Registration Statement, its amendments
and exhibits. Please refer to the Registration Statement for further information
about Separate Account II, the Company, and the Policies offered. Statements in
this Prospectus about the content of Policies and other legal instruments are
summaries. For the complete text of those Policies and instruments, please refer
to those documents as filed with the SEC and available on the SEC's website at
http://www.sec gov.
HYPOTHETICAL ILLUSTRATIONS
We have included illustrations in this prospectus, and use them in connection
with your purchase of the Policy. These illustrations are based on hypothetical
rates of return that are not guaranteed. The rates are illustrative only, and do
not represent past or future performance. Your actual Policy values and benefits
will be different from these illustrations.
The illustrations assume you paid planned premiums annually and the return on
the assets in the Investment Subdivisions were a uniform gross annual rate of
0%, 6% or 12%, before deduction of any fees and charges. The values reflect the
deduction of all Policy and Fund fees and charges. The tables also show planned
premiums accumulated at 5% interest. The values under a Policy would be
different from those shown if the returns averaged 0%, 6% or 12% but fluctuated
over and under those averages throughout the years shown. The hypothetical
investment rates of return are illustrative only and should not be deemed a
representation of past or future investment rates of return. Actual rates of
return for a particular Policy may be more or less than the hypothetical
investment rates of return used in the illustrations.
<PAGE>
The illustrations assume an average annual expense ratio of .80% of the average
daily net assets of the Funds available under the Policies, based on the
estimated expense ratios of each of the Funds incurred in 1998, or on estimates,
as may be the case. For information on Fund expenses, see the prospectus for the
Funds accompanying this prospectus. The illustrations also take into account the
charge by us to an Investment Subdivision for assuming mortality and expense
risks, made daily at an annual rate of .70% of the net assets of the Investment
Subdivision. After deduction of these amounts, the illustrated gross annual
investment rates of return of 0%, 6% and 12%, correspond to approximate net
annual rates of -1.50%, 4.50% and 10.50%, respectively.
The illustrations reflect the monthly deduction for the hypothetical Insured. We
reflect our current charges and the higher guaranteed charges we have the
contractual right to charge in separate illustrations on each of the following
pages. All the illustrations reflect the fact that no charges for Federal or
state income taxes are currently made against Separate Account II and assume no
Policy Debt or charges for supplemental benefits.
The illustration shows our sex distinct rates for non-tobacco users. Upon
request, we will furnish a comparable illustration based upon the proposed
Insured's individual circumstances. Such illustrations may assume different
hypothetical rates of return than those illustrated.
<PAGE>
<TABLE>
<CAPTION>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<S> <C>
Male Issue Age 45 Initial Specified Amount $250,000
Preferred Nonsmoker Underwriting Risk Initial Premium and Planned
Death Benefit Option A Premium (Payable Annually) (1) $ 13,100
0% Assumed Hypothetical 6% Assumed Hypothetical 12% Assumed Hypothetical
Gross Annual Investment Gross Annual Investment Gross Annual Investment
Return with Maximum Charges(2)(3) Return with Maximum Charges(2)(3) Return with Maximum Charge(2)(3)
----------------------------------- --------------------------------- ----------------------------------
Premiums
Accumulated
End At 5% Surrender Account Death Surrender Account Death Surrender Account Death
of Policy Interest Value Value Benefit Value Value Benefit Value Value Benefit
----- ----- ------- ----- ----- ------- ----- ----- -------
Year Per Year
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
- ------------------
* Premium in addition to the planned premium is required to keep the
Policy in effect.
(1) The values illustrated assume the planned premium of $13,100 is paid at
the beginning of each Policy year. Values will be different if premiums
are paid with a different frequency or in different amounts.
(2) The values and benefits are as of the end of the year shown. They
assume that no Policy loans or withdrawals have been made. Excessive
loans or withdrawals may cause this Policy to lapse because of
insufficient account value.
(3) The values and benefits are shown using the maximum expense charges and
cost of insurance rates allowable under the Policy. Accordingly, if the
assumed hypothetical gross annual investment return were earned, the
values and benefits of an actual Policy with the listed specifications
could never be less than those shown, and in some cases may be greater
than those shown.
THE HYPOTHETICAL GROSS ANNUAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND
ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A
REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN.
ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING PREVAILING INTEREST RATES, RATES OF
INFLATION, AND THE ALLOCATIONS MADE BY AN OWNER AMONG THE INVESTMENT OPTIONS.
THE GROSS HYPOTHETICAL INVESTMENT RATES OF RETURN OF 0%, 6% AND 12% SHOWN ABOVE
CORRESPOND TO NET ANNUAL RATES OF -1.50%, 4.50% AND 10.50%. THE DEATH BENEFIT
AND ACCOUNT VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATE OF RETURN AVERAGES 0%, 6% AND 12% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATIONS CAN BE MADE BY US OR THE FUNDS THAT THESE HYPOTHETICAL
INVESTMENT RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
Male Issue Age 45 Initial Specified Amount $250,000
Preferred Nonsmoker Underwriting Risk Initial Premium and Planned
Death Benefit Option A Premium (Payable Annually) (1) $ 13,100
0% Assumed Hypothetical 6% Assumed Hypothetical 12% Assumed Hypothetical
Gross Annual Investment Gross Annual Investment Gross Annual Investment
Return with Current Charges(2)(3) Return with Current Charges(2)(3) Return with Current Charge(2)(3)
----------------------------------- --------------------------------------------------------------------
Premiums
Accumulated
End At 5% Surrender Account Death Surrender Account Death Surrender Account Death
of Policy Interest Value Value Benefit Value Value Benefit Value Value Benefit
----- ----- ------- ----- ----- ------- ----- ----- -------
Year Per Year
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
- ------------------
(1) The values illustrated assume the planned premium of $13,100 is paid at
the beginning of each Policy year. Values will be different if premiums
are paid with a different frequency or in different amounts.
(2) The values and benefits are as of the end of the year shown. They
assume that no Policy loans or withdrawals have been made. Excessive
loans or withdrawals may cause this Policy to lapse because of
insufficient account value.
(3) The values and benefits are shown using the expense charges and cost of
insurance rates currently in effect. Although we anticipate deducting
these charges for the foreseeable future, THESE CHARGES ARE NOT
GUARANTEED AND COULD BE RAISED AT OUR DISCRETION. Accordingly, even if
the assumed hypothetical gross annual investment return were earned,
the values and benefits under an actual Policy with the listed
specifications may be less than those shown if the cost of insurance
charges were increased.
THE HYPOTHETICAL GROSS ANNUAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND
ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A
REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN.
ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING PREVAILING INTEREST RATES, RATES OF
INFLATION, AND THE ALLOCATIONS MADE BY AN OWNER AMONG THE INVESTMENT OPTIONS.
THE GROSS HYPOTHETICAL INVESTMENT RATES OF RETURN OF 0%, 6% AND 12% SHOWN ABOVE
CORRESPOND TO NET ANNUAL RATES OF -1.50%, 4.50% AND 10.50%. THE DEATH BENEFIT
AND ACCOUNT VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATE OF RETURN AVERAGES 0%, 6% AND 12% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATIONS CAN BE MADE BY US OR THE FUNDS THAT THESE HYPOTHETICAL
INVESTMENT RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
Male Issue Age 45 Initial Specified Amount $250,000
Preferred Nonsmoker Underwriting Risk Initial Premium and Planned
Death Benefit Option B Premium (Payable Annually) (1) $ 5,000
0% Assumed Hypothetical 6% Assumed Hypothetical 12% Assumed Hypothetical
Gross Annual Investment Gross Annual Investment Gross Annual Investment
Return with Maximum Charges(2)(3) Return with Maximum Charges(2)(3) Return with Maximum Charge(2)(3)
----------------------------------- --------------------------------- ----------------------------------
Premiums
Accumulated
End At 5% Surrender Account Death Surrender Account Death Surrender Account Death
of Policy Interest Value Value Benefit Value Value Benefit Value Value Benefit
----- ----- ------- ----- ----- ------- ----- ----- -------
Year Per Year
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
- ------------------
* Premium in addition to the planned premium is required to keep the Policy in effect.
(1) The values illustrated assume the planned premium of $5,000 is paid at
the beginning of each Policy year. Values will be different if premiums
are paid with a different frequency or in different amounts.
(2) The values and benefits are as of the end of the year shown. They
assume that no Policy loans or withdrawals have been made. Excessive
loans or withdrawals may cause this Policy to lapse because of
insufficient account value.
(3) The values and benefits are shown using the maximum expense charges and
cost of insurance rates allowable under the Policy. Accordingly, if the
assumed hypothetical gross annual investment return were earned, the
values and benefits of an actual Policy with the listed specifications
could never be less than those shown, and in some cases may be greater
than those shown.
THE HYPOTHETICAL GROSS ANNUAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND
ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A
REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN.
ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING PREVAILING INTEREST RATES, RATES OF
INFLATION, AND THE ALLOCATIONS MADE BY AN OWNER AMONG THE INVESTMENT OPTIONS.
THE GROSS HYPOTHETICAL INVESTMENT RATES OF RETURN OF 0%, 6% AND 12% SHOWN ABOVE
CORRESPOND TO NET ANNUAL RATES OF -1.50%, 4.50% AND 10.50%. THE DEATH BENEFIT
AND ACCOUNT VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATE OF RETURN AVERAGES 0%, 6% AND 12% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATIONS CAN BE MADE BY US OR THE FUNDS THAT THESE HYPOTHETICAL
INVESTMENT RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
Male Issue Age 45 Initial Specified Amount $250,000
Preferred Nonsmoker Underwriting Risk Initial Premium and Planned
Death Benefit Option B Premium (Payable Annually) (1) $
5,000
0% Assumed Hypothetical 6% Assumed Hypothetical 12% Assumed Hypothetical
Gross Annual Investment Gross Annual Investment Gross Annual Investment
Return with Current Charges(2)(3) Return with Current Charges(2)(3) Return with Current Charge(2)(3)
----------------------------------- --------------------------------- ----------------------------------
Premiums
Accumulated
End At 5% Surrender Account Death Surrender Account Death Surrender Account Death
of Policy Interest Value Value Benefit Value Value Benefit Value Value Benefit
----- ----- ------- ----- ----- ------- ----- ----- -------
Year Per Year
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
- ------------------
(1) The values illustrated assume the planned premium of $5,000 is paid at
the beginning of each Policy year. Values will be different if premiums
are paid with a different frequency or in different amounts.
(2) The values and benefits are as of the end of the year shown. They
assume that no Policy loans or withdrawals have been made. Excessive
loans or withdrawals may cause this Policy to lapse because of
insufficient account value.
(3) The values and benefits are shown using the expense charges and cost of
insurance rates currently in effect. Although we anticipate deducting
these charges for the foreseeable future, THESE CHARGES ARE NOT
GUARANTEED AND COULD BE RAISED AT OUR DISCRETION. Accordingly, even if
the assumed hypothetical gross annual investment return were earned,
the values and benefits under an actual Policy with the listed
specifications may be less than those shown if the cost of insurance
charges were increased.
THE HYPOTHETICAL GROSS ANNUAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND
ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A
REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN.
ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING PREVAILING INTEREST RATES, RATES OF
INFLATION, AND THE ALLOCATIONS MADE BY AN OWNER AMONG THE INVESTMENT OPTIONS.
THE GROSS HYPOTHETICAL INVESTMENT RATES OF RETURN OF 0%, 6% AND 12% SHOWN ABOVE
CORRESPOND TO NET ANNUAL RATES OF -1.50%, 4.50% AND 10.50%. THE DEATH BENEFIT
AND ACCOUNT VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATE OF RETURN AVERAGES 0%, 6% AND 12% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATIONS CAN BE MADE BY US OR THE FUNDS THAT THESE HYPOTHETICAL
INVESTMENT RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
Male Issue Age 55 Initial Specified Amount $250,000
Preferred Nonsmoker Underwriting Risk Initial Premium and Planned
Death Benefit Option B Premium (Payable Annually) (1) $ 8,300
0% Assumed Hypothetical 6% Assumed Hypothetical 12% Assumed Hypothetical
Gross Annual Investment Gross Annual Investment Gross Annual Investment
Return with Maximum Charges(2)(3) Return with Maximum Charges(2)(3) Return with Maximum Charge(2)(3)
----------------------------------- --------------------------------- --------------------------------
Premiums
Accumulated
End At 5% Surrender Account Death Surrender Account Death Surrender Death
of Policy Interest Value Value Benefit Value Value Benefit Value Account Value Benefit
----- ----- ------- ----- ----- ------- ----- ----- -------
Year Per Year
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
- ------------------
* Premium in addition to the planned premium is required to keep the policy in effect.
(1) The values illustrated assume the planned premium of $8,300 is paid at
the beginning of each Policy year. Values will be different if premiums
are paid with a different frequency or in different amounts.
(2) The values and benefits are as of the end of the year shown. They
assume that no Policy loans or withdrawals have been made. Excessive
loans or withdrawals may cause this Policy to lapse because of
insufficient account value.
(3) The values and benefits are shown using the maximum expense charges and
cost of insurance rates allowable under the Policy. Accordingly, if the
assumed hypothetical gross annual investment return were earned, the
values and benefits of an actual Policy with the listed specifications
could never be less than those shown, and in some cases may be greater
than those shown.
THE HYPOTHETICAL GROSS ANNUAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND
ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A
REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN.
ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING PREVAILING INTEREST RATES, RATES OF
INFLATION, AND THE ALLOCATIONS MADE BY AN OWNER AMONG THE INVESTMENT OPTIONS.
THE GROSS HYPOTHETICAL INVESTMENT RATES OF RETURN OF 0%, 6% AND 12% SHOWN ABOVE
CORRESPOND TO NET ANNUAL RATES OF - 1.50%, 4.50% AND 10.50%. THE DEATH BENEFIT
AND ACCOUNT VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATE OF RETURN AVERAGES 0%, 6% AND 12% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATIONS CAN BE MADE BY US OR THE FUNDS THAT THESE HYPOTHETICAL
INVESTMENT RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
Male Issue Age 55 Initial Specified Amount $250,000
Preferred Nonsmoker Underwriting Risk Initial Premium and Planned
Death Benefit Option B Premium (Payable Annually) (1)$ 8,300
0% Assumed Hypothetical 6% Assumed Hypothetical 12% Assumed Hypothetical
Gross Annual Investment Gross Annual Investment Gross Annual Investment
Return with Current Charges(2)(3) Return with Current Charges(2)(3) Return with Current Charge(2)(3)
----------------------------------- --------------------------------- ----------------------------------
Premiums
Accumulated
End At 5% Surrender Account Death Surrender Account Death Surrender Account Death
of Policy Interest Value Value Benefit Value Value Benefit Value Value Benefit
----- ----- ------- ----- ----- ------- ----- ----- -------
Year Per Year
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
- ------------------
(1) The values illustrated assume the planned premium of $8,300 is paid at
the beginning of each Policy year. Values will be different if premiums
are paid with a different frequency or in different amounts.
(2) The values and benefits are as of the end of the year shown. They
assume that no Policy loans or withdrawals have been made. Excessive
loans or withdrawals may cause this Policy to lapse because of
insufficient account value.
(3) The values and benefits are shown using the expense charges and cost of
insurance rates currently in effect. Although we anticipate deducting
these charges for the foreseeable future, THESE CHARGES ARE NOT
GUARANTEED AND COULD BE RAISED AT OUR DISCRETION. Accordingly, even if
the assumed hypothetical gross annual investment return were earned,
the values and benefits under an actual Policy with the listed
specifications may be less than those shown if the cost of insurance
charges were increased.
THE HYPOTHETICAL GROSS ANNUAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND
ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A
REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN.
ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING PREVAILING INTEREST RATES, RATES OF
INFLATION, AND THE ALLOCATIONS MADE BY AN OWNER AMONG THE INVESTMENT OPTIONS.
THE GROSS HYPOTHETICAL INVESTMENT RATES OF RETURN OF 0%, 6% AND 12% SHOWN ABOVE
CORRESPOND TO NET ANNUAL RATES OF - 1.50%, 4.50% AND 10.50%. THE DEATH BENEFIT
AND ACCOUNT VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATE OF RETURN AVERAGES 0%, 6% AND 12% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATIONS CAN BE MADE BY US OR THE FUNDS THAT THESE HYPOTHETICAL
INVESTMENT RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
Male Issue Age 65 Initial Specified Amount $250,000
Preferred Nonsmoker Underwriting Risk Initial Premium and Planned
Death Benefit Option B Premium (Payable Annually) (1)$ 14,300
0% Assumed Hypothetical 6% Assumed Hypothetical 12% Assumed Hypothetical
Gross Annual Investment Gross Annual Investment Gross Annual Investment
Return with Maximum Charges(2)(3) Return with Maximum Charges(2)(3) Return with Maximum Charge(2)(3)
----------------------------------- --------------------------------- ----------------------------------
Premiums
Accumulated
End At 5% Surrender Account Death Surrender Account Death Surrender Account Death
of Policy Interest Value Value Benefit Value Value Benefit Value Value Benefit
----- ----- ------- ----- ----- ------- ----- ----- -------
Year Per Year
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
- ------------------
* Premium in addition to the planned premium is required to keep the policy in effect.
(1) The values illustrated assume the planned premium of $14,300 is paid at
the beginning of each Policy year. Values will be different if premiums
are paid with a different frequency or in different amounts.
(2) The values and benefits are as of the end of the year shown. They
assume that no Policy loans or withdrawals have been made. Excessive
loans or withdrawals may cause this Policy to lapse because of
insufficient account value.
(3) The values and benefits are shown using the maximum expense charges and
cost of insurance rates allowable under the Policy. Accordingly, if the
assumed hypothetical gross annual investment return were earned, the
values and benefits of an actual Policy with the listed specifications
could never be less than those shown, and in some cases may be greater
then those shown.
THE HYPOTHETICAL GROSS ANNUAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND
ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A
REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN.
ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING PREVAILING INTEREST RATES, RATES OF
INFLATION, AND THE ALLOCATIONS MADE BY AN OWNER AMONG THE INVESTMENT OPTIONS.
THE GROSS HYPOTHETICAL INVESTMENT RATES OF RETURN OF 0%, 6% AND 12% SHOWN ABOVE
CORRESPOND TO NET ANNUAL RATES OF - 1.50%, 4.50% AND 10.50%. THE DEATH BENEFIT
AND ACCOUNT VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATE OF RETURN AVERAGES 0%, 6% AND 12% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATIONS CAN BE MADE BY US OR THE FUNDS THAT THESE HYPOTHETICAL
INVESTMENT RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
Male Issue Age 65 Initial Specified Amount $250,000
Preferred Nonsmoker Underwriting Risk Initial Premium and Planned
Death Benefit Option B Premium (Payable Annually) (1)$ 14,300
0% Assumed Hypothetical 6% Assumed Hypothetical 12% Assumed Hypothetical
Gross Annual Investment Gross Annual Investment Gross Annual Investment
Return with Current Charges(2)(3) Return with Current Charges(2)(3) Return with Current Charge(2)(3)
----------------------------------- --------------------------------- ----------------------------------
Premiums
Accumulated
End At 5% Surrender Account Death Surrender Account Death Surrender Account Death
of Policy Year Interest Value Value Benefit Value Value Benefit Value Value Benefit
---- ----- ----- ------- ----- ----- ------- ----- ----- -------
Per Year
1
2
3
4
5
6
7
8
9
10
15
20
25
30
35
- ------------------
(1) The values illustrated assume the planned premium of $14,300 is paid at
the beginning of each Policy year. Values will be different if premiums
are paid with a different frequency or in different amounts.
(2) The values and benefits are as of the end of the year shown. They
assume that no Policy loans or withdrawals have been made. Excessive
loans or withdrawals may cause this Policy to lapse because of
insufficient account value.
(3) The values and benefits are shown using the expense charges and cost of
insurance rates currently in effect. Although we anticipate deducting
these charges for the foreseeable future, THESE CHARGES ARE NOT
GUARANTEED AND COULD BE RAISED AT OUR DISCRETION. Accordingly, even if
the assumed hypothetical gross annual investment return were earned,
the values and benefits under an actual Policy with the listed
specifications may be less than those shown if the cost of insurance
charges were increased.
THE HYPOTHETICAL GROSS ANNUAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND
ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A
REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN.
ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING PREVAILING INTEREST RATES, RATES OF
INFLATION, AND THE ALLOCATIONS MADE BY AN OWNER AMONG THE INVESTMENT OPTIONS.
THE GROSS HYPOTHETICAL INVESTMENT RATES OF RETURN OF 0%, 6% AND 12% SHOWN ABOVE
CORRESPOND TO NET ANNUAL RATES OF - 1.50%, 4.50% AND 10.50%. THE DEATH BENEFIT
AND ACCOUNT VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATE OF RETURN AVERAGES 0%, 6% AND 12% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATIONS CAN BE MADE BY US OR THE FUNDS THAT THESE HYPOTHETICAL
INVESTMENT RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
Male Issue 75 Initial Specified Amount $250,000
Preferred Nonsmoker Underwriting Risk Initial Premium and Planned
Death Benefit Option B Premium (Payable Annually) (1)$ 25,800
0% Assumed Hypothetical 6% Assumed Hypothetical 12% Assumed Hypothetical
Gross Annual Investment Gross Annual Investment Gross Annual Investment
Return with Maximum Charges(2)(3) Return with Maximum Charges(2)(3) Return with Maximum Charge(2)(3)
----------------------------------- --------------------------------- ----------------------------------
Premiums
Accumulated
End At 5% Surrender Account Death Surrender Account Death Surrender Account Death
of Policy Year Interest Value Value Benefit Value Value Benefit Value Value Benefit
----- ----- ----- ------- ----- ----- ------- ----- ----- -------
Per Year
1
2
3
4
5
6
7
8
9
10
15
20
25
- ------------------
* Premium in addition to the planned premium is required to keep the
policy in effect.
(1) The values illustrated assume the planned premium of $25,800 is paid at
the beginning of each Policy year. Values will be different if premiums
are paid with a different frequency or in different amounts.
(2) The values and benefits are as of the end of the year shown. They
assume that no Policy loans or withdrawals have been made. Excessive
loans or withdrawals may cause this Policy to lapse because of
insufficient account value.
(3) The values and benefits are shown using the maximum expense charges and
cost of insurance rates allowable under the Policy. Accordingly, if the
assumed hypothetical gross annual investment return were earned, the
values and benefits of an actual Policy with the listed specifications
could never be less than those shown, and in some cases may be greater
then those shown.
THE HYPOTHETICAL GROSS ANNUAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND
ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A
REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN.
ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING PREVAILING INTEREST RATES, RATES OF
INFLATION, AND THE ALLOCATIONS MADE BY AN OWNER AMONG THE INVESTMENT OPTIONS.
THE GROSS HYPOTHETICAL INVESTMENT RATES OF RETURN OF 0%, 6% AND 12% SHOWN ABOVE
CORRESPOND TO NET ANNUAL RATES OF - 1.50%, 4.50% AND 10.50%. THE DEATH BENEFIT
AND ACCOUNT VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATE OF RETURN AVERAGES 0%, 6% AND 12% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATIONS CAN BE MADE BY US OR THE FUNDS THAT THESE HYPOTHETICAL
INVESTMENT RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
Male Issue Age 75 Initial Specified Amount $250,000
Preferred Nonsmoker Underwriting Risk Initial Premium and Planned
Death Benefit Option B Premium (Payable Annually) (1)$ 25,800
0% Assumed Hypothetical 6% Assumed Hypothetical 12% Assumed Hypothetical
Gross Annual Investment Gross Annual Investment Gross Annual Investment
Return with Current Charges(2)(3) Return with Current Charges(2)(3) Return with Current Charge(2)(3)
----------------------------------- --------------------------------- --------------------------------
Premiums
Accumulated
End At 5% Surrender Account Death Surrender Account Death Surrender Account Death
of Policy Year Interest Value Value Benefit Value Value Benefit Value Value Benefit
----- ----- ----- ------- ----- ----- ------- ----- ----- -------
Per Year
1
2
3
4
5
6
7
8
9
10
15
20
25
- ------------------
(1) The values illustrated assume the planned premium of $25,800 is paid at
the beginning of each Policy year. Values will be different if premiums
are paid with a different frequency or in different amounts.
(2) The values and benefits are as of the end of the year shown. They
assume that no Policy loans or withdrawals have been made. Excessive
loans or withdrawals may cause this Policy to lapse because of
insufficient account value.
(3) The values and benefits are shown using the expense charges and cost of
insurance rates currently in effect. Although we anticipate deducting
these charges for the foreseeable future, THESE CHARGES ARE NOT
GUARANTEED AND COULD BE RAISED AT OUR DISCRETION. Accordingly, even if
the assumed hypothetical gross annual investment return were earned,
the values and benefits under an actual Policy with the listed
specifications may be less than those shown if the cost of insurance
charges were increased.
THE HYPOTHETICAL GROSS ANNUAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND
ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A
REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN.
ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING PREVAILING INTEREST RATES, RATES OF
INFLATION, AND THE ALLOCATIONS MADE BY AN OWNER AMONG THE INVESTMENT OPTIONS.
THE GROSS HYPOTHETICAL INVESTMENT RATES OF RETURN OF 0%, 6% AND 12% SHOWN ABOVE
CORRESPOND TO NET ANNUAL RATES OF - 1.50%, 4.50% AND 10.50%. THE DEATH BENEFIT
AND ACCOUNT VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATE OF RETURN AVERAGES 0%, 6% AND 12% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATIONS CAN BE MADE BY US OR THE FUNDS THAT THESE HYPOTHETICAL
INVESTMENT RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
</TABLE>
<PAGE>
Part II
Other Information
<PAGE>
Undertaking To File Reports
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned Registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore, or hereafter duly adopted pursuant to
authority conferred in that section.
Rule 484 Undertaking
GE Life and Annuity Assurance Company's By-laws provide, in Article V,
Section 5, for indemnification of directors, officers and employees of the
Company.
Insofar as indemnification for liability arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provision, or otherwise
under circumstances where the burden of proof set forth in Section 11(b) of the
Act has not been sustained, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
Representation Pursuant To Section 26(e)(2)(A)
GE Life & Annuity hereby represents that the fees and charges deducted
under the Policy, in the aggregate, are reasonable in relation to the services
rendered, the expenses expected to be incurred, and the risks assumed by GE Life
& Annuity.
<PAGE>
Contents Of Registration Statement
This Registration Statement comprises the following Papers and Documents:
The facing sheet.
The prospectus consisting of ___ pages. The undertaking to file
reports. The Rule 484 undertaking. Representation pursuant to Section
26(e)(2)(A).
The Signatures.
Written consents of the following persons:
(a) Patricia L. Dysart
(b) Messrs. Sutherland, Asbill & Brennan LLP
(c) Bruce E. Booker, F.S.A.
(d) KPMG Peat Marwick LLP
(e) Ernst & Young LLP
The following exhibits, corresponding to those required by paragraph A
of the instructions as to exhibits in Form N-8B-2:
(1)(a) Resolution of the Board of Directors of GE Life and Annuity Assurance
Company authorizing the establishment of Separate Account II.13/ --
(1)(b) Resolution of the Board of Directors of Life of Virginia authorizing the
addition of Investment Subdivisions to Separate Account II.12/ --
(1)(c) Resolution of the Board of Directors of Life of Virginia authorizing the
establishment of Investment Subdivisions of Separate Account II which
invest in shares of the Fidelity Variable Insurance Products Fund II Asset
Manager Portfolio and Neuberger and Berman Advisers Management Trust
Balanced Portfolio.12/ --
(1)(d) Resolution of the 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.12/ --
(1)(e) Resolution of the Board of Directors of Life of Virginia authorizing the
establishment of Investment Subdivisions of Separate Account II which
invest in shares of the Utility Fund of the Investment Management
Series.12/ --
(1)(f) Resolution of the 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.12/ --
(1)(g) Resolution of the 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.12/ ---------
(1)(h) Resolution of the 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. 12/ --
(1)(i) Resolution of the Board of Directors of Life of Virginia authorizing
additional Investment Subdivisions investing in shares 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.12/ --
(1)(j) Resolution of the Board of Directors of Life of Virginia authorizing
additional Investment Subdivisions investing in shares of Capital
Appreciation Portfolio of Janus Aspen Series.8/
(1)(k) Resolution of Board of Directors of Life of Virginia authorizing
additional Investment Subdivisions investing in shares of the Salomon
Brothers Variable Series Funds, Inc.14/
1A(2) Not Applicable
1A(3)(a) Underwriting Agreement dated December 12, 199 between The Life
Insurance Company of Virginia and Capital Brokerage Corporation.11/
1A(3)(b) Broker-Dealer Sales Agreement.11/
1A(4) Not Applicable
1A(5) Policy Form, Commonwealth Four.10/
1A(5)(a) Endorsement to policy
(a) Accelerated Benefit Rider
(b) Disability Benefit Rider9/
(c) Disability Benefit Rider9/
(d) Insurance Rider for Additional Insured Person 9/
(e) Children's Insurance Rider9/
(f) Death Benefit Rider 9/
(g) Guarantee Account Rider 9/
(h) Unisex Rider9/
(i) Unit Value Endorsement9/
1A(6)(a) Articles of Incorporation of The Life Insurance Company of Virginia12/
1A(6)(b) By-Laws of The Life Insurance Company of Virginia12/
1A(7) Not Applicable
1A(8)(b) Amendment to Participation Agreement among Variable Insurance Products
Fund II, Fidelity Distributors Corporation, and The Life Insurance Company
of Virginia.7/
1A(8)(b)(i) Amendment to Participation Agreement among Variable Insurance
Products Fund, Fidelity Distributors Corporation, and The Life Insurance
Company of Virginia.7/
1A(8)(b)(ii) Participation Agreement among Variable Insurance Products Fund,
Fidelity Distributors Corporation, and The Life Insurance Company of
Virginia.12/
1A(8)(c) Agreement between Oppenheimer Variable Account Funds, Oppenheimer
Management Corporation, and The Life Insurance Company of Virginia.12/
1A(8)(d) Amendment to the Participation Agreement between Oppenheimer Variable
Account Funds, Oppenheimer Management Corporation, and The Life Insurance
Company of Virginia.12/
1A(8)(e) Participation Agreement among Variable Insurance Products Fund II,
Fidelity Distributors Corporation and The Life Insurance Company of
Virginia.12/
1A(8)(h) Fund Participation Agreement between Janus Aspen Series and The Life
Insurance Company of Virginia.12/
1A(8)(i) Fund Participation Agreement between Insurance Management Series,
Federated Securities Corporation, and The Life Insurance Company of
Virginia.12/
1A(8)(j) Fund Participation Agreement between The Alger American Fund, Fred
Alger and Company, Inc., and The Life Insurance Company of Virginia.6/
1A(8)(k) Fund Participation Agreement between Variable Insurance Products Fund
III and The Life Insurance Company of Virginia.8/
1A(8)(l) Fund Participation Agreement between PBHG Insurance Series Fund, Inc.,
and The Life Insurance Company of Virginia.8/
1A(8)(m) Fund Participation Agreement between Goldman Sachs Variable Insurance
Trust Fund and The Life Insurance Company of Virginia 13/
1A(8)(n) Fund Participation Agreement between Salomon Brothers Variable Series
Fund and The Life Insurance Company of Virginia 13/
1A(8)(o) Fund Participation Agreement between GE Investments Funds, Inc. and The
Life Insurance Company of Virginia. 14/
1A(9) Administrative Agreement12/
1A(10) Application for Commonwealth Four Policy9/
2 See Exhibit 1(A)5
3(a) Opinion and Consent of Counsel 14/
3(b) Consent of Messrs. Sutherland, Asbill & Brennan LLP 14/
3(c) Consent of KPMG Peat Marwick LLP 14/
4 Not Applicable
5 Not Applicable
6 Opinion and Consent of Bruce E. Booker, Actuary.14/
7 Memorandum describing Life of Virginia's Issuance, Transfer, Redemption and
Exchange Procedures for the Policies.11/
8 Udertaking to Guarantee performance of obligations of principal
underwriter.12/ --
9 Power of Attorney dated April 16, 1997.8/ -
- --------------------
1. Filed April 24, 1992 with Post-Effective Amendment Number 7 to Forms
S-6 for Life of Virginia Separate Account II, Registration Number
33-9651.
2. Filed April 30, 1993 with Post-Effective Amendment Number 8 to Form S-6
for Life of Virginia Separate Account II, Registration Number 33-9651.
3. Filed April 29, 1994 with Post-Effective Amendment Number 9 to Form S-6
for Life of Virginia Separate Account II, Registration Number 33-9651.
4. Filed January 3, 1995 with Post-Effective Amendment Number 10 to Form
S-6 for Life of Virginia Separate Account II, Registration Number
33-9651.
5. Filed April 28, 1995 with Post-Effective Amendment Number 11 to Form
S-6 for Life of Virginia Separate Account II, Registration Number
33-9651.
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 November 18, 1997 with Pre-Effective Amendment No. 1 to Form S-6
for Life of Virginia Separate Account II, Registration Number
333-32071.
10. Filed November 25, 1997 with initial filing to Form S-6 for Life of
Virginia Separate Account II, Registration Number 333-41031
11. Filed February 20, 1998 with Pre-Effective Amendment No. 1 for Life of
Virginia Separate Account II, Registration Number 333-41031.
12. Incorporated herein by reference with Post-Effective Amendment No. 9
for Life of Virginia Separate Account II, Registration Number 33-9651.
13 Incorporated herein by reference with Post-Effective Amendment No. 17
for Life of Virginia Separate Account II, Registration Number 33-9651
14 To be added by Post-Effective Amendment
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant, GE
Life & Annuity Separate Account II has duly caused this 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 5th day of February, 1999. 1999.
GE Life & Annuity Separate Account II
GE Life and Annuity Assurance Company
(Depositor)
Attest: /s/LAURA C. DEUSEBIO
By:/s/SELWYN L. FLOURNOY, JR.
Selwyn L. Flournoy, Jr.
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, GE Life and Annuity
Assurance Company certifies that it has duly caused this 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 the5th day of February, 1999.
GE Life and Annuity Assurance Company
Attest: /s/LAURA C. DEUSEBIO
By:/s/SELWYN L. FLOURNOY, JR.
Selwyn L. Flournoy, Jr.
Senior Vice President
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the date(s) indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C>
/s/RONALD V. DOLAN Director, Chairman of the Board
Ronald V. Dolan
_/s/SELWYN L. FLOURNOY, JR. Director, Senior Vice President
Selwyn L. Flournoy, Jr. Chief Financial Officer
/s/ROBERT D. CHINN Director, Senior Vice President
Robert D. Chinn
/s/VICTOR C. MOSES Director
Victor C. Moses
/s/GEOFFREY S. STIFF
Geoffrey S. Stiff Director
</TABLE>
By /s/SELWYN L. FLOURNOY, JR., pursuant to Power of Attorney executed on April
16, 1997.
<PAGE>
EXHIBIT LIST
Exhibits to be included in a subsequent post-effective amendment.
- --------
