Filed with the Securities and Exchange Commission on October 27, 1998
Registration No. 33-90686
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO 4
on
Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
A. Exact name of trust: Variable Account B
B. Name of depositor: American International Life Assurance
Company of New York
C. Complete address of depositor's principal executive offices:
80 Pine Street, New York, NY 10005
D. Name and address of agent for service:
Robert Liguori, Senior Vice President and General Counsel
American International Life Assurance Company of New York
80 Pine Street
New York, NY 10005
COPIES TO:
Michael Berenson, Esq. Florence Davis, Esq.
Jorden Burt Boros Cicchetti American International Group, Inc.
Berenson & Johnson, LLP 70 Pine Street
Suite 400 East New York, NY 10270
1025 Thomas Jefferson Street, NW
Washington, DC 20007-0805
It is proposed that this filing will become effective:
X immediately upon filing pursuant to paragraph (b) of Rule 485
_____ on ______________ pursuant to paragraph (b) of Rule 485
_____ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
_____ on ______________ pursuant to paragraph (a)(1) of Rule 485
If appropriate, check the following box:
_____ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
E. Title and amount of securities being registered: Individual and Group
Flexible Premium Variable Universal Life Insurance Policies.
F. Proposed maximum aggregate offering price to the public of the securities
being registered: N/A
G. Amount of Filing Fee: N/A
<PAGE>
CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
N-8B-2 Item Caption in Prospectus
1 The Company, The Separate Account
2 The Company
3 Not Applicable
4 Distribution of the Policy
5 The Separate Account
6(a) Not Applicable
6(b) Not Applicable
9 Legal Proceedings
10 The Policy
11 The Separate Account, The Funds and
the Investment Advisers
12 The Separate Account, The Funds and
the Investment Advisers
13 Charges and Deductions
14 The Policy
15 The Separate Account
16 The Separate Account, The Funds and
the Investment Advisers
17 The Policy
18 The Policy
19 Not Applicable
20 Not Applicable
21 Not Applicable
22 Not Applicable
23 Not Applicable
24 Not Applicable
25 The Company
26 Not Applicable
27 The Company
28 The Company
29 The Company
30 The Company
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 The Company
37 Not Applicable
38 Distribution of the Policy
39 Distribution of the Policy
40 Not Applicable
41(a) Distribution of the Policy
42 Not Applicable
43 Not Applicable
44 The Policy
45 Not Applicable
46 The Policy
47 Not Applicable
48 Not Applicable
49 Not Applicable
50 Not Applicable
51 The Company, The Policy
52 The Funds and the Investment Advisers
53 Tax Considerations
54 Financial Statements
55 Not Applicable
<PAGE>
Part I - Incorporated by reference to Registrant's Post-Effective Amendment No.
3 filed on Form S-6 (File No. 33-90686), dated May 1, 1998, as amended by the
filings under Rule 497(e) on June 11, 1998 and June 19, 1998.
<PAGE>
Part II - Other Information
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 theretofore or hereafter duly adopted pursuant to
authority conferred in that section.
REPRESENTATION
American International Life Assurance Company represents that the fees
and charges deducted under the Policy covered by this registration statement, in
the aggregate are reasonable in relation to the services rendered, the expenses
expected to be incurred, and the risks assumed by the Company.
INDEMNIFICATION
Under its Bylaws, the Company, to the full extent permitted by Delaware
law shall indemnify any person who was or is a party to any proceeding (whether
brought by or in right of the Company or otherwise) by reason of the fact that
he or she is or was a Director of the Company, or while a Director of the
Company, is or was serving at the request of the Company as a Director, Officer,
partner, Trustee, Employee, or Agent of another foreign or domestic corporation,
partnership, joint venture, trust, other enterprise or employee benefit plan,
against judgments, penalties, fines, settlements and reasonable expenses
actually incurred by him or her in connection with such proceeding.
The company shall extend such indemnification, as is provided to
directors above, to any person, not a director of the Company, who is or was an
officer of the Company or is or was serving at the request of the Company as a
director, officer, partner, trustee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, other enterprise or employee
benefit plan. In addition, the Board of Directors of the Company may, by
resolution, extend such further indemnification to an officer or such other
person as may to it seem fair and reasonable in view of all relevant
circumstances.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Company pursuant to such provision of the bylaws or statutes or otherwise,
the Company has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any such action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the Policies issued by Variable Account II, the Company 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 said Act and
will be governed by the final adjudication of such issue.
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet.
The Prospectus consisting of 53 pages.
Incorporated by reference to Registrant's Post-Effective Amendment No.
3 filed on Form S-6 (File No. 33-90686), dated May 1, 1998, as amended by
the filings under Rule 497(e) on June 11, 1998 and June 19, 1998.
The undertaking to file reports.
Representation.
The signatures.
Written consents of the following persons:
Kenneth D. Walma
Michael Burns
Jorden Burt Boros Cicchetti Berenson & Johnson LLP
Coopers & Lybrand
Powers of Attorney
Incorporated by reference to Registrant's Post-Effective Amendment No. 3
filed on Form S-6 (File No. 33-90686), dated May 1, 1998.
The following exhibits:
A. Copies of all exhibits required by paragraph A of instructions for Exhibits
in Form N-8B-2, unless indicated otherwise.
1. Certificate of Resolution for American International Life Insurance
Company of New York, dated June 5, 1986, authorizing the issuance and
sale of variable life contracts.
2. N/A
3. Principal Underwriter's Agreement between American International Life
Insurance Company of New York and American International Fund
Distributors, dated August 15, 1989;
4. N/A
5. (a) Form of Flexible Premium Variable Life Insurance Policy
(2VUL1294NY)
(b) Form of Certificate of Group Variable Universal Life
(2VUL1294NY-C)
(c) Form of Group Variable Universal Life Policy (2VUL1294NY-G)
6. (a) American International Life Insurance Company of New York By-Laws
(as amended on 3/25/75);
(b) Charter of American International Life Insurance Company of New
York, dated March 5, 1962;
(c) Certificate of Amendment of the Certificate of Incorporation of
American International Life Insurance Company of New York, dated
February 4, 1972;
(d) Certificate of Amendment of the Certificate of Incorporation of
American International Life Insurance Company of New York, dated
January 18, 1985;
(e) Certificate of Amendment of the Certificate of Incorporation of
American International Life Insurance Company of New York, dated
June 1, 1987;
(f) Certificate of Amendment of the Certificate of Incorporation of
American International Life Insurance Company of New York, dated
March 22, 1989;
(g) Certificate of Amendment of the Certificate of Incorporation of
American International Life Insurance Company of New York, dated
June 27, 1991;
7. N/A
8. N/A.
9. N/A.
10. (a) Form of Life Insurance Application (24APP0396NY)
(b) Form of Supplemental Application (2VULSUP1294NY)
11. Incorporated by reference to Registrant's Post-Effective Amendment No.
3 filed on Form S-6 (File No. 33-90686), dated May 1, 1998.
B. Opinion and Consent of Counsel
Incorporated by reference to Registrant's Post-Effective Amendment No. 3
filed on Form S-6 (File No. 33-90686), dated May 1, 1998.
C. Opinion and Consent of Actuary
Incorporated by reference to Registrant's Post-Effective Amendment No. 3
filed on Form S-6 (File No. 33-90686), dated May 1, 1998.
D. Consent of Independent Certified Public Accountants
Incorporated by reference to Registrant's Post-Effective Amendment No. 3
filed on Form S-6 (File No. 33-90686), dated May 1, 1998.
E. Consent of Jorden Burt Boros Cicchetti Berenson & Johnson LLP
Incorporated by reference to Registrant's Post-Effective Amendment No. 3
filed on Form S-6 (File No. 33-90686), dated May 1, 1998.
F. Memorandum Regarding Administrative Procedures
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
A. Certificate of Resolution for American International Life Assurance
Company of New York, dated June 5, 1986, authorizing the issuance and
sale of variable life contracts.
B. Principal Underwriter's Agreement between American International Life
Assurance Company of New York and American International Fund
Distributors, dated August 15, 1989;
C. (1) Form of Flexible Premium Variable Life Insurance Policy
(2VUL1294NY)
(2) Form of Certificate of Group Variable Universal Life
(2VUL1294NY-C)
(3) Form of Group Variable Universal Life Policy (2VUL1294NY-G)
D. (1) American International Life Insurance Company of New York By-Laws
(as amended on 3/25/75);
(2) Charter of American International Life Insurance Company of New
York, dated March 5, 1962;
(3) Certificate of Amendment of the Certificate of Incorporation of
American International Life Insurance Company of New York, dated
February 4, 1972;
(4) Certificate of Amendment of the Certificate of Incorporation of
American International Life Insurance Company of New York, dated
January 18, 1985;
(5) Certificate of Amendment of the Certificate of Incorporation of
American International Life Insurance Company of New York, dated
June 1, 1987;
(6) Certificate of Amendment of the Certificate of Incorporation of
American International Life Insurance Company of New York, dated
March 22, 1989;
(7) Certificate of Amendment of the Certificate of Incorporation of
American International Life Insurance Company of New York, dated
June 27, 1991;
E. (1) Form of Life Insurance Application (24APP0396NY)
(2) Form of Supplemental Application (2VULSUP1294NY)
F. Memorandum Regarding Administrative Procedures
EXHIBIT A
Certificate of Resolution for American International Life Assurance
Company of New York, dated June 5, 1986, authorizing the issuance and
sale of variable life contracts.
<PAGE>
CERTIFICATE OF RESOLUTION
I, the undersigned, Maureen P. Tully, being the duly elected Secretary
of AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF NEW YORK, a corporation
organized and existing under the laws of New York, DO HEREBY CERTIFY that by
virtue of my office I have access to the original records of the said
corporation; that at a meeting of the Board of Directors of the said corporation
held on June 5, 1986 in accordance with the law and the By-laws of the said
corporation, a quorum being present throughout and voting thereon, the following
resolution was unanimously adopted:
WHEREAS, the Company is desirous of developing and marketing certain
types of life insurance contracts which may be required to be registered with
the Securities and Exchange Commission pursuant to the various securities laws;
and
WHEREAS, it will be necessary to take certain actions including, but
not limited to, establishing separate accounts for segregation of assets and
seeking approval of regulatory authorities;
NOW THEREFORE, BE IT RESOLVED, that the Company is hereby
authorized to develop the necessary program in order to
effectuate the issuance and sale of variable life insurance
contracts; and.
FURTHER RESOLVED, that the Company is hereby authorized to
establish and to designate one or more separate accounts of
the Company in accordance with the provisions of state
insurance law. The purpose of any such separate account shall
be to provide an investment medium for such variable life
insurance contracts issued by the Company as may be designated
as participating therein. Any such separate account shall
receive, hold, invest and reinvest only the monies arising
from (1) premiums, contributions or payments made pursuant to
the variable life insurance contracts participating therein;
(ii) such assets of the Company as shall be deemed appropriate
to be invested in the same manner as the assets applicable to
the Company's reserve liability under the variable life
insurance contracts participating in such separate accounts;
or as may be necessary for the establishment of such separate
accounts; (iii) the dividends, interest and gains produced by
the foregoing; and
FURTHER RESOLVED, that the proper officers of the Company are
hereby authorized:
(i) to register the variable life insurance contracts
participating in any such separate accounts under the
provisions of the Securities Act of 1933 to the
extent that it shall be determined that such
registration is necessary;
(ii) to register any such separate accounts with the
Securities and Exchange Commission under the
provisions of the Investment Company Act of 1940 to
the extent that it shall be determined that such
registration is necessary.
(iii) to prepare, execute and file such amendments to
any registration statements filed under the
aforementioned Acts (including post-effective
amendments), supplements and exhibits thereto as they
may be deemed necessary or desirable;
(iv) to apply for exemption from those provisions of
the aforementioned Acts as shall be deemed necessary
and to take any and all other actions which shall be
deemed necessary, desirable, or appropriate in
connection with such Acts;
(v) to file the variable life insurance contracts
participating in any such separate accounts with the
appropriate state insurance departments and to
prepare and execute all necessary documents to obtain
approval of the insurance departments;
(vi) to prepare or have prepared and execute all
necessary documents to obtain approval of, or
clearance with, or other appropriate actions
required, of any other regulatory authority that may
be necessary; and
FURTHER RESOLVED, that for the purposes of facilitating the
execution and filing of any registration statement and of
remedying any deficiencies therein by appropriate amendments
(including post effective amendments) or supplements thereto,
the President of the Company and the Secretary of the Company,
and each of them, are hereby designated as attorneys and
agents of the Company; and the appropriate officers of the
Company be, and they hereby are authorized and directed to
grant the power of attorney of the Company to the President of
the Company and the Secretary of the Company by executing and
delivering to such individuals, on behalf of the Company, a
power of attorney; and
FURTHER RESOLVED, that in connection with the offering and
sale of the variable life insurance contracts in the various
States of the United States, as and to the extent necessary,
the appropriate officers of the Company be, and they hereby
are, authorized to take any and all such action, including but
not limited to the preparation, execution and filing with
proper State authorities, on behalf of and in the name of the
Company, of such applications, notices, certificates,
affidavits, powers of attorney, consents to service of
process, issuer's covenants, certified copies of minutes of
shareholders' and directors' meetings, bonds, escrow and
impounding agreements and other writings and instruments as
may be required in order to render permissible the offering
and sale of the variable life insurance contracts in such
jurisdictions; and
FURTHER RESOLVED, that the forms of any resolutions required
by any State authority to be filed in connection with any of
the documents or instruments referred to any of the preceding
resolutions be, and the same hereby are, adopted as if fully
set forth herein if (1) in the option of the appropriate
officers of the Company, the adoption of the resolutions is
advisable and (2) the Secretary or any Assistant Secretary of
the Company evidences such adoption by inserting into these
minutes copies of any such resolutions; and
FURTHER RESOLVED, that the officers of the Company, and each
of them, are hereby authorized to prepare and to execute the
necessary documents and to take such further actions as may be
deemed necessary or appropriate, in their discretion, to
implement the purpose of these resolutions.
THAT the same has not been altered, amended or rescinded, and is now in full
force and effect; and that I am duly authorized on behalf of the said
corporation to make this certificate.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
seal of said corporation this 19th day of June 1986.
/s/ Maureen P. Tully
--------------------------------
Maureen P. Tully
EXHIBIT B
Principal Underwriter's Agreement between American International Life
Assurance Company of New York and American International Fund
Distributors, dated August 15, 1989
<PAGE>
PRINCIPAL UNDERWRITER'S AGREEMENT
IT IS HEREBY AGREED by and between AMERICAN INTERNATIONAL LIFE
ASSURANCE COMPANY OF NEW YORK (the "INSURANCE COMPANY") on behalf of VARIABLE
ACCOUNT B (the "Variable Account") and AMERICAN INTERNATIONAL FUND DISTRIBUTORS,
INC. ("PRINCIPAL UNDERWRITER") as follows:
I.
INSURANCE COMPANY proposes to issue and sell Individual Flexible
Premium Variable Life Insurance Policies and Individual Single Premium Variable
Life Insurance Policies (the "Policies") to the public through PRINCIPAL
UNDERWRITER. The PRINCIPAL UNDERWRITER agrees to provide sales service subject
to the terms and conditions hereof. The Policies to be sold are more fully
described in the registration statement and the prospectus hereinafter
mentioned. Such Policies will be issued by INSURANCE COMPANY through the
Variable Account.
II.
INSURANCE COMPANY grants PRINCIPAL UNDERWRITER the exclusive right,
during the term of this Agreement, subject to registration requirements of the
Securities Act of 1933 and the Investment Company Act of 1940 and the provisions
of the Securities Exchange Act of 1934, to be the distributor of the Policies
issued through the Variable Account. PRINCIPAL UNDERWRITER will sell the
Policies under such terms as set by INSURANCE COMPANY and will make such sales
to purchasers permitted to buy such Policies as specified in the prospectus.
III.
PRINCIPAL UNDERWRITER agrees it shall undertake at its own expense, to
perform all duties and functions which are necessary and proper for the
distribution of the Policies.
IV.
PRINCIPAL UNDERWRITER shall be compensated for its distribution service
in an amount mutually agreed to by INSURANCE COMPANY and PRINCIPAL UNDERWRITER
on an individual basis.
V.
On behalf of the Variable Account, INSURANCE COMPANY shall furnish
PRINCIPAL UNDERWRITER with copies of all prospectuses, financial statements and
other documents which PRINCIPAL UNDERWRITER reasonably requests for use in
connection with the distribution of the Policies. INSURANCE COMPANY shall
provide to PRINCIPAL UNDERWRITER such number of copies of the current effective
prospectus as PRINCIPAL UNDERWRITER shall reasonably request.
VI.
PRINCIPAL UNDERWRITER is not authorized to give any information or to
make any representations concerning the Policies or the Variable Account of
INSURANCE COMPANY other than those contained in the current registration
statement or prospectus filed with the Securities and Exchange Commission or
such sales literature as may be authorized by INSURANCE COMPANY.
VII.
Both parties to this Agreement agree to keep the necessary records as
indicated by applicable state and federal law and to render the necessary
assistance to one another for the accurate and timely preparation of such
records.
VIII.
This Agreement shall be effective upon the execution hereof and will
remain in effect unless terminated as hereinafter provided. This Agreement shall
automatically be terminated in the event of its assignment as defined by the
Investment Company Act of 1940.
This Agreement may at any time be terminated by either party hereto
upon 60 days written notice to the other party.
All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been given on the date
of service if serviced personally on the party to whom notice is to be given, or
on the date of mailing if sent by First Class Mail, Registered or Certified,
postage prepaid and properly addressed.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be signed on their behalf by their respective officers thereunto duly
authorized.
EXECUTED this 15th day of August, 1989
INSURANCE COMPANY
AMERICAN INTERNATIONAL LIFE
ASSURANCE COMPANY OF NEW YORK
/s/ A. Raymond Williams
By: ____________________________
A. Raymond Williams,
President
/s Maureen P. Tully
ATTEST: _______________________
Secretary
PRINCIPAL UNDERWRITER
AMERICAN INTERNATIONAL FUND
DISTRIBUTORS, INC.
/s/Kevin Clowe
By: _____________________________
Kevin Clowe
President
/s/ Maureen P. Tully
ATTEST: _________________________
Secretary
EXHIBIT C(1)
Form of Flexible Premium Variable Life Insurance Policy (2VUL1294NY)
<PAGE>
80 Pine Street
New York, New York 10270
A capital stock company
We agree to pay the Insurance Benefit of this Policy and to provide its other
benefits and rights in accordance with its provisions.
Flexible Premium Variable Life Insurance Policy
This is a flexible premium variable life insurance policy. You can, within
limits: o increase or decrease the Face Amount; o pay Premium at any
time and in any amount; o change the Death Benefit Option; o change the
allocation of Net Premiums among Your investment options; and o
transfer amounts among Your investment options.
All of these rights and benefits are subject to the terms and conditions of this
Policy. All requests for Policy changes are subject to Our approval and may
require evidence of insurability.
We will put Your Net Premiums paid prior to the Allocation Date into the Money
Market Subaccount. On the Allocation Date all such Premiums will then be
allocated in accordance with directions contained in Your Policy application.
The portion of Your Policy Account Value that is in a Subaccount will vary up or
down depending on the unit value of such Subaccount, which in turn depends on
the investment performance of the corresponding portfolio of a designated
investment company. There are no minimum guarantees as to such portion of Your
Policy Account Value.
The portion of Your Policy Account Value that is in Our Guaranteed Account will
accumulate, after deductions, at rates of interest We determine. Such rates will
not be less than 4% per year, compounded annually.
The amount and duration of the Death Benefit may be variable or fixed as
described in this Policy.
Please Read This Policy With Care. A Table Of Contents is on Page 2. A policy
summary is also on Page 2.
Right To Examine This Policy. You may examine this Policy and if for any reason
You are not satisfied with it You may cancel it by returning this Policy with a
written request for cancellation to Our Administrative Office no later than the
later of (a) 10 days after You receive it; or (b) 45 days after the application
was signed. If You do this, We will refund the Premiums that were paid on this
Policy.
/s/ Elizabeth M. Tuck /s/ RJ O'Connell
Elizabeth M. Tuck RJ O'Connell
Secretary President
<PAGE>
CONTENTS
Policy Summary 2
Policy Information 3
Table Of Expense Charges 4
Table Of Maximum Surrender Charges 5
Table Of Guaranteed Maximum Cost Of Insurance Rates 6
Definitions 7
Policy Owner And Beneficiary Provisions 9
The Benefits We Pay 9
Changing The Face Amount Or The Death Benefit Option 11
The Premiums You Pay 12
Your Policy Account Value And How It Works 13
Your Investment Options 14
Your Policy Account Value 15
The Cash Surrender Value Of This Policy 16
How A Loan Can Be Made 18
Our Separate Account 19
Our Annual Report To You 19
How Benefits Are Paid 20
Other Important Information 20
A copy of the application for this Policy and any additional benefit riders are
at the back of this Policy.
POLICY SUMMARY
The Premiums You pay into this Flexible Premium Variable Life Insurance
Policy, after deductions are made in accordance with the Table Of Expense
Charges in the Policy Information section, are put into Your Policy Account
Value. Amounts in Your Policy Account Value are allocated at Your direction
to one or more Subaccounts and to Our Guaranteed Account.
The Subaccounts invest in shares of registered investment companies whose
value is subject to market fluctuations and investment risk. There is no
guarantee of principal or investment experience.
The Guaranteed Account earns interest at rates We declare in advance. The
rates are guaranteed not to be less than 4% per year, compounded annually.
The principal, after deductions, is also guaranteed.
The duration of life insurance coverage depends upon the Net Cash Surrender
Value.
If Death Benefit Option I is in effect, the Death Benefit is the Face
Amount, and the amount of the Death Benefit is fixed except when it is a
percentage of Your Policy Account Value. If Death Benefit Option II is in
effect, the Death Benefit is the Face Amount plus Your Policy Account
Value. The amount of the Death Benefit under Death Benefit Option II is
variable.
We make monthly deductions from Your Policy Account Value to cover the cost
of the benefits provided by this Policy. If You give up this Policy for its
Net Cash Surrender Value, make a Partial Surrender, reduce the Face Amount,
or if this Policy ends without value at the end of the Grace Period, We may
deduct a surrender charge from Your Policy Account Value.
This is only a summary of what this Policy provides. You should read the
entire Policy carefully. Its terms govern Your rights and Our obligations.
<PAGE>
POLICY INFORMATION
INSURED PERSON [JOHN DOE] AGE [35] SEX [MALE] [N O N S M O K E R]
OWNER [JOHN DOE]
FACE AMOUNT [$100,000]
DEATH BENEFIT OPTION [I] (SEE PAGE 10)
POLICY NUMBER [XX XXX XXX]
BENEFICIARY [JANE DOE]
POLICY DATE [JANUARY 1, 1995]
ISSUE DATE [JANUARY 1, 1995]
INSURED PERSON'S
STATE OF RESIDENCE [SPECIMEN]
SEPARATE ACCOUNT [VARIABLE ACCOUNT II]
PARTIAL SURRENDER MINIMUM PARTIAL SURRENDER IS $500
POLICY LOAN MINIMUM LOAN IS $500
POLICY LOAN
INTEREST RATE 8%
TRANSFER MINIMUM TRANSFER AMOUNT IS $250
AN INITIAL PREMIUM OF [$800.00] IS DUE ON OR BEFORE DELIVERY OF THE POLICY.
[THE PLANNED PERIODIC PREMIUM OF [$800.00] IS PAYABLE [QUARTERLY]]. THE MINIMUM
PREMIUM WHICH WE WILL ACCEPT AT ANY TIME IS [$50].
THE LOANED PORTION OF YOUR POLICY ACCOUNT VALUE IS ELIGIBLE FOR INTEREST AT 6%.
HOWEVER, AT THE BEGINNING OF THE 11TH POLICY YEAR AND THEREAFTER, THE PORTION OF
THE LOAN WHICH IS CONSIDERED PREFERRED, WILL BE ELIGIBLE FOR INTEREST AT 8%.
THIS IS DESCRIBED IN THE PROVISIONS ENTITLED YOUR VALUE IN OUR GUARANTEED
ACCOUNT ON PAGE 16 AND PREFERRED LOAN VALUE ON PAGE 18.
ANY ADDITIONAL BENEFIT ARE RIDERS LISTED BELOW.
THE PREMIUM SHOWN ABOVE MAY NOT BE SUFFICIENT TO CONTINUE THE POLICY AND LIFE
INSURANCE COVERAGE TO THE MATURITY DATE, WHICH IS THE POLICY ANNIVERSARY
FOLLOWING THE INSURED PERSON'S ATTAINED AGE 99. THE PERIOD FOR WHICH THE POLICY
AND COVERAGE WILL CONTINUE IN FORCE WILL DEPEND ON: (1) THE TIMING, FREQUENCY,
AND AMOUNT OF PREMIUM; (2) CHANGES IN THE FACE AMOUNT AND THE DEATH BENEFIT
OPTIONS; (3) CHANGES IN THE INTEREST RATES CREDITED TO OUR GUARANTEED ACCOUNT
AND IN THE INVESTMENT PERFORMANCE OF THE SUBACCOUNTS; (4) CHANGES IN THE MONTHLY
COST OF INSURANCE DEDUCTIONS FROM THE POLICY ACCOUNT VALUE FOR THIS POLICY AND
ANY BENEFITS PROVIDED BY RIDERS TO THIS POLICY; AND (5) LOAN AND PARTIAL
SURRENDER ACTIVITY.
<PAGE>
POLICY INFORMATION CONTINUED
TABLE OF EXPENSE CHARGES
DEDUCTIONS FROM PREMIUMS:
CHARGE FOR APPLICABLE TAXES (OTHER THAN TAXES DISCUSSED ON PAGE 15):
2.00% OF EACH PREMIUM PAYMENT. THIS AMOUNT IS SUBTRACTED FROM EACH
PREMIUM PAYMENT. WE RESERVE THE RIGHT TO CHANGE THIS PERCENTAGE TO
CONFORM TO CHANGES IN THE LAW OR IF THE OWNER CHANGES PLACE OF
RESIDENCE.
PREMIUM CHARGE.
5.00% OF EACH PREMIUM. WE RESERVE THE RIGHT TO CHANGE THIS CHARGE BUT
IT WILL NEVER BE MORE THAN 5.00%.
DEDUCTIONS FROM YOUR POLICY ACCOUNT VALUE:
ADDITIONAL FIRST YEAR ADMINISTRATIVE CHARGE:
$20.00 IS DEDUCTED AT THE BEGINNING OF EACH POLICY MONTH DURING THE
FIRST POLICY YEAR. WE RESERVE THE RIGHT TO CHANGE THIS CHARGE BUT IT
WILL NEVER BE MORE THAN $25.00 A MONTH.
ADMINISTRATIVE CHARGE:
$7.50 IS DEDUCTED AT THE BEGINNING OF EACH POLICY MONTH DURING EACH
POLICY YEAR. WE RESERVE THE RIGHT TO CHANGE THIS CHARGE BUT IT WILL
NEVER BE MORE THAN $15.00 A MONTH. CHANGES WILL BE AS DESCRIBED IN
"CHANGES IN POLICY COST FACTORS: ON PAGE 20.
PARTIAL SURRENDER;
$25.00 IS DEDUCTED WHENEVER THERE IS A PARTIAL SURRENDER. THERE ALSO
MAY BE A PARTIAL SURRENDER CHARGE AS DESCRIBED IN "PARTIAL SURRENDER"
ON PAGE 17.
INCREASES IN FACE AMOUNT THAT YOU ASK FOR:
$20.00 A MONTH IS DEDUCTED FOR THE 12 MONTHS IMMEDIATELY FOLLOWING THE
EFFECTIVE DATE OF THE INCREASE. WE RESERVE THE RIGHT TO CHANGE THIS
CHARGE BUT IT WILL NEVER BE MORE THAN $25.00 A MONTH.
TRANSFERS:
WE RESERVE THE RIGHT TO DEDUCT UP TO $25.00 FOR EACH TRANSFER OF
AMOUNTS AMONG YOUR INVESTMENT OPTIONS. HOWEVER WE WILL NOT MAKE A
CHARGE FOR THE FIRST 12 TRANSFERS IN ANY POLICY YEAR.
<PAGE>
<TABLE>
POLICY INFORMATION CONTINUED
TABLE OF MAXIMUM SURRENDER CHARGES
POLICY MINIMUM POLICY MINIMUM
YEAR FACTOR CHARGE YEAR FACTOR CHARGE
<S> <C> <C> <C> <C> <C>
1 100% $1,086.94 9 60% $652.16
2 100% $1,086.94 10 50% $543.47
3 100% $1,086.94 11 40% $434.78
4 100% $1,086.94 12 30% $326.08
5 100% $1,086.94 13 20% $217.39
6 90% $978.25 14 10% $108.69
7 80% $869.55 15 0% $0.00
8 70% $760.86
</TABLE>
A SURRENDER CHARGE WILL BE SUBTRACTED FROM YOUR POLICY ACCOUNT VALUE IF THIS
POLICY IS SURRENDERED FOR ITS NET CASH SURRENDER VALUE OR IF THIS POLICY
TERMINATES WITHIN THE FIRST FOURTEEN POLICY YEARS. A PARTIAL SURRENDER CHARGE
WILL ALSO BE SUBTRACTED FROM YOUR POLICY ACCOUNT VALUE IF YOU MAKE A PARTIAL
SURRENDER OF THIS POLICY. THE MAXIMUM CHARGE AT ANY TIME IN A POLICY YEAR IS
EQUAL TO THE LESSER OF (1) THE CHARGE SHOWN IN THE TABLE ABOVE FOR THAT YEAR; OR
(2) AN AMOUNT EQUAL TO (A) TIMES (B) WHERE (A) IS 25% OF THE FIRST $1,025 IN
PREMIUM RECEIVED DURING THE FIRST POLICY YEAR, PLUS 4% OF ALL OTHER PREMIUM
RECEIVED DURING THE FIRST POLICY YEAR; AND (B) IS THE FACTOR IN THE TABLE ABOVE
FOR THAT YEAR.
THIS TABLE ASSUMES NO FACE AMOUNT INCREASES. SEE PAGE 17 FOR A DESCRIPTION OF
SURRENDER CHARGES FOR FACE AMOUNT INCREASES.
IN THE FACE AMOUNT IS REDUCED WITHIN THE FIRST FOURTEEN POLICY YEARS, A PRO RATA
SHARE OF THE APPLICABLE SURRENDER CHARGE AT THAT TIME MAY BE DEDUCTED FROM YOUR
POLICY ACCOUNT VALUE. SEE PAGE 17 FOR A DESCRIPTION OF THE PRO RATA SURRENDER
CHARGE.
RIGHT TO CHANGE POLICY COST FACTORS
ADDITIONAL AMOUNTS NOT GUARANTEED
SUBJECT TO MINIMUM GUARANTEED INTEREST RATES, MAXIMUM EXPENSE CHARGES AND
GUARANTEED MAXIMUM COST OF INSURANCE RATES, WE HAVE THE RIGHT TO CHANGE: (1) THE
RATE OF INTEREST CREDITED TO THE AMOUNT YOU HAVE IN OUR GUARANTEED ACCOUNT; (2)
THE MONTHLY COST OF INSURANCE RATE AND (3) EXPENSE CHARGES DEDUCTED UNDER THE
POLICY, WHICH MAY REQUIRE MORE PREMIUM TO BE PAID THAN WAS ILLUSTRATED, OR MAY
RESULT IN POLICY VALUES BEING LESS THAN THOSE ILLUSTRATED.
<PAGE>
<TABLE>
POLICY INFORMATION CONTINUED
TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES
GUARANTEED MAXIMUM MONTHLY RATES PER $1,000
OF NET AMOUNT AT RISK (SEE PAGE 13)
------------------- --------------------------------- ---------------------- ------------------------------------
Attained Monthly Attained Monthly
Age Rate Age Rate
------------------- --------------------------------- ---------------------- ------------------------------------
<S> <C> <C> <C>
35 0.14419 68 2.49957
36 0.15169 69 2.75591
37 0.16169 70 3.04592
38 0.17253 71 3.37720
39 0.18420 72 3.75992
40 0.19837 73 4.19334
41 0.21338 74 4.67004
42 0.22922 75 5.18003
43 0.24673 76 5.71919
44 0.26590 77 6.28340
45 0.28758 78 6.87612
46 0.31093 79 7.51607
47 0.33595 80 8.22375
48 0.36347 81 9.01810
49 0.39349 82 9.91569
50 0.42768 83 10.91280
51 0.46688 84 11.99040
52 0.51193 85 13.12418
53 0.56365 86 14.29994
54 0.62122 87 15.49991
55 0.68547 88 16.71910
56 0.75557 89 17.97489
57 0.82985 90 19.28574
58 0.91250 91 20.68243
59 1.00518 92 22.21791
60 1.10873 93 24.04369
61 1.22400 94 26.50346
62 1.35684 95 30.20740
63 1.50727 96 36.35803
64 1.67447 97 47.21180
65 1.85761 98 66.20701
66 2.05588 99 90.90909
67 2.26847
------------------- --------------------------------- ---------------------- ------------------------------------
</TABLE>
<PAGE>
DEFINITIONS
We, Our, Us. American International Life Assurance Company of New York.
Administrative Office. 80 Pine Street, New York, NY 10005.
Allocation Date. The first business day following the completion of the Right To
Examine This Policy period.
Attained Age. The Insured Person's age on the Policy Date plus the number of
full years since the Policy Date.
Beneficiary. The person(s) who is entitled to the Insurance Benefit of this
Policy.
Cash Surrender Value. Policy Account Value less any applicable surrender charge
that would be deducted upon surrender. See page 5.
Death Benefit. The amount of money payable to the Beneficiary if the Insured
Person dies while the Policy is in force. The Death Benefit is described on page
10.
Face Amount. The amount of insurance You have specified and from which the death
benefit will be determined. The initial Face Amount is shown in the Policy
Information section.
Grace Period. The period of time following a Monthly Anniversary during which
this Policy will continue in force while the Net Cash Surrender Value is not
sufficient to cover the total monthly deduction then due.
Guaranteed Account. An account within the general account which consists of all
of Our assets other than the assets of the Separate Account and any of Our other
separate accounts.
Insured Person. The person whose life is covered by the Policy.
Issue Date. The date the Policy is issued. It may be a later date than the
Policy Date if the initial Premium is received at Our Administrative Office and
invested before underwriting has been completed. Once issued, Policy coverage is
retroactive to the Policy Date. The Issue Date is used to measure contestability
periods. See page 20.
Maturity Date. The Policy Anniversary following the Insured Person's attained
age 99.
Monthly Anniversary. The same day as the Policy Date for each succeeding month,
except that, for those months not having such a day, it is the last day of that
month.
Net Cash Surrender Value. The Cash Surrender Value less any Outstanding Loan.
Net Premium. A Premium less any expense charges deducted from the Premium. See
page 4.
Outstanding Loan. The total amount of Policy loans including both principal and
accrued interest.
Owner, You, Your. The person who purchased this Policy as shown in the
application, unless later changed. The Owner may be someone other than the
Insured Person.
Planned Periodic Premium. The amount of Premium You have selected to pay at the
frequency shown in the Policy Information section.
Policy. This Flexible Premium Variable Life Insurance contract between American
International Life Assurance Company of New York and You.
Policy Account Value. The total amounts in the accounts credited to a Policy.
The Policy Account Value is described on page 15.
Policy Anniversary. An anniversary of the Policy Date.
Policy Date. The first date as of which We have received the initial Premium and
an application in good order. If a Policy is issued, insurance is effective as
of the Policy Date.
Policy Loan Account. The portion of the Policy Account Value held in the
Guaranteed Account as collateral for Policy loans.
Policy Month. The month commencing with the Policy Date and ending on the day
before the first Monthly Anniversary, or any following month commencing with a
Monthly Anniversary and ending on the day before the next Monthly Anniversary.
Policy Year. The year commencing with the Policy Date and ending on the day
before the first Policy Anniversary, or any following year commencing with a
Policy Anniversary and ending on the day before the next Policy Anniversary.
Premium. The total consideration paid by you in exchange for our obligations
under this Policy. The initial Premium is due on or before delivery of this
Policy.
Separate Account. Variable Account B, a separate investment account of American
International Life Assurance Company of New York.
Subaccount. A division of the Separate Account established to invest in a
particular fund and available for investment under the Policy.
Valuation Date. Each day the New York Stock Exchange is open for business.
Valuation Period. A period commencing with the close of business on the New York
Stock Exchange on any particular day and ending at the close of business on the
New York Stock Exchange for the next succeeding Valuation Date.
<PAGE>
POLICYOWNER AND BENEFICIARY PROVISIONS
Owner. The Owner of this Policy is the Insured Person unless otherwise stated in
the application, or later changed.
As the Owner, You are entitled to exercise all the rights of this Policy while
the Insured Person is living. To exercise a right, You do not need the consent
of anyone who has only a conditional or future ownership interest in this
Policy.
Beneficiary. The Beneficiary is as stated in the application, unless later
changed. The Beneficiary is entitled to the Insurance Benefit of this Policy.
One or more beneficiaries for the Insurance Benefit can be named in the
application. If more than one Beneficiary is named, they can be classed as
primary or contingent. If two or more persons are named in a class, their shares
in the benefit can be stated. The stated shares in the Insurance Benefit will be
paid to any primary beneficiaries who survive the Insured Person. If no primary
beneficiaries survive, payment will be made to any surviving contingent
beneficiaries. Beneficiaries who survive in the same class will share the
Insurance Benefit equally, unless You have made another arrangement with us.
If there is no designated Beneficiary living at the death of the Insured Person,
We will pay the Insurance Benefit to the Owner, if living, otherwise to the
Owner's estate.
Changing The Owner Or Beneficiary. While the Insured Person is living, You may
change the Owner or Beneficiary by written notice in a form satisfactory to us.
(You can get such a form from Our agent or by writing to Us at Our
Administrative Office.) The change will take effect on the date You sign the
notice. But, it will not apply to any payment We make or other action We take
before We receive the notice. If You change the Beneficiary, any previous
arrangement You made as to a payment option for benefits is canceled. You may
choose a payment option for the new Beneficiary in accordance with "How Benefits
Are Paid" on page 20.
Assignment. You may assign this Policy, if We agree. In any event, We will not
be bound by an assignment unless We have received it in writing at Our
Administrative Office. Your rights and those of any other person referred to in
this Policy will be subject to the assignment. We assume no responsibility for
the validity of an assignment. An absolute assignment will be considered as a
change of ownership to the assignee.
THE BENEFITS WE PAY
Insurance Benefit. We will pay the Insurance Benefit of this Policy to the
Beneficiary when We receive at Our Administrative Office (1) proof satisfactory
to Us that the Insured Person died before the Maturity Date and while this
Policy was in force; and (2) all other requirements We deem necessary before
such payment may be made. The Insurance Benefit includes the following amounts,
which We will determine as of the date of the Insured Person's death:
o the Death Benefit described below;
o plus any other benefits then due from riders to this Policy; o minus any
Outstanding Loan and accrued loan interest;
o minus any overdue deductions from Your Policy Account Value if the
Insured Person dies during a grace Period.
We will add interest to the resulting amount for the period from the date of
death to the date of payment. We will compute the interest at a rate We
determine, but not less than the rate required by any applicable law. Payment of
the Insurance Benefit may also be affected by other provisions of this Policy.
See Page 20 and 21, where We specify Our right to contest the Policy, the
suicide exclusion, and what happens if age or sex has been misstated. Special
exclusions or limitations (if any) are listed in the Policy Information section.
<PAGE>
Death Benefit. The Death Benefit will be determined under either Death Benefit
Option I or II below, whichever You have chosen and is in effect at such time.
Under either Death Benefit Option, the duration of insurance coverage depends
upon Your Net Cash Surrender Value.
Under Death Benefit Option I, the Death Benefit is the greater of the Face
Amount, or a percentage of the Policy Account Value on the date of death (see
Table Of Applicable Percentages, below). Under this Option, the amount of the
Death Benefit is fixed, unless it is determined by such a percentage.
Under Death Benefit Option II, the Death Benefit is the greater of the Face
Amount plus the Policy Account Value on the date of death, or a percentage of
the Policy Account Value on the date of death (see Table Of Applicable
Percentages, below). Under this Option, the amount of the Death Benefit is
variable.
The following table is used in determining the Death Benefit under Death Benefit
Options I and II above. For Attained Ages not shown, the applicable percentages
shall decrease by a ratable portion for each full year.
Table Of Applicable Percentages
Attained Age Percentage
40 Or Less 250%
45 215%
50 185%
55 150%
60 130%
70 115%
75 through 90 105%
95 through 99 100%
Maturity Benefit. If the Insured Person is living on the Maturity Date defined
in the Policy Information section, We will pay You Your Policy Account Value on
that date minus any Outstanding Loan and accrued loan interest and this Policy
will then end.
<PAGE>
CHANGING THE FACE AMOUNT OR THE DEATH BENEFIT OPTION
At any time after the first Policy Year while this Policy is in force, You may
change the Death Benefit Option or the Face Amount by written request to Us at
Our Administrative Office, subject to Our approval and the following:
1. You may ask Us to increase the Face Amount if You provide evidence
satisfactory to Us of the insurability of the Insured Person. If the Face
Amount is increased, then the cost of insurance rate for the amount of the
increase will be based on the rating class of the Insured Person on the
date of the increase, and the Insured Person's sex and Attained Age. Any
increase You ask for must be at least $10,000. There is a charge for such
increase which is shown in the Policy Information section. We will deduct
the charge from Your Policy Account Value beginning with the date the
increase takes effect. Such deduction will be made in accordance with the
"Treatment Of Deductions" provision on Page 13. If You increase the Face
Amount, an additional fourteen year surrender charge may apply to that
increase if any or all of that increase is surrendered before the end of
the fourteenth year from the effective date of increase. We will not allow
You to increase the Face Amount more than once during any Policy Year, nor
will We allow You to increase the Face Amount after the Insured Person's
75th birthday.
2. You may ask Us to reduce the Face Amount but not to less than the minimum
Face Amount for which We would then issue this Policy under Our rules. Any
such reduction in the Face Amount may not be less than $5,000 or, during
the first five Policy Years, more than 10% of the original Face Amount. If
You do this before the end of the fourteenth year or before the end of the
fourteenth year following an increase in the Face Amount, We may deduct
from Your Policy Account Value a pro rata share of the applicable surrender
charge (see Page 17). Reductions will first be applied against the most
recent increase in the Face Amount. They will then be applied to prior
increases in the Face Amount in the reverse order in which such increases
took place, and then to the original Face Amount. We will not allow You to
reduce the Face Amount in the first year immediately following the
effective date of an increase in the Face Amount or more than once during
any Policy Year.
3. You can change Your Death Benefit Option. We may require that You submit
evidence, satisfactory to Us that the Insured Person is insurable. If You
ask Us to change from the Death Benefit Option I to Death Benefit Option
II, We will decrease the Face Amount by the amount in Your Policy Account
Value on the date the change takes effect. However, We reserve the right to
decline to make such change if it would reduce the Face Amount below the
minimum Face Amount for which We would then issue this Policy under Our
rules. If You ask Us to change from Death Benefit Option II to Death
Benefit Option I, We will increase the Face Amount by the amount in Your
Policy Account Value on the date the change takes effect. Such decreases
and increases in the Face Amount are made so that the Death Benefit remains
the same on the date the change takes effect. However, if Your Death
Benefit is determined by a percentage multiple of the Policy Account Value,
there may be an increase in the Death Benefit.
4. The change will take effect at the beginning of the Policy Month that
coincides with or next follows the date We approve Your request.
5. We reserve the right to decline to make any change that We determine would
cause this Policy to fail to qualify as life insurance as defined in
Section 7702 of the Internal Revenue Code, as amended (see Page 20).
6. You may ask for a change by completing an Application For Change, which You
can get from Our agent or by writing to Us at Our Administrative Office. A
copy of Your Application For Change will be attached to the new Policy
Information section that We will issue when the change is made. The new
section and the Application For Change will become a part of this Policy.
We will require You to return this Policy to Our Administrative Office to
make a Policy change.
<PAGE>
THE PREMIUMS YOU PAY
The initial Premium shown in the Policy Information section is due on or before
delivery of this Policy. No insurance will take effect before the initial
Premium is paid. Other Premiums may be paid at any time while this Policy is in
force and before the Maturity Date at Our Administrative Office.
We will send Premium notices to You for the Planned Periodic Premium shown in
the Policy Information section. You may skip Planned Periodic Premiums. However,
this may adversely affect the duration of the Death Benefit and Your Policy's
values.
Limits. Each Premium after the initial one must be at least the minimum Premium
amount shown in the Policy Information section. We reserve the right to limit
the amount of any Premium which is in addition to the Planned Periodic Premiums.
We also reserve the right not to accept Premium (in a Policy Year) that We
determine would cause this Policy to fail to qualify as a life insurance
contract as defined in Section 7702 of the Internal Revenue Code, as amended
(see Page 20).
Grace Period. The duration of insurance coverage depends upon the Net Cash
Surrender Value being sufficient to cover the total monthly deductions described
on Page 13. If the Net Cash Surrender Value at the beginning of any Policy Month
is less than such deductions for that month, We will send a written notice
within 30 days to You and any assignee on Our records at last known addresses
stating that a Grace Period of 61 days has begun, starting with the beginning of
that Policy Month. The notice will also state the amount of premium which would
increase the Net Cash Surrender Value sufficiently to cover total monthly
deductions for 3 months if no Policy changes were made. If we do not receive the
requested premium amount before the end of the Grace Period, this Policy will
end without value.
If the Insured Person dies during a Grace Period, We will pay the Insurance
Benefit as described on Page 9.
Reinstatement Of Your Policy. If this Policy has ended without value, You may
reinstate the Policy while the Insured Person is alive if you:
1. Ask for reinstatement of the Policy within 3 years from the end of the
Grace Period; and
2. Provide evidence of insurability satisfactory to us; and
3. Pay a Premium sufficient to cover (i) the total monthly administrative
charges from the beginning of the Grace Period to the effective date of
reinstatement; (ii) total monthly deductions for 3 months, calculated from
the effective date of reinstatement; and (iii) the charge for applicable
taxes, the Premium charge, and any increase in surrender charges associated
with this payment. We will determine the required Premium as if no interest
or investment performance were credited to or charged against Your Policy
Account Value; and
4. Repay or reinstate any Policy loan which existed on the date the Policy
ended.
The effective date of the reinstatement of this Policy will be the beginning of
the Policy Month which coincides with or next follows the date We approve Your
request.
From the required Premium We will deduct the charge for applicable taxes and the
Premium charge. The Policy Account Value, Policy loan and surrender charges
applicable at the time of reinstatement will be those that were in effect on the
date this Policy lapsed.
We will start to make monthly deductions again as of the effective date of
reinstatement. The monthly administrative charges from the beginning of the
Grace Period to the effective date of reinstatement will be deducted from the
Policy Account Value as of the effective date of reinstatement.
<PAGE>
YOUR POLICY ACCOUNT VALUE AND HOW IT WORKS
Premium. When We receive Your Premium, We subtract the expense charges shown in
the table in the Policy Information section. We put the balance (the Net
Premium) into Your Policy Account Value as of the date We receive the Premium at
Our Administrative Office, and before any deductions from Your Policy Account
Value as of the Policy Date if it is later than the date of receipt. No Premiums
will be applied to Your Policy Account Value until the full initial Premium, as
shown on Your application, is received at Our Administrative Office.
Monthly Deductions. At the beginning of each Policy Month We make a deduction
from Your Policy Account Value to cover monthly administrative charges and to
provide insurance coverage, subject to the Grace Period provision. Such
deduction for any Policy Month is the sum of the following amounts determined as
of the beginning of that month:
o the monthly administrative charges;
o the monthly cost of insurance for the Insured Person;
o the monthly cost of any benefits provided by riders to this Policy.
The monthly cost of insurance is the sum of a) Our current monthly cost of
insurance rate times the net amount at risk at the beginning of the Policy Month
divided by $1,000; plus b) any extra charge per $1,000 of Face Amount shown in
the Policy Information section, times the Face Amount at the beginning of the
Policy Month divided by $1,000. If the Death Benefit is the Face Amount, then
the net amount at risk is the Death Benefit divided by 1.0032737 minus the
amount in Your Policy Account Value at that time. However, if the Death Benefit
is a percentage of the Account Value of this Policy, then the net amount at risk
is the Death Benefit minus the amount in Your Policy Account Value at that time.
The cost of insurance rate is based on the Face Amount and on the sex, Attained
Age, rating class, and smoker or non-smoker status of the Insured Person.
We will determine cost of insurance rates from time to time. Any change in the
cost of insurance rates We use will be as described in "Changes In Policy Cost
Factors" on page 20. They will never be more than those shown in the Table Of
Guaranteed Maximum Cost Of Insurance Rates on page 6.
Other Deductions. We also make the following additional deductions from Your
Policy Account Value as they occur:
o We deduct a partial surrender charge if You make a partial surrender
of this Policy (see page 17).
o We deduct a surrender charge if, before the end of the fourteenth
Policy Year, You give up this Policy for its Net Cash Surrender Value,
You reduce the Face Amount, or if this Policy terminates without value
at the end of a Grace Period (see page 17). A surrender charge may
also apply to such transactions for up to fourteen years immediately
following a Face Amount increase.
o We deduct a charge if You increase the Face Amount (see page 11).
o We deduct a charge for certain transfers (see page 14).
Treatment Of Deductions. We will make all deductions based on the proportion
that Your unloaned value in Our Guaranteed Account and Your values in the
Subaccounts bear to the total unloaned value in Your Policy Account Value.
<PAGE>
YOUR INVESTMENT OPTIONS
Allocations. This Policy provides investment options for the amount in Your
Policy Account Value. Amounts put into Your Policy Account Value are allocated
to the Subaccounts and to the unloaned portion of Our Guaranteed Account at Your
direction. You specified Your initial Premium allocation percentages in Your
application for this Policy, a copy of which is attached to this Policy. Unless
You change them, such percentages shall also apply to subsequent Premiums.
However, any Premium which is put into Your Policy Account Value prior to the
Allocation Date will initially be allocated to the Money Market Subaccount. On
the Allocation Date, any such amounts then in the Money Market Subaccount will
be allocated in accordance with the directions contained in Your Policy
application.
No less than 5% of a Premium may be allocated to any one account. Allocation
percentages must be zero or a whole number not greater than 100. The sum of the
Premium allocation percentages must equal 100. You may change such allocation
percentages by written notice to Our Administrative Office. A change will take
effect on the date We receive it at Our Administrative Office except for changes
received on or prior to the Allocation Date which will take effect on the first
business day following the Allocation Date.
Transfers. At Your written request to Our Administrative Office, We will
transfer amounts from Your value in any Subaccounts to one or more other
Subaccounts or to Our Guaranteed Account. Any such transfer will take effect on
the date We receive Your written request for it at Our Administrative Office.
Once during each Policy Year You may ask Us by written request to Our
Administrative Office to transfer an amount You specify from Your unloaned value
in Our Guaranteed Account to one or more Subaccounts. However, We will make such
a transfer only if (1) We receive Your written request at Our Administrative
Office within 30 days before or after a Policy Anniversary; and (2) the amount
You specify is not more than the greater of 25% of Your unloaned value in Our
Guaranteed Account as of the date the transfer takes effect or the minimum
transfer amount shown on page 3. In no event will We transfer more than Your
unloaned value in Our Guaranteed Account. The transfer will take effect on the
date We receive Your written request for it at Our Administrative Office but not
before the Policy Anniversary.
The minimum amount that We will transfer from the amount You have in a
Subaccount is the lesser of the minimum transfer amount shown on page 3 or the
amount You have in that Subaccount on that date, except as stated in the next
paragraph. The minimum amount that We will transfer from the amount You have in
Our Guaranteed Account is the lesser of the minimum transfer amount shown on
page 3 or Your unloaned value in Our Guaranteed Account as of the date the
transfer takes effect, except as stated in the next paragraph. If You do not
transfer the entire amount You have in a Subaccount or of the unloaned amount
You have in Our Guaranteed Account, the remaining value in either must be no
less than the minimum transfer amount shown on page 3.
We will waive the minimum amount limitations set forth in the immediately
preceding paragraph if the total amount being transferred on that date is at
least the minimum transfer amount shown on Page 3.
We reserve the right to make a transfer charge up to the amount shown on Page 4.
The transfer charge, if any, is deducted from the amounts transferred from the
Subaccounts and the Guaranteed Account based on the proportion that the amount
transferred from each Subaccount and the Guaranteed Account bears to the total
amount being transferred. A transfer from the Money Market Subaccount on the
Allocation Date (if applicable) will not incur a transfer charge.
<PAGE>
YOUR POLICY ACCOUNT VALUE
The amount in Your Policy Account Value at any time is equal to the sum of the
amounts You then have in Our Guaranteed Account and the Subaccounts under this
Policy.
Your Value In The Subaccounts. The amount You have in a Subaccount under this
Policy at any time is equal to the number of units this Policy then has in that
Subaccount multiplied by the Subaccount's unit value at that time. A Policy
transaction occurs when units of a Subaccount are either purchased or redeemed.
Amounts allocated, transferred or added to a Subaccount are used to purchase
units of that Subaccount; units are redeemed when amounts are deducted, loaned,
transferred, or fully or partially surrendered.
The number of units a Policy has in a Subaccount at any time is equal to the
number of units purchased minus the number of units redeemed in that Subaccount
to that time. The number of units purchased or redeemed in a Policy transaction
is equal to the dollar amount of the Policy transaction divided by the
Subaccount's unit value on the date of the Policy transaction. Policy
transactions may be made on any day. The unit value that applies to a
transaction made on a business day will be the unit value for that day. The unit
value that applies to a transaction made on a non-business day will be the unit
value for the next business day.
We determine unit values for the Subaccounts at the end of each business day.
Generally, a business day is any day the New York Stock Exchange is open for
trading. A business day immediately preceded by one or more non-business
calendar days will include those non-business days as part of that business day.
For example, a business day which falls on a Monday will consist of that Monday
and the immediately preceding Saturday and Sunday.
The unit value of a Subaccount on any business day is equal to the unit value
for that Subaccount on the immediately preceding business day multiplied by the
net investment factor for that Subaccount on that business day.
The net investment factor for a Subaccount on any business day is (a) divided by
(b), minus (c), where:
(a) is the net asset value of the shares in designated investment companies that
belong to the Subaccount at the close of business on such business day before
any Policy transaction are made on that day, plus the amount of any dividend or
capital gain distribution paid by the investment companies on that day;
(b) is the value of the assets in that Subaccount at the close of business on
the immediately preceding business day after all transactions were made for that
day; and
(c) is a charge for each calendar day in that business day, as defined above,
corresponding to a charge not exceeding .90% yearly for mortality and expense
risks, plus any charge for that day for taxes or amounts set aside as a reserve
for taxes.
The net asset value of an investment company's shares held in each Subaccount
shall be the value reported to Us by that investment company.
<PAGE>
Your Value In Our Guaranteed Account. The amount You have in Our Guaranteed
Account at any time is equal to the amounts allocated and transferred to it,
plus the interest credited to it, minus amounts deducted, transferred and
partially surrendered from it.
We will credit Our Guaranteed Account with interest rates We determine. An
interest rate equal to the loan interest rate will be applied to the loaned
portion in Our Guaranteed Account which is considered preferred Policy loan. An
interest rate of not less than the Policy loan rate minus 2% will be credited to
the loaned amount in Our Guaranteed Account which is considered non-preferred
Policy loan. Any change in the interest rate We credit to the unloaned amount in
Our Guaranteed Account will be as described in "Changes In Policy Cost Factors"
on Page 20. The interest rate applied to either the loaned or unloaned amount in
Our Guaranteed Account will not be less than 4% per year, compounded annually.
At the end of each Policy Month We will credit interest on unloaned amounts in
Our Guaranteed Account as follows:
o On amounts that remain in Our Guaranteed Account for the entire Policy
Month from the beginning to the end of the Policy Month.
o On amounts allocated to Our Guaranteed Account during a Policy Month
that are Net Premium payments or loan repayments, from the date We
receive them to the end of the Policy Month.
o On amounts transferred to Our Guaranteed Account during a Policy Month
from the date of the transfer to the end of the Policy Month.
o On amounts deducted or partially surrendered from Our Guaranteed
Account during a Policy Month, from the beginning of the Policy Month,
or the date such amount is allocated to the Guaranteed Account, if
later, to the date of the deduction or partial surrender.
THE CASH SURRENDER VALUE OF THIS POLICY
Cash Surrender Value. The Cash Surrender Value on any date is equal to the
amount in Your Policy Account Value on that date minus any surrender charge.
Net Cash Surrender Value. The Net Cash Surrender Value is equal to the Cash
Surrender Value minus any Policy loan and accrued loan interest. You may give up
this Policy for its Net Cash Surrender Value at any time while the Insured
Person is living. You may do this by sending Us a written request for it and
this Policy to Our Administrative Office. We will compute the Net Cash Surrender
Value as of the date We receive Your request for it and this Policy at Our
Administrative Office. All insurance coverage under this Policy ends on such
date.
<PAGE>
Surrender Charges. If You give up this Policy for its Net Cash Surrender Value
or if it ends without value at the end of a Grace Period before the end of the
fourteenth Policy Year, We will subtract a surrender charge from Your Policy
Account Value. A table of maximum surrender charges is in the Policy Information
section.
An increase in the Face Amount will result in an additional fourteen year
surrender charge applicable to that increase. The additional surrender charge
period will begin on the effective date of the increase.
If the Face Amount is reduced before the end of the fourteenth Policy Year or
within fourteen years immediately following a Face Amount increase, because You
asked for a reduction in the Face Amount, We will also deduct a pro rata share
of any applicable surrender charge from Your Policy Account Value. Reductions
will first be applied against the most recent increase in the Face Amount. They
will then be applied to prior increases in the Face Amount in the reverse order
in which such increases took place, and then to the original Face Amount.
The amount of any pro rata surrender charge will be determined by the formula
A/B x C, where:
A = the amount of the reduction in the Face Amount.
B = the Face Amount immediately prior to the reduction.
C = the total surrender charge applicable to this policy immediately prior
to the reduction.
If there is an increase or reduction in the surrender charge shown on page 5, We
will send You a new table showing the revised surrender charges. We have filed a
detailed statement of the method of computing surrender charges with the
insurance supervisory official of the jurisdiction in which this Policy is
delivered.
Partial Surrender. A partial surrender will result in a reduction in the Cash
Surrender Value and in Your Policy Account Value equal to the partial surrender
amount as well as a reduction in Your Death Benefit. If Death Benefit Option I
is in effect, the partial surrender may also result in a decrease in the Face
Amount. However, We will not allow such partial surrender if it would reduce the
Face Amount to less than the minimum amount for which We would then issue this
Policy under Our rules. We will also not allow a partial surrender during the
first Policy Year or during the first 12 Policy Months immediately following an
increase in the Face Amount. After such periods and while the Insured Person is
living, You may ask for a partial surrender by written request to Our
Administrative Office no more than twice during a Policy Year. Your request will
be subject to Our approval based on Our rules in effect when We receive Your
request, and to the minimum partial surrender amount shown in the Policy
Information section. The partial surrender amount deducted from the Policy
Account Value is equal to the amount requested plus the expense charge shown in
the Table Of Expense Charges in the Policy Information section, as well as a
partial surrender charge. We have the right to decline a request for a partial
surrender.
You may tell Us how much of each partial surrender is to come from Your unloaned
value in Our Guaranteed Account and from Your values in each of the Subaccounts.
If You do not tell us, the partial surrender will be deducted from the Policy
Account Value based on the proportion that Your unloaned value in Our Guaranteed
Account and Your values in the Subaccounts bear to the total unloaned value in
Your Policy Account Value.
Such partial surrender and resulting reduction in the Death Benefit, in the Cash
Surrender Value and in Your Policy Account Value will take effect on the date We
receive Your written request for it at Our Administrative Office. We will send
You the applicable new page in the Policy Information section if a partial
surrender results in a reduction in the Face Amount. It will become a part of
this Policy. We may require You to return this Policy to Our Administrative
Office to make a change.
Partial Surrender Charge. The partial surrender charge is equal to the amount of
partial surrender plus the expense charge for a partial surrender divided by the
Net Cash Surrender Value immediately prior to the partial surrender and then
multiplied by the total surrender charge in effect at that time.
<PAGE>
HOW A LOAN CAN BE MADE
Policy Loans. After the first Policy Year You can get a loan on this Policy
while it has a loan value. This Policy will be the only security for the loan.
The initial loan and each additional loan must be for at least the minimum loan
amount shown in the Policy Information section. Any amount on loan is part of
Your Policy Account Value (see page 16). We refer to this as the loaned portion
of Your Policy Account Value.
Loan Value. The loan value on any date is 90% of the Net Cash Surrender Value on
that date. The amount of the loan may not be more than the loan value. If You
request an increase to an existing loan, the amount requested will be added to
the amount of the existing loan and accrued loan interest.
Your request for a Policy loan must be in writing to Our Administrative Office.
You may tell Us how much of the requested loan is to be allocated to Your
unloaned value in Our Guaranteed Account and Your value in each Subaccount. Such
values will be determined as of the date We receive Your request. If You do not
tell Us We will allocate the loan based on the proportion that Your unloaned
value in Our Guaranteed Account and Your values in the Subaccounts bear to the
total unloaned value in Your Policy Account Value.
The loaned portion of Your Policy Account Value will be maintained as a part of
Our Guaranteed Account. Thus, when a loaned amount is allocated to an
Subaccount, We will redeem units of that Subaccount sufficient in value to cover
the amount of the loan so allocated and transfer that amount to Our Guaranteed
Account.
Preferred Loan Value. In Policy Year 11 and thereafter, the loaned portion of
Your Policy Account Value which is equal to or less than Your Policy Account
Value minus the sum of the Premiums paid into this Policy will be considered
preferred Policy loan. The remaining loaned portion of Your Policy Account Value
will be considered non-preferred Policy loan.
These amounts will be recalculated on each Monthly Anniversary.
Loan Interest. Interest on a loan accrues daily at the loan interest rate shown
in Policy Information section. Loan interest is due on each Policy Anniversary.
If the interest is not paid when due, it will be added to Your Outstanding Loan
and allocated based on the proportion that Your unloaned value in Our Guaranteed
Account and Your values in the Subaccounts bear to the total unloaned value in
Your Policy Account Value. The unpaid interest will then be treated as part of
the loaned amount and will bear interest at the loan rate.
When unpaid loan interest is allocated to a Subaccount, We will redeem units of
that Subaccount sufficient in value to cover the amount of the interest so
allocated and transfer that amount to Our Guaranteed Account.
Loan Repayment. You may repay all or part of a Policy loan at any time while the
Insured Person is alive and this Policy is in force. We will assume that any
payment You make to Us while You have a loan and Your Policy is not in the Grace
Period is a loan repayment, unless You tell Us in writing that it is a Premium
payment. A loan repayment will reduce the loaned portion of Your Policy Account
and will then be allocated on the basis of the Premium allocation percentages
then in effect.
Failure to repay a Policy loan or to pay loan interest will not terminate this
Policy unless at the beginning of a Policy Month the Net Cash Surrender Value is
less than the total monthly deduction then due. In that case, the Grace Period
provision will apply (see page 12).
A Policy loan will have a permanent effect on Your benefits under this Policy
even if it is repaid.
<PAGE>
OUR SEPARATE ACCOUNT
The Separate Account is described on page 3. We established it and We maintain
it under the laws of the State of New York. Realized and unrealized gains and
losses from the assets of Our Separate Account are credited or charged against
it without regard to Our other income, gains, or losses. Assets are put in the
Separate Account to support this Policy and other variable life insurance
policies.
The assets of the Separate Account are Our property. The portion of its assets
equal to the reserves and other Policy liabilities with respect to the Separate
Account will not be chargeable with liabilities arising out of any other
business We conduct. We may transfer assets of the Separate Account in excess of
its reserves and other liabilities to another separate account or to Our general
account.
Subaccounts. Our Separate Account consists of Subaccounts. Each Subaccount
invests its assets in shares of a designated investment company or companies.
The Subaccounts that You chose for Your initial allocations are shown on the
application for this Policy, a copy of which is attached to this Policy. We may
from time to time make other Subaccounts available to you. We will provide You
with written notice of all material details including investment objectives and
all charges.
Subject to the prior approval of the insurance supervisory official of the
jurisdiction in which this Policy was delivered, We have the right to:
1. change, add or delete designated investment companies;
2. add or remove Subaccounts; and
3. combine any two or more Subaccounts.
Consistent with state law, We have the right to:
1. register or deregister the Separate Account under the Investment Company
Act of 1940;
2. run the Separate Account under the direction of a committee, and discharge
such committee at any time;
3. restrict or eliminate any voting rights of Policy Owners, or other persons
who have voting rights as to the Separate Account; and 4. operate the
Separate Account or one or more of the Subaccounts by making direct
investments or in any other form. If We do so, We may invest the assets of
the Separate Account or one or more of the Subaccounts in any legal
investments. We will rely upon Our own or outside counsel for advice in
this regard. Also, unless otherwise required by law or regulation, an
investment advisor or any investment Policy may not be changed without Our
consent. If required by law or regulation, the investment policy of a
Subaccount will not be changed by Us unless approved by the Superintendent
of Insurance of the State of New York or deemed approved in accordance with
such law or regulation. If so required, the process for getting such
approval is on file with the insurance supervisory official of the
jurisdiction in which this Policy is delivered.
If any of these changes result in a material change in the underlying
investments of a Subaccount, We will notify You of such change, as required by
law. If You have value in that Subaccount, We will transfer it at Your written
direction from that Subaccount (without charge) to another Subaccount or to Our
Guaranteed Account, and You may then change Your Premium allocation percentages.
OUR ANNUAL REPORT TO YOU
For each Policy Year We will send You a report for this Policy that shows the
current Death Benefit, the value You have in Our Guaranteed Account and the
value You have in each Subaccount of Our Separate Account, the Cash Surrender
Value and any Policy loan with the current loan interest rate. It will also show
the Premiums paid and any other information as may be required by the insurance
supervisory official of the jurisdiction in which this Policy is delivered.
<PAGE>
HOW BENEFITS ARE PAID
The Insurance Benefit, surrender value or Your Policy Account Value payable on
the Maturity Date will be paid immediately in one sum.
OTHER IMPORTANT INFORMATION
Your Contract With Us. This Policy is issued in consideration of the payment of
the initial Premium shown in the Policy Information section.
This Policy, and the attached copy of the initial application, supplemental
application and all subsequent applications to change this Policy, and all
additional Policy Information sections added to this Policy, make up the entire
contract. The rights conferred by this Policy are in addition to those provided
by applicable Federal and State laws and regulations.
Only Our executive officers can modify this contract or waive any of Our rights
or requirements under it. The person making these changes must put them in
writing and sign them.
Policy Changes - Applicable Tax Law. For You and the Beneficiary to receive the
tax treatment accorded to life insurance under Federal law, this Policy must
qualify initially and continue to qualify as life insurance under the Internal
Revenue Code or and successor law or regulation. Therefore, to assure this
qualification for You, We have reserved earlier in this Policy the right to
decline to accept Premium, in whole or in part, to decline to change Death
Benefit Options, to decline to change the Face Amount or to decline to make
partial surrenders that would cause this Policy to fail to qualify as a life
insurance contract as defined in Section 7702 of the Internal Revenue Code, as
amended. Further, We reserve the right to make changes in this Policy or its
riders (for example, in the Table Of Applicable Percentages on page 10) or to
require additional Premium or to make distributions from this Policy to the
extent We deem it necessary to continue to qualify this Policy as life
insurance. Any such changes will apply uniformly to all policies that are
affected and will be subject to the prior approval of the insurance supervisory
official of the jurisdiction in which the policy is delivered. You will be given
advance notice of such changes.
Changes In Policy Cost Factors. Changes in Policy cost factors (interest rates
We credit, cost of insurance deductions and expense charges) will be by class
and based upon changes in future expectations for such elements as: investment
earnings, mortality, persistency, expenses and taxes. Any change in Policy cost
factors will be determined in accordance with procedures and standards on file,
if required, with the insurance supervisory official of the jurisdiction in
which this Policy is delivered.
When The Policy Is Incontestable. We have the right to contest the validity of
this Policy based on material misstatements made in the initial application for
this Policy. We also have the right to contest the validity of any Policy change
or restoration based on material misstatements made in any application for that
change. However, We will not contest the validity of this Policy after it has
been in effect during the lifetime of the Insured Person for two years from the
Issue Date shown in the Policy Information section. We will not contest any
Policy change that requires evidence of insurability, or any restoration of this
Policy, after the change or restoration has been in effect for two years during
the Insured Person's lifetime.
No statement shall be used to contest a claim unless contained in an
application.
All statements made in an application are representations and not warranties.
See any additional benefit riders for modifications of this provision that apply
to them.
<PAGE>
What If Age Or Sex Has Been Misstated? If the Insured Person's age or sex has
been misstated on any application, the Death Benefit and any benefits provided
by riders to this Policy shall be those which would be purchased by the most
recent deduction for the cost of insurance, and the cost of any benefits
provided by riders, at the correct age and sex.
How The Suicide Exclusion Affects Benefits. If the Insured Person commits
suicide within two years after the Issue Date shown in the Policy Information
section, Our liability will be limited to the payment of a single sum. This sum
will be equal to the Premiums paid, minus any loan and accrued loan interest and
minus any partial surrender and minus the cost of any riders attached to this
Policy. If the Insured Person commits suicide within two years after the
effective date of a change that You asked for that increases the Death Benefit,
then Our liability as to the increase in amount will be limited to the payment
of a single sum equal to the monthly cost of insurance deductions made for such
increase plus the expense charge deducted for the increase (see page 11).
How We Measure Policy Periods And Anniversaries. We measure Policy Years, Policy
Months, and Policy Anniversaries from the Policy Date. Each Policy Month begins
on the same day as the Policy Date for each succeeding month, except that, for
those months not having such a day, it is the last day of that month.
How, When And What We May Defer. We may not be able to obtain the value of the
assets of the Subaccounts if: (1) the New York Stock Exchange is closed; or (2)
the Securities and Exchange Commission requires trading to be restricted or
declares an emergency. During such times, as to amounts allocated to the
Subaccounts, We may defer:
1. Determination and payment of partial surrenders;
2. Determination and payment of any Death Benefit in excess of the Face Amount;
3. Payments of loans;
4. Determination of the unit values of the Subaccounts; and
5. Any requested transfer or the transfer on the Allocation Date.
As to amounts allocated to Our Guaranteed Account, We may defer payment of any
surrender or loan amount for up to six months after We receive a request for it.
We will allow interest, at a rate of at least 4% a year, on any Net Cash
Surrender Value payment derived from Our Guaranteed Account that we defer for 10
days or more after We receive a request for it.
The Basis We Use For Computation. We provide Cash Surrender Values that are at
least equal to those required by law. If required to do so, We have filed with
the insurance supervisory official of the jurisdiction in which this Policy is
delivered a detailed statement of Our method of computing such values. We
compute reserves under this Policy by the Commissioners Reserve Valuation
Method.
We base minimum Cash Surrender Values and reserves on the Commissioners 1980
Standard Ordinary Male and Female, Smoker and Non-Smoker, Mortality Tables, Age
Last Birthday. We also use these tables as the basis for determining maximum
insurance costs, taking Account of sex, Attained Age, rating class and Smoker or
Non-Smoker status of the Insured Person. We use an effective annual interest
rate of 4%.
Policy Illustrations. Upon request We will give You an illustration of the
future benefits under this Policy based upon both guaranteed and current cost
factor assumptions. However, if You ask Us to do this more than once in any
Policy Year, We reserve the right to charge You a reasonable fee for this
service.
Policy Changes. You may add additional benefit riders or make other changes,
subject to Our rules at the time of change.
<PAGE>
Your Exchange Right. You may exchange this Policy while it is in force for a new
flexible premium fixed benefit life insurance policy on the life of the Insured
Person, without evidence of insurability. This exchange may be made either:
1. within 24 months after the Issue Date while this Policy is in force;
or
2. within 24 months after any increase in the Face Amount of this Policy;
or
3. within 60 days of the effective date of a material change in the
investment policy of a Subaccount, or within 60 days of the
notification of such change, if later. In the event of such a change,
the Company will notify You and give You information on the options
available.
When an exchange is requested, We accomplish this by transferring all monies to
the Guaranteed Account. There is no charge for this transfer. Once this option
is exercised, Your entire Policy Account Value must remain in the Guaranteed
Account for the life of this Policy. The Face Amount in effect at the time of
the exchange will remain unchanged. The Policy Date, Issue Date and issue age of
the Insured Person will remain unchanged. The Owner and Beneficiary will remain
the same as were recorded immediately before the exchange.
Dollar Cost Averaging. Using Our Dollar Cost Averaging Plan Request Form, You
may elect automatic monthly transfers from the Money Market Subaccount into
Subaccounts for a specified dollar amount or specified number of months, not in
excess of 24, in accordance with the following:
1. the allocation to the Subaccounts will be based on the premium allocation
that is in effect at the time of each transfer;
2. if you elect Dollar Cost Averaging in conjunction with Your application for
this Policy, the automatic transfers will begin on the first Monthly
Anniversary following the end of the Free Look Period;
3. if you elect Dollar Cost Averaging after this Policy has been issued, the
automatic transfers will begin on the second Monthly Anniversary following
Our receipt of Your election;
4. this option may be elected at any time provided there is a minimum balance
of $2,000 in the Money Market Subaccount;
5. all premiums received after the date you elect Dollar Cost Averaging will
be applied to the Money Market Subaccount for the purpose of Dollar Cost
Averaging.
If you elect to transfer a specific dollar amount each month, automatic
transfers will continue until Your Money Market Subaccount is depleted. If you
elect to transfer based on a specific number of months, each month We will
transfer a fraction of the balance in the Money Market Fund equal to one divided
by the number of months remaining in the period. For example, if You elect to
transfer over a 12 month period, the first transfer will be1/12th of the balance
in the Money Market Fund, the second transfer will be 1/11th of the balance, the
third transfer will be 1/10th of the balance and so on until the end of the
requested period.
Automatic monthly transfers will continue until one of the following conditions
occur:
1. the balance in the Money Market subaccount is depleted;
2. We receive Your written request to cancel future transfers;
3. We receive notification of the death of the Insured Person;
4. this Policy lapses.
<PAGE>
AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF NEW YORK
80 PINE STREET
NEW YORK, NEW YORK 10005
Flexible Premium Variable Life Insurance Policy. Insurance payable upon death
before the Maturity Date while this Policy is in force. Policy Account Value
payable on Maturity Date. Adjustable Death Benefit. Premiums may be paid while
Insured Person is living and before the Maturity Date. Net Cash Surrender Value
must be sufficient to keep the Policy in force. Values provided by this Policy
are based on declared interest rates, and on the investment performance of the
Subaccounts. Policy values are not guaranteed as to dollar amount. Investment
options are described on page 14. This is a non-participating Policy.
EXHIBIT C(2)
Form of Certificate of Group Variable Universal Life (2VUL1294NY-C)
<PAGE>
American International Life Assurance
Company of New York
80 Pine Street
New York, New York 10270
A capital stock company
We agree to pay the Insurance Benefit of this Certificate and to provide its
other benefits and rights in accordance with its provisions.
Flexible Premium Variable Life Insurance Certificate
This is a flexible premium variable life insurance certificate. You can,
within limits: o increase or decrease the Face Amount; o pay Premium at
any time and in any amount; o change the Death Benefit Option; o change
the allocation of Net Premiums among Your investment options; and o
transfer amounts among Your investment options.
All of these rights and benefits are subject to the terms and conditions of this
Certificate. All requests for Certificate changes are subject to Our approval
and may require evidence of insurability.
We will put Your Net Premiums paid prior to the Allocation Date into the Money
Market Subaccount. On the Allocation Date all such Premiums will then be
allocated in accordance with directions contained in Your Certificate
application.
The portion of Your Certificate Account Value that is in a Subaccount will vary
up or down depending on the unit value of such Subaccount, which in turn depends
on the investment performance of the corresponding portfolio of a designated
investment company. There are no minimum guarantees as to such portion of Your
Certificate Account Value.
The portion of Your Certificate Account Value that is in Our Guaranteed Account
will accumulate, after deductions, at rates of interest We determine. Such rates
will not be less than 4% per year, compounded annually.
The amount and duration of the Death Benefit may be variable or fixed as
described in this Certificate.
Please Read This Certificate With Care. A Table Of Contents is on Page 2. A
Certificate summary is also on Page 2.
Right To Examine This Certificate. You may examine this Certificate and if for
any reason You are not satisfied with it You may cancel it by returning this
Certificate with a written request for cancellation to Our Administrative Office
no later than the later of (a) 10 days after You receive it; or (b) 45 days
after the application was signed. If You do this, We will refund the Premiums
that were paid on this Certificate.
Elizabeth M. Tuck R J O'Connell
/s/ Elizabeth M. Tuck /s/ R J O'Connell
Secretary President
<PAGE>
CONTENTS
Certificate Summary 2
Certificate Information 3
Table Of Expense Charges 4
Table Of Maximum Surrender Charges 5
Table Of Guaranteed Maximum Cost Of Insurance Rates 6
Definitions 7
Certificate Owner And Beneficiary Provisions 9
The Benefits We Pay 9
Changing The Face Amount Or The Death Benefit Option 11
The Premiums You Pay 12
Your Certificate Account Value And How It Works 13
Your Investment Options 14
Your Certificate Account Value 15
The Cash Surrender Value Of This Certificate 16
How A Loan Can Be Made 18
Our Separate Account 19
Our Annual Report To You 19
How Benefits Are Paid 20
Other Important Information 20
A copy of the application for this Certificate and any additional benefit riders
are at the back of this Certificate.
CERTIFICATE SUMMARY
The Premiums You pay into this Flexible Premium Variable Life Insurance
Certificate, after deductions are made in accordance with the Table Of
Expense Charges in the Certificate Information section, are put into Your
Certificate Account Value. Amounts in Your Certificate Account Value are
allocated at Your direction to one or more Subaccounts and to Our
Guaranteed Account.
The Subaccounts invest in shares of registered investment companies whose
value is subject to market fluctuations and investment risk. There is no
guarantee of principal or investment experience.
The Guaranteed Account earns interest at rates We declare in advance. The
rates are guaranteed not to be less than 4% per year, compounded annually.
The principal, after deductions, is also guaranteed.
The duration of life insurance coverage depends upon the Net Cash Surrender
Value.
If Death Benefit Option I is in effect, the Death Benefit is the Face
Amount, and the amount of the Death Benefit is fixed except when it is a
percentage of Your Certificate Account Value. If Death Benefit Option II is
in effect, the Death Benefit is the Face Amount plus Your Certificate
Account Value. The amount of the Death Benefit under Death Benefit Option
II is variable.
We make monthly deductions from Your Certificate Account Value to cover the
cost of the benefits provided by this Certificate. If You give up this
Certificate for its Net Cash Surrender Value, make a Partial Surrender,
reduce the Face Amount, or if this Certificate ends without value at the
end of the Grace Period, We may deduct a surrender charge from Your
Certificate Account Value.
This is only a summary of what this Certificate provides. You should read
the entire Certificate carefully. Its terms govern Your rights and Our
obligations.
<PAGE>
CERTIFICATE INFORMATION
GROUP POLICYHOLDER [Direct Consumer's Group Trust Dated April 8, 1996]
GROUP POLICY NUMBER 12345
CERTIFICATE OWNER [JOHN DOE]
CERTIFICATE NUMBER [54321]
CERTIFICATE DATE [JANUARY 1, 1998]
ISSUE DATE [JANUARY 1, 1998]
INSURED PERSON [JOHN DOE]
AGE [35] SEX [MALE] [N O N S M O K E R]
FACE AMOUNT [$100,000]
DEATH BENEFIT OPTION [I] (SEE PAGE 10)
BENEFICIARY [JANE DOE]
INSURED PERSON'S
STATE OF RESIDENCE [NEW YORK]
SEPARATE ACCOUNT [VARIABLE ACCOUNT B]
PARTIAL SURRENDER MINIMUM PARTIAL SURRENDER IS $500
CERTIFICATE LOAN MINIMUM LOAN IS $500
CERTIFICATE LOAN
INTEREST RATE 8%
TRANSFER MINIMUM TRANSFER AMOUNT IS $250
AN INITIAL PREMIUM OF [$800.00] IS DUE ON OR BEFORE DELIVERY OF THE CERTIFICATE.
[THE PLANNED PERIODIC PREMIUM OF [$800.00] IS PAYABLE [QUARTERLY]]. THE MINIMUM
PREMIUM WHICH WE WILL ACCEPT AT ANY TIME IS $50.
THE LOANED PORTION OF YOUR CERTIFICATE ACCOUNT VALUE IS ELIGIBLE FOR INTEREST AT
6%. HOWEVER, AT THE BEGINNING OF THE 11TH CERTIFICATE YEAR AND THEREAFTER, THE
PORTION OF THE LOAN WHICH IS CONSIDERED PREFERRED WILL BE ELIGIBLE FOR INTEREST
AT 8%. THIS IS DESCRIBED IN THE PROVISIONS ENTITLED YOUR VALUE IN OUR GUARANTEED
ACCOUNT ON PAGE 16 AND PREFERRED LOAN VALUE ON PAGE 18.
ANY ADDITIONAL BENEFIT ARE RIDERS LISTED BELOW.
THE PREMIUM SHOWN ABOVE MAY NOT BE SUFFICIENT TO CONTINUE THE CERTIFICATE AND
LIFE INSURANCE COVERAGE TO THE MATURITY DATE, WHICH IS THE CERTIFICATE
ANNIVERSARY FOLLOWING THE INSURED PERSON'S ATTAINED AGE 99. THE PERIOD FOR WHICH
THE CERTIFICATE AND COVERAGE WILL CONTINUE IN FORCE WILL DEPEND ON: (1) THE
TIMING, FREQUENCY, AND AMOUNT OF PREMIUM; (2) CHANGES IN THE FACE AMOUNT AND THE
DEATH BENEFIT OPTIONS; (3) CHANGES IN THE INTEREST RATES CREDITED TO OUR
GUARANTEED ACCOUNT AND IN THE INVESTMENT PERFORMANCE OF THE SUBACCOUNTS; (4)
CHANGES IN THE MONTHLY COST OF INSURANCE DEDUCTIONS FROM THE CERTIFICATE ACCOUNT
VALUE FOR THIS CERTIFICATE AND ANY BENEFITS PROVIDED BY RIDERS TO THIS
CERTIFICATE; AND (5) LOAN AND PARTIAL SURRENDER ACTIVITY.
<PAGE>
CERTIFICATE INFORMATION CONTINUED
TABLE OF EXPENSE CHARGES
DEDUCTIONS FROM PREMIUMS:
CHARGE FOR APPLICABLE TAXES (OTHER THAN TAXES DISCUSSED ON PAGE 15):
2.00% OF EACH PREMIUM PAYMENT. THIS AMOUNT IS SUBTRACTED FROM EACH PREMIUM
PAYMENT. WE RESERVE THE RIGHT TO CHANGE THIS PERCENTAGE TO CONFORM TO
CHANGES IN THE LAW OR IF THE OWNER CHANGES PLACE OF RESIDENCE.
PREMIUM CHARGE.
5.00% OF EACH PREMIUM. WE RESERVE THE RIGHT TO CHANGE THIS CHARGE BUT IT
WILL NEVER BE MORE THAN 5.00%.
DEDUCTIONS FROM YOUR CERTIFICATE ACCOUNT VALUE:
ADDITIONAL FIRST YEAR ADMINISTRATIVE CHARGE:
$20.00 IS DEDUCTED AT THE BEGINNING OF EACH CERTIFICATE MONTH DURING THE
FIRST CERTIFICATE YEAR. WE RESERVE THE RIGHT TO CHANGE THIS CHARGE BUT IT
WILL NEVER BE MORE THAN $25.00 A MONTH.
ADMINISTRATIVE CHARGE:
$7.50 IS DEDUCTED AT THE BEGINNING OF EACH CERTIFICATE MONTH DURING EACH
CERTIFICATE YEAR. WE RESERVE THE RIGHT TO CHANGE THIS CHARGE BUT IT WILL
NEVER BE MORE THAN $15.00 A MONTH. CHANGES WILL BE AS DESCRIBED IN "CHANGES
IN CERTIFICATE COST FACTORS" ON PAGE 20.
PARTIAL SURRENDER;
$25.00 IS DEDUCTED WHENEVER THERE IS A PARTIAL SURRENDER. THERE ALSO MAY BE
A PARTIAL SURRENDER CHARGE AS DESCRIBED IN "PARTIAL SURRENDER" ON PAGE 17.
INCREASES IN FACE AMOUNT THAT YOU ASK FOR:
$20.00 A MONTH IS DEDUCTED FOR THE 12 MONTHS IMMEDIATELY FOLLOWING THE
EFFECTIVE DATE OF THE INCREASE. WE RESERVE THE RIGHT TO CHANGE THIS
CHARGE BUT IT WILL NEVER BE MORE THAN $25.00 A MONTH.
TRANSFERS:
WE RESERVE THE RIGHT TO DEDUCT UP TO $25.00 FOR EACH TRANSFER OF AMOUNTS
AMONG YOUR INVESTMENT OPTIONS. HOWEVER WE WILL NOT MAKE A CHARGE FOR THE
FIRST 6 TRANSFERS IN ANY CERTIFICATE YEAR.
<PAGE>
CERTIFICATE INFORMATION CONTINUED
TABLE OF MAXIMUM SURRENDER CHARGES
CERTIFICATE MINIMUM CERTIFICATE MINIMUM
YEAR FACTOR CHARGE YEAR FACTOR CHARGE
1 100% $1,086.94 9 60% $652.16
2 100% $1,086.94 10 50% $543.47
3 100% $1,086.94 11 40% $434.78
4 100% $1,086.94 12 30% $326.08
5 100% $1,086.94 13 20% $217.39
6 90% $978.25 14 10% $108.69
7 80% $869.55 15 0% $0.00
8 70% $760.86
A SURRENDER CHARGE WILL BE SUBTRACTED FROM YOUR CERTIFICATE ACCOUNT VALUE IF
THIS CERTIFICATE IS SURRENDERED FOR ITS NET CASH SURRENDER VALUE OR IF THIS
CERTIFICATE TERMINATES WITHIN THE FIRST FOURTEEN CERTIFICATE YEARS. A PARTIAL
SURRENDER CHARGE WILL ALSO BE SUBTRACTED FROM YOUR CERTIFICATE ACCOUNT VALUE IF
YOU MAKE A PARTIAL SURRENDER OF THIS CERTIFICATE. THE MAXIMUM CHARGE AT ANY TIME
IN A CERTIFICATE YEAR IS EQUAL TO THE LESSER OF (1) THE CHARGE SHOWN IN THE
TABLE ABOVE FOR THAT YEAR; OR (2) AN AMOUNT EQUAL TO (A) TIMES (B) WHERE (A) IS
25% OF THE FIRST $1,025 IN PREMIUM RECEIVED DURING THE FIRST CERTIFICATE YEAR,
PLUS 4% OF ALL OTHER PREMIUM RECEIVED DURING THE FIRST CERTIFICATE YEAR; AND (B)
IS THE FACTOR IN THE TABLE ABOVE FOR THAT YEAR.
THIS TABLE ASSUMES NO FACE AMOUNT INCREASES. SEE PAGE 17 FOR A DESCRIPTION OF
SURRENDER CHARGES FOR FACE AMOUNT INCREASES.
IF THE FACE AMOUNT IS REDUCED WITHIN THE FIRST FOURTEEN CERTIFICATE YEARS, A PRO
RATA SHARE OF THE APPLICABLE SURRENDER CHARGE AT THAT TIME MAY BE DEDUCTED FROM
YOUR CERTIFICATE ACCOUNT VALUE. SEE PAGE 17 FOR A DESCRIPTION OF THE PRO RATA
SURRENDER CHARGE.
THE PREMIUM SHOWN ABOVE MAY NOT BE SUFFICIENT TO CONTINUE THE CERTIFICATE AND
LIFE INSURANCE COVERAGE TO THE MATURITY DATE, WHICH IS THE CERTIFICATE
ANNIVERSARY FOLLOWING THE INSURED PERSON'S ATTAINED AGE 99. THE PERIOD FOR WHICH
THE CERTIFICATE AND COVERAGE WILL CONTINUE IN FORCE WILL DEPEND ON: (1) THE
TIMING, FREQUENCY, AND AMOUNT OF PREMIUM; (2) CHANGES IN THE FACE AMOUNT AND THE
DEATH BENEFIT OPTIONS; (3) CHANGES IN THE INTEREST RATES CREDITED TO OUR
GUARANTEED ACCOUNT AND IN THE INVESTMENT PERFORMANCE OF THE SUBACCOUNTS; (4)
CHANGES IN THE MONTHLY COST OF INSURANCE DEDUCTIONS FROM THE CERTIFICATE ACCOUNT
VALUE FOR THIS CERTIFICATE AND ANY BENEFITS PROVIDED BY RIDERS TO THIS
CERTIFICATE; AND (5) LOAN AND PARTIAL SURRENDER ACTIVITY.
<PAGE>
CERTIFICATE INFORMATION CONTINUED
TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES
GUARANTEED MAXIMUM MONTHLY RATES PER $1,000
OF NET AMOUNT AT RISK (SEE PAGE 13)
Attained Monthly Attained Monthly
Age Rate Age Rate
-------- -------- -------- --------
35 0.14419 68 2.49957
36 0.15169 69 2.75591
37 0.16169 70 3.04592
38 0.17253 71 3.37720
39 0.18420 72 3.75992
40 0.19837 73 4.19334
41 0.21338 74 4.67004
42 0.22922 75 5.18003
43 0.24673 76 5.71919
44 0.26590 77 6.28340
45 0.28758 78 6.87612
46 0.31093 79 7.51607
47 0.33595 80 8.22375
48 0.36347 81 9.01810
49 0.39349 82 9.91569
50 0.42768 83 10.91280
51 0.46688 84 11.99040
52 0.51193 85 13.12418
53 0.56365 86 14.29994
54 0.62122 87 15.49991
55 0.68547 88 16.71910
56 0.75557 89 17.97489
57 0.82985 90 19.28574
58 0.91250 91 20.68243
59 1.00518 92 22.21791
60 1.10873 93 24.04369
61 1.22400 94 26.50346
62 1.35684 95 30.20740
63 1.50727 96 36.35803
64 1.67447 97 47.21180
65 1.85761 98 66.20701
66 2.05588 99 90.90909
67 2.26847
<PAGE>
DEFINITIONS
We, Our, Us. American International Life Assurance Company of New York.
Administrative Office. 80 Pine Street, New York, NY 10005.
Allocation Date. The first business day following the completion of the Right To
Examine This Certificate period.
Attained Age. The Insured Person's age on the Certificate Date plus the number
of full years since the Certificate Date.
Beneficiary. The person(s) who is entitled to the Insurance Benefit of this
Certificate.
Cash Surrender Value. Certificate Account Value less any applicable surrender
charge that would be deducted upon surrender. See page 5.
Certificate. This Flexible Premium Variable Life Insurance contract between
American International Life Assurance Company of New York and You.
Certificate Account Value. The total amounts in the accounts credited to a
Certificate. The Certificate Account Value is described on page 15.
Certificate Anniversary. An anniversary of the Certificate Date.
Certificate Date. The first date as of which We have received the initial
Premium and an application in good order. If a Certificate is issued, insurance
is effective as of the Certificate Date.
Certificate Loan Account. The portion of the Certificate Account Value held in
the Guaranteed Account as collateral for Certificate loans.
Certificate Month. The month commencing with the Certificate Date and ending on
the day before the first Monthly Anniversary, or any following month commencing
with a Monthly Anniversary and ending on the day before the next Monthly
Anniversary.
Certificate Year. The year commencing with the Certificate Date and ending on
the day before the first Certificate Anniversary, or any following year
commencing with a Certificate Anniversary and ending on the day before the next
Certificate Anniversary.
Death Benefit. The amount of money payable to the Beneficiary if the Insured
Person dies while the Certificate is in force. The Death Benefit is described on
page 10.
Face Amount. The amount of insurance You have specified and from which the death
benefit will be determined. The initial Face Amount is shown in the Certificate
Information section.
Grace Period. The period of time following a Monthly Anniversary during which
this Certificate will continue in force while the Net Cash Surrender Value is
not sufficient to cover the total monthly deduction then due.
Guaranteed Account. An account within the general account which consists of all
of Our assets other than the assets of the Separate Account and any of Our other
separate accounts.
Insured Person. The person whose life is covered by the Certificate.
Issue Date. The date the Certificate is issued. It may be a later date than the
Certificate Date if the initial Premium is received at Our Administrative Office
and invested before underwriting has been completed. Once issued, Certificate
coverage is retroactive to the Certificate Date. The Issue Date is used to
measure contestability periods. See page 20.
Maturity Date. The Certificate Anniversary following the Insured Person's
attained age 99.
Monthly Anniversary. The same day as the Certificate Date for each succeeding
month, except that, for those months not having such a day, it is the last day
of that month.
Net Cash Surrender Value. The Cash Surrender Value less any Outstanding Loan.
Net Premium. A Premium less any expense charges deducted from the Premium. See
page 4.
Outstanding Loan. The total amount of Certificate loans including both principal
and accrued interest.
Owner, You, Your. The person who purchased this Certificate as shown in the
application, unless later changed. The Owner may be someone other than the
Insured Person.
Planned Periodic Premium. The amount of Premium You have selected to pay at the
frequency shown in the Certificate Information section.
Premium. The total consideration paid by you in exchange for our obligations
under this Certificate. The initial Premium is due on or before delivery of this
Certificate.
Separate Account. Variable Account B, a separate investment account of American
International Life Assurance Company of New York.
Subaccount. A division of the Separate Account established to invest in a
particular fund and available for investment under the Certificate.
Valuation Date. Each day the New York Stock Exchange is open for business.
Valuation Period. A period commencing with the close of business on the New York
Stock Exchange on any particular day and ending at the close of business on the
New York Stock Exchange for the next succeeding Valuation Date.
<PAGE>
CERTIFICATEOWNER AND BENEFICIARY PROVISIONS
Owner. The Owner of this Certificate is the Insured Person unless otherwise
stated in the application, or later changed.
As the Owner, You are entitled to exercise all the rights of this Certificate
while the Insured Person is living. To exercise a right, You do not need the
consent of anyone who has only a conditional or future ownership interest in
this Certificate.
Beneficiary. The Beneficiary is as stated in the application, unless later
changed. The Beneficiary is entitled to the Insurance Benefit of this
Certificate. One or more beneficiaries for the Insurance Benefit can be named in
the application. If more than one Beneficiary is named, they can be classed as
primary or contingent. If two or more persons are named in a class, their shares
in the benefit can be stated. The stated shares in the Insurance Benefit will be
paid to any primary beneficiaries who survive the Insured Person. If no primary
beneficiaries survive, payment will be made to any surviving contingent
beneficiaries. Beneficiaries who survive in the same class will share the
Insurance Benefit equally, unless You have made another arrangement with us.
If there is no designated Beneficiary living at the death of the Insured Person,
We will pay the Insurance Benefit to the Owner, if living, otherwise to the
Owner's estate.
Changing The Owner Or Beneficiary. While the Insured Person is living, You may
change the Owner or Beneficiary by written notice in a form satisfactory to us.
(You can get such a form from Our agent or by writing to Us at Our
Administrative Office.) The change will take effect on the date You sign the
notice. But, it will not apply to any payment We make or other action We take
before We receive the notice. If You change the Beneficiary, any previous
arrangement You made as to a payment option for benefits is canceled. You may
choose a payment option for the new Beneficiary in accordance with "How Benefits
Are Paid" on page 20.
Assignment. You may assign this Certificate, if We agree. In any event, We will
not be bound by an assignment unless We have received it in writing at Our
Administrative Office. Your rights and those of any other person referred to in
this Certificate will be subject to the assignment. We assume no responsibility
for the validity of an assignment. An absolute assignment will be considered as
a change of ownership to the assignee.
THE BENEFITS WE PAY
Insurance Benefit. We will pay the Insurance Benefit of this Certificate to the
Beneficiary when We receive at Our Administrative Office (1) proof satisfactory
to Us that the Insured Person died before the Maturity Date and while this
Certificate was in force; and (2) all other requirements We deem necessary
before such payment may be made. The Insurance Benefit includes the following
amounts, which We will determine as of the date of the Insured Person's death:
the Death Benefit described below;
plus any other benefits then due from riders to this Certificate;
minus any Outstanding Loan and accrued loan interest;
minus any overdue deductions from Your Certificate Account Value if the
Insured Person dies during a Grace Period.
We will add interest to the resulting amount for the period from the date of
death to the date of payment. We will compute the interest at a rate We
determine, but not less than the rate required by any applicable law. Payment of
the Insurance Benefit may also be affected by other provisions of this
Certificate. See Page 20 and 21, where We specify Our right to contest the
Certificate, the suicide exclusion, and what happens if age or sex has been
misstated. Special exclusions or limitations (if any) are listed in the
Certificate Information section.
<PAGE>
Death Benefit. The Death Benefit will be determined under either Death Benefit
Option I or II below, whichever You have chosen and is in effect at such time.
Under either Death Benefit Option, the duration of insurance coverage depends
upon Your Net Cash Surrender Value.
Under Death Benefit Option I, the Death Benefit is the greater of the Face
Amount, or a percentage of the Certificate Account Value on the date of death
(see Table Of Applicable Percentages, below). Under this Option, the amount of
the Death Benefit is fixed, unless it is determined by such a percentage.
Under Death Benefit Option II, the Death Benefit is the greater of the Face
Amount plus the Certificate Account Value on the date of death, or a percentage
of the Certificate Account Value on the date of death (see Table Of Applicable
Percentages, below). Under this Option, the amount of the Death Benefit is
variable.
The following table is used in determining the Death Benefit under Death Benefit
Options I and II above. For Attained Ages not shown, the applicable percentages
shall decrease by a ratable portion for each full year.
Table Of Applicable Percentages
Attained Age Percentage
40 Or Less 250%
45 215%
50 185%
55 150%
60 130%
70 115%
75 through 90 105%
95 through 99 100%
Maturity Benefit. If the Insured Person is living on the Maturity Date defined
in the Certificate Information section, We will pay You Your Certificate Account
Value on that date minus any Outstanding Loan and accrued loan interest and this
Certificate will then end.
<PAGE>
CHANGING THE FACE AMOUNT OR THE DEATH BENEFIT OPTION
At any time after the first Certificate Year while this Certificate is in force,
You may change the Death Benefit Option or the Face Amount by written request to
Us at Our Administrative Office, subject to Our approval and the following:
1. You may ask Us to increase the Face Amount if You provide evidence
satisfactory to Us of the insurability of the Insured Person. If the Face
Amount is increased, then the cost of insurance rate for the amount of the
increase will be based on the rating class of the Insured Person on the
date of the increase, and the Insured Person's sex and Attained Age. Any
increase You ask for must be at least $10,000. There is a charge for such
increase which is shown in the Certificate Information section. We will
deduct the charge from Your Certificate Account Value beginning with the
date the increase takes effect. Such deduction will be made in accordance
with the "Treatment Of Deductions" provision on Page 13. If You increase
the Face Amount, an additional fourteen year surrender charge may apply to
that increase if any or all of that increase is surrendered before the end
of the fourteenth year from the effective date of increase. We will not
allow You to increase the Face Amount more than once during any Certificate
Year, nor will We allow You to increase the Face Amount after the Insured
Person's 75th birthday.
2. You may ask Us to reduce the Face Amount but not to less than the minimum
Face Amount for which We would then issue this Certificate under Our rules.
Any such reduction in the Face Amount may not be less than $5,000 or,
during the first five Certificate Years, more than 10% of the original Face
Amount. If You do this before the end of the fourteenth year or before the
end of the fourteenth year following an increase in the Face Amount, We may
deduct from Your Certificate Account Value a pro rata share of the
applicable surrender charge (see Page 17). Reductions will first be applied
against the most recent increase in the Face Amount. They will then be
applied to prior increases in the Face Amount in the reverse order in which
such increases took place, and then to the original Face Amount. We will
not allow You to reduce the Face Amount in the first year immediately
following the effective date of an increase in the Face Amount or more than
once during any Certificate Year.
3. You can change Your Death Benefit Option. We may require that You submit
evidence, satisfactory to Us that the Insured Person is insurable. If You
ask Us to change from the Death Benefit Option I to Death Benefit Option
II, We will decrease the Face Amount by the amount in Your Certificate
Account Value on the date the change takes effect. However, We reserve the
right to decline to make such change if it would reduce the Face Amount
below the minimum Face Amount for which We would then issue this
Certificate under Our rules. If You ask Us to change from Death Benefit
Option II to Death Benefit Option I, We will increase the Face Amount by
the amount in Your Certificate Account Value on the date the change takes
effect. Such decreases and increases in the Face Amount are made so that
the Death Benefit remains the same on the date the change takes effect.
However, if Your Death Benefit is determined by a percentage multiple of
the Certificate Account Value, there may be an increase in the Death
Benefit.
4. The change will take effect at the beginning of the Certificate Month that
coincides with or next follows the date We approve Your request.
5. We reserve the right to decline to make any change that We determine would
cause this Certificate to fail to qualify as life insurance as defined in
Section 7702 of the Internal Revenue Code, as amended (see Page 20).
6. You may ask for a change by completing an Application For Change, which
You can get from Our agent or by writing to Us at Our Administrative
Office. A copy of Your Application For Change will be attached to the new
Certificate Information section that We will issue when the change is
made. The new section and the Application For Change will become a part of
this Certificate. We will require You to return this Certificate to Our
Administrative Office to make a Certificate change.
<PAGE>
THE PREMIUMS YOU PAY
The initial Premium shown in the Certificate Information section is due on or
before delivery of this Certificate. No insurance will take effect before the
initial Premium is paid. Other Premiums may be paid at any time while this
Certificate is in force and before the Maturity Date at Our Administrative
Office.
We will send Premium notices to You for the Planned Periodic Premium shown in
the Certificate Information section. You may skip Planned Periodic Premiums.
However, this may adversely affect the duration of the Death Benefit and Your
Certificate's values.
Limits. Each Premium after the initial one must be at least the minimum Premium
amount shown in the Certificate Information section. We reserve the right to
limit the amount of any Premium which is in addition to the Planned Periodic
Premiums.
We also reserve the right not to accept Premium (in a Certificate Year) that We
determine would cause this Certificate to fail to qualify as a life insurance
contract as defined in Section 7702 of the Internal Revenue Code, as amended
(see Page 20).
Grace Period. The duration of insurance coverage depends upon the Net Cash
Surrender Value being sufficient to cover the total monthly deductions described
on Page 13. If the Net Cash Surrender Value at the beginning of any Certificate
Month is less than such deductions for that month, We will send a written notice
within 30 days to You and any assignee on Our records at last known addresses
stating that a Grace Period of 61 days has begun, starting with the beginning of
that Certificate Month. The notice will also state the amount of premium which
would increase the Net Cash Surrender Value sufficiently to cover total monthly
deductions for 3 months if no Certificate changes were made. If we do not
receive the requested premium amount before the end of the Grace Period, this
Certificate will end without value.
If the Insured Person dies during a Grace Period, We will pay the Insurance
Benefit as described on Page 9.
Reinstatement Of Your Certificate. If this Certificate has ended without value,
You may reinstate the Certificate while the Insured Person is alive if you:
1. Ask for reinstatement of the Certificate within 3 years from the end
of the Grace Period; and
2. Provide evidence of insurability satisfactory to us; and
3. Pay a Premium sufficient to cover (i) the total monthly administrative
charges from the beginning of the Grace Period to the effective date
of reinstatement; (ii) total monthly deductions for 3 months,
calculated from the effective date of reinstatement; and (iii) the
charge for applicable taxes, the Premium charge, and any increase in
surrender charges associated with this payment. We will determine the
required Premium as if no interest or investment performance were
credited to or charged against Your Certificate Account Value; and
4. Repay or reinstate any Certificate loan which existed on the date the
Certificate ended.
The effective date of the reinstatement of this Certificate will be the
beginning of the Certificate Month which coincides with or next follows the date
We approve Your request.
From the required Premium We will deduct the charge for applicable taxes and the
Premium charge. The Certificate Account Value, Certificate loan and surrender
charges applicable at the time of reinstatement will be those that were in
effect on the date this Certificate lapsed.
We will start to make monthly deductions again as of the effective date of
reinstatement. The monthly administrative charges from the beginning of the
Grace Period to the effective date of reinstatement will be deducted from the
Certificate Account Value as of the effective date of reinstatement.
<PAGE>
YOUR CERTIFICATE ACCOUNT VALUE AND HOW IT WORKS
Premium. When We receive Your Premium, We subtract the expense charges shown in
the table in the Certificate Information section. We put the balance (the Net
Premium) into Your Certificate Account Value as of the date We receive the
Premium at Our Administrative Office, and before any deductions from Your
Certificate Account Value as of the Certificate Date if it is later than the
date of receipt. No Premiums will be applied to Your Certificate Account Value
until the full initial Premium, as shown on Your application, is received at Our
Administrative Office.
Monthly Deductions. At the beginning of each Certificate Month We make a
deduction from Your Certificate Account Value to cover monthly administrative
charges and to provide insurance coverage, subject to the Grace Period
provision. Such deduction for any Certificate Month is the sum of the following
amounts determined as of the beginning of that month:
the monthly administrative charges;
the monthly cost of insurance for the Insured Person;
the monthly cost of any benefits provided by riders to this Certificate.
The monthly cost of insurance is the sum of a) Our current monthly cost of
insurance rate times the net amount at risk at the beginning of the Certificate
Month divided by $1,000; plus b) any extra charge per $1,000 of Face Amount
shown in the Certificate Information section, times the Face Amount at the
beginning of the Certificate Month divided by $1,000. If the Death Benefit is
the Face Amount, then the net amount at risk is the Death Benefit divided by
1.0032737 minus the amount in Your Certificate Account Value at that time.
However, if the Death Benefit is a percentage of the Account Value of this
Certificate, then the net amount at risk is the Death Benefit minus the amount
in Your Certificate Account Value at that time. The cost of insurance rate is
based on the Face Amount and on the sex, Attained Age, rating class, and smoker
or non-smoker status of the Insured Person.
We will determine cost of insurance rates from time to time. Any change in the
cost of insurance rates We use will be as described in "Changes In Certificate
Cost Factors" on page 20. They will never be more than those shown in the Table
Of Guaranteed Maximum Cost Of Insurance Rates on page 6.
Other Deductions. We also make the following additional deductions from Your
Certificate Account Value as they occur:
We deduct a partial surrender charge if You make a partial surrender of
this Certificate (see page 17).
We deduct a surrender charge if, before the end of the fourteenth
Certificate Year, You give up this Certificate for its Net Cash Surrender
Value, You reduce the Face Amount, or if this Certificate terminates
without value at the end of a Grace Period (see page 17). A surrender
charge may also apply to such transactions for up to fourteen years
immediately following a Face Amount increase.
We deduct a charge if You increase the Face Amount (see page 11).
We deduct a charge for certain transfers (see page 14).
Treatment Of Deductions. We will make all deductions based on the proportion
that Your unloaned value in Our Guaranteed Account and Your values in the
Subaccounts bear to the total unloaned value in Your Certificate Account Value.
<PAGE>
YOUR INVESTMENT OPTIONS
Allocations. This Certificate provides investment options for the amount in Your
Certificate Account Value. Amounts put into Your Certificate Account Value are
allocated to the Subaccounts and to the unloaned portion of Our Guaranteed
Account at Your direction. You specified Your initial Premium allocation
percentages in Your application for this Certificate, a copy of which is
attached to this Certificate. Unless You change them, such percentages shall
also apply to subsequent Premiums. However, any Premium which is put into Your
Certificate Account Value prior to the Allocation Date will initially be
allocated to the Money Market Subaccount. On the Allocation Date, any such
amounts then in the Money Market Subaccount will be allocated in accordance with
the directions contained in Your Certificate application.
No less than 5% of a Premium may be allocated to any one account. Allocation
percentages must be zero or a whole number not greater than 100. The sum of the
Premium allocation percentages must equal 100. You may change such allocation
percentages by written notice to Our Administrative Office. A change will take
effect on the date We receive it at Our Administrative Office except for changes
received on or prior to the Allocation Date which will take effect on the first
business day following the Allocation Date.
Transfers. At Your written request to Our Administrative Office, We will
transfer amounts from Your value in any Subaccounts to one or more other
Subaccounts or to Our Guaranteed Account. Any such transfer will take effect on
the date We receive Your written request for it at Our Administrative Office.
Once during each Certificate Year You may ask Us by written request to Our
Administrative Office to transfer an amount You specify from Your unloaned value
in Our Guaranteed Account to one or more Subaccounts. However, We will make such
a transfer only if (1) We receive Your written request at Our Administrative
Office within 30 days before or after a Certificate Anniversary; and (2) the
amount You specify is not more than the greater of 25% of Your unloaned value in
Our Guaranteed Account as of the date the transfer takes effect or the minimum
transfer amount shown on page 3. In no event will We transfer more than Your
unloaned value in Our Guaranteed Account. The transfer will take effect on the
date We receive Your written request for it at Our Administrative Office but not
before the Certificate Anniversary.
The minimum amount that We will transfer from the amount You have in a
Subaccount is the lesser of the minimum transfer amount shown on page 3 or the
amount You have in that Subaccount on that date, except as stated in the next
paragraph. The minimum amount that We will transfer from the amount You have in
Our Guaranteed Account is the lesser of the minimum transfer amount shown on
page 3 or Your unloaned value in Our Guaranteed Account as of the date the
transfer takes effect, except as stated in the next paragraph. If You do not
transfer the entire amount You have in a Subaccount or of the unloaned amount
You have in Our Guaranteed Account, the remaining value in either must be no
less than the minimum transfer amount shown on page 3.
We will waive the minimum amount limitations set forth in the immediately
preceding paragraph if the total amount being transferred on that date is at
least the minimum transfer amount shown on Page 3.
We reserve the right to make a transfer charge up to the amount shown on Page 4.
The transfer charge, if any, is deducted from the amounts transferred from the
Subaccounts and the Guaranteed Account based on the proportion that the amount
transferred from each Subaccount and the Guaranteed Account bears to the total
amount being transferred. A transfer from the Money Market Subaccount on the
Allocation Date (if applicable) will not incur a transfer charge.
<PAGE>
YOUR CERTIFICATE ACCOUNT VALUE
The amount in Your Certificate Account Value at any time is equal to the sum of
the amounts You then have in Our Guaranteed Account and the Subaccounts under
this Certificate.
Your Value In The Subaccounts. The amount You have in a Subaccount under this
Certificate at any time is equal to the number of units this Certificate then
has in that Subaccount multiplied by the Subaccount's unit value at that time. A
Certificate transaction occurs when units of a Subaccount are either purchased
or redeemed. Amounts allocated, transferred or added to a Subaccount are used to
purchase units of that Subaccount; units are redeemed when amounts are deducted,
loaned, transferred, or fully or partially surrendered.
The number of units a Certificate has in a Subaccount at any time is equal to
the number of units purchased minus the number of units redeemed in that
Subaccount to that time. The number of units purchased or redeemed in a
Certificate transaction is equal to the dollar amount of the Certificate
transaction divided by the Subaccount's unit value on the date of the
Certificate transaction. Certificate transactions may be made on any day. The
unit value that applies to a transaction made on a business day will be the unit
value for that day. The unit value that applies to a transaction made on a
non-business day will be the unit value for the next business day.
We determine unit values for the Subaccounts at the end of each business day.
Generally, a business day is any day the New York Stock Exchange is open for
trading. A business day immediately preceded by one or more non-business
calendar days will include those non-business days as part of that business day.
For example, a business day which falls on a Monday will consist of that Monday
and the immediately preceding Saturday and Sunday.
The unit value of a Subaccount on any business day is equal to the unit value
for that Subaccount on the immediately preceding business day multiplied by the
net investment factor for that Subaccount on that business day.
The net investment factor for a Subaccount on any business day is (a) divided by
(b), minus (c), where:
(a) is the net asset value of the shares in designated investment companies that
belong to the Subaccount at the close of business on such business day before
any Certificate transaction are made on that day, plus the amount of any
dividend or capital gain distribution paid by the investment companies on that
day;
(b) is the value of the assets in that Subaccount at the close of business on
the immediately preceding business day after all transactions were made for that
day; and
(c) is a charge for each calendar day in that business day, as defined above,
corresponding to a charge not exceeding .90% yearly for mortality and expense
risks, plus any charge for that day for taxes or amounts set aside as a reserve
for taxes.
The net asset value of an investment company's shares held in each Subaccount
shall be the value reported to Us by that investment company.
<PAGE>
Your Value In Our Guaranteed Account. The amount You have in Our Guaranteed
Account at any time is equal to the amounts allocated and transferred to it,
plus the interest credited to it, minus amounts deducted, transferred and
partially surrendered from it.
We will credit Our Guaranteed Account with interest rates We determine. An
interest rate equal to the loan interest rate will be applied to the loaned
portion in Our Guaranteed Account which is considered preferred Certificate
loan. An interest rate of not less than the Certificate loan rate minus 2% will
be credited to the loaned amount in Our Guaranteed Account which is considered
non-preferred Certificate loan. Any change in the interest rate We credit to the
unloaned amount in Our Guaranteed Account will be as described in "Changes In
Certificate Cost Factors" on Page 20. The interest rate applied to either the
loaned or unloaned amount in Our Guaranteed Account will not be less than 4% per
year, compounded annually.
At the end of each Certificate Month We will credit interest on unloaned amounts
in Our Guaranteed Account as follows:
o On amounts that remain in Our Guaranteed Account for the entire
Certificate Month from the beginning to the end of the Certificate
Month.
o On amounts allocated to Our Guaranteed Account during a Certificate
Month that are Net Premium payments or loan repayments, from the date
We receive them to the end of the Certificate Month.
o On amounts transferred to Our Guaranteed Account during a Certificate
Month from the date of the transfer to the end of the Certificate
Month.
o On amounts deducted or partially surrendered from Our Guaranteed
Account during a Certificate Month, from the beginning of the
Certificate Month, or the date such amount is allocated to the
Guaranteed Account, if later, to the date of the deduction or partial
surrender.
THE CASH SURRENDER VALUE OF THIS CERTIFICATE
Cash Surrender Value. The Cash Surrender Value on any date is equal to the
amount in Your Certificate Account Value on that date minus any surrender
charge.
Net Cash Surrender Value. The Net Cash Surrender Value is equal to the Cash
Surrender Value minus any Certificate loan and accrued loan interest. You may
give up this Certificate for its Net Cash Surrender Value at any time while the
Insured Person is living. You may do this by sending Us a written request for it
and this Certificate to Our Administrative Office. We will compute the Net Cash
Surrender Value as of the date We receive Your request for it and this
Certificate at Our Administrative Office. All insurance coverage under this
Certificate ends on such date.
<PAGE>
Surrender Charges. If You give up this Certificate for its Net Cash Surrender
Value or if it ends without value at the end of a Grace Period before the end of
the fourteenth Certificate Year, We will subtract a surrender charge from Your
Certificate Account Value. A table of maximum surrender charges is in the
Certificate Information section.
An increase in the Face Amount will result in an additional fourteen year
surrender charge applicable to that increase. The additional surrender charge
period will begin on the effective date of the increase.
If the Face Amount is reduced before the end of the fourteenth Certificate Year
or within fourteen years immediately following a Face Amount increase, because
You asked for a reduction in the Face Amount, We will also deduct a pro rata
share of any applicable surrender charge from Your Certificate Account Value.
Reductions will first be applied against the most recent increase in the Face
Amount. They will then be applied to prior increases in the Face Amount in the
reverse order in which such increases took place, and then to the original Face
Amount.
The amount of any pro rata surrender charge will be determined by the formula
A/B x C, where:
A = the amount of the reduction in the Face Amount.
B = the Face Amount immediately prior to the reduction.
C = the total surrender charge applicable to this Certificate immediately
prior to the reduction.
If there is an increase or reduction in the surrender charge shown on page 5, We
will send You a new table showing the revised surrender charges. We have filed a
detailed statement of the method of computing surrender charges with the
insurance supervisory official of the jurisdiction in which this Certificate is
delivered.
Partial Surrender. A partial surrender will result in a reduction in the Cash
Surrender Value and in Your Certificate Account Value equal to the partial
surrender amount as well as a reduction in Your Death Benefit. If Death Benefit
Option I is in effect, the partial surrender may also result in a decrease in
the Face Amount. However, We will not allow such partial surrender if it would
reduce the Face Amount to less than the minimum amount for which We would then
issue this Certificate under Our rules. We will also not allow a partial
surrender during the first Certificate Year or during the first 12 Certificate
Months immediately following an increase in the Face Amount. After such periods
and while the Insured Person is living, You may ask for a partial surrender by
written request to Our Administrative Office no more than twice during a
Certificate Year. Your request will be subject to Our approval based on Our
rules in effect when We receive Your request, and to the minimum partial
surrender amount shown in the Certificate Information section. The partial
surrender amount deducted from the Certificate Account Value is equal to the
amount requested plus the expense charge shown in the Table Of Expense Charges
in the Certificate Information section, as well as a partial surrender charge.
We have the right to decline a request for a partial surrender.
You may tell Us how much of each partial surrender is to come from Your unloaned
value in Our Guaranteed Account and from Your values in each of the Subaccounts.
If You do not tell us, the partial surrender will be deducted from the
Certificate Account Value based on the proportion that Your unloaned value in
Our Guaranteed Account and Your values in the Subaccounts bear to the total
unloaned value in Your Certificate Account Value.
Such partial surrender and resulting reduction in the Death Benefit, in the Cash
Surrender Value and in Your Certificate Account Value will take effect on the
date We receive Your written request for it at Our Administrative Office. We
will send You the applicable new page in the Certificate Information section if
a partial surrender results in a reduction in the Face Amount. It will become a
part of this Certificate. We may require You to return this Certificate to Our
Administrative Office to make a change.
Partial Surrender Charge. The partial surrender charge is equal to the amount of
partial surrender plus the expense charge for a partial surrender divided by the
Net Cash Surrender Value immediately prior to the partial surrender and then
multiplied by the total surrender charge in effect at that time.
<PAGE>
HOW A LOAN CAN BE MADE
Certificate Loans. After the first Certificate Year You can get a loan on this
Certificate while it has a loan value. This Certificate will be the only
security for the loan. The initial loan and each additional loan must be for at
least the minimum loan amount shown in the Certificate Information section. Any
amount on loan is part of Your Certificate Account Value (see page 16). We refer
to this as the loaned portion of Your Certificate Account Value.
Loan Value. The loan value on any date is 90% of the Net Cash Surrender Value on
that date. The amount of the loan may not be more than the loan value. If You
request an increase to an existing loan, the amount requested will be added to
the amount of the existing loan and accrued loan interest.
Your request for a Certificate loan must be in writing to Our Administrative
Office. You may tell Us how much of the requested loan is to be allocated to
Your unloaned value in Our Guaranteed Account and Your value in each Subaccount.
Such values will be determined as of the date We receive Your request. If You do
not tell Us We will allocate the loan based on the proportion that Your unloaned
value in Our Guaranteed Account and Your values in the Subaccounts bear to the
total unloaned value in Your Certificate Account Value.
The loaned portion of Your Certificate Account Value will be maintained as a
part of Our Guaranteed Account. Thus, when a loaned amount is allocated to an
Subaccount, We will redeem units of that Subaccount sufficient in value to cover
the amount of the loan so allocated and transfer that amount to Our Guaranteed
Account.
Preferred Loan Value. In Certificate Year 11 and thereafter, the loaned portion
of Your Certificate Account Value which is equal to or less than Your
Certificate Account Value minus the sum of the Premiums paid into this
Certificate will be considered preferred Certificate loan. The remaining loaned
portion of Your Certificate Account Value will be considered non-preferred
Certificate loan. These amounts will be recalculated on each Monthly
Anniversary.
Loan Interest. Interest on a loan accrues daily at the loan interest rate shown
in Certificate Information section. Loan interest is due on each Certificate
Anniversary. If the interest is not paid when due, it will be added to Your
Outstanding Loan and allocated based on the proportion that Your unloaned value
in Our Guaranteed Account and Your values in the Subaccounts bear to the total
unloaned value in Your Certificate Account Value. The unpaid interest will then
be treated as part of the loaned amount and will bear interest at the loan rate.
When unpaid loan interest is allocated to a Subaccount, We will redeem units of
that Subaccount sufficient in value to cover the amount of the interest so
allocated and transfer that amount to Our Guaranteed Account.
Loan Repayment. You may repay all or part of a Certificate loan at any time
while the Insured Person is alive and this Certificate is in force. We will
assume that any payment You make to Us while You have a loan and Your
Certificate is not in the Grace Period is a loan repayment, unless You tell Us
in writing that it is a Premium payment. A loan repayment will reduce the loaned
portion of Your Certificate Account and will then be allocated on the basis of
the Premium allocation percentages then in effect.
Failure to repay a Certificate loan or to pay loan interest will not terminate
this Certificate unless at the beginning of a Certificate Month the Net Cash
Surrender Value is less than the total monthly deduction then due. In that case,
the Grace Period provision will apply (see page 12).
A Certificate loan will have a permanent effect on Your benefits under this
Certificate even if it is repaid.
<PAGE>
OUR SEPARATE ACCOUNT
The Separate Account is described on page 3. We established it and We maintain
it under the laws of the State of New York. Realized and unrealized gains and
losses from the assets of Our Separate Account are credited or charged against
it without regard to Our other income, gains, or losses. Assets are put in the
Separate Account to support this Certificate and other variable life insurance
policies.
The assets of the Separate Account are Our property. The portion of its assets
equal to the reserves and other Certificate liabilities with respect to the
Separate Account will not be chargeable with liabilities arising out of any
other business We conduct. We may transfer assets of the Separate Account in
excess of its reserves and other liabilities to another separate account or to
Our general account.
Subaccounts. Our Separate Account consists of Subaccounts. Each Subaccount
invests its assets in shares of a designated investment company or companies.
The Subaccounts that You chose for Your initial allocations are shown on the
application for this Certificate, a copy of which is attached to this
Certificate. We may from time to time make other Subaccounts available to you.
We will provide You with written notice of all material details including
investment objectives and all charges.
Subject to the prior approval of the insurance supervisory official of the
jurisdiction in which this Certificate was delivered, We have the right to:
1. change, add or delete designated investment companies;
2. add or remove Subaccounts; and
3. combine any two or more Subaccounts.
Consistent with state law, We have the right to:
1. register or deregister the Separate Account under the Investment Company Act
of 1940;
2. run the Separate Account under the direction of a committee, and discharge
such committee at any time;
3. restrict or eliminate any voting rights of Certificate Owners, or other
persons who have voting rights as to the Separate Account; and
4. operate the Separate Account or one or more of the Subaccounts by making
direct investments or in any other form. If We do so, We may invest the assets
of the Separate Account or one or more of the Subaccounts in any legal
investments. We will rely upon Our own or outside counsel for advice in this
regard. Also, unless otherwise required by law or regulation, an investment
advisor or any investment policy may not be changed without Our consent. If
required by law or regulation, the investment policy of a Subaccount will not be
changed by Us unless approved by the Superintendent of Insurance of the State of
New York or deemed approved in accordance with such law or regulation. If so
required, the process for getting such approval is on file with the insurance
supervisory official of the jurisdiction in which this Certificate is delivered.
If any of these changes result in a material change in the underlying
investments of a Subaccount, We will notify You of such change, as required by
law. If You have value in that Subaccount, We will transfer it at Your written
direction from that Subaccount (without charge) to another Subaccount or to Our
Guaranteed Account, and You may then change Your Premium allocation percentages.
OUR ANNUAL REPORT TO YOU
For each Certificate Year We will send You a report for this Certificate that
shows the current Death Benefit, the value You have in Our Guaranteed Account
and the value You have in each Subaccount of Our Separate Account, the Cash
Surrender Value and any Certificate loan with the current loan interest rate. It
will also show the Premiums paid and any other information as may be required by
the insurance supervisory official of the jurisdiction in which this Certificate
is delivered.
<PAGE>
HOW BENEFITS ARE PAID
The Insurance Benefit, surrender value or Your Certificate Account Value payable
on the Maturity Date will be paid immediately in one sum.
OTHER IMPORTANT INFORMATION
Your Contract With Us. This Certificate is issued in consideration of the
payment of the initial Premium shown in the Certificate Information section.
This Certificate, and the attached copy of the initial application, supplemental
application and all subsequent applications to change this Certificate, and all
additional Certificate Information sections added to this Certificate, make up
the entire contract. The rights conferred by this Certificate are in addition to
those provided by applicable Federal and State laws and regulations.
Only Our executive officers can modify this contract or waive any of Our rights
or requirements under it. The person making these changes must put them in
writing and sign them.
Certificate Changes - Applicable Tax Law. For You and the Beneficiary to receive
the tax treatment accorded to life insurance under Federal law, this Certificate
must qualify initially and continue to qualify as life insurance under the
Internal Revenue Code or and successor law or regulation. Therefore, to assure
this qualification for You, We have reserved earlier in this Certificate the
right to decline to accept Premium, in whole or in part, to decline to change
Death Benefit Options, to decline to change the Face Amount or to decline to
make partial surrenders that would cause this Certificate to fail to qualify as
a life insurance contract as defined in Section 7702 of the Internal Revenue
Code, as amended. Further, We reserve the right to make changes in this
Certificate or its riders (for example, in the Table Of Applicable Percentages
on page 10) or to require additional Premium or to make distributions from this
Certificate to the extent We deem it necessary to continue to qualify this
Certificate as life insurance. Any such changes will apply uniformly to all
policies that are affected and will be subject to the prior approval of the
insurance supervisory official of the jurisdiction in which the certificate is
delivered. You will be given advance notice of such changes.
Changes In Certificate Cost Factors. Changes in Certificate cost factors
(interest rates We credit, cost of insurance deductions and expense charges)
will be by class and based upon changes in future expectations for such elements
as: investment earnings, mortality, persistency, expenses and taxes. Any change
in Certificate cost factors will be determined in accordance with procedures and
standards on file, if required, with the insurance supervisory official of the
jurisdiction in which this Certificate is delivered.
When The Certificate Is Incontestable. We have the right to contest the validity
of this Certificate based on material misstatements made in the initial
application for this Certificate. We also have the right to contest the validity
of any Certificate change or restoration based on material misstatements made in
any application for that change. However, We will not contest the validity of
this Certificate after it has been in effect during the lifetime of the Insured
Person for two years from the Issue Date shown in the Certificate Information
section. We will not contest any Certificate change that requires evidence of
insurability, or any restoration of this Certificate, after the change or
restoration has been in effect for two years during the Insured Person's
lifetime.
No statement shall be used to contest a claim unless contained in an
application.
All statements made in an application are representations and not warranties.
See any additional benefit riders for modifications of this provision that apply
to them.
<PAGE>
What If Age Or Sex Has Been Misstated? If the Insured Person's age or sex has
been misstated on any application, the Death Benefit and any benefits provided
by riders to this Certificate shall be those which would be purchased by the
most recent deduction for the cost of insurance, and the cost of any benefits
provided by riders, at the correct age and sex.
How The Suicide Exclusion Affects Benefits. If the Insured Person commits
suicide within two years after the Issue Date shown in the Certificate
Information section, Our liability will be limited to the payment of a single
sum. This sum will be equal to the Premiums paid, minus any loan and accrued
loan interest and minus any partial surrender and minus the cost of any riders
attached to this Certificate. If the Insured Person commits suicide within two
years after the effective date of a change that You asked for that increases the
Death Benefit, then Our liability as to the increase in amount will be limited
to the payment of a single sum equal to the monthly cost of insurance deductions
made for such increase plus the expense charge deducted for the increase (see
page 11).
How We Measure Certificate Periods And Anniversaries. We measure Certificate
Years, Certificate Months, and Certificate Anniversaries from the Certificate
Date. Each Certificate Month begins on the same day as the Certificate Date for
each succeeding month, except that, for those months not having such a day, it
is the last day of that month.
How, When And What We May Defer. We may not be able to obtain the value of the
assets of the Subaccounts if: (1) the New York Stock Exchange is closed; or (2)
the Securities and Exchange Commission requires trading to be restricted or
declares an emergency. During such times, as to amounts allocated to the
Subaccounts, We may defer:
1. Determination and payment of partial surrenders;
2. Determination and payment of any Death Benefit in excess of the Face Amount;
3. Payments of loans;
4. Determination of the unit values of the Subaccounts; and
5. Any requested transfer or the transfer on the Allocation Date.
As to amounts allocated to Our Guaranteed Account, We may defer payment of any
surrender or loan amount for up to six months after We receive a request for it.
We will allow interest, at a rate of at least 4% a year, on any Net Cash
Surrender Value payment derived from Our Guaranteed Account that we defer for 10
days or more after We receive a request for it.
The Basis We Use For Computation. We provide Cash Surrender Values that are at
least equal to those required by law. If required to do so, We have filed with
the insurance supervisory official of the jurisdiction in which this Certificate
is delivered a detailed statement of Our method of computing such values. We
compute reserves under this Certificate by the Commissioners Reserve Valuation
Method.
We base minimum Cash Surrender Values and reserves on the Commissioners 1980
Standard Ordinary Male and Female, Smoker and Non-Smoker, Mortality Tables, Age
Last Birthday. We also use these tables as the basis for determining maximum
insurance costs, taking account of sex, Attained Age, rating class and Smoker or
Non-Smoker status of the Insured Person. We use an effective annual interest
rate of 4%.
Certificate Illustrations. Upon request We will give You an illustration of the
future benefits under this Certificate based upon both guaranteed and current
cost factor assumptions. However, if You ask Us to do this more than once in any
Certificate Year, We reserve the right to charge You a reasonable fee for this
service.
Certificate Changes. You may add additional benefit riders or make other
changes, subject to Our rules at the time of change.
<PAGE>
Your Exchange Right. You may exchange this Certificate while it is in force for
a new flexible premium fixed benefit life insurance Certificate on the life of
the Insured Person, without evidence of insurability. This exchange may be made
either:
1. within 24 months after the Issue Date while this Certificate is in force; or
2. within 24 months after any increase in the Face Amount of this Certificate;
or
3. within 60 days of the effective date of a material change in the investment
policy of a Subaccount, or within 60 days of the notification of such change, if
later. In the event of such a change, the Company will notify You and give You
information on the options available.
When an exchange is requested, We accomplish this by transferring all monies to
the Guaranteed Account. There is no charge for this transfer. Once this option
is exercised, Your entire Certificate Account Value must remain in the
Guaranteed Account for the life of this Certificate. The Face Amount in effect
at the time of the exchange will remain unchanged. The Certificate Date, Issue
Date and issue age of the Insured Person will remain unchanged. The Owner and
Beneficiary will remain the same as were recorded immediately before the
exchange.
Continuation Of Certificate Coverage. If the Policy under which this Certificate
is issued should terminate, coverage may be continued under this Certificate by
the timely payment of premiums directly to our Administrative Office or to one
of our agents.
Dollar Cost Averaging. Using Our Dollar Cost Averaging Plan Request Form, You
may elect automatic monthly transfers from the Money Market Subaccount into
Subaccounts for a specified dollar amount or specified number of months, not in
excess of 24, in accordance with the following:
1. the allocation to the Subaccounts will be based on the premium allocation
that is in effect at the time of each transfer;
2. if you elect Dollar Cost Averaging in conjunction with Your application for
this Certificate, the automatic transfers will begin on the first Monthly
Anniversary following the end of the Free Look Period;
3. if you elect Dollar Cost Averaging after this Certificate has been issued,
the automatic transfers will begin on the second Monthly Anniversary
following Our receipt of Your election;
4. this option may be elected at any time provided there is a minimum balance
of $2,000 in the Money Market Subaccount; 5. all premiums received after
the date you elect Dollar Cost Averaging will be applied to the Money
Market Subaccount for the purpose of Dollar Cost Averaging.
If you elect to transfer a specific dollar amount each month, automatic
transfers will continue until Your Money Market Subaccount is depleted. If you
elect to transfer based on a specific number of months, each month We will
transfer a fraction of the balance in the Money Market Fund equal to one divided
by the number of months remaining in the period. For example, if You elect to
transfer over a 12 month period, the first transfer will be 1/12th of the
balance in the Money Market Fund, the second transfer will be 1/11th of the
balance, the third transfer will be 1/10th of the balance and so on until the
end of the requested period.
Automatic monthly transfers will continue until one of the following conditions
occur:
1. the balance in the Money Market Subaccount is depleted;
2. We receive Your written request to cancel future transfers;
3. We receive notification of the death of the Insured Person;
4. this Certificate lapses.
<PAGE>
AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF NEW YORK
80 PINE STREET
NEW YORK, NEW YORK 10005
Flexible Premium Variable Life Insurance Certificate. Insurance payable upon
death before the Maturity Date while this Certificate is in force. Certificate
Account Value payable on Maturity Date. Adjustable Death Benefit. Premiums may
be paid while Insured Person is living and before the Maturity Date. Net Cash
Surrender Value must be sufficient to keep the Certificate in force. Values
provided by this Certificate are based on declared interest rates, and on the
investment performance of the Subaccounts. Certificate values are not guaranteed
as to dollar amount. Investment options are described on page 14. This is a
non-participating Certificate.
EXHIBIT C(3)
Form of Group Variable Universal Life Policy (2VUL1294NY-G)
<PAGE>
American International Life Assurance
Company of New York
80 Pine Street
New York, New York 10270
A capital stock company
This Policy is a contract between American International Life Assurance Company
of New York ("We", "Us" or "Our") and the Policyholder ("You" or "Your") shown
on the Policy Schedule.
Subject to the terms of this Policy and the Certificates We issue to each
Certificate Owner, We will provide the benefits described in this Policy. We do
this in return for the application of the Policyholder, and the required
individual applications for life insurance coverage on the Insureds and for the
payment of the premiums.
This Policy becomes effective at 12:01 A.M. Standard Time on the Policy
Effective Date at the address of the Policyholder and will continue in force, in
accordance with the applicable provisions, unless terminated in accordance with
its provisions.
This Policy is non-participating and is not entitled to share in Our surplus
earnings.
/s/ Elizabeth M. Tuck /s/ RJ O'Connell
Elizabeth M. Tuck RJ O'Connell
Secretary President
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Non-Participating
<PAGE>
INDEX
Policy Sections Page
Policy Schedule 3
Table Of Guaranteed Maximum Cost Of Insurance Rates 4 & 5
Policy Provisions 6
<PAGE>
GROUP POLICY SCHEDULE
GROUP POLICY NUMBER [00004]
GROUP POLICYHOLDER [Direct Consumer's Group Trust Dated April 8, 1996]
GROUP POLICY EFFECTIVE DATE [January 1, 1998]
ELIGIBLE PERSONS: [Customers, members or employees of participating
Financial institutions]
ANNUITY SERVICE OFFICE: [AI Life Assurance Company of New York
c/o Delaware Valley Financial Services
300 Berwyn Park
P.O. Box 3031
Berwyn, PA 19312-0031
(800) 255-8402]
<PAGE>
<TABLE>
Guaranteed Monthly Cost Insurance Rates-Male
Per $1,000 of Net Amount at Risk
- -----------------------------------------------------------------------------------------------------------
Attained Monthly COI Rate Attained Monthly COI Rate
----------------------------------- ------------------------------------
Age Nonsmoker Smoker Age Nonsmoker Smoker
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
0 N/A 0.21921 50 0.42768 0.83403
1 N/A 0.08584 51 0.46688 0.91166
2 N/A 0.08251 52 0.51193 0.99933
3 N/A 0.08084 53 0.56365 1.09871
4 N/A 0.07751 54 0.62122 1.20729
5 N/A 0.07334 55 0.68547 1.32342
6 N/A 0.06917 56 0.75557 1.44626
7 N/A 0.06500 57 0.82985 1.57581
8 N/A 0.06250 58 0.91250 1.71209
9 N/A 0.06167 59 1.00518 1.85845
10 N/A 0.06250 60 1.10873 2.02158
11 N/A 0.06750 61 1.22400 2.20569
12 N/A 0.07667 62 1.35684 2.41331
13 N/A 0.08917 63 1.50727 2.64531
14 N/A 0.10334 64 1.67447 2.89921
15 0.11335 0.14669 65 1.85761 3.16834
16 0.12335 0.16336 66 2.05588 3.45020
17 0.13085 0.17503 67 2.26847 3.74229
18 0.13585 0.18420 68 2.49957 4.04883
19 0.13919 0.19004 69 2.75591 4.38161
20 0.14002 0.19337 70 3.04592 4.74911
21 0.13835 0.19337 71 3.37720 5.16235
22 0.13585 0.19004 72 3.75992 5.62985
23 0.13252 0.18670 73 4.19334 6.14841
24 0.12918 0.18170 74 4.67004 6.71732
25 0.12502 0.17586 75 5.18003 7.32578
26 0.12252 0.17253 76 5.71919 7.94851
27 0.12085 0.17086 77 6.28340 8.57456
28 0.12001 0.17086 78 6.87612 9.20818
29 0.12001 0.17336 79 7.51607 9.87149
30 0.12085 0.17753 80 8.22375 10.58674
31 0.12335 0.18337 81 9.01810 11.37459
32 0.12668 0.19087 82 9.91569 12.24906
33 0.13168 0.20087 83 10.91280 13.19603
34 0.13752 0.21255 84 11.99040 14.18421
35 0.14419 0.22672 85 13.12418 15.18033
36 0.15169 0.24339 86 14.29994 16.16034
37 0.16169 0.26424 87 15.49991 17.16810
38 0.17253 0.28758 88 16.71910 18.22020
39 0.18420 0.31427 89 17.97489 19.26842
40 0.19837 0.34512 90 19.28574 20.32834
41 0.21338 0.37848 91 20.68243 21.43307
42 0.22922 0.41517 92 22.21791 22.71710
43 0.24673 0.45521 93 24.04369 24.36888
44 0.26590 0.49942 94 26.50346 26.62992
45 0.28758 0.54613 95 30.20740 30.20740
46 0.31093 0.59452 96 36.35803 36.35803
47 0.33595 0.64709 97 47.21180 47.21180
48 0.36347 0.70383 98 66.20701 66.20701
49 0.39349 0.76559 99 90.90909 90.90909
- -----------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
Guaranteed Monthly Cost Insurance Rates-Female
Per $1,000 of Net Amount at Risk
- -----------------------------------------------------------------------------------------------------------
Attained Monthly COI Rate Attained Monthly COI Rate
----------------------------------- ------------------------------------
Age Nonsmoker Smoker Age Nonsmoker Smoker
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
0 N/A 0.15669 50 0.36180 0.56449
1 N/A 0.07000 51 0.38932 0.60537
2 N/A 0.06667 52 0.42101 0.65209
3 N/A 0.06500 53 0.45604 0.70383
4 N/A 0.06417 54 0.49191 0.75641
5 N/A 0.06250 55 0.53028 0.81066
6 N/A 0.06084 56 0.56866 0.86408
7 N/A 0.05917 57 0.60620 0.91417
8 N/A 0.05834 58 0.64375 0.96343
9 N/A 0.05750 59 0.68630 1.01603
10 N/A 0.05667 60 0.73638 1.07866
11 N/A 0.05834 61 0.79814 1.15717
12 N/A 0.06084 62 0.87493 1.25825
13 N/A 0.06417 63 0.96927 1.38107
14 N/A 0.06834 64 1.07532 1.51813
15 0.07167 0.08001 65 1.18975 1.66276
16 0.07501 0.08417 66 1.30838 1.80994
17 0.07751 0.08834 67 1.42954 1.95214
18 0.08001 0.09251 68 1.55491 2.09605
19 0.08251 0.09501 69 1.69453 2.25256
20 0.08417 0.09751 70 1.85845 2.43759
21 0.08584 0.09918 71 2.05839 2.67212
22 0.08667 0.10168 72 2.30363 2.95957
23 0.08834 0.10418 73 2.59756 3.30170
24 0.09001 0.10668 74 2.93610 3.69191
25 0.09168 0.10918 75 3.31428 4.11856
26 0.09418 0.11335 76 3.72382 4.57248
27 0.09584 0.11668 77 4.16309 5.04701
28 0.09834 0.12085 78 4.63892 5.54895
29 0.10168 0.12585 79 5.16656 6.09610
30 0.10418 0.13168 80 5.76724 6.70972
31 0.10751 0.13669 81 6.45895 7.40696
32 0.11085 0.14252 82 7.25729 8.20087
33 0.11501 0.15002 83 8.15937 9.11907
34 0.12001 0.15836 84 9.15556 10.11631
35 0.12585 0.16753 85 10.23537 11.17773
36 0.13418 0.18170 86 11.39164 12.29517
37 0.14419 0.19837 87 12.62319 13.45788
38 0.15502 0.21755 88 13.93142 14.67216
39 0.16669 0.23839 89 15.32721 15.93752
40 0.18087 0.26340 90 16.82248 17.34402
41 0.19587 0.29008 91 18.45266 18.86254
42 0.21088 0.31677 92 20.28063 20.55222
43 0.22588 0.34345 93 22.43826 22.54368
44 0.24089 0.37014 94 25.22305 25.22305
45 0.25757 0.39849 95 29.24956 29.24956
46 0.27508 0.42768 96 35.72205 35.72205
47 0.29425 0.45771 97 46.86829 46.86829
48 0.31427 0.49024 98 66.09429 66.09429
49 0.33678 0.52611 99 90.90909 90.90909
- -----------------------------------------------------------------------------------------------------------
</TABLE>
POLICY PROVISIONS
Eligible Persons. Persons eligible to become insured under this Policy are those
described as Eligible Persons on the Policy Schedule.
Certificates. We will issue a Certificate to each Certificate Owner describing
each Insured's life insurance coverage under this Policy. The certificate will
describe the benefits of this Policy, to whom the benefits will be paid, and the
limitations and conditions that apply.
A certificate may be modified by rider or endorsement issued by Us to be
attached to the certificate. The rider or endorsement will set forth the
modifications to the certificate which affect the Insured.
Premiums. All premiums are payable in advance to Us. The planned premium for
each Insured is shown on that Insured's certificate Information Page.
Required Data. The Policyholder must give Us all data that We need to administer
this Policy.
Examination Of Records. We have the right to examine all records of the
Policyholder that pertain to the life insurance provided by this Policy.
Continuation Of This Policy. This Policy will continue in force, subject to the
Policy Termination provision.
Entire Contract. The entire contract ("Policy") consists of this Policy, the
certificates, the policyholder's application, each Insured's application for
life insurance coverage under this Policy, and any attached riders, endorsements
or amendments.
We rely on the Policyholder's application to issue this Policy and the
individual applications, if any, to issue certificates providing life insurance
coverage on each Insured. Statements made by the Policyholder or any Insured or
Certificate Owner are deemed to be representations and not warranties. No such
statement will be used to contest this Policy, a certificate or a claim unless a
copy of the instrument is furnished to the person making the statement or to
his/her beneficiary.
Changing This Policy. This Policy may only be changed, in writing, by one of our
executive officers. No other person, including an agent, has any authority to
change or reinstate this Policy or extend the time for paying a premium.
Conformity With State Statutes. Any provision of this Policy that, on the Policy
Effective Date, conflicts with state laws of the governing jurisdiction is
changed to meet the minimum requirements of those laws.
Policy Termination. This Policy may only be terminated with respect to the
issuance of new certificates. Either We or the Policyholder may terminate this
Policy upon giving at least 31 days written notice to the other. We will not
terminate this Policy prior to the end of the first year following the Policy
Effective Date.
Clerical Error. Clerical error will not void any certificate issued under this
Policy which is otherwise validly in force, nor will it keep in force any
certificate that otherwise would end.
Certificate Provisions Made Part Of This Policy. The remainder of this Policy
consists of provisions that appear in the certificates, riders and endorsements.
A copy of the certificates, riders and endorsements is added to and made a part
of this Policy.
<PAGE>
American International Life Assurance Company of New York
80 Pine Street
New York, New York 10270
GROUP FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE POLICY
Non-Participating
EXHIBIT D(1)
American International Life Insurance Company of New York By-Laws (as
amended on 3/25/75
<PAGE>
BY-LAWS
OF
AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF NEW YORK
ARTICLE I
Section 1 - Stockholders' Meeting
All meetings of the stockholders shall be held at the office of the
corporation in New York City, New York, or at such other place in the City of
New York as may from time to time be designated by its Board of Directors.
Section 2 - Voting
At all stockholders' meetings, stockholders may vote in person, by
proxy, or by general power of attorney produced at the meeting. No proxy shall
be valid which shall have been granted more than thirty-five (35) days before
the meeting which shall be named therein, and such proxy shall not be valid
after the final adjournment of such meeting.
Section 3 - Address of Stockholders
Notices to a stockholder shall be mailed to his address as it appears
on the stock book of the corporation unless he shall have filed with the
Secretary of the corporation a written request that notices be mailed to him at
some other address, in which case it shall be mailed to the address designated
in such request.
Section 4 - Annual Meeting
The annual stockholders' meeting shall be held in the State of New York
on the fourth Wednesday of March in each and every year, or, if such day in any
year be a legal holiday, then on the next succeeding business day, at 2:00
o'clock P.M., according to the time then prevailing in the State of New York or
at such other hour as may from time to time be designated by the Board of
Directors. Proper notice of annual stockholders' meetings shall be mailed to
each stockholder not less than ten (10) days nor more than forty; (40) days
prior to the meeting
Section 5 - Special Meetings
Special stockholders' meetings shall be held on the request of the
Chairman of the Board or the President, or on resolution of the Board of
Directors, or on demand in writing by stockholders of record owning one-fourth
of the amount of the stock of the corporation outstanding. Notice of special
stockholders' meetings shall be mailed to each stockholder not less than ten
(10) days nor more than forty (40) days prior to the meeting.
Section 6 - Waiver of Notice
Meetings of the stockholders may be held without notice if all of the
stockholders entitled to vote at the meeting are present in person or
represented by proxy at the meeting, or if notice is waived in writing by those
not so present or represented.
ARTICLE II
Section 1 - Board of Directors
The property and business of the corporation shall be managed by its Board
of Directors. The number of directors of the corporation shall be not less than
thirteen (13) and not more than twenty-five (25) as the stockholders or the
Board of Directors may from time to time by resolution determine. The majority
of the Board of Directors, whatever its fixed number, shall consist of persons
who are neither officers, nor salaried employees of the company. Each director
shall hold office until the next annual meeting of stockholders and until his
successor shall have been elected and qualified. If any vacancies shall occur in
the Board of Directors by death or resignation or removal or otherwise, such
vacancies shall be filled in the manner provided in the corporation's Charter.
The Board of Directors shall approve the salaries of all officers and shall
approve the salary, compensation or emolument amounting in any one year to more
than twenty thousand dollars to any person, firm or corporation.
No officer or director who is paid a salary for his services shall receive
any other compensation, bonus or emolument, from this company directly or
indirectly.
Section 2 - Meetings of the Board
Regular meetings of the Board of Directors shall be held quarterly at such
places and at such times as the Board may determine from time to time. Notice
need not be given of the regular meetings of the Board held at times fixed by
resolution of the Board.
Special meetings of the Board of Directors may be called by the Chairman of
the Board, the President or a Vice President, or on the written request of five
members of the Board. Not less than one day's notice by telegram or letter of
such special meeting shall be given each director.
Meetings of the Board of Directors may be held without notice if all of the
directors entitled to vote at the meeting are present in person or represented
by proxy at the meeting, or if notice is waived in writing by those not so
present or represented.
The Board of Directors may make rules for the conduct of its business and
may elect a Chairman to preside over its meetings and the meetings of
stockholders and a Vice Chairman to act in the absence of the Chairman.
Section 3 - Executive Committee
The Board of Directors shall appoint an Executive Committee from among its
members consisting of not less than five (5) directors.
The Executive Committee shall have and may exercise, when the Board is not
in session, so far as may be permitted by law, all of the powers of the Board in
the management of the business and affairs of the corporation, and shall have
power to authorize the seal of the corporation to be affixed to all papers which
may require it; but the Executive Committee shall not have power to fill
vacancies in the Board, or to change the membership of, or to fill vacancies in,
the Executive Committee, or to make or amend the By-Laws of the corporation. The
Board shall have the power at any time to fill vacancies in, to change the
membership of , to change the number of members of, or to dissolve, the
Executive Committee. The Executive Committee may make rules for the conduct of
its business and may appoint such committees and assistants as it shall from
time to time deem necessary.
A majority of the members of the Executive Committee shall constitute a
quorum at any meeting thereof and the quorum of any meeting shall include at
least one member who is neither an officer nor salaried employee of the company.
All action taken by the Executive Committee shall be reported to the Board at
the meeting next succeeding such action.
Section 4 - Finance Committee
The Board of Directors shall appoint a Finance Committee from among its
members consisting of not less than five (5) directors. The Finance Committee
shall direct the financial and investment policy of the company. Subject to the
control of the Board of Directors, it shall have power to invest and reinvest
the assets of the company in such securities or other property as it may elect
and to change such investments at such time or times as it may deem proper, all
subject to the requirements of law and to proper regulations of the Insurance
Department of the State of New York. The Board of Directors shall have power at
any time to fill vacancies in, to change the membership of, or to dissolve, the
Finance Committee. The Finance Committee may make rules for the conduct of its
business and may appoint such committees and assistants as it shall from time to
time deem necessary. A majority of the members of the Finance Committee shall
constitute a quorum at any meeting thereof, and a quorum at any meeting shall
include at least one member who is neither an officer nor salaried employee of
the company. All action taken by the Finance Committee shall be reported to the
Board at its meeting next succeeding such action.
ARTICLE III
Section 1 - President
The President shall be the chief executive officer of the corporation. He
shall have general charge of the administrative affairs of the corporation and
shall have such other duties as shall be prescribed by the Board of Directors.
Except when inconsistent with the corporation's Charter and these By-Laws, he
shall have power to employ, fix the duties and discharge such employees as he
may deem necessary and proper. The President shall make such reports to the
Board of Directors as may be required by it.
Section 2 - Vice Presidents
The Vice Presidents shall perform such duties as are prescribed by the
Board of Directors or the principal executive officers. A duly designated Vice
President shall perform the duties of the President in the latter's absence or
inability to act.
Section 3 - Secretary
The Secretary shall attend all of the meetings of the Stockholders and the
Board of Directors, and act as clerk thereof and shall record all notes and the
minutes of all proceedings in a book kept for that purpose. He shall see that
proper notice in accordance with the provisions of the Charter and these By-Laws
or as required by statute is given of all regular and special meetings of the
stockholders and of special meetings of the Board of Directors, and shall
perform such other duties as may be required by said Board or by the principal
executive officers.
Section 4 - Treasurer
The Treasurer shall supervise the custody of the corporation's funds and
securities and the deposit of all moneys of the corporation as authorized or
approved by the Board of Directors, the authorization and proper receipting and
vouchering of all expenditures, and the maintenance of an accurate account of
all moneys received and expended on account of the corporation.
Section 5 - Assistant Secretaries
The President or the Board of Directors may appoint one or more Assistant
Secretaries. In the absence of the Secretary an Assistant Secretary designated
by the President or Board of Directors shall have the power to perform his
duties including the certification, execution and attestation of corporate
records and corporate instruments. Assistant Secretaries shall have such other
powers and perform such other duties as may be delegated to them by the
President or Board of Directors.
Section 6 - Assistant Treasurers
The President or Board of Directors may appoint one or more Assistant
Treasurers who, in the absence of the Treasurer, shall perform his duties.
Assistant Treasurers shall have such other powers and perform such other duties
as may be delegated to them by the President or Board of Directors.
Section 7 - Other Officers
The corporation may have such other officers as the Board of Directors may
from time to time elect.
ARTICLE IV
Section 1 - Stock Certificate and Stock Records
Certificates for shares of the capital stock of the corporation shall be in
such form, not inconsistent with the Charter of the corporation and the laws of
the State of New York as shall be prepared or be approved by the Board of
Directors.
The certificates shall be signed by the President or a Vice President, and
also by the Secretary or an Assistant Secretary. The certificates shall be
consecutively numbered, and the name of the person owning the shares represented
thereby, together with the number of such shares, and the date of issue, shall
be entered on the corporation's books.
No certificate hereafter issued shall be valid unless it is signed by the
President or a Vice President, and by the Secretary or an Assistant Secretary.
No certificates surrendered to the corporation shall be cancelled, and no new
certificates shall be issued until the former certificate for the same number of
shares shall have been surrendered and cancelled.
Section 2 - Transfer of Shares
Shares of the capital stock of the corporation shall be transferred only on
the books of the corporation by the holder thereof in person, or by his
attorney, upon surrender or cancellation of certificates for a like number of
shares. However, no such transfer shall be made until notice thereof shall have
been give to the Superintendent of the Insurance of the State of New York as
required by law.
Section 3 - Regulations
In accordance with the requirements of law and the corporation's Charters
and these By-Laws, the Board of Directors shall have power and authority to make
all such rules and regulations as they may deem expedient concerning issues,
transfer, and registration of certificates for shares of the capital stock of
the corporation.
Section 4
Any person claiming a certificate of stock to have been lost, stolen or
destroyed and desiring a new certificate in lieu thereof shall make an affidavit
of such fact, reciting the circumstances attending such loss or destruction, and
shall give the corporation a bond of indemnity, with a surety company as surety
thereon, satisfactory to the President or a Vice President of the corporation,
in at least double the then market value of such stock (excepting the Board of
Directors may, by a special resolution, authorize the acceptance of a bond of
different amount, or a bond with personal surety thereon) whereupon in the
discretion of the President or a Vice President a new certificate may be issued
of the same tenor and for the same number of shares as the one alleged to have
been lost, stolen or destroyed.
Section 5
The Board of Directors shall fix in advance a date, not more than forty
(40) days prior to the date of any meeting of stockholders or the date for the
payment of any dividend, or the date for the allotment of rights, or the date
when any change or conversion or exchange of stock shall go into effect, as a
record date for the determination of the stockholders entitled to notice of, and
to vote at, any such meeting, or entitled to receive payment of any such
dividend, or to any such allotment of rights, or to exercise the rights in
respect of any such change, conversion or exchange of stock, and in such case
only such stockholders as shall be stockholders of record on the date so fixed
shall be entitled to such notice of and to vote at such meeting, or to receive
payment of such dividend, or to receive such allotment of rights, or to exercise
such rights, as the case may be, notwithstanding any transfer of any stock on
the books of the corporation after any such record date fixed as aforesaid.
ARTICLE V
Section 1
To the full extent authorized by law, the corporation shall indemnify any
person made, or threatened to be made, a party to an action or proceeding,
whether criminal or civil, by reason of the fact that he, his testator or
intestate is or was a director or officer of the corporation or serves or served
in any capacity any other corporation at the request of the corporation. Nothing
contained herein shall affect any rights to indemnification to which corporate
personnel other than directors and officers may be entitled by contract or
otherwise under law.
ARTICLE VI
Section 1 - Amendments
These By-Laws may be altered, amended or repealed and new By-Laws may be
adopted by the stockholders or the Board of Directors at any regular or special
meeting of the stockholders or the Board of Directors.
<PAGE>
New Language Underscored
Amend sub-paragraph (1) of Article II, Section I, Board of Directors to
read in its entirety.
The property and business of the corporation shall be managed by its
Board of Directors. The number of directors of the corporation shall be not less
than thirteen (13) and not more than twenty-five (25) as the stockholders or the
Board of Directors may from time to time by resolution determine. The majority
of the Board of Directors, whatever its fixed number, shall consist of persons
who are neither officers, nor salaried employees of the company. Each director
shall hold office until the next annual meeting of stockholders and until his
successor shall have been elected and qualified. If any vacancies shall occur in
the Board of Directors by death or resignation or removal or otherwise, such
vacancies shall be filled in the manner provided in the corporation's Charter.
Amend sub-paragraph (1) of Article II, Section 3 - Executive Committee
to read in its entirety:
The Board of Directors shall appoint an Executive Committee from among its
members consisting of not less than five (5) directors.
Amend sub-paragraph (3) of Article II, Section 3 - Executive Committee
to read in its entirety:
A majority of the members of the Executive Committee shall constitute a
quorum at any meeting thereof and the quorum of any meeting shall include at
least one member who is neither an officer nor salaried employee of the company.
All action taken by the Executive Committee shall be reported to the Board at
the meeting next succeeding such action.
To amend sub-paragraph (1) of Article II, section 4 - Finance Committee
to read in its entirety:
The Board of Directors shall appoint a Finance Committee from among its
members consisting of not less than five (5) directors. The Finance Committee
shall direct the financial and investment policy of the Company. Subject to the
control of the Board of Directors, is shall have power to invest and reinvest
the assets of the Company in such securities or other property as it may elect
and to change such investments at such time or times as it may deem proper, all
subject to the requirement of law and to proper regulations of the Insurance
Department of the State of New York. The Board of Directors shall have power at
any time to fill vacancies in, to change the membership of, or to dissolve, the
Finance Committee. The Finance Committee may make rules for the conduct of its
business and may appoint such committees and assistants as it shall from time to
time deem necessary. A majority of the members of the Finance Committee shall
constitute a quorum at any meeting thereof, and a quorum at any meeting shall
include at least one member who is neither an officer nor salaried employee of
the Company. All action taken by the Finance Committee shall be reported to the
Board at its meeting next succeeding such action.
EXHIBIT D(2)
Charter of American International Life Assurance Company of New York, dated
March 5, 1962
<PAGE>
DECLARATION OF INTENTION
AND
CHARTER
OF
AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF NEW YORK
- --------------------------------------------------------------------------------
We, the undersigned, all being natural persons of full age, and at least
two-thirds of us citizens of the United States, and at least three of us
residents of the State of New York, do hereby declare our intention to form a
stock life insurance company for the purpose of doing the kinds of insurance
business authorized by paragraphs "1", "2", "3" and "23" of Section 46 of the
Insurance Law of the State of New York, and for that purpose do adopt the
following charter:
<PAGE>
CHARTER OF AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF NEW YORK
- --------------------------------------------------------------------------------
Sec. 1. The name of this corporation shall be AMERICAN INTERNATIONAL LIFE
ASSURANCE COMPANY OF NEW YORK.
Sec. 2. The principal office of the corporation shall be located at 102
Maiden Lane, in the City, County and State of New York.
Sec. 3. The kinds of insurance to be transacted by the corporation shall be:
(1) "Life Insurance", meaning every insurance upon the lives of human
beings and every insurance appertaining thereto. The business of life insurance
shall be deemed to include the granting of endowment benefits; additional
benefits in the event of death by accident or accidental means; additional
benefits operating to safeguard the contract from lapse, or to provide a special
surrender value, in the event of total and permanent disability of the insured;
and optional modes of settlement of proceeds.
(2) "Annuities", meaning all agreements to make periodical payments where
the making or continuance of all or of some of a series of such payments, or the
amount of any such payment, is dependent upon the continuance of human life,
except payments made under the authority f the preceding paragraph.
(3) "Accident and Health Insurance", meaning
(a) Insurance against death or personal injury by accident or by any
specified kind or kinds of accident and insurance against sickness, ailment or
bodily injury, including insurance providing disability benefits pursuant to
article nine of the workmen's compensation law, except as specified in
subparagraph (b) following; and
(b) Non-cancellable disability insurance, meaning insurance against
disability resulting from sickness, ailment or bodily injury, (but not including
insurance solely against accidental injury) under any contract which does not
give the insurer the option to cancel or otherwise terminate the contract at or
after one year from its effective date or renewal date. and such other kind or
kinds of business to the extent necessarily or properly incidental to the kind
or kinds of business which the corporation is specifically authorized to
transact as stated above.
Sec. 4. The corporate powers of this corporation shall be exercised through
a Board of Directors and through such officers and agents as such Board shall
empower.
Sec. 5. The Board of Directors of this corporation shall not be less than
thirteen (13) nor more than twenty-five (25) in number, as from time to time
determined in accordance with the provisions of the By-Laws. However, in no case
shall the number of directors be less than thirteen (13). Directors shall be
elected at each annual meeting of stockholders and each director so elected
shall hold office until the next annual meeting of stockholders and until his
successor is elected and qualified. In the event that the number of directors
duly elected and serving shall be less than thirteen (13), the corporation shall
not for that reason be dissolved, but the vacancy or vacancies shall be filled
as provided in Section 7 hereof.
Sec. 6. The annual meeting of the stockholders of the corporation shall be
held in the State of New York and in accordance with the By-Laws on the fourth
Wednesday of March in each and every year, or, if such day in any year by a
legal holiday, then on the next succeeding business day. Notice of the time and
place of such meeting shall be given as prescribed in the By-Laws and as
required by law, including notice to the Superintendent of Insurance of the
State of New York to the extent required by law. At such meeting the
stockholders shall elect a Board of Directors and shall transact such other
business as may legally come before the meeting.
At any meeting of the stockholders the holders of a majority of the shares
of the capital stock of the corporation, present in person or represented by
proxy, shall constitute a quorum of the stockholders for all purposes, unless
the representation of a larger number shall be required by law, and, in that
case, the representation of the number so required shall constitute a quorum.
At any regular or special stockholders' meeting, each stockholder shall be
entitled to vote in person, or by general power of attorney, or by proxy,
appointed by an instrument in writing, subscribed by such stockholder, or by his
duly authorized attorney, and delivered to the Secretary, and shall have one
vote for each share of stock standing registered in his name on the stock books
of the corporation. The Board of Directors may fix a day, not more than forty
(40) days prior to the day of holding any meeting of the stockholders as the day
as of which stockholders entitled to notice of and to vote at such meeting shall
be determined, and only stockholders of record on such day shall be entitled to
notice or to vote at such meeting.
Sec. 7. At all times a majority of the directors shall be citizens and
residents of New York or of adjoining states and not less than three (3) thereof
shall be residents of New York. The directors need to be stockholders of the
corporation. The directors who are salaried officers or employees of the
corporation shall at all times be less than a quorum of the Board of Directors.
If any vacancies shall occur in the Board of Directors by death or
resignation or removal or otherwise, the remaining members of the Board at a
meeting called for that purpose on such notice as may be provided for in the
By-Laws, or at any regular meeting, shall elect a director or directors to fill
the vacancy or vacancies occasioned and each director so elected shall hold
office until the next annual meeting of stockholders. Notice of any election of
a director or directors under the provisions of this Section 7 shall be given to
the Superintendent of Insurance of the State of New York in the manner and to
the extent required by law.
A director may be removed by the majority vote of the stockholders at any
meeting of stockholders. If a request is received from the Superintendent of
Insurance of the State of New York for the removal of a director, the President
or Secretary shall immediately call a Special Meeting of Directors and such
director may be removed by the vote of a majority of the remaining directors
present at such Special Meeting.
Sec. 8. The names and post-office residence addresses of the directors who
shall serve until the first annual meeting of such corporation are as follows:
Name Post-Office Residence Address
---- -----------------------------
John Ahlers 160 Cabrini Blvd., New York 33, N.Y.
Paul M. Anderson 1158 Fifth Avenue, New York 29, N.Y.
Gerarld F. Beal 1 Beekman Place, New York 22, N.Y.
Creighton P. Cunningham 7 Fairview Terrace, Maplewood, N.J.
W. Palmer Dixon 550 Park Avenue, New York 21, N.Y.
Maurice R. Greenberg 1001 Park Avenue, New York 28, N.Y.
Francis F. Randolph 129 East 69th Street, New York 21, N.Y.
Ralph T. Reed 435 East 52nd Street, New York 22, N.Y.
Jack J. Reynolds 1158 Fifth Avenue, New York 29, N.Y.
Cornelius V. Starr 930 Fifth Avenue, New York 21, N.Y.
Gordon B. Tweedy 520 East 86th Street, New York 28, N.Y.
John S. Woodbridge Scott's Cove, Darien, Conn.
William S. Youngman 778 Park Avenue, New York 21, N.Y.
Sec. 9. The duration of the corporate existence of this corporation shall
be perpetual.
Sec. 10. The amount of the capital of this corporation shall be One Million
Dollars ($1,000,000) and shall consist of Ten Thousand (10,000) shares of the
par value of One Hundred Dollars ($100) each.
Sec. 11. The Annual Meeting of the Board of Directors shall be held in the
month of May of each year on a date, time and place which the directors shall
set by resolution at the first quarterly meeting held in March of each year. At
such annual meeting the directors may elect a Chairman of the Board and shall
elect a President from their own number, and also shall elect from their own
number or otherwise, at their discretion, such Vice Presidents and other
officers as may seem advisable to them for the conduct of the corporation's
business, including a Secretary and a Treasurer, who shall hold their offices at
the pleasure of the Board of Directors from the time of their election until the
next succeeding annual meeting and until their successors are elected and
qualified. Any two or more offices may be held by the same person, except that
the duties of President and Secretary shall not be performed by the same person.
In the event of the death, resignation, or removal of any elected officer the
Board of Directors may fill the vacancy. The Board of Directors shall have the
power to delegate powers and duties to persons and to committees to be appointed
by it. At any meeting of the Board of Directors a majority of the Board shall
constitute a quorum for the transaction of business, unless otherwise required
by law or this Charter.
IN WITNESS WHEREOF, we have hereunto subscribed our names and affixed our
seals as of this ______ day of March, 1962.
/s/ Gordon B. Tweedy /s/ Jack J. Reynolds
------------------------------ -------------------------------
Gordon B. Tweedy Jack J. Reynolds
/s/ Frank G. Sterritte /s/ John Ahlers
------------------------------ -------------------------------
Frank G. Sterritte John Ahlers
/s/ Augustus K. Karg /s/ Kenyon D. Ettinger
------------------------------ -------------------------------
Augustus K. Karg Kenyon E. Ettinger
/s/ Arthur F. Searing Creighton P. Cunningham
------------------------------ -------------------------------
Arthur F Searing Creighton P. Cunningham
/s/ Robert L. White /s/ Richard A. McCarthy
------------------------------ -------------------------------
Robert L. White Richard A. McCarthy
/s/ Robert A. McCorkle /s/ Arthur O. King
------------------------------ -------------------------------
Robert A. McCorkle Arthur O. King
/s/ William S. Youngman
-------------------------------
William S. Youngman
<PAGE>
ACKNOWLEDGMENT
STATE OF NEW YORK )
: SS.:
COUNTY OF NEW YORK)
On this 5th day of March, 1962, before me personally came the
following-named individuals, to me known, who being by me duly sworn did each
acknowledge to me that he resides at the address shown after his respective
name:
Name Post-Office Residence Address
Gordon B. Tweedy 520 East 86th Street, New York 28, N.Y.
Jack J. Reynolds 1158 Fifth Avenue, New York 29, N.Y.
Frank G. Sterritte 28 Fairview Avenue, East Williston, N.Y.
John Ahlers 160 Cabrini Blvd., New York 33, N.Y.
Augustus K. Karg 43 Noe Avenue, Madison, N.J.
Kenyon D. Ettinger 137 Asharoken Avenue, Northport, N.Y.
Arthur F. Searing 200 East 57th Street, New York, 22, N.Y.
Creighton P. Cunningham 7 Fairview Terrace, Maplewood, N.J.
Robert L. White 20 Stone Fence Road, Allendale, N.J.
Richard A. McCarthy 86 Princeton Street, Garden City, N.Y.
Robert A. McCorkle 200 East 71st Street, New York 21, N.Y.
Arthur O. King 1 Washington Sq. Village, New York 12, N.Y.
William S. Youngman 778 Park Avenue, New York 21, N.Y.
and that he is a proposed incorporator of AMERICAN INTERNATIONAL LIFE
ASSURANCE COMPANY OF NEW YORK and that in such capacity he signed the foregoing
Declaration of Intention and Charter of the said American International Life
Assurance Company of New York as his free act and deed.
/s/ James A. Mackinnon
------------------------
Notary Public
EXHIBIT D(3)
Certificate of Amendment of the Certificate of Incorporation of American
International Life Insurance Company of New York, dated February 4, 1972
<PAGE>
STATE OF NEW YORK
INSURANCE DEPARTMENT
324 STATE STREET
ALBANY, NEW YORK 12210
BENJAMIN R. SCHENCK
Superintendent of Insurance
The attached Certificate of Amendment of Certificate of Incorporation of
AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF NEW YORK, of New York, New
York, to effect the following:
To increase authorized capital from $1,000,000 comprised of 10,000 shares
with a par value of $100. per share to $1,250,000. comprised of 12,500 shares
with a par value of $100. per share,
IS HEREBY APPROVED February 22, 1972 pursuant to Section 53, of the New
York Insurance Law.
In Witness Whereof, I have hereunto
set my hand and affixed the
official seal of this Department at
the City of Albany, New York, this
22nd day of February, 1972.
BENJAMIN R. SCHENCK
Superintendent of Insurance
By /s/ Robert J. Bertrand
Robert J. Bertrand
Deputy Superintendent
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF NEW YORK
Under Section 805 of the Business Corporation Law
The undersigned, being the President and Secretary, does hereby certify and
set forth:
1. The name of the corporation is AMERICAN INTERNATIONAL LIFE ASSURANCE
COMPANY OF NEW YORK.
2. The certificate of incorporation of AMERICAN INTERNATIONAL LIFE
ASSURANCE COMPANY OF NEW YORK was filed with the Department of State on the 16th
day of March, 1962.
3. The certificate of incorporation of AMERICAN INTERNATIONAL LIFE
ASSURANCE COMPANY OF NEW YORK is hereby amended, pursuant to section 805 of the
Business Corporation Law, to effect a change in the authorized paid-in capital
from $1,000,000 divided into 10,000 each, to be increased to $1,250,000 divided
into 12,500 shares of Common Stock at a par value of $100.00 each.
4. The certificate of incorporation in section 10 is hereby amended as
follows:
"The amount of the capital of this corporation shall be One Million Two
Hundred and Fifty Thousand Dollars ($1,250,000) and shall consist of Twelve
Thousand Five Hundred (12,500) shares of the par value of One Hundred Dollar
($100.00) each." 5. The manner in which this amendment to the certificate of
incorporation of AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF NEW YORK was
authorized was by unanimous consent of the Shareholders and approved by the
Board of Directors.
IN WITNESS WHEREOF, the undersigned have executed and signed this
certificate this 4th day of February, 1972.
/s/ George A. Abouzeid
-----------------------------------
George A. Abouzeid - President
/s/ Preston E. Heath
----------------------------------
Preston E. Heath - Secretary
SEAL
<PAGE>
STATE OF NEW YORK )
: SS.:
COUNTY OF NEW YORK)
BEFORE ME, the undersigned officers, personally appeared GEORGE A. ABOUZEID
and PRESTON E. HEATH, who acknowledged that they were President and Secretary
respectively of AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF NEW YORK, and
that they, as such officers, being authorized to do so, executed the foregoing
instrument for the purpose therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal this 4th
day February, 1972.
/s/ Donald T. DeCarlo
-------------------------
Notary Public
DONALD T. DECARLO
<PAGE>
STATE OF NEW YORK
DEPARTMENT OF LAW
ALBANY
LOUIS J. LEFKOWITZ
ATTORNEY GENERAL
PAXTON BLAIR
SOLICITOR GENERAL
I, Louis J. Lefkowitz, Attorney General of the State of New York, do hereby
certify that I have examined the annexed proposed Declaration and Charter of
American International Life Assurance Company of New York with principal office
at 102 Maiden Lane, in the City, County and State of New York, for the purpose
of transacting the kinds of insurance business authorized by Section 46,
paragraphs 1, 2, 3 and 23 of the Insurance Law of the State of New York,
together with the proof of publication of notice of intention to form such
corporation, and I am of the opinion that the instruments submitted conform with
the requirements of law.
In Witness Whereof, I have hereunto set
my hand and affixed the official seal
of my office the day and year first
above written.
LOUIS J. LEFKOWITZ
Attorney General
By:______________________________
Solicitor General
EXHIBIT D(4)
Certificate of Amendment of the Certificate of Incorporation of American
International Life Insurance Company of New York, dated January 18, 1985
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF NEW YORK
(A New York Corporation)
UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW
We, the undersigned, William F. Healy and Marion E. Fajen,
President and Secretary respectively, of AMERICAN INTERNATIONAL LIFE
ASSURANCE COMPANY OF NEW YORK, hereby certify under the seal of the
Corporation:
(1) The name of the corporation is AMERICAN INTERNATIONAL LIFE ASSURANCE
COMPANY OF NEW YORK.
(2) The Certificate of Incorporation of AMERICAN INTERNATIONAL LIFE
ASSURANCE COMPANY OF NEW YORK was filed with the Department of Insurance on the
16th day of March, 1962.
(3) The Certificate of Incorporation as now in force and effect is hereby
amended to effect the following amendment authorized by Section 805 of the
Business Corporation Law. To change the date when the Annual Meeting of the
Board of Directors should be held for the purpose of election of officers.
(4) The first sentence of SECTION 11 of the Certificate of Incorporation is
amended to read as follows:
Section 11. The Annual Meeting of the Board of Directors shall be held in
the month of May of each year on a date, time and place which the directors
shall set by resolution at the first quarterly meeting held in March of each
year.
(5) The manner in which this amendment to the Certificate of Incorporation
was authorized was by the written consent of the sole stockholder of all
outstanding shares on September 7, 1984.
IN WITNESS WHEREOF, the undersigned have executed and signed this
certificate this 18th day of January, 1985.
/s/ William F. Healy
----------------------------
William F. Healy, President
/s/ Marion E. Fajen
------------------------------
Marion E. Fajen, Secretary
STATE OF NEW YORK) SS.:
COUNTY OF NEW YORK)
William F. Healy and Marion E. Fajen, being first duly sworn, depose and
say that they are the President and Secretary of AMERICAN INTERNATIONAL LIFE
ASSURANCE COMPANY OF NEW YORK and that they have read the foregoing certificate
and know the contents thereof and that the statements therein contained are
true. Sworn to before me this 18th day of January 1985.
/s/ ROSALIE A. BROWN
- --------------------------------------
Notary Public
ROSALIE A. BROWN
<PAGE>
AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF NEW YORK
Unanimous Consent of Shareholder in Lieu
of Meeting
September 7, 1984
--------------------------------------------------------------
The undersigned holder of record of 12,500 shares, all of the outstanding
Capital Stock of AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF NEW YORK, a
New York corporation ("Corporation"), entitled to vote if a Meeting of
Shareholders were held, in conformity with Section 615 of the New York Business
Corporation Law, hereby adopts and consents to the following action:
To amend the first sentence of Section 11 the CERTIFICATE OF INCORPORATION
as follows:
Section 11. The Annual Meeting of the Board of Directors shall be held in
the month of May of each year on a date, time and place which the directors
shall set by resolution at the first quarterly meeting held in March of each
year.
WITNESS the signature of the undersigned this 7th day September, 1984.
AMERICAN INTERNATIONAL GROUP, INC.
/s/ Marion E. Fajen
By: ______________________________
EXHIBIT D(5)
Certificate of Amendment of the Certificate of Incorporation of American
International Life Insurance Company of New York, dated June 1, 1987
<PAGE>
STATE OF NEW YORK
INSURANCE DEPARTMENT
AGENCY BUILDING ONE
THE GOVERNOR NELSON A. ROCKEFELLER
EMPIRE STATE PLAZA
ALBANY, NEW YORK 12257
JAMES P. CORCORAN
Superintendent of Insurance
The attached Certificate of Amendment of the Certificate of
Incorporation of AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF NEW YORK, of
New York, New York, filed pursuant to Section 805 of the Business Corporation
Law to effect the following:
To amend Section 2 of the Certificate of Incorporation
regarding principal office address.
IS HEREBY APPROVED pursuant to Section 1206 of the New York Insurance
Law.
In Witness Whereof, I have hereunto
set my hand and affixed the
official seal of this Department at
the City of Albany, this 16th day
of June, 1987.
/s/ Robert A. Donnelly
Special Deputy
Superintendent of Insurance
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF NEW YORK
(A New York Corporation)
UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW
We, the undersigned, William F. Healy and Maureen P. Tully, President
and Secretary respectively, of AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF
NEW YORK, hereby certify under the seal of the Corporation:
(1) The name of the corporation is AMERICAN INTERNATIONAL LIFE ASSURANCE
COMPANY OF NEW YORK.
(2) The Certificate of Incorporation of AMERICAN INTERNATIONAL LIFE
ASSURANCE COMPANY OF NEW YORK was filed with the Department of Insurance on the
16th day of March, 1962.
(3) The Certificate of Incorporation as now in force and effect is hereby
amended to effect the following amendment authorized by Section 805 of the
Business Corporation Law.
To delete reference to the street address of the principal office of the
corporation.
(4) Section 2 of the Certificate of Incorporation is amended to read as
follows:
Section 2. The principal office of the corporation shall be located in the
City, County and State of New York.
(5) The manner in which this amendment to the Certificate of Incorporation
was authorized was by the written consent of the sole stockholder of all
outstanding shares on May 19, 1987.
IN WITNESS WHEREOF, the undersigned has executed and signed this
certificate this 1st day of June, 1987.
/s/ William F. Healy
-----------------------------
William F. Healy, President
/s/ Maureen P. Tully
-------------------------------
Maureen P. Tully
<PAGE>
STATE OF NEW YORK) SS.:
COUNTY OF NEW YORK)
William F. Healy and Maureen P. Tully, being first duly sworn, depose and say
that they are the President and Secretary of AMERICAN INTERNATIONAL LIFE
ASSURANCE COMPANY OF NEW YORK and that they have read the foregoing certificate
and know the contents thereof and that the statements therein contained are
true.
Sworn to before me this 1st day of June, 1987.
/s/ Rosalie A. Brown
- ---------------------------------
Notary Public
ROSALIE A. BROWN
<PAGE>
STATE OF NEW YORK
INSURANCE DEPARTMENT
AGENCY BUILDING ONE
THE GOVERNOR NELSON A. ROCKEFELLER
EMPIRE STATE PLAZA
ALBANY, NEW YORK 12257
JAMES P. CORCORAN
Superintendent of Insurance
The attached Certificate of Amendment of the Certificate of Incorporation
of AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF NEW YORK, of New York, New
York, filed pursuant to Section 805 of the Business Corporation Law to effect
the following:
To change the date when the Annual Meeting of the Board of Directors should
be held for the purpose of election of officers.
IS HEREBY APPROVED pursuant to Section 1206 of the New York Insurance Law.
IN WITNESS WHEREOF, I have
hereunto set my hand and
affixed the official seal of
this Department at the City of
Albany, New York, this 1st day
of February, 1985.
JAMES P. CORCORAN
Superintendent of Insurance
By /s/ Robert A. Donnelly
Special Deputy Superintendent
EXHIBIT D(6)
Certificate of Amendment of the Certificate of Incorporation of American
International Life Insurance Company of New York, dated March 22, 1989
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF NEW YORK
(a New York Corporation)
UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW
We, the undersigned, A. Raymond Williams and Maureen P. Tully, the
President and the Secretary respectively, of AMERICAN INTERNATIONAL LIFE
ASSURANCE COMPANY OF NEW YORK, hereby certify under the seal of the Corporation:
(1) The name of the corporation is AMERICAN INTERNATIONAL LIFE ASSURANCE
COMPANY OF NEW YORK.
(2) The Certificate of Incorporation of AMERICAN INTERNATIONAL LIFE
ASSURANCE COMPANY OF NEW YORK was filed with the Department of Insurance on the
16th day of March, 1962.
(3) The Certificate of Incorporation as now in force and effect is hereby
amended to effect the following amendment authorized by Section 805 of the
Business Corporation Law. To change the par value of the capital stock of the
corporation.
(4) Section 10 of the Certificate of Incorporation is amended to read as
follows: Section 10. "The amount of the Capital of the corporation shall be TWO
MILLION FIVE HUNDRED THOUSAND DOLLARS ($2,500,000) and shall consist of Twelve
Thousand Five Hundred (12,500) shares of the par value of TWO HUNDRED DOLLARS
($200.00) each."
(5) The manner in which this amendment of the Certificate of Incorporation
was authorized by the written consent of the sole stockholder of all outstanding
shares on March 22, 1989.
IN WITNESS WHEREOF, the undersigned have executed and signed this
certificate this 22nd day of March 1989.
---------------------------------
A. Raymond Williams, President
---------------------------------
Maureen P. Tully, Secretary
STATE OF NEW YORK) SS.:
COUNTY OF NEW YORK)
A. Raymond Williams and Maureen P. Tully, being first duly sworn, depose
and say that they are the President and Secretary of AMERICAN INTERNATIONAL LIFE
ASSURANCE COMPANY OF NEW YORK and that they have read the foregoing certificate
and know the contents thereof and that the statements therein contained are
true.
Sworn to me this 22nd day of March, 1989.
/s/ ROSALIE A. BROWN
--------------------------
Notary Public
ROSALIE A. BROWN
EXHIBIT D(7)
Certificate of Amendment of the Certificate of Incorporation of American
International Life Insurance Company of New York, dated June 27, 1991
<PAGE>
SHORT CERTIFICATE
STATE OF NEW YORK
INSURANCE DEPARTMENT
GREGORY V. SERIO
ACTING SUPERINTENDENT OF INSURANCE
It is hereby certified that the annexed copy of Declaration of Intention and
Charter of AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF NEW YORK, of New
York, New York, as filed in this Department March 16, 1962, with Amendments to
date,
has been compared with the original on file in this Department and that it is a
correct transcript therefrom and of the whole of said original.
In Witness Whereof, I have
hereunto set my hand and affixed
the official seal of this Dept.
at the City of Albany, this 18th
day of February, 1997.
/s/ Frank M. D'Amico
Special Deputy Superintendent
<PAGE>
STATE OF NEW YORK
INSURANCE DEPARTMENT
AGENCY BUILDING ONE
THE GOVERNOR NELSON A. ROCKEFELLER
EMPIRE STATE PLAZA
ALBANY, NEW YORK 12257
SALVATORE R. CURIALE
Superintendent of Insurance
The attached Certificate of Amendment of the Certificate of
Incorporation of AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF NEW YORK, of
New York, New York, filed pursuant to Section 805 of the Business Corporation
Law and effecting the following:
To increase the capital stock from $2,500,000 comprised of 12,500
shares with a par value of $200.00 per share to $3,225,000 comprised of 16,125
shares with a par value of $200.00 per share.
IS HEREBY APPROVED pursuant to Section 1206 of the New York Insurance
Law.
In Witness Whereof, I have
hereunto set my hand and affixed
the official seal of this Department
at the City of Albany, this 28th day
of June, 1991.
SALVATORE R. CURIALE
Superintendent of Insurance
By /s/ Robert A. Donnelly
Special Deputy Superintendent
<PAGE>
Certificate of Amendment of the Certificate of Incorporation
of
American International Life Assurance Company of New York
Under Section 805 of the New York Business Corporation Law and
Section 1206 of the New York Insurance Law
- --------------------------------------------------------------------------------
It is hereby certified that:
FIRST: The name of the corporation is American International Life Assurance
Company of New York.
SECOND: The certificate of incorporation of the corporation was filed by
the Department of Insurance on March 16, ------ 1962.
THIRD: The amendment of the certificate of incorporation of the corporation
effected by this certificate
of amendment is to increase the capital stock of the corporation.
FOURTH: To accomplish the foregoing amendment, Section 10 of the
certificate of incorporation of the corporation, relating to the authorized
capital stock of the corporation is hereby amended to read as follows:
Section 10: The amount of capital stock of this corporation shall be Three
Million Two Hundred and Twenty Five Thousand Dollars ($3,225,000) and shall
consist of Sixteen Thousand One Hundred and Twenty Five (16,125) shares of the
par value of Two Hundred Dollars ($200) each.
FIFTH: The foregoing amendment of the certificate of incorporation of the
corporation was authorized by the unanimous written consent of the Board of
Directors of the corporation, followed by the unanimous written consent of the
holders of all of the outstanding shares of the corporation entitled to vote on
the said amendments of the certificate of incorporation.
IN WITNESS WHEREOF, we have subscribed this document on the date set forth
below and do hereby affirm, under the penalties of perjury, that the statements
contained therein have been examined by us and are true and correct.
Date: June 27, 1991
/S/ PATRICK J. FOLEY
- --------------------------------------------------------------------------------
Sworn and subscribed before me Patrick J. Foley
this 27th day of June 1991. Vice President
PATRICIA R. MCAULIFFE
- ------------------------------- -------------------------
Notary Public Debra E. Klugman
Secretary
<PAGE>
STATE OF NEW YORK
INSURANCE DEPARTMENT
AGENCY BUILDING ONE
THE GOVERNOR NELSON A. ROCKEFELLER
EMPIRE STATE PLAZA
ALBANY, NEW YORK 12257
JAMES P. CORCORAN
Superintendent of Insurance
The attached Certificate of Amendment of the Certificate of
Incorporation of AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY OF NEW YORK, of
New York, New York, filed pursuant to Section 805 of the Business Corporation
Law and effecting the following:
To increase the capital stock from $1,250,000 comprised of 12,500
shares with a par value of $100.00 per share to $2,500,000 comprised of 12,500
shares with a par value of $200.00 per share.
IS HEREBY APPROVED pursuant to Section 1206 of the New York Insurance
Law.
In Witness Whereof, I have hereunto
set my hand and affixed the
official seal of this Department at
the City of Albany, this
9th day of June, 1989.
JAMES P. CORCORAN
Superintendent of Insurance
By /s/ Robert A. Donnelly
Special Deputy Superintendent
EXHIBIT E(1)
Form of Life Insurance Application (24APP0396NY)
<PAGE>
ASSURANCE COMPANY OF NEW YORK New York, NY 10005
LIFE INSURANCE APPLICATION
1. PROPOSED First Middle Last Date of Birth Age Sex Place of Birth
INSURED ______________________ _____________ ____ ___ ______________
mo. day yr.
Address City State Zip
------------------------------------------------------------------------------
Social Security No. __________ Citizenship ____ U.S. Other (Country)_________
Telephone Occupation and Duties:______________________________
Home ( ) Employer: __________________
------------------------------
Business ( ) Address: ________________________
-----------------
- -------------------------------------------------------------------------------
2. OWNER First Middle Last Social Security or Tax I.D. No.
(if other _____________________________________________________________________
than Address City State Zip
proposed _____________________________________________________________________
insured) If a contingent owner is desired, indicate in special
instructions below.
- -------------------------------------------------------------------------------
3. BENEFICIARY Primary Relationship
-------------------------------------------------------------
Contingent Relationship
-------------------------------------------------------------
- -------------------------------------------------------------------------------
4. PLAN Plan _________________ Insurance Amount $ _________________
SELECTION $_________Waiver or Premium Accidental Death $ ___________ Waiver of
Specified Premium $ __________ Other _________________
Death Benefit Option:_____ Universal Life - Option A (increasing)
_____ Variable Life - Option I (level)
_____ Universal Life - Option B(level)
_____ Variable Life - Option II (enhanced)
- -------------------------------------------------------------------------------
5. PREMIUM Premium Paid with Application $ _____ must be at least two months
premium for the plan and
insurance amount applied for)
Universal Life or Variable Life only:
Planned Initial Premium $ ___________ Planned Periodic Payment $ ________
Frequency:_____ Annual _____ Semi-Annual ______ Quarterly _____ Other ______
- -------------------------------------------------------------------------------
6. OTHER Life Insurance now in force: Company Amount Plan Year Issued
IMPORTANT (if none, so state)
INFORMATION
YES or NO
a. Have you ever had a request for life or disability insurance
declined, postponed, rated, or restricted in any way, or are any
other applications for insurance pending or contemplated?
b. Will the policy applied for replace or change any existing life
insurance or annuity?
c. Within the past two years have you flown or taken instruction as
a pilot, or engaged in any kind of racing, scuba or sky diving,
hang gliding, or do you intend to?
d. Within the past five years have you used amphetamines, narcotics,
barbiturates, hallucinogens, cocaine, or marijuana, or received
treatment for drug or alcohol use?
e. Have you ever had your driver's license restricted or revoked?
Driver's License No._____ _____
f. Proposed Insured's Height _____ ft. ______ in. Weight ______ lbs.
Any weight loss in last year?
g. Within the past 12 months have you smoked cigarettes or used any
other tobacco products?
h. Do you intend to reside or travel outside the United States?
Give details to "YES" responses to questions 6a through 6h.
- -------------------------------------------------------------------------------
HOME OFFICE AMENDMENTS AND CORRECTIONS SPECIAL INSTRUCTIONS (for home office use
only where permitted by state statute)
- --------------------------------------------------------------------------------
<PAGE>
- ------------------------------------------------------------------------------
7. Have you within the past 5 years: YES NO
a. Consulted a physician for any reason; had an electrocardiogram or
other diagnostic tests?
b. Been in a clinic, hospital, or medical facility for observation
or treatment?
c. Been advised to have any diagnostic test, hospitalization, or
surgery which was not done?
- -------------------------------------------------------------------------------
8. Within the past 10 years, have you ever had or been treated for or had
indication of:
a. Cancer, stroke, or heart attack? _
b. Diabetes, glandular disorder, enlarged lymph nodes, epilepsy, or any other
mental or nervous disorder?
c. Chest pain, high blood pressure, heart murmur, or other circulatory or
blood disorder?
d. Kidney, urinary or reproductive disorder, or sexually transmitted disease?
e. Liver or gastro-intestinal disorder?
f. Asthma, emphysema, or other respiratory disorder?
g. Loss of vision, amputation, deformity, arthritis, or other musculo-skeletal
disorder?
- ----------------------------------------------------------------------------
9. Any family history of diabetes or heart disease?
- -----------------------------------------------------------------------------
10. FAMILY HISTORY AGE IF STATE OF AGE AT CAUSE OF
LIVING HEALTH DEATH DEATH
FATHER
MOTHER
BROTHERS & SISTERS
No. Living
No. Dead
- -------------------------------------------------------------------------------
11. Have you ever had or been told you have:
a. "AIDS" (Acquired Immune Deficiency Syndrome)?
b. "AIDS" Related Complex (ARC)?
c. Tested positive for antibodies to the "AIDS"
(Human T-Cell Lymphotropic, Type III;
HTLV-III) Virus?
- -------------------------------------------------------------------------------
12. Are you presently taking any medication?
INSTRUCTIONS: Give full details for all "YES" answers to questions 7 to 12. Give
dates, treatment, duration of illness, and names and addresses of all attending
physicians and medical facilities.
- -------------------------------------------------------------------------------
13. Personal Physician: (If none, so state)
Name___________________________
Address_________________________
Date and Reason Last Seen__________
================================
- -------------------------------------------------------------------------------
I hereby represent all my statements and answers to the above questions to be
correct and true to the best of my knowledge and belief. This application and
any amendments shall be a part of any contract issued by the Company. No medical
examiner or agent can make or change a contract or waive any of the Company's
rights or requirements. Unless otherwise provided by the Receipt for Conditional
Temporary Insurance, if applicable, no policy will take effect unless and until
while the insured is living, the application is approved, the full initial
premium is paid, the policy is delivered and accepted by the owner, and answers
and statements in this application continue to be complete and true at the time
of such payment and acceptance. Acceptance of any policy issued based on this
application will be a ratification of any amendments or corrections noted by
American International Life Assurance Company of New York in the space headed
"Home Office Amendments and Corrections," except that if required by state
statute or regulation, any change in amount, age, plan of insurance, additional
benefits, or classification must be agreed to in writing.
I authorize any physician or medical professional, hospital, clinic or
medically-related facility, insurer or reinsurer, Veterans Administration
facility, the Medical Information Bureau, Inc., consumer reporting agency,
employer or person, to disclose to American International Life Assurance Company
of New York and its reinsurers, medical and other information pertaining to me
for use in determining insurability. I authorize all such sources, except the
MIB, Inc. to give such information to any insurance support organization
authorized by American International Life Assurance Company of New York to
collect and transmit such information. I agree that this authorization shall be
valid from the date signed for a period of 2 1/2 years. I agree that a photocopy
of this authorization shall be as valid as the original. I understand that a
copy is available to me upon request. I hereby acknowledge receipt of the Notice
to Applicant Part One and Part Two.
SIGNED AT ____________________________ ON _______________________________
(City, State)
(Signature of Proposed Insured
or Parent if a Minor)
________________________________________________
(Signature of Owner if other than Proposed Insured)
________________________________________________
(Printed Name of Agency) (Code No.)
- --------------------------------------- -----------------------------------
(Signature of Agent) (Address of Agency)
( ) ( )
- --------------------------------------- -----------------------------------
(Printed name of Agent) (Code No.) (Agent Phone Number) (Agency Phone
Number)
AGENT: Do you have any reason to believe the contract applied for is to replace
or change any existing annuities or life insurance on the life of the proposed
insured? _____YES_____NO
<PAGE>
AMERICAN INTERNATIONAL LIFE 80 Pine Street
ASSURANCE COMPANY OF NEW YORK New York, NY 10005
RECEIPT FOR CONDITIONAL TEMPORARY INSURANCE
In exchange for the completion of the application and the payment of the
premium required by this receipt as shown below, American International Life
Assurance Company of New York ("Company") will provide insurance prior to the
issuance of the policy, upon the following terms:
No insurance will be provided under this receipt unless all Requirements shown
below are first fulfilled during the lifetime of the proposed insured, and
within 60 days from the date Conditional Temporary Insurance starts. If all
Requirements are not so met, or the proposed insured dies by suicide, the
liability of the Company shall be limited to a refund to the applicant of the
premium paid with this receipt. This receipt provides no insurance for riders or
additional benefits.
Requirements. The following must all be fulfilled before insurance will start:
(1) All questions in the application(s) have been fully answered with no
material misrepresentation; (2) Question No 8a is answered "NO"; (3) A first
premium equal to the greater of (a) the full modal premium or (b) at least two
months premium for the plan and insurance amount applied for has been received
by the Company; (4) All medical examination and tests required by the Company's
published underwriting rules according to the age and insurance amount applied
for have been completed; (5) The proposed insured is acceptable to the Company
under its rules and practices for the plan and insurance amount applied for, at
the rate class applied for or a lesser premium, as of the date the Company
receives all of its medical requirements.
When Conditional Temporary Insurance Starts. If the Requirements have been
fulfilled, this Receipt will provide insurance beginning with the later of (1)
the date of the application; or (2) the date all medical examination and tests
have been completed.
Death Benefit Amount Limit. The total amount of insurance provided by this
receipt, and the total in the aggregate of this and all other similar receipts
on the life of the proposed insured pending with the Company, is limited to the
lesser of: (1) the initial death benefit of the insurance applied for in the
application; or (2) $500,000. The death benefit will be paid to the beneficiary
named in the application.
When Conditional Temporary Insurance Ends. Insurance provided by this receipt
ends on the earliest of the following: (1) The date of the policy applied for is
issued as applied for (2) The date the Company mails to the applicant at the
address on the application, a notice that the application has been declined; (3)
60 days after the date Conditional Temporary Insurance starts under this
receipt; (4) The date the applicant receives an offer from the Company to issue
the policy other than as applied for. If the insurance coverage ends under (2),
(3) or (4) above, the premium paid with this receipt will be refunded. In no
event will insurance be in effect under both this receipt and any policy issued
on the basis of the application.
Payment Terms. The required premium will not be considered paid unless any
check, draft, money order or other form of payment is paid in accordance with
its terms. All premium checks must be made payable to the Company. Do not leave
the payee blank.
No agent may alter or waive any part of this receipt.
Receipt of $ _______ is hereby acknowledged this _____ day of ________, 19___
- -------------------------------------------------------------
(Signature of Agent)
- -------------------------------------------------------------------------------
<PAGE>
NOTICE TO APPLICANT - PART ONE
In order to properly underwrite and administer your insurance program, American
International Life Assurance Company of New York, (we, our) and our reinsurers
will rely heavily on information provided by you. We may also ask for medical or
other information about you from others, such as medical professionals who have
treated you and the Medical Information Bureau, Inc. In some situations, and in
compliance with applicable law, we may disclose necessary items of information
to third parties without your specific authorization. Upon written request, you
may have access to the information in your life. You also have the right to seek
correction of information you believe to be inaccurate.
In making this application for insurance, it is understood that an investigative
consumer report may be prepared whereby information is obtained through personal
interviews with your neighbors, friends, or others with whom you are acquainted.
This inquiry includes information as to your character, general reputation,
personal characteristics, and mode of living. You have the right to make a
written within a reasonable period of time to receive additional information
about the nature and scope of this investigation. You also have the right to
request to be interviewed in connection with the preparation of such report. You
may receive a copy of the report upon written request.
<PAGE>
NOTICE TO APPLICANT - PART TWO
Information regarding your insurability will be treated as confidential. We may,
however, make a brief report thereon to the Medical Information Bureau, Inc., a
non-profit membership organization of life insurance companies, which operates
an information exchange on behalf of its members. If you apply to another Bureau
member company for life or health insurance coverage, or a claim for benefits is
submitted to such a company, the Bureau, upon request, will supply such company
with information in its file. We or our reinsurers may also release information
in our files to other insurance companies to which you may apply for life or
health insurance or to which a claim for benefits may be submitted.
Upon receipt of a request from you, the Bureau will arrange disclosure of any
information it may have in your file. If you question the accuracy of
information in the Bureau's file, you may contact the Bureau and seek correction
in accordance with the procedures set forth in the Federal Fair Credit Reporting
Act. The address of the Bureau's information office is: P.O. Box 105, Essex
Station, Boston, MA 02112, telephone number (617) 426-3660. If you would like to
receive a more detailed explanation of our procedures and your rights, please
send your request to: The Director of Underwriting, American International Life
Assurance Company of New York, 80 Pine Street, New York, NY 10005.
EXHIBIT E(2)
Form of Supplemental Application (2VULSUP1294NY)
<PAGE>
AMERICAN INTERNATIONAL LIFE 80 Pine Street
ASSURANCE COMPANY OF NEW YORK New York, NY 10005
Supplemental Application For
PLEASE PRINT ALL ANSWERS Flexible Premium Variable Life Insurance
1. Proposed Insured 2. Birth Date
- ----------------- ----- ----------------- ----- ---- ---
First Name M.I. Last Name Month Day Year
3. Social Security Number
- -
- -------------------------
4. Allocation of premium (Must be in 1% increments and no less than 5% to
any one fund. Total must equal 100%.)
Guaranteed Account % Fidelity:
---- ---------
Asset Manager %
----
Alliance: Growth %
-------- ----
Conservative Investors % High Income %
----- ----
Growth % Investment Grade Bond %
----- ----
Growth & Income % Money Market %
----- ----
Growth Investors % Overseas %
----- ----
%
Dreyfus: Van Eck: ----
Stock Index Fund ----- % Worldwide Hard Assets ---- %
Zero Coupon ----- % World Wide Emerging
Markets ---- %
NOTE: The Premium will be allocated to the Fidelity Money Market Fund until the
end of the Right to Examine This Policy Period.
5. Dollar Cost Averaging (Minimum of $2,000 must be allocated to the Fidelity
Money Market Fund). Yes No If elected you must complete the Dollar Cost
Averaging Plan Request Form.
6. (a) Did the Owner receive current prospectuses? Yes ____ No ______
(b) Does the Owner understand that:
The death benefit may increase or decrease depending on investment
performance? Yes No
The cash value may increase or decrease depending on the investment
performance? Yes No
The policy will lapse if the cash surrender value becomes insufficient
to cover policy charges? Yes No
(c) Does the Owner believe that this policy will meet insurance needs and
financial objectives? Yes _____ No _____
7. Suitability
What is the Owner's:
Approximate net worth
Income earned
Income unearned
Number of dependents
Marginal tax bracket
Investment Objective(s) (check all that apply):
Growth ________ Growth and Income ________ Income ________
Capital Appreciation ________ Speculation ________
I, the Owner, represent that the statements and answers in this supplemental
application are written as made by me and are complete and true to the best of
my knowledge and belief.
Signed on ______________ , 19___ _________________________
Signature of Owner
at ____________, State of ______ _________________________
Signature of Proposed Insured if not
________________________________ Owner (Parent if Proposed Insured is
Signature of Soliciting Agent Age 15 or less)
An Illustration of Benefits, Including Death Benefits, Policy Values and
Cash Surrender Values is Available Upon Request.
EXHIBIT F
Memorandum Regarding Procedures
<PAGE>
Issuance, Redemption and Transfer Procedures for
Policies Pursuant to Rule 6e-3 (T)(b)(12)(iii)
This document set forth, as required by Rule 6e-3(T)(b)(12)(ii), the
administrative procedures that will be followed by American International Life
Assurance Company of New York "AI Life" in connection with the issuance of the
flexible premium variable universal life insurance policy ("the Policy")
described in this Registration Statement, the transfer of assets held
thereunder, and the redemption by Policyowners of their interests in the
Policies.
-------------------------------
1. "Public Offering Price":
Purchase and Related Transactions
Set out below is a summary of the principal Policy provisions and
administrative procedures which might be deemed to constitute, either
directly or indirectly, a "purchase" transaction. The summary shows that,
because of the insurance nature of the Policies, the procedures involved
necessarily differ in certain significant respects from the purchase
procedures for mutual funds and contractual plans.
(a) Premium Schedules and Underwriting Standards
A premium payment schedule (Planned Periodic Premium) may be selected at
the time of application and may be changed at any time. The planned
periodic premium is set forth in the Policy. There is no penalty if the
planned periodic premium is not paid, nor does payment of this amount
guarantee coverage for any period of time. Even if scheduled premiums are
paid, the Policy terminates when the Net Cash Surrender Value becomes
insufficient to pay certain monthly; charges and a grace period expires
without sufficient payment.
A Policyowner may make additional premium payments at any time before
the death of the insured prior to the Policy Anniversary following the
Insured attained age 99. The minimum premium payment is $50.00. We may
require satisfactory evidence of insurability before accepting any premium
which results in an increase in the net amount at risk. In addition, total
premiums paid in a policy year may not exceed guideline premium limitations
for life insurance set forth in the Internal Revenue Code.
The Policies will be offered and sold pursuant to established
underwriting standards and in accordance with state insurance laws. State
insurance laws prohibit unfair discrimination among insureds but recognize
the mortality charges must be based upon factors such as age, sex, health
and smoker status and occupation.
(b) Application and Initial Premium Procedures
Individuals wishing to purchase a Policy must complete an Application.
The Policy is available as a Qualified Policy or a Non-qualified Policy.
The minimum Face Amount of a Policy is $50.00. The insured may not be older
than attained age 75 as of the Policy Date or the date of any increase in
Face Amount. Before issuing any Policy AI Life will require satisfactory
evidence of insurability.
The Policyowner selects a premium payment schedule in the Application.
The amount of the planned periodic premium is shown on the Policy
Information Section. There is no penalty if the planned periodic premium is
not paid, nor does payment of this amount guarantee coverage for any period
of time. While the insured is living, the owner may make unscheduled
premium payments at any time prior to the Policy Anniversary following the
Insured attained age 99.
The initial Net Premium will be credited to the Policy as of the
Policy Date. Subsequent Planned Periodic Premiums and accepted unplanned
premiums will be credited to the Policy and the Net Premiums will be
invested as of the date the Premium or notification of deposit is received
at Our Administrative Office. However, any Net Premiums requiring
underwriting will be allocated to the Money Market Subaccount until
underwriting has been completed. When accepted or at the end of the Free
Look Period, the Policy Account Value in the Money Market Subaccount
attributable to the resulting Net Premiums will be credited to the Policy
and allocated in accordance with the specified allocation percentages
directly;. If additional Premium is rejected, AI Life will refund the
excess amount.
(c) Free Look Provision
A Policy may be canceled within 10 days (or longer if required by
state law0 after the Policyowner receives it by returning it to AI Life or
the registered representative through whom it was purchased. Premiums will
be allocated to the Money Market Fund until 10 days after the Issue Date or
the end of the Free Look Period. The Policyowner will then receive from AIG
Life the greater of the Policy's Net Cash Value as of the date the Policy
is returned or premiums paid; less loans and Partial Surrenders. The
Policyowner may cancel increases in the Face Amount under the same time
limitations. For canceled increases in the Face Amount, the refund equals
the amount of premiums allocated to the increase in accordance with the
surrender charge provision, less any portion of such amount previously paid
to the Policyowner.
(d) Repayment of Policy Loan
Unless AI Life sets a lower rate for any period, the effective annual
loan interest rate is 8%, which is payable in arrears. Loan interest for
the Policy Year in which a loan is taken will be due on the next Policy
Anniversary. Loan interest accrues each day and is payable on the Policy
Anniversary, on the date of death, surrender or lapse. Loan interest not
paid in cash as of the Policy Anniversary, or prior to the expiration of
the grace period will be charged as a new loan and amounts may need to be
transferred to the Guaranteed Account to cover the increased loan amount.
If the loan interest rate is lower than 8% per year, any subsequent
increase in the interest rate will be subject to the following conditions:
(1) The effective date of any increase in the interest rate shall not
be earlier than one year after the effective date of the
establishment of the previous rate.
(2) The amount by which the interest rate may be increased will not
exceed one percent per year, but the rate of interest shall in no
event ever exceed 8%.
(3) AI Life will give notice of the interest rate in effect when a
loan is made and when sending notice of loan interest due.
(4) If a loan is outstanding 40 days or more before the effective
date of an increase in the interest rate, AI Life will notify
the Policyowner of the increase at least 30 days prior to the
effective date of the increase.
(5) AI Life will give notice of any increase in the interest rate
when a loan is made during the 40 days before the effective date
of the increase.
All or part of an unpaid loan can be repaid before the Insured's
death or before the Policy is surrendered. Loan repayments are
allocated to the Subaccounts or the Guaranteed Account in accordance
with premium allocations in effect at the time of the loan repayment.
If a loan is outstanding when the insurance or surrender proceeds
become payable, AI Life will deduct the amount of any outstanding
loan from these proceeds.
If the outstanding loan exceeds the Net Cash Surrender Value on
any monthly anniversary, the Policy will be in default. If the Policy
goes into default, the Policyowner will be allowed a 61 day grace
period to pay a premium sufficient to keep the Policy in force for 3
months. AI Life will send notice of the amount required to be paid
during the grace period to the last known address and to any assignee
of record. The Grace Period will begin when the notice is sent.
(e) Correction of Misstatement of Age or Sex
If the Insured's age or sex is misstated in the Policy
application, the Death Benefit payable under the Policy will be
adjusted based on what the Policy would provide according to the most
recent mortality charge for the correct date of birth or correct sex.
2. "Redemption Procedures":
Surrender and Related Transactions
This section outlines those procedures which might be deemed to constitute
redemptions under the Policy. These procedures differ in certain significant
respects from the redemption procedures for mutual funds and contractual plans.
(a) Policy Account Values
The owner of a Policy may make a Partial Surrender or Full Surrender of the
Policy to receive part or all of the Policy's Net Cash Surrender Value, at any
time while the Insured is living. The Net Cast Surrender Value is the Policy's
Account Value less any surrender charges, any administrative charges and
outstanding Policy Loans. The Policy Account Value is the amount provided for
investment in the Separate Accounts and the Guaranteed Account. The Policy
Account Value is held in one or more subaccounts of the Separate Accounts and
the Guaranteed Account. The Policy Account Value is held in one or more
subaccounts of the Separate Accounts and the Guaranteed Account. Initially, this
Policy Account Value equals the net amount of the first premium paid under the
Policy. This amount is allocated among the Guaranteed Account and the
subaccounts according to the allocation percentages requested in the
Application.
Partial Surrenders are not permitted during the first Policy Year, or
during the first 12 months following a Face Amount increase. The minimum Partial
Surrender is $500. The amount available is the Policy's Account Value at the end
of the valuation period during which the written request for the surrender or
partial surrender is received by AI Life, less any surrender charges and
administrative charges and outstanding loans. A partial surrender will be made
on a pro rata basis from the Guaranteed Account and/or subaccount, unless the
Policyowner indicates otherwise. Partial Surrenders will cause a reduction in
the Policy's Face Amount when the Level Death Benefit is in effect. If the Fact
Amount has been increased, the partial surrender will reduce first the most
recent increase, and then the next most recent increase, if any, in reverse
order, and finally the initial face amount. The Net Cash Surrender Value must
exceed $500 after the partial surrender is deducted from the Policy Account
Value. No more than two partial surrenders may be made during a policy year, and
each partial surrender must be at least $500. a partial surrender charge and an
administrative charge will be assessed on a partial surrender. The charge will
be deducted from the Policyowner's Account Value along with the amount requested
to be surrendered.
During the first 14 Policy Years, a surrender charge will be assessed on a
full or partial surrender or decrease in Face Amount. The surrender charge equal
to the sum of (1) and (2) times a duration factor will be assessed against the
Policy Account Value where:
(1) is equal to 25% of the first year paid premium up to the surrender
charge premium; and (20 is equal to 4% of the first year paid premium in excess
of the Surrender Charge Premium.
In addition, the sum of (1) and (2) will be capped at a level not to exceed
4.25% of the Internal Revenue Code 7702 Guideline Single Premium.
<PAGE>
The following table lists the duration factor as described above:
Year Surrender Charge Factor
1-5 100%
6 90%
7 80%
8 70%
9 60%
10 50%
11 40%
12 30%
13 20%
14 10%
15+ 0%
An increase in the Face Amount of the Policy will result in an additional
fourteen year surrender charge applicable to that increase. The additional
surrender charge period will begin on the effective date of the increase.
If the Face Amount of the Policy is reduced before the end of the fourteen
policy year or within fourteen years following a Face Amount increase, AI Life
may also deduct a pro rata share of any applicable surrender charge from the
Policyowner's Policy Account Value. Reductions will first be applied against the
most recent increase in the Face Amount of the Policy. They will then be applied
to prior increases in the Face Amount of the Policy in the reverse order in
which such increases took place, and then to the original Face Amount of the
Policy.
In addition, a Partial Surrender Charge will be assessed and equal to a pro
rate portion of the applicable surrender charge that would apply to a Full
Surrender. The Partial Surrender Charge is determined by multiplying the
applicable surrender charge by a fraction (equal to the partial surrender amount
plus the Partial Surrender Administrative Charge payable divided by the result
of subtracting the applicable surrender charge from the unloaned portion of the
Policy Account Value). This amount is assessed against the Subaccounts or the
Guaranteed Account in the same manner as provided for with respect to the
partial surrender amount paid.
A partial surrender charge is also deducted from the Policy Account Value
upon a decrease in Fact Amount. The charge is equal to the applicable surrender
charge multiplied by a fraction (equal to the decrease in Face Amount divided by
the Face Amount of the Policy prior to the decrease).
AI Life will deduct an administrative charge upon a partial surrender.
This charge is $25. If required by the insurance regulations of any state, the
administrative charge for a partial surrender will be equal to the lesser of $25
or 2% of the amount surrendered. This charge will be deducted from the Policy
Account Value in addition to the amount requested to be surrendered and will be
considered to be part of the partial surrender amount.
Each partial surrender will reduce the Policy Account Value by the amount
of partial surrender plus the proportional surrender charge and $25 fee. If the
Death Benefit coverage is the Level Death Benefit Option, the Face Amount will
also be reduced by the amount of the partial surrender in the following order:
1. The most recent increase in the Face Amount, if any, will be reduced
first
2. The next most recent increases in the Face Amount, if any, will then
be successively decreased.
3. The initial Face Amount will then be decreased.
(b) Payment of Proceeds
If the Policy has not terminated, payment of the Net Cash Surrender Value,
any Partial Surrender, loan proceeds or the Death Benefit are made within 7 days
after AI Life receives all required documents at it Administrative Office or
such other location that AI Life indicates to the Policyowner in writing. But
AI Life can delay payment of the Net Cash Surrender Value or any Partial
Surrender from the Separate Accounts, loan proceeds, or the Death Benefit during
any period that:
It is not reasonable practicable to determine the amount because the New
York Stock Exchange is closed (other than customary weekend and holiday
closings), trading is restricted by the Securities and Exchange Commission
declares that an emergency exists; or
The Commission, by order, permits AI Life to delay payment in order to
protect Policyowners.
AI Life may delay paying any surrender value or loan proceeds on the Guaranteed
Account for up to 6 months from the date the request is received at its
Administrative Office. AI Life can delay payment of the entire Death Benefit if
payment is contested. AI Life investigates all death claims arising within the
two-year contestable period. Upon receiving the information from a completed
investigation, AI Life generally makes a determination within five days as to
whether the claim should be authorized for payment. Payments are made promptly
after authorization. If payment of a Net Cash Surrender Value or Partial
Surrender value is delayed for 30 days or more, AI Life adds interest at an
annual rate of 3%, or more, if required by law. AI Life adds interest to a Death
Benefit from the date of death to the date of payment at the same rate. When AI
Life receives written notification of the Insured death, AI Life receives
written notification of the Insured death, AI Life will transfer the
Policyowners's Account Value from the Subaccounts to the Guaranteed Account.
The Death Benefit is the amount payable to the named Beneficiary when the
Insured dies. Upon receiving due proof of death, AI Life pays the Beneficiary
the Death Benefit amount determined as of the date the Insured dies. All or part
of the benefit can be paid in cash or applied under one or more of the payment
options under the Policy.
Added to the Face Amount is the value of any additional benefits provided
by rider. AI Life pays interest on the Death Benefit from the date of death to
the date the Death Benefit is paid or a payment option becomes effective. AIG
Life subtracts any outstanding loan, and any unpaid monthly deductions.
(c) Policy Loans
Using the Policy as sole security, the Policyowner can borrow any amount up
to the loan value of the Policy at any time after the first 12 months of the
Policy or after the first 12 months following any increase in Face Amount, by
submitting a written request to AI Life's Administrative Office. The loan value
on any given date is equal to 90% of the Net Cash Surrender Value.
There will be a $25 fee deducted from the Policy Account Value for each
loan request. The minimum amount that can be borrowed is $500.
When a Policy Loan is made, an amount equal to the loan proceeds is
withdrawn from the Policy Account Value in the Subaccounts or Guaranteed
Account. This withdrawal is made pro rata on the basis of the Policy Account
Value in each Subaccount or Guaranteed Account unless the Policyowner directs a
different allocation when requesting the loan. The loan amount withdrawn is then
transferred to the Policy Loan Account in the Guaranteed Account and will become
part of the Guaranteed Policy Account Value. Conversely, when a loan is repaid,
an amount equal to the repayment will be transferred from the Policy Loan
Account to the Guaranteed Account or Subaccounts in accordance with the
effective net premium allocation percentages.
The amount in the Policy Loan Account will be credited with interest at an
annual rate of 6.00%. AI Life may, at its discretion, increase this rate. Thus,
the maximum net cost of a loan is 2.00% per year (the difference between the
rate of interest we charge and the amount of interest credited).
If the Policy has not terminated, payment of loan proceeds is made within 7
days after AI Life receives any required documents at its Administrative Office
or any other location indicated in writing by AI Life. AI Life can delay
payment of loan proceeds attributable to the Separate Account during any period
that:
It is not reasonably practicable to determine the amount because the New
York Stock Exchange is closed (other than customary weekend and holiday
closings), trading is restricted by the Commission, or the Commission declares
that an emergency exists; or
The Commission, by order, permits AI Life to delay payment in order to
protect Policyowners.
AI Life may delay paying any loan proceeds from the Guaranteed Account for
up to 6 months from the date the request is received at its Administrative
Office.
(d) Policy Termination
The Policy does not terminate for failure to pay premiums since payments,
other than the initial premium are not specifically required. Rather, if on a
Monthly Anniversary, the Net Cash Surrender Value is less than the monthly
deduction charge for the next Policy month, the Policy will continue for a grace
period of 61 days after that Monthly Anniversary.
AI Life allows 61 days to pay any premium necessary to cover the 3 months
of monthly deductions and/or excess Policy loan. AI Life will mail a notice to
the Policyowner at his last known address, and a copy to the last known asignee
on the records at least 31 days before the end of the grace period which sets
forth this amount. During the grace period, the Policy remains in force. If AIG
Life does not receive the required payment before the end of this grace period,
the Policy will end and there will be no Policy Account Value or life insurance
benefit. If the insured dies during the grace period, AI Life will pay the
Death Benefit. However, these proceeds will be reduced by the amount of any
Monthly Deduction Charges for the full Policy month or months that run from the
beginning of the late period through the Policy month in which the Insured dies
or by the amount of any Policy loans.
For a period of five (5) years after termination, the Policyowner can
request that AI Life reinstate the Policy during the Insured's lifetime. AIG
Life will not reinstate the Policy if it has been returned for its Net Cash
Surrender Value.
Before AI Life will reinstate the Policy, AI Life must receive the
following:
Evidence of insurability satisfactory to AI Life, if the reinstatement is
requested more than 30 days after termination.
A payment of an amount sufficient to cover (i) the total monthly
administrative charges from the beginning of the grace period to the effective
date of reinstatement; (ii) total monthly deductions for 3 months, calculated
from the effective date of reinstatement; and (iii) the charges for applicable
taxes, associated with this payment. AI Life will determine the amount of this
required payment as if no interest or investment performance were credited to or
charged against the Policyowner's Account Value.
If AI Life does reinstate the Policy, the Face Amount for the reinstated
Policy will be same as it would have been if the Policy had not terminated.
4. Transfers
All or part of the Policy Account Value may be transferred among
Subaccounts of the Separate Account or to the Guaranteed Account. The minimum
value of Accumulation Units that may be transferred between Subaccounts or to
the Guaranteed Account, is the lesser of (i) $250 or (ii) the total value of the
Accumulation Units in a Subaccount or the Guaranteed Account Value would be less
than $250, the entire value will be transferred. There is no charge for the
first six transfers in any one Policy Year. AI Life reserves the right to
charge $25 for each transfer in excess of six per year.
Amounts may be transferred from the Guaranteed Account to the Subaccounts,
subject to the following conditions:
1. Maximum Transfer. An amount not greater than 25% of the unloaned
portion of the Guaranteed Account Value.
2. Minimum Transfer. Transfers of at least the minimum amount are
permitted. The minimum amount that may be transferred from the
Guaranteed Account to the Subaccounts is the lesser of (i) $250 or
(ii) the Guaranteed Account Value, unless AI Life agrees otherwise.
3. Minimum Remaining Value. Additionally, the remaining values in the
Guaranteed Account must be at least $250. If, after a contemplated
transfer, the remaining values in the Guaranteed Account would be less
than $250, the amount must be included in the transfer.
Policy Account Value held in the Guaranteed Account may be transferred to a
Subaccount or Subaccounts only during the 60 day period within 30 days before
and following the end each policy year.
Transfer requests must be in writing on a form approved in accordance with
established procedures.
Through a process called Dollar Cost Averaging, the Policyowner may specify
an automatic transfer from the Money Market Subaccount into other Subaccounts
for a specified dollar amount or number or number of months not in excess of 24.
This option can be selected at any time provided there is a minimum balance of
$5,000 in the Money Market Subaccount at the time of election. The allocation to
the Subaccounts will be based on the Policyowner's Premium allocation that is in
effect at the time of each transfer. If the Policyowner elects the option on the
Policy application, the automatic transfers will begin on the first Monthly
Anniversary following the end of the Free Look Period. If the Policyowner elects
the option after the application has been submitted, the automatic transfers
will begin on the second Monthly Anniversary following the receipt of the
request at AI Life's Administrative Office.
If the Policyowner elects to transfer a specific dollar amount each month,
the automatic transfers will continue until the Money Market Subaccount is
depleted. If the Policyowner elects to have the funds transferred over a
specific number of months, AI Life will transfer a fraction equal to one
divided by the number of months remaining in the period. For example, if the
Policyowner elects to transfer over a 12 month period, the first transfer will
be 1/12 of Money Market Subaccount Value, the second transfer will be for 1/11,
the third will be for 1/10 and so on until the end of the requested period.
Automatic transfers will remain in effect until one of the following
conditions occur:
1. The funds in the Money Market Subaccount are depleted
2. AIG Life receives the Policyowner's written request at our
Administrative Office to cancel future transfers
3. AI Life receives notification of death of the Insured
4. The Policy lapses
<PAGE>
EXCHANGE PROCEDURE
At any time within 24 months of the Issue Date, the Policyonwer may request
that the entire Accumulation Value of the Policy be transferred to the
Guaranteed Account to acquire fixed benefit life insurance protection on the
life of the Insured. The exchange will become effective when AI Life receives a
proper written request. Once this exchange is exercised, the entire cash value
must remain in the Guaranteed Account for the life of the Policy.
At any time within 24 months of the Issue Date, or within 24 months of any
increase in Face Amount, the Policyowner may exchange the Policy for a Policy of
flexible premium fixed benefit life insurance which AI Life is offering for
this purpose. AI Life will not require evidence of insurability. The date of
exchange will be the later of (a) the date the Policyowner sends AI Life the
Policy along with a proper written request; or (b) the date AI Life receives at
the Administrative Office or such other location that AI Life indicates to the
Policyowner in writing, the necessary payment for the exchange. All riders will
end. The endorsed policy will have the same Issue Date, issue age and risk
classification as the original Policy. In order to exchange the Policy, AI Life
will require: (a) that the Policy be in effect on the date of exchange; (b)
repayment of any unpaid loan plus accrued interest; and (c) an adjustment, if
any, for premiums and cash values of the Policy and any new policy.
