<PAGE>
As filed with the Securities and Exchange Commission on April 28, 2000
Registration No. 333-53477
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Post-Effective Amendment No. 3
TO
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
(Exact Name of Registrant)
GENERAL AMERICAN LIFE INSURANCE COMPANY
700 Market Street
St. Louis, MO 63101
(Name and Address of principal executive office of depositor)
Christopher A. Martin, Esquire
General American Life Insurance Company
700 Market Street
St. Louis, MO 63101
(Name and Address of Agent for Service of Process)
It is proposed that this filing will become effective (check
appropriate space)
[ ] immediately upon filing pursuant to paragraph (b), of Rule 485
[X] on 1 May 2000 pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[ ] on 1 May 1999, pursuant to paragraph (a)(1) of rule 485
[ ] 75 days after filing pursuant to paragraph (a)(2) of rule 485
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485
[ ] this post-effective amendment designates a new effective
date for a previously filed post-effective amendment
<PAGE>
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
ISSUED BY
GENERAL AMERICAN LIFE INSURANCE COMPANY
700 MARKET STREET
ST. LOUIS, MO 63101
(314) 231-1700
This Prospectus describes an individual flexible premium variable life
insurance Policy ("the Policy") offered by General American Life
Insurance Company ("General American" or "the Company"). The Policy is
designed to provide lifetime insurance protection and to provide
maximum flexibility to vary premium payments and change the level of
death benefits payable under the Policy. This flexibility allows you
to provide for changing insurance needs under a single insurance
policy. You also have the opportunity to allocate Net Premiums among
several investment portfolios with different investment objectives.
The Policy provides:
(1) a Cash Surrender Value that can be obtained by surrendering the
Policy;
(2) Policy Loans; and
(3) a death benefit payable at the Insured's death.
As long as a Policy remains in force before the Insured's Attained Age
100, the death benefit will be at least the current Face Amount of the
Policy. A Policy will remain in force as long as its Cash Surrender
Value is sufficient to pay the monthly charges.
After the end of the "Right to Examine Policy" period, you may allocate
the Net Premiums to one or more of the Divisions of General American
Separate Account Eleven ("the Separate Account") or, in some contracts,
to General American's General Account.
You will find a list of the Funds in the Separate Account, the fund
managers, and the investment objectives in the Summary on page 14.
Note that investment results in the Separate Account are not guaranteed
- -- you may either make money or lose money. Depending on investment
results, the policy could lapse or the death benefit could change.
The Prospectus of each Fund contains a full description of the Fund,
including the investment policies, restrictions, risks, and charges.
You should receive a Prospectus for each Fund along with this
Prospectus for the Policy.
In most policies you may also invest all or part of your cash value in
the General Account, which guarantees at least 4% interest.
It may not be advantageous to purchase a Policy as a replacement for
another type of life insurance or as a means to obtain additional
insurance protection if the purchaser already owns another flexible
premium variable life insurance policy.
These securities have not been approved or disapproved by the
Securities and Exchange Commission nor has the Commission passed upon
the accuracy or adequacy of this prospectus. Any representation to the
contrary is a criminal offense.
Please read this Prospectus carefully and keep it for future reference.
The date of this Prospectus is May 1, 2000. The Policies are not
available in all states.
This prospectus does not constitute an offering in any jurisdiction in
which such offering may not be lawfully made. No dealer, salesman, or
other person is authorized to give any information or make any
representations in connection with this offering other than those
contained in this prospectus, and, if given or made, such other
information or representations must not be relied upon.
<PAGE>
<PAGE>
TABLE OF CONTENTS
Page
Summary 1
Definitions 13
The Company and the Separate Account 14
The Company
The Separate Account
General American Capital Company
Russell Insurance Funds
American Century Variable Portfolios
J.P. Morgan Series Trust II
Variable Insurance Products Fund
Variable Insurance Products Fund II
Van Eck Worldwide Insurance Trust
SEI Investments Management Corporation
Metropolitan Series Fund
New England Zenith Fund
Addition, Deletion, or Substitution of Investments 21
Policy Benefits 22
Death Benefit
Cash Value
Policy Rights 25
Loans
Surrender, Partial Withdrawals and Pro Rata Surrender
Transfers
Portfolio Rebalancing
Dollar Cost Averaging
Right to Examine Policy
Death Benefit at Attained Age 100
Payment and Allocation of Premiums 30
Issuance of a Policy
Premiums
Allocation of Net Premiums and Cash Value
Policy Lapse and Reinstatement
Charges and Deductions 33
Premium Expense Charges
Monthly Deduction
Contingent Deferred Sales Charge
Separate Account Charges
Dividends 36
The General Account 36
General Matters 37
Distribution of the Policies 41
Federal Tax Matters 41
Unisex Requirements Under Montana Law 44
Safekeeping of the Separate Account's Assets 44
Voting Rights 44
State Regulation of the Company 45
Management of the Company 46
Legal Matters 49
Legal Proceedings 49
Experts 49
Additional Information 49
Financial Statements 49
Appendix A - Illustration of Death Benefits and
Cash Values 50
<PAGE>
<PAGE>
SUMMARY
THROUGHOUT THIS SUMMARY, THE TERMS "YOU" AND "YOUR" REFER TO THE OWNER
OF THE POLICY. THE OWNER MAY OR MAY NOT BE THE PERSON INSURED UNDER
THE POLICY. THE TERMS "WE," "US," AND "OUR" REFER TO GENERAL AMERICAN
LIFE INSURANCE COMPANY.
THE INFORMATION IN THIS SECTION IS JUST A SUMMARY, WRITTEN IN "LAYMEN'S
TERMS" TO HELP YOU UNDERSTAND THE POLICY. HOWEVER, BOTH YOUR POLICY
AND THIS PROSPECTUS ARE LEGAL DOCUMENTS. IF YOU HAVE QUESTIONS ABOUT
THEM, YOU SHOULD CONTACT YOUR AGENT OR OTHER COMPETENT PROFESSIONAL
ADVISERS.
IN PREPARING THIS SUMMARY, WE ASSUME THAT THE POLICY IS IN FORCE, AND
THAT YOU HAVE NOT BORROWED ANY OF THE CASH VALUE.
THE POLICY. You are purchasing a life insurance policy. Like many
life insurance policies, it has both a death benefit and a cash value.
The death benefit is the amount of money that we will pay to the
beneficiary if the person insured under the policy dies while the
policy is in force. The cash value is the amount of money accumulated
in your policy as an investment at any time. The cash value consists
of the premiums you have paid, reduced by the expenses deducted for
operation of the policy, and either increased or decreased by
investment results.
You have certain rights, including the right to borrow or withdraw
money from the policy's cash value and the right to select the funds in
which you will invest your premiums.
You have the right to review the policy and decide whether you want to
keep it. If you decide not to keep the policy, you may return it to
us or to your agent during the "Right to Examine Policy Period." This
period is sometimes referred to as the "Free Look Period." It normally
ends on the latter of:
1. twenty days after you receive the policy or
2. forty-five days after you signed the application.
In some states the period may be longer. Your agent can tell you if
this is the case.
During the "Right to Examine Policy Period" we will hold any premiums
you have paid in the money market fund. If you return the policy
before the end of the free look period, we will cancel the policy and
return any premiums you have paid. (For policies issued in Kansas, the
rules are different. Your agent can provide you with the details.)
(See Policy Rights - Right to Examine Policy.)
When the "Right to Examine Policy Period" ends, we will deduct any
charges due and transfer the rest of the money (your "net premium")
into the investment funds that you have selected. We will continue to
transfer future net premiums into the investments that you select as
soon as we receive the premiums.
The policy is a "flexible premium" policy. This means that you may,
within limits described below, make premium payments at any time and in
any amount you choose. You do not have to make premium payments
according to a fixed schedule, although you may choose to do so.
There are limits on the amount that you may pay into the policy without
creating tax consequences. If you make a premium payment that exceeds
the limit, we will notify you and offer to refund the excess paid.
We will deduct certain expenses from your cash value. These expenses
are described below. In addition, your cash value may increase or
decrease, depending on the investment experience of the funds you
select. Because it is possible for your cash value to decrease, you
may have to pay additional premiums in order to keep the policy in
force.
As long as there is enough money in your cash value to pay the monthly
charges, your death benefit will always be at least the face amount of
your policy, minus any amount that you have borrowed from the policy.
The face amount of your policy means the amount of insurance that you
have purchased. It is shown on the specifications page of your policy.
We will notify you if your cash value is not enough to pay the monthly
charges. If that happens, you will have 62 days to make a premium
payment big enough to bring your cash value up to the amount required
to pay the charges. If you make the premium payment, the policy will
stay in force. If you don't, the policy will lapse, or terminate with
no value. (See Payment and Allocation of Premiums - Policy Lapse and
Reinstatement.)
INVESTING YOUR CASH VALUE. You may tell us to invest your cash value
in either the general account or the separate account, or you may split
your cash value between them.
THE GENERAL ACCOUNT. The general account is an interest-bearing
account. Money in the general account is guaranteed to earn at least
4% interest, and it may earn more. General American determines the
current interest rate from time to time, and we will notify you in
advance of any changes. We have the right to limit the amount of money
that you may put into the general account.
1
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THE SEPARATE ACCOUNT. The separate account consists of divisions,
which represent different types of investments. Each division may
either make money or lose money. Therefore if you invest in a division
of the separate account, you may either make money or lose money,
depending on the investment experience of that division. There is no
guaranteed rate of return in the separate account.
The divisions of the separate account represent investment funds run by
various investment companies. The investment companies hire advisers
to operate or advise on the day-to-day operation of the funds.
The following list shows the investment companies whose funds are
available under the policy, along with the managers or advisers and the
divisions that they oversee.
NOTE: THE RUSSELL INSURANCE FUNDS ARE ONLY AVAILABLE ON POLICIES WITH
AN ISSUE DATE PRIOR TO JANUARY 1, 2000.
<TABLE>
- -------------------------------------------------------------------------------------------------------
<CAPTION>
INVESTMENT COMPANY INVESTMENT MANAGER/ADVISER
- -------------------------------------------------------------------------------------------------------
<S> <C>
General American Capital Company Conning Asset Management Company
- -------------------------------------------------------------------------------------------------------
Russell Insurance Funds Frank Russell Investment Management Company
- -------------------------------------------------------------------------------------------------------
American Century Variable Portfolios American Century Investment Management, Inc.
- -------------------------------------------------------------------------------------------------------
J.P. Morgan Series Trust II J.P. Morgan Investment Management, Inc.
- -------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund Fidelity Management & Research Company
- -------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund II Fidelity Management & Research Company
- -------------------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance Products Fund II Fidelity Management & Research Company
- -------------------------------------------------------------------------------------------------------
Van Eck Worldwide Insurance Trust Van Eck Associates Corporation
- -------------------------------------------------------------------------------------------------------
SEI Insurance Products Trust SEI Investments Management Company
- -------------------------------------------------------------------------------------------------------
Metropolitan Series Fund, Inc. Metropolitan Life Insurance Company
- -------------------------------------------------------------------------------------------------------
New England Zenith Fund New England Investment Management, Inc.
- -------------------------------------------------------------------------------------------------------
</TABLE>
These investment funds have different investment goals and strategies,
which we have summarized in the following table. You should review the
prospectus of each fund, or seek professional guidance in determining
which fund(s) best meet your objectives.
<TABLE>
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
INVESTMENT FUND INVESTMENT OBJECTIVE
---------- ---- ---------- ---------
MANAGER NAME TYPE
------- ---- ----
- --------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <S>
Conning To achieve a rate of return that parallels the
Asset Management S&P 500 Index Fund Growth & Income return of the stock market as a whole, as
Company represented by the Standard and Poor's 500 Stock
Index.
- --------------------------------------------------------------------------------------------------------------------------------
Conning To obtain the highest level of current income
Asset Management Money Market Fund Money Market consistent with the preservation of capital and
Company maintenance of liquidity.
- --------------------------------------------------------------------------------------------------------------------------------
Conning To provide a rate of return that reflects the
Asset Management Bond Index Fund Corporate Bonds performance of the bond market as a whole, as
Company measured by the Lehman Brothers
Government/Corporate Bond Index.
- --------------------------------------------------------------------------------------------------------------------------------
Conning
Asset Management Asset Allocation Fund Balanced To obtain a high rate of long-term return,
Company composed of capital growth and income.
- --------------------------------------------------------------------------------------------------------------------------------
2
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<PAGE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
INVESTMENT FUND INVESTMENT OBJECTIVE
---------- ---- ---------- ---------
MANAGER NAME TYPE
------- ---- ----
- --------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <S>
Conning
Asset Management Managed Equity Fund Growth To obtain long-term capital growth through
Company investment in common stocks.
- --------------------------------------------------------------------------------------------------------------------------------
To obtain investment results that parallel the
Conning International Growth price and yield performance of publicly-traded
Asset Management Index Fund International Stock common stocks in the Morgan Stanley Capital
Company International, Europe, Australia, and Far East
Index ("EAFE Index").
- --------------------------------------------------------------------------------------------------------------------------------
To obtain long-term capital appreciation through
Conning investment primarily in common stocks of
Asset Management Mid-Cap Equity Fund Growth U.S.-based, publicly traded companies with medium
Company market capitalization, defined as within the
range of the S&P Mid-Cap 400 at the time of the
Fund's investment.
- --------------------------------------------------------------------------------------------------------------------------------
To provide a high rate of return through
Conning investment in the common stock of small companies,
Asset Management Small-Cap Equity Fund Aggressive Growth making up, at one time, the smallest 20% of
Company U.S.-based companies on the New York Stock
Exchange.
- --------------------------------------------------------------------------------------------------------------------------------
To seek capital appreciation, normally through
Fidelity Management & Growth Portfolio Growth purchases of common stocks, although its
Research Company investments are not restricted to any one type of
security.
- --------------------------------------------------------------------------------------------------------------------------------
Fidelity Management & Equity-Income Portfolio Growth & Income To seek reasonable income by investing primarily
Research Company in income-producing equity securities.
- --------------------------------------------------------------------------------------------------------------------------------
Fidelity Management & Overseas Portfolio Growth: To seek long-term growth of capital primarily
Research Company International Stock through investment in foreign securities.
- --------------------------------------------------------------------------------------------------------------------------------
To seek a high total return with reduced risk over
Fidelity Management & Asset Manager Portfolio Balanced the long-term by allocating its assets among
Research Company domestic and foreign stocks, bonds, and short-term
fixed income instruments.
- --------------------------------------------------------------------------------------------------------------------------------
To seek a high level of current income by
Fidelity Management & High Income Portfolio High Yield Bond investing primarily in high yielding, lower-rated,
Research Company fixed income securities, while also considering
growth of capital.
- --------------------------------------------------------------------------------------------------------------------------------
3
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<PAGE
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
INVESTMENT FUND INVESTMENT OBJECTIVE
---------- ---- ---------- ---------
MANAGER NAME TYPE
------- ---- ----
- --------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <S>
Fidelity Management & Mid Cap Portfolio Long-Term Growth To seek long-term growth by investing primarily
Research Company of Capital in common stocks, with at least 65% of total
assets in securities of companies with medium
market capitalizations, similar to those in the
S&P MidCap 400. The fund may potentially invest
in domestic and foreign companies with smaller
or larger market capitalizations, investing in
"growth" and/or "value" stocks. The fund
selects investments by using fundamental
analysis of each issuer's financial condition
and industry position and market and economic
conditions.
- --------------------------------------------------------------------------------------------------------------------------------
To seek long-term capital appreciation by
investing in equity and debt securities of
Van Eck Associates Worldwide Hard Aggressive Growth: companies engaged in the exploration, development,
Corporation Assets Fund Specialty production, and distribution of gold and other
natural resources such as strategic and other
metals, minerals, forest products, oil, natural
gas, and coal.
- --------------------------------------------------------------------------------------------------------------------------------
To obtain long-term capital appreciation by
investing in equity securities in emerging markets
Van Eck Associates Worldwide Emerging Aggressive Growth: around the world. The Fund emphasizes primarily
Corporation Markets Fund International Stock investment in countries that, compared to the
world's major economies, exhibit relatively low
gross national product per capita, as well as
the potential for rapid economic growth.
- --------------------------------------------------------------------------------------------------------------------------------
Frank Russell
Investment Management Multi-Style Equity Growth & Income To obtain income and capital growth by investing
Company Fund principally in equity securities.
- --------------------------------------------------------------------------------------------------------------------------------
Frank Russell To provide capital appreciation by assuming a
Investment Management Aggressive Equity Aggressive Growth higher level of volatility than is ordinarily
Company Fund expected from the Multi-Style Equity Fund, by
investing in equity securities.
- --------------------------------------------------------------------------------------------------------------------------------
To achieve favorable total return and additional
Frank Russell Growth: diversification for United States investors by
Investment Management Non-U.S. Fund International Stocks investing primarily in equity and debt securities
Company and Bonds of non-United States companies and non-United
States governments.
- --------------------------------------------------------------------------------------------------------------------------------
Frank Russell To maximize total return through capital
Investment Management Core Bond Fund Growth & Income appreciation and income by assuming a level of
Company volatility consistent with the broad fixed-income
market, by investing in fixed-income securities.
- --------------------------------------------------------------------------------------------------------------------------------
J.P. Morgan Investment To provide a high total return consistent with
Management, Inc. Bond Portfolio Growth & Income moderate risk of capital and maintenance of
liquidity.
- --------------------------------------------------------------------------------------------------------------------------------
4
<PAGE>
<PAGE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
INVESTMENT FUND INVESTMENT OBJECTIVE
---------- ---- ---------- ---------
MANAGER NAME TYPE
------- ---- ----
- --------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <S>
To provide high total return from a portfolio of
equity securities of small companies. The Fund
J.P. Morgan Investment Small Company Aggressive Growth invests at least 65% of the value of its total
Management, Inc. Portfolio assets in the common stock of small U.S. companies
primarily with market capitalizations less than $1
billion.
- --------------------------------------------------------------------------------------------------------------------------------
To attain long-term growth of capital as well as
American Century current income. The Fund pursues a total return
Investment Income & Growth Fund Growth & Income and dividend yield that exceeds those of the S&P
Management, Inc. 500 by investing in stocks of companies with
strong dividend growth potential.
- --------------------------------------------------------------------------------------------------------------------------------
To obtain capital growth over time by investing in
common stocks of foreign companies considered to
American Century have better-than-average prospects for
Investment International Fund Aggressive Growth: appreciation. Because this Fund invests in
Management, Inc. International Stock foreign securities, a higher degree of short-term
price volatility, or risk, is expected due to
factors such as currency fluctuation and political
instability.
- --------------------------------------------------------------------------------------------------------------------------------
To attain long-term capital growth, with income as
American Century a secondary objective. The Fund invests primarily
Investment Value Fund Growth in equity securities of well-established companies
Management, Inc. that are believed by management to be undervalued
at the time of purchase.
- --------------------------------------------------------------------------------------------------------------------------------
SEI Investments Large Cap Value Long-Term Growth Utilizing multiple specialist sub-advisers that
Management Fund of Capital and manage in a value style, the Fund invests in
Corporation Income large cap income-producing U.S. common stocks.
- --------------------------------------------------------------------------------------------------------------------------------
SEI Investments Large Cap Growth Capital Appreciation Utilizing multiple specialist sub-advisers that
Management Fund manage in a growth style, the Fund invests in
Corporation large cap U.S. common stocks.
- --------------------------------------------------------------------------------------------------------------------------------
SEI Investments Small Cap Value Capital Appreciation Utilizing multiple specialist sub-advisers that
Management Fund manage in a value style, the Fund invests in
Corporation common stocks of smaller U.S. companies.
- --------------------------------------------------------------------------------------------------------------------------------
SEI Investments Small Cap Growth Long-Term Capital Utilizing multiple specialist sub-advisers that
Management Fund Appreciation manage in a growth style, the Fund invests in
Corporation common stocks of smaller U.S. companies.
- --------------------------------------------------------------------------------------------------------------------------------
SEI Investments International Equity Capital Appreciation Utilizing multiple specialist sub-advisers, the
Management Fund Fund invests in equity securities of foreign
Corporation companies.
- --------------------------------------------------------------------------------------------------------------------------------
SEI Investments Emerging Markets Capital Appreciation Utilizing multiple specialist sub-advisers, the
Management Equity Fund Fund invests in equity securities of emerging
Corporation markets companies.
- --------------------------------------------------------------------------------------------------------------------------------
SEI Investments Core Fixed Income Current Income and Utilizing multiple specialist sub-advisers that
Management Fund Preservation of have fixed income investment expertise, the Fund
Corporation Capital invests in investment grade U.S. fixed income
securities.
- --------------------------------------------------------------------------------------------------------------------------------
5
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<PAGE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
INVESTMENT FUND INVESTMENT OBJECTIVE
---------- ---- ---------- ---------
MANAGER NAME TYPE
------- ---- ----
- --------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <S>
SEI Investments High Yield Bond Total Return Utilizing a specialist sub-adviser that has high
Management Fund yield investment expertise, the Fund invests in
Corporation high yield, high risk securities.
- --------------------------------------------------------------------------------------------------------------------------------
SEI Investments International Fixed Capital Appreciation Utilizing a specialist sub-adviser, the Fund
Management Income Fund and Current Income invests in investment grade fixed income
Corporation securities of foreign government and corporate
issuers.
- --------------------------------------------------------------------------------------------------------------------------------
SEI Investments Emerging Markets Total Return Utilizing a specialist sub-adviser, the Fund
Management Debt Fund invests U.S. dollar denominated debt in
Corporation securities of emerging market issuers.
- --------------------------------------------------------------------------------------------------------------------------------
Metropolitan Life Janus Mid-Cap Long-Term Growth The Portfolio normally invests at least 65% of
Insurance Portfolio of Capital its total assets in common stocks of medium
Company capitalization companies selected for their
growth potential. The portfolio manager defines
medium capitalization ("mid-cap") companies as
those whose market capitalization falls within
the range of companies included in the S&P
MidCap 400 Index at the time of the purchase.
- --------------------------------------------------------------------------------------------------------------------------------
Metropolitan Life T. Rowe Price Long-Term Growth The Portfolio normally invests at least 65% of
Insurance Company Large Cap Growth of Capital and, its total assets in a diversified group of large
Portfolio Secondarily, capitalization growth companies. The portfolio
Dividend Income managers define large capitalization ("large-
cap") companies as those whose market
capitalization falls within the range of the
largest 300 companies included in the Russell
3000 Index at the time of the purchase.
- --------------------------------------------------------------------------------------------------------------------------------
Metropolitan Life T. Rowe Price Long-Term Capital The Portfolio normally invests at least 65% of
Insurance Company Small Cap Growth Growth its total assets in a diversified group of small
Portfolio capitalization companies. The portfolio manager
defines small capitalization ("small cap")
companies as those whose market capitalization
falls within the range of companies included in
the bottom 10% of the S&P 500 Index at the time
of the purchase.
- --------------------------------------------------------------------------------------------------------------------------------
New England Alger Equity Growth Alger invests Equity Growth's assets primarily
Investment Growth Series in growth stocks. Alger will ordinarily invest
Management, Inc. at least 65% of Equity Growth's total assets in
equity securities of issues with market
capitalization of $1 billion or greater.
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
You may change the investments that you want to use for your future
premiums by notifying our Home Office.
You may transfer your cash value among the various investment funds,
and you may withdraw money, but there are certain rules. We don't
charge you a transaction fee for the first twelve transfers or
withdrawals in a policy year, but we charge a $25 fee for each transfer
or withdrawal after the first twelve. (A policy year is measured
beginning on the anniversary of the date that the policy was issued,
and ending on the day before the next anniversary.)
6
<PAGE>
<PAGE>
We have the right to change or eliminate transfers in the future,
although we don't currently intend to do so.
CHARGES AND DEDUCTIONS. There are certain costs that we charge you
for issuing your policy and keeping it in force. This section
describes those charges -- what they are and what they cover.
SALES CHARGE. Each time you pay a premium, we deduct a portion to
cover expenses of the policy. Part of this deduction covers sales
charges. We guarantee that this part of the deduction will never
exceed the following amounts:
* in the first policy year, 15% of the amount you pay up to the
target premium and 5% of the amount you pay above the target premium.
(The amount of the target premium varies by age and risk class, and
is shown in your policy.)
* in the 2nd through 10th Policy Years, 5% of the actual premium
you pay;
* in the 11th Policy Year and later, 2% of the actual premium you
pay.
For policies issued in the state of Oregon we deduct an additional 2%
of actual premium paid in all policy years.
TAX CHARGE. The Federal government and many states and territories
impose taxes or charges on insurance premiums. We deduct from your
premium payment the amount required to pay these taxes and charges.
We deduct 1.3% of each premium payment to pay the Federal charge.
The amount we deduct to pay the state and territory charges varies
by state. It ranges from 0% to 4%, with an average of about 2.1%.
If the tax rates change, we may change the amount of the deduction to
cover the new charge. (See Charges and Deductions - Premium Expense
Charges.)
If we are required by law to pay taxes based on the separate account,
we may charge an appropriate share to policies that invest in the
separate account. (See Federal Tax Matters.)
SURRENDER CHARGE. If you surrender your policy or let it lapse during
the first ten policy years, we will keep part of the cash value to help
us recover the costs of selling and issuing the policy. This charge is
called a Contingent Deferred Sales Charge (CDSC) or, more simply, a
surrender charge.
The surrender charge is 45% of the target premium if you surrender the
policy or let it lapse during the first five policy years. After that
the amount of the surrender charge goes down each month. After the
10th policy year there is no charge.
There is a table in your policy that shows the amount of the target
premium and the percentage of the surrender charge for each month.
If you withdraw money from your policy or if you surrender a portion of
your policy, we will charge a pro-rated portion of the surrender
charge.
Of course, if you don't surrender all or part of your policy, or let it
lapse, or withdraw cash from it, then you will not pay a surrender
charge.
If you increase the face amount of your policy, the increase will have
its own surrender charge for the first 10 policy years following the
increase.
(See Policy Rights - Surrender, Partial Withdrawals, and Pro-Rata
Surrender; Policy Benefits - Death Benefit; and Charges and Deductions
- - Contingent Deferred Sales Charge.)
Under certain conditions, applied in a uniform and nondiscriminatory
manner, we may reduce the surrender charge. (See Adjustment of
Charges.)
ADMINISTRATIVE FEE. We charge a monthly fee to cover your policy's
administrative cost. This charge is $25 each month for the first
policy year, and $6 each month after the first policy year. We will
deduct the charge from your cash value each month.
SELECTION AND ISSUE EXPENSE CHARGE. This charge allows us to recover
part of the commissions and other costs of issuing your policy. We
determine the amount of the charge based on the size of your policy and
on the age, sex, and risk class of the person insured under the policy.
The charge ranges from about 4 cents per $1,000 of Face Amount to about
65 cents per $1,000. We deduct the charge from your cash value each
month for the first ten policy years. If you increase the face amount
of your policy, there is a new charge associated with that increase
until it has been in effect for ten policy years.
COST OF INSURANCE. Because this is a life insurance policy, it has a
death benefit. We charge an insurance cost each month to cover the
risk that you will die and we will have to pay the death benefit.
The amount of this charge varies with the age, sex, risk class of the
person insured under the policy, and the amount of the death benefit at
risk -- if the risk of
7
<PAGE>
<PAGE>
death or the amount of the death benefit is greater, then the cost of
insurance is also greater. We deduct the cost of insurance from your
cash value each month.
We make another charge to cover mortality and expense risks under the
Policy. We calculate this charge based on a percentage of the net
assets in each division of the separate account. Rather than deducting
the charge from the cash value, we apply the charge by adjusting the
net rate of return in the separate account. We guarantee that the
charge will not exceed the following amounts, shown on an annual
percentage basis:
Policy years 1-10 .55% of net separate account assets
Policy years 11-20 .45% of net separate account assets
Policy years 21+ .35% of net separate account Assets
(See Charges and Deductions - Separate Account Charges.)
We pay the operating expenses of the separate account. The investment
funds pay for their own operating expenses and investment fees. For a
description of these charges, see Charges and Deductions - Separate
Account Charges.
The following chart shows the operating expenses of the funds as
reported for the fiscal year ending December 31, 1999:
<TABLE>
- ----------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES <F1>
As a Percentage of Average Net Assets
- ----------------------------------------------------------------------------------
<CAPTION>
INVESTMENT
FUND ADVISORY / OTHER EXPENSES TOTAL
MANAGEMENT
FEE
- ----------------------------------------------------------------------------------
GENERAL AMERICAN CAPITAL COMPANY
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
S&P 500 Index Fund .25% .05% .30%
- ----------------------------------------------------------------------------------
Money Market Fund .125% .08% .205%
- ----------------------------------------------------------------------------------
Bond Index Fund .25% .05% .30%
- ----------------------------------------------------------------------------------
Managed Equity Fund .29% .10% .39%
- ----------------------------------------------------------------------------------
Asset Allocation Fund .50% .10% .60%
- ----------------------------------------------------------------------------------
International Index Fund .50% <F2> .30% .80%
- ----------------------------------------------------------------------------------
Mid-Cap Equity Fund .55% <F3> .10% .65%
- ----------------------------------------------------------------------------------
Small-Cap Equity Fund .25% .05% .30%
- ----------------------------------------------------------------------------------
<CAPTION>
RUSSELL INSURANCE FUNDS
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Multi-Style Equity Fund .74% .18% .92% <F4>
- ----------------------------------------------------------------------------------
Aggressive Equity Fund .86% .39% 1.25% <F5>
- ----------------------------------------------------------------------------------
Non-U.S. Fund .75% .55% 1.30% <F6>
- ----------------------------------------------------------------------------------
Core Bond Fund .54% .26% .80% <F7>
- ----------------------------------------------------------------------------------
<CAPTION>
AMERICAN CENTURY VARIABLE PORTFOLIOS
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Income & Growth Fund .70% .00% .70%
- ----------------------------------------------------------------------------------
International Fund 1.37% .00% 1.37%
- ----------------------------------------------------------------------------------
Value Fund 1.00% .00% 1.00%
- ----------------------------------------------------------------------------------
<CAPTION>
J.P. MORGAN SERIES TRUST II
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Bond Portfolio .30% .45% .75%
- ----------------------------------------------------------------------------------
Small Company Portfolio .60% .55% 1.15%
- ----------------------------------------------------------------------------------
<PAGE>
<CAPTION>
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Equity-Income Portfolio .48% .08% .56%
- ----------------------------------------------------------------------------------
Growth Portfolio .58% .07% .65%
- ----------------------------------------------------------------------------------
Overseas Portfolio .73% .14% .87%
- ----------------------------------------------------------------------------------
High Income Portfolio .58% .11% .69%
- ----------------------------------------------------------------------------------
<CAPTION>
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Asset Manager .53% .09% .62%
- ----------------------------------------------------------------------------------
8
<PAGE>
<PAGE>
<CAPTION>
FIDELITY VARIABLE INSURANCE PRODUCTS FUND III
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Mid Cap Portfolio .97% .00% .97%
- ----------------------------------------------------------------------------------
<CAPTION>
VAN ECK WORLDWIDE INSURANCE TRUST
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Worldwide Hard Assets Fund 1.00% .34% 1.34%
- ----------------------------------------------------------------------------------
Worldwide Emerging Markets Fund 1.00% .26% 1.26%
- ----------------------------------------------------------------------------------
<CAPTION>
SEI INSURANCE PRODUCTS TRUST
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Large Cap Value Fund .35% .50% .85% <F8>
- ----------------------------------------------------------------------------------
Large Cap Growth Fund .40% .45% .85% <F8>
- ----------------------------------------------------------------------------------
Small Cap Value Fund .65% .45% 1.10% <F8>
- ----------------------------------------------------------------------------------
Small Cap Growth Fund .65% .45% 1.10% <F8>
- ----------------------------------------------------------------------------------
International Equity Fund .51% .77% 1.28% <F8>
- ----------------------------------------------------------------------------------
Emerging Markets Equity Fund 1.05% .90% 1.95% <F8>
- ----------------------------------------------------------------------------------
Core Fixed Income Fund .28% .32% .60% <F8>
- ----------------------------------------------------------------------------------
High Yield Bond Fund .49% .36% .85% <F8>
- ----------------------------------------------------------------------------------
International Fixed Income Fund .40% .60% 1.00% <F8>
- ----------------------------------------------------------------------------------
Emerging Markets Debt Fund .85% .50% 1.35% <F8>
- ----------------------------------------------------------------------------------
<CAPTION>
METROPOLITAN SERIES FUND, INC.
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Janus Mid-Cap Portfolio .67% .04% .71%
- ----------------------------------------------------------------------------------
T. Rowe Price Large Cap Growth Portfolio .69% .24% .93%
- ----------------------------------------------------------------------------------
T. Rowe Price Small Cap Growth Portfolio .52% .09% .61%
- ----------------------------------------------------------------------------------
<CAPTION>
NEW ENGLAND ZENITH FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Alger Equity Growth Series .80% .00% .80%
- ----------------------------------------------------------------------------------
<FN>
<F1> The Fund expenses shown above are collected from the underlying
Fund, and are not direct charges against the Separate Account assets or
reductions from the Policy's Cash Value. These underlying Fund Expenses
are taken into consideration in computing each Fund's net asset value,
which is used to calculate the unit values in the Separate Account. The
management fees and other expenses are more fully described in the
prospectus of each individual Fund. The information relating to the
Fund expenses was provided by the Fund and was not independently
verified by General American. Except as otherwise specifically noted,
the management fees and other expenses are not currently subject to fee
waivers or expense reimbursements.
<F2> The fees charged by the International Index Fund are stated as a
series of annual percentages of the average daily value of the net
assets of the Funds. The percentages decrease with respect to assets of
the Fund above certain amounts, as follows: First $10 million, 0.50%;
Next $20 million, 0.40%; Balance over $20 million, 0.30%.
<F3> The fees charged by the Mid-Cap Equity Fund are stated as a series
of annual percentages of the average daily value of the net assets of
the Funds. The percentages decrease with respect to assets of the Fund
above certain amounts, as follows: First $10 million, 0.55%; Next $10
million, 0.45%; Balance over $20 million, 0.40%.
<F4> The Manager has voluntarily agreed to waive a portion of its 0.78%
management fee, up to the full amount of that fee, equal to the amount
by which the Fund's total operating expenses exceed 0.92% of the Fund's
average daily net assets on an annual basis, and to reimburse the Fund
for all remaining expenses after fee waivers which exceed 0.92% of
average daily net assets on an annual basis. The management fee waivers
and reimbursements are intended to be in effect for 2000, but may be
revised or eliminated at any time thereafter without notice to
shareholders. Absent the waiver, the management fee would have been
0.78%, and total Fund expenses would have been 0.96% of average daily
net assets.
<F5> The Manager has voluntarily agreed to waive a portion of its 0.95%
management fee, up to the full amount of that fee, equal to the amount
by which the Fund's total operating expenses exceed 1.25% of the Fund's
average daily net
assets on an annual basis, and to reimburse the Fund for all
remaining expenses after fee waivers which exceed 1.25% of average
daily net assets on an annual basis. The management fee waivers
and reimbursements are intended to be in effect for 2000, but may
be revised or eliminated at any time thereafter without notice to
shareholders. Absent the waiver, the management fee would have
been 0.95%, and total Fund expenses would have been 1.34% of
average daily net assets.
9
<PAGE>
<PAGE>
<F6> The Manager has voluntarily agreed to waive a portion of its 0.95%
management fee, up to the full amount of that fee, equal to the amount
by which the Fund's total operating expenses exceed 1.30% of the Fund's
average daily net assets on an annual basis, and to reimburse the Fund
for all remaining expenses after fee waivers which exceed 1.30% of
average daily net assets on an annual basis. The management fee waivers
and reimbursements are intended to be in effect for 2000, but may be
revised or eliminated at any time thereafter without notice to
shareholders. Absent the waiver, the management fee would have been
0.95%, and total Fund expenses would have been 1.50% of average daily
net assets.
<F7> The Manager has voluntarily agreed to waive a portion of its 0.60%
management fee, up to the full amount of that fee, equal to the amount
by which the Fund's total operating expenses exceed 0.80% of the Fund's
average daily net assets on an annual basis, and to reimburse the Fund
for all remaining expenses after fee waivers which exceed 0.80% of
average daily net assets on an annual basis. The management fee waivers
and reimbursements are intended to be in effect for 2000, but may be
revised or eliminated at any time thereafter without notice to
shareholders. Absent the waiver, the management fee would have been
0.60%, and total Fund expenses would have been 0.86% of average daily
net assets.
<F8> The SEI VP Funds' total actual annual fund operating expenses for
the current fiscal year are expected to be less than the maximum amount
allowed because the Adviser will voluntarily waive a portion of its fee
in order to keep total operating expenses at a specified level. The
Adviser may discontinue all or part of its waiver at any time. With
this fee waiver, the Funds' actual total operating expenses are expected
to be the amounts shown in the table above. Absent the fee waiver, the
Funds' total operating expenses would be: Large Cap Value Fund, 0.95%;
Large Cap Growth Fund, 1.00%; Small Cap Value Fund, 1.20%; Small Cap
Growth Fund, 1.20%; International Equity Fund, 1.41%; Emerging Markets
Equity Fund, 2.34%; Core Fixed Income Fund, 0.70%; High Yield Bond
Fund, 0.99%; International Fixed Income Fund, 1.31%; Emerging Markets
Debt Fund, 1.95%.
</TABLE>
PREMIUMS. Within limits, you decide how much money you want to
put into the policy. There is a minimum premium that you have
to pay to put the policy in force. That amount is 1/12 of the
"minimum initial annual premium amount" shown on the
specifications page of your policy.
After the policy is in force, you may pay any amount you want
as long as the cash value is always enough to cover the
surrender charge and the current month's expenses. If you
continue to pay at least 1/12 of the minimum initial annual
premium each month (or to prepay it), and if you don't withdraw
or borrow cash from the policy, we guarantee that the policy
will not lapse during the first five policy years, even if the
cash value is not enough to cover the charges.
If you have borrowed or withdrawn money from your cash value,
you can still keep your no-lapse guarantee in force for the
first five years. Here is how it works. Each month, we look
at the total amount of premium that you have paid into the
policy since it was issued. We then subtract the amount of
money that you have withdrawn or borrowed. If the amount left
is at least equal to 1/12 of the annual minimum premium,
multiplied by the number of months the policy has been in
force, then your no-lapse guarantee still applies. If not,
then we will notify you that you have 62 days to make enough
of a premium payment to restore the no-lapse guarantee. If
you do not make the payment, your policy could lapse, or end
with no value.
If you have converted a General American term insurance policy
to this policy, and if the term policy includes conversion
credits, you may apply those credits to reduce your first-year
minimum premium.
You can set up a schedule of payments, and we will send you
reminders, but you are not required to make the payments as
long as the cash value covers the surrender charge and the
current month's expenses. (See Payment and Allocation of
Premiums.)
<PAGE>
DEATH BENEFIT. If the person insured under the policy dies
while the policy is in force, we will pay a death benefit to
the beneficiary. You can select one of three death benefits at
the time the policy is issued:
* Option A: The death benefit is the greater of the face
amount of the policy or an "applicable percentage" of the
cash value.
* Option B: The death benefit is the greater of the face
amount of the policy plus the cash value, or an
"applicable percentage" of the cash value.
* Option C: The death benefit is the greater of the face
amount of the policy, or the cash value multiplied by an
attained age factor.
As long as the policy remains in force and the person insured
is less than 100 years old, the minimum death benefit under any
death benefit option will be at least the current face amount.
We will increase the death benefit by any dividends earned
prior to the death of the person insured, and by
10
<PAGE>
<PAGE>
the cost of insurance from the date of death to the end of the
month, and will reduce it by any outstanding loans and interest.
We will pay the death benefit according to the settlement options
available at the time of death. (See Policy Benefits - Death
Benefit.)
The minimum face amount at issue is generally $50,000 under our
current rules. Subject to certain restrictions, you may change
the face amount and the death benefit option. In certain cases
we may require evidence that the person insured under the
policy is still insurable. (See Change in Death Benefit
Option, and Change In Face Amount.)
You may include additional insurance benefits with your policy.
These are described under General Matters - Additional
Insurance Benefits. If you elect any additional benefits, we
will deduct the charges for those benefits from your Cash
Value.
CASH VALUE. Your Policy has a cash value that is the total
amount credited to you in the separate account, the loan
account, and the general account. The cash value increases by
the amount of net premium payments, and decreases by partial
withdrawals and expense charges for the policy. It may either
increase or decrease based on the investment experience of the
separate account divisions that you have selected. (See Policy
Benefits - Cash Value.)
There is no minimum guaranteed cash value.
POLICY LOANS. You may borrow against the cash value of your
policy. The loan value is the maximum amount that you may
borrow. The loan value is:
the cash value on the date we receive the loan
request;
plus interest on the loan balance to the next anniversary
date, calculated at the guaranteed general account
interest rate;
minus interest on the new loan to the next policy
anniversary;
minus any loans and interest already outstanding;
minus any surrender charges;
minus monthly deductions to the next policy anniversary.
When you borrow against the policy, we will take the money from
the general account and the divisions of the separate account
in proportion to your balances in each account.
Loan interest is due at each policy anniversary. If you don't
pay the loan interest, we will add it to the amount of the
loan.
You may repay all or part of the loan at any time. When you
make a loan payment, we will put the money back into the
general account or the divisions of the separate account in the
same percentages used them to make the loan.
When we pay out the proceeds of your policy, either as a death
benefit or as a policy surrender, we will deduct any
outstanding loans and interest from the amount we pay. (See
Policy Rights - Loans.)
Loans taken from or secured by a policy may have Federal income
tax consequences. (See Federal Tax Matters.)
SURRENDER, PARTIAL WITHDRAWALS, AND PRO-RATA SURRENDER. You
may surrender the policy at any time while it is in force. We
will pay you the cash surrender value, plus dividends (if any)
earned prior to the surrender.
After the first year you may request a partial withdrawal of
your cash surrender value. Normally, withdrawing a portion of
your cash surrender value will reduce your death benefit by the
amount of the withdrawal. However, if you have included the
Anniversary Partial Withdrawal Rider on your policy, you may
withdraw a portion of your cash surrender value without reducing
the death benefit. Under this rider, there are limits on how
much you can withdraw, and the withdrawal must be at the policy
anniversary. You can find more information about the rider
under General Matters - Additional Insurance Benefits.
You may also request a pro-rata surrender of the policy, which
allows you to surrender part of the policy and keep the rest in
force. You can find more information under Policy Rights -
Surrender, Partial Withdrawals, and Pro-Rata Surrender.
A surrender, partial withdrawal, or Pro-Rata Surrender may have
Federal income tax consequences. We suggest that you discuss
your situation with a competent tax adviser before taking one
of these steps. (See Federal Tax Matters.)
<PAGE>
ILLUSTRATIONS OF DEATH BENEFITS AND CASH SURRENDER VALUES. The
death benefit and cash surrender value of your policy will
depend on how well your investments perform. In Appendix A we
have illustrated some sample policies. Depending on the rate
of return, the values may increase or decrease. In order to
help you to understand the cost of the policy, we also show how
your premium would grow if you simply invested it at 5%
interest, compounded annually.
If you surrender your policy in the first few years, the cash
surrender value that you receive may be low compared to what
you would have accumulated by
11
<PAGE>
<PAGE>
investing the premiums at interest. In this case, the insurance
protection that you received while the policy was in force will
have been expensive.
We will provide you with an illustration showing projected
future cash values if you request it in writing. We may charge
a fee of up to $25 for preparing the illustration.
TAX CONSEQUENCES OF THE POLICY. If your policy was issued in a
standard premium class, then we believe that it qualifies as a
life insurance contract for Federal income tax purposes.
Similarly, if your policy was issued on a guaranteed issue or
simplified issue basis, we believe that it will qualify as a
life insurance contract. However, if the policy was issued on
a substandard basis, it is not clear whether it will qualify as
a life insurance contract for tax purposes. The IRS has
provided very limited guidance in this area.
Assuming that the policy does qualify as a life insurance
contract for Federal income tax purposes, then we believe that
the cash value should be subject to the same tax treatment as
the cash value of a conventional fixed-benefit contract. This
means that growth in the cash value will not be taxed until you
receive a distribution.
There are some actions that may trigger a tax. If you transfer
ownership to someone else, or if you surrender the policy or
withdraw cash from it, you may have to pay a tax. Similarly,
if you let the policy lapse while there is an outstanding loan,
or if you exchange the policy for another policy, you may owe a
tax. (See Federal Tax Matters.)
If you pay too much in premium, your policy may become a
"modified endowment contract." If that happens, then some pre-
death distributions of cash will be taxable income. If there
is more cash value in the policy that what you actually paid in
premiums, you will taxed on the excess in the year in which you
receive a distribution. You may withdraw the amount that you
paid into the policy without being taxed, but only after you
have received the excess as taxable income. In addition, any
taxable distribution that you receive before age 59 1/2 will
generally be subject to an additional 10% tax.
On the other hand, if the policy is not a modified endowment
contract, then distributions are normally treated first as a
return of your "cost basis," or investment in the contract. In
this case, you may withdraw up to the amount of the premiums
you paid with no tax consequences. After that, any additional
distributions are treated as taxable income. In addition,
loans from the policy are not treated as distributions, so they
are not considered taxable income. Finally, if you policy is
not a modified endowment contract, neither distributions or
loans are subject to the 10% additional tax (See Federal Tax
Matters.)
Please note that General American is neither a law firm nor a
tax adviser, so we cannot give you legal or tax advice. If you
have specific legal or tax questions, we suggest that you
consult a qualified professional in these fields.
DIVIDENDS. We do not expect to pay dividends on this Policy.
(See Dividends.)
* * *
This Prospectus describes only those aspects of the Policy that
relate to the Separate Account, except where General Account
matters are specifically mentioned. For a brief summary of the
aspects of the Policy relating to the General Account, see The
General Account.
12
<PAGE>
<PAGE>
DEFINITIONS
ATTAINED AGE - The Issue Age of the Insured plus the number of
completed Policy Years.
BENEFICIARY - The person(s) named in the application or by
later designation to receive Policy proceeds in the event of
the Insured's death. A Beneficiary may be changed as set forth
in the Policy and this Prospectus.
CASH VALUE - The total amount that a Policy provides for
investment at any time. It is equal to the total of the
amounts credited to the Owner in the Separate Account and the
General Account, including the Loan Account.
CASH SURRENDER VALUE - The Cash Value of a Policy on the date
of surrender, less any Indebtedness, and less any surrender
charges.
DIVISION - A subaccount of the Separate Account. Each Division
invests exclusively in the shares of a corresponding Fund of
either General American Capital Company, Russell Insurance
Funds, American Century Variable Portfolios, J.P. Morgan Series
Trust II, Variable Insurance Products Fund, Variable Insurance
Products Fund II, or Van Eck Worldwide Insurance Trust.
EFFECTIVE DATE - The date as of which insurance coverage begins
under a policy.
FACE AMOUNT - The minimum death benefit under the Policy so
long as the Policy remains in force.
FUND - A separate investment portfolio of a registered open-end
investment company. Although sometimes referred to elsewhere as
"portfolios," they are referred to in this prospectus as "Funds,"
except where "Portfolio" is part of their name.
GENERAL ACCOUNT - The assets of the Company other than those
allocated to the Separate Account or any other separate
account. The Loan Account is part of the General Account.
HOME OFFICE - The service office of General American Life
Insurance Company, the mailing address of which is P.O. Box
14490, St. Louis, Missouri 63178.
INDEBTEDNESS - The sum of all unpaid Policy Loans and accrued
interest on loans.
INSURED - The person whose life is insured under the Policy.
INVESTMENT START DATE - The date the initial premium is applied
to the General Account and/or the Divisions of the Separate
Account. This date is the later of the Issue Date or the date
the initial premium is received at General American's Home
Office.
ISSUE AGE - The Insured's age at his or her nearest birthday as
of the date the Policy is issued.
ISSUE DATE - The date from which Policy Anniversaries, Policy
Years, and Policy Months are measured.
LOAN ACCOUNT - The account of the Company to which amounts
securing Policy Loans are allocated. The Loan Account is part
of General American's General Account.
LOAN SUBACCOUNT - A Loan Subaccount exists for the General
Account and for each Division of the Separate Account. Any
Cash Value transferred to the Loan Account will be allocated to
the appropriate Loan Subaccount to reflect the origin of the
Cash Value. At any point in time, the Loan Account will equal
the sum of all the Loan Subaccounts.
MONTHLY ANNIVERSARY - The same date in each succeeding month as
the Issue Date except that whenever the Monthly Anniversary
falls on a date other than a Valuation Date, the Monthly
Anniversary will be deemed the next Valuation Date. If any
Monthly Anniversary would be the 29th, 30th, or 31st day of a
month that does not have that number of days, then the Monthly
Anniversary will be the last day of that month.
NET PREMIUM - The premium less the premium expense charges
(consisting of the sales charge and the premium tax charge).
OWNER - The Owner of a Policy, as designated in the application
or as subsequently changed.
POLICY - The flexible premium variable life insurance Policy
offered by the Company and described in this Prospectus.
<PAGE>
POLICY ANNIVERSARY - The same date each year as the Issue Date.
POLICY MONTH - A month beginning on the Monthly Anniversary.
POLICY YEAR - A period beginning on a Policy Anniversary and
ending on the day immediately preceding the next Policy
Anniversary.
13
<PAGE>
<PAGE>
PORTFOLIO - see Fund.
PRO-RATA SURRENDER - A requested reduction of both the Face
Amount and the Cash Value by a given percentage.
SEC - The United States Securities and Exchange Commission.
SEPARATE ACCOUNT - General American Separate Account Eleven, a
separate investment account established by the Company to
receive and invest the Net Premiums paid under the Policy, and
certain other variable life policies, and allocated by the
Owner to provide variable benefits.
TARGET PREMIUM - A premium calculated when a Policy is issued,
based on the Insured's age, sex (except in unisex policies) and
risk class. The target premium is used to calculate the first
year's premium expense charge, the contingent deferred sales
charge, and agent compensation under the Policy. (See Charges
and Deductions.)
VALUATION DATE - Each day that the New York Stock Exchange is
open for trading and the Company is open for business. The
Company is not open for business the day after Thanksgiving.
VALUATION PERIOD - The period between two successive Valuation
Dates, commencing at 4:00 p.m. (Eastern Standard Time) on a
Valuation Date and ending 4:00 p.m. on the next succeeding
Valuation Date.
THE COMPANY AND THE SEPARATE ACCOUNT
THE COMPANY
General American Life Insurance Company ("General American" or "the
Company") was originally incorporated as a stock company in 1933. In
1936, General American initiated a program to convert to a mutual life
insurance company. In 1997, General American's policyholders approved a
reorganization of the Company into a mutual holding company structure
under which General American became a stock company wholly owned by
GenAmerica Corporation, an intermediate stock holding company.
On January 6, 2000 The Metropolitan Life Insurance Company of New York
("MetLife") acquired GenAmerica Corporation. As a result of that
transaction, General American became an indirect, wholly-owned
subsidiary of MetLife.
Headquartered in New York City since 1868, MetLife is a leading provider
of insurance and financial services to a broad spectrum of individual
and group customers. The company, with approximately $357.7 billion
worth of assets under management as of December 31, 1998, provides
individual insurance and investment products to approximately 9 million
households in the United States. MetLife also serves over 33 million
people by providing group insurance and investment products to
corporations and other institutions.
General American is principally engaged in writing individual and group
life insurance policies and annuity contracts. As of December 31, 1998,
it had consolidated assets of approximately $29 billion. It is admitted
to do business in 49 states, the District of Columbia, Puerto Rico, and
in ten Canadian provinces. The principal offices of General American
are located at 700 Market Street, St. Louis, Missouri 63101. The
mailing address of General American's service center ("the Home Office")
is P.O. Box 14490, St. Louis, Missouri 63178.
THE SEPARATE ACCOUNT
General American Life Insurance Company Separate Account Eleven
("the Separate Account") was established by General American as
a separate investment account on January 24, 1985 under
Missouri law. The Separate Account will receive and invest the
Net Premiums paid under this Policy and allocated to it. In
addition, the Separate Account currently receives and invests
Net Premiums for other classes of flexible premium variable
life insurance policies and might do so for additional classes
in the future.
The Separate Account has been registered with the SEC as a unit
investment trust under the Investment Company Act of 1940 ("the
1940 Act") and meets the definition of a "separate account"
under Federal securities laws. Registration with the SEC does
not involve supervision of the management or investment
practices or policies of the Separate Account or General
American by the SEC.
The Separate Account is divided into Divisions. Divisions invest
in corresponding Funds from various open-end, diversified management
investment companies. Income and both realized and unrealized gains
or losses from the assets of each Division of the Separate Account
are credited to or charged against that Division without regard to
income, gains, or losses from any other Division of the Separate
Account or arising out of any other business General American may
conduct.
14
<PAGE>
<PAGE>
Although the assets of the Separate Account are the property of
General American, the assets in the Separate Account equal to
the reserves and other liabilities of the Separate Account are
not chargeable with liabilities arising out of any other
business which General American may conduct. The assets of the
Separate Account are available to cover the general liabilities
of General American only to the extent that the Separate Account's
assets exceed its liabilities arising under the Policies. From
time to time, the Company may transfer to its General Account
any assets of the Separate Account that exceed the reserves and
the Policy liabilities of the Separate Account (which will
always be at least equal to the aggregate Policy value
allocated to the Separate Account under the Policies). Before
making any such transfers, General American will consider any
possible adverse impact the transfer may have on the Separate
Account.
GENERAL AMERICAN CAPITAL COMPANY
General American Capital Company ("the Capital Company") is an
open-end, diversified management investment company which was
incorporated in Maryland on November 15, 1985, and commenced
operations on October 1, 1987. Only the Funds described in
this section of the Prospectus are currently available as
investment choices for this Policy even though additional Funds
may be described in the prospectus for the Capital Company.
Shares of Capital Company are currently offered to separate
accounts established by General American Life Insurance Company
and affiliates. The Capital Company's investment adviser is
Conning Asset Management Company ("the Advisor"), an indirect,
majority-owned subsidiary of General American. The adviser
selects investments for the Funds.
The investment objectives and policies of each Fund are
summarized below:
S&P 500 INDEX FUND: The investment objective of this Fund
is to provide investment results that parallel the price
and yield performance of publicly-traded common stocks in
the aggregate. The Fund uses the Standard & Poor's
Composite Index of 500 Stocks ("the S&P Index") as its
standard for performance comparison. The Fund attempts
to duplicate the performance of the S&P Index and
includes dividend income as a component of the Fund's
total return. The Fund is not managed by Standard &
Poor's.
THE MONEY MARKET FUND: The investment objective of the
Money Market Fund is to obtain the highest level of
current income which is consistent with the preservation
of capital and maintenance of liquidity. The Fund
invests primarily in high-quality, short-term money
market instruments. An investment in the Money Market
Fund is neither insured nor guaranteed by the U.S.
Government.
BOND INDEX FUND: The investment objective of this Fund is
to provide a rate of return that reflects the performance
of the publicly-traded bond market as a whole. The Fund
uses the Lehman Brothers Government/Corporate Bond Index
as its standard for performance comparison.
MANAGED EQUITY FUND: The investment objective of this
Fund is long-term growth of capital, obtained by
investing primarily in common stocks. Securing moderate
current income is a secondary objective.
ASSET ALLOCATION FUND: The investment objective of this
Fund is a high rate of long-term total return composed of
capital growth and income payments. Preservation of
capital is the secondary objective and chief limit on
investment risk. The Fund will invest only in those
types of securities that the other Capital Company Funds
may invest in. The Asset Allocation Fund invests in a
combination of common stocks, bonds, or money market
instruments in accordance with guidelines established
from time to time by Capital Company's Board of
Directors.
INTERNATIONAL INDEX FUND: The investment objective of
this Fund is to obtain investment results that parallel
the price and yield performance of publicly-traded common
stocks in the Morgan Stanley Capital International
("MSCI") Europe, Australia and Far East Index ("EAFE").
MID-CAP EQUITY FUND: The investment objective of this
Fund is capital appreciation. It pursues this objective
by investing primarily in common stocks of United States-
based, publicly traded companies with medium market
capitalizations falling within the capitalization range
of the S&P Mid-Cap 400 at the time of the Fund's
investment.
<PAGE>
SMALL-CAP EQUITY FUND: The investment objective of this
Fund is to provide a rate of return that corresponds to
the performance of the common stock of small companies,
while incurring a level of risk that is generally equal
to the risks associated with small company common
15
<PAGE>
<PAGE>
stock. The Fund attempts to duplicate the performance of the
smallest 20% of companies, based on capitalization size,
that are based in the United States and listed on the New
York Stock Exchange ("NYSE").
RUSSELL INSURANCE FUNDS
Russell Insurance Funds ("RIF") is organized as a Massachusetts
business trust under a Master Trust Agreement dated July 11,
1996. RIF is authorized to issue an unlimited number of shares
evidencing beneficial interests in different investment Funds,
which interests may be offered in one or more classes. RIF is
a diversified open end management investment company, commonly
known as a "mutual fund." Frank Russell Company, which is a
consultant to RIF, has been primarily engaged since 1969 in
providing asset management consulting services to large
corporate employee benefit funds. Major components of its
consulting services are: (i) quantitative and qualitative
research and evaluation aimed at identifying the most
appropriate investment management firms to invest large pools
of assets in accord with specific investment objectives and
styles; and (ii) the development of strategies for investing
assets using "multi-style, multi-manager diversification."
This is a method for investing large pools of assets by
dividing the assets into segments to be invested using
different investment styles, and selecting money managers for
each segment based upon their expertise in that style of
investment. General management of RIF is provided by Frank
Russell Investment Management Company, a wholly-owned
subsidiary of Frank Russell Company, which furnishes officers
and staff required to manage and administer RIF on a day-to-day
basis.
The investment objectives and policies of each Fund are
summarized below:
MULTI-STYLE EQUITY FUND: The investment objective of this
Fund is to provide income and capital growth by investing
principally in equity securities.
AGGRESSIVE EQUITY FUND: This Fund seeks to provide
capital appreciation by assuming a higher level of
volatility than is ordinarily expected from the Multi-
Style Equity Fund while still investing in equity
securities.
NON-U.S. FUND: This Fund's objective is to provide
favorable total return and additional diversification for
U.S. investors by investing primarily in equity and
fixed-income securities of non-U.S. companies, and
securities issued by non-U.S. governments.
CORE BOND FUND: This Fund's objective is to maximize
total return, through capital appreciation and income, by
assuming a level of volatility consistent with the broad
fixed-income market. The Fund invests in fixed-income
securities.
AMERICAN CENTURY VARIABLE PORTFOLIOS
American Century Variable Portfolios, Inc., a part of American
Century Investments, was organized as a Maryland corporation on
June 4, 1987. It is a diversified, open-end management
investment company. Its business and affairs are managed by
its officers under the Direction of its Board of Directors.
American Century Investment Management, Inc. serves as the
investment manager of the fund.
The investment objective and policies of the Funds are
summarized below:
INCOME & GROWTH FUND: The investment objective of this
Fund is to attain long-term growth of capital as well as
current income. The Fund pursues a total return and
dividend yield that exceed those of the S&P 500 by
investing in stocks of companies with strong dividend
growth potential. Dividends are paid monthly.
INTERNATIONAL FUND: This Fund seeks capital growth over
time by investing in common stocks of foreign companies
considered to have better-than-average prospects for
appreciation. Because the Fund invests in foreign
securities, a higher degree of short-term price
volatility, or risk, is expected due to factors such as
currency fluctuation and political instability.
VALUE FUND: This Fund is a core equity fund that seeks
long-term capital growth. Income is a secondary
objective. To pursue its objectives, the fund invests
primarily in equity securities of well-established
companies that are believed by management to be
undervalued at the time of purchase. Please note that
this is an equity investment and, by nature, may
fluctuate in value.
<PAGE>
J.P. MORGAN SERIES TRUST II
J.P. Morgan Series Trust II is an open-end diversified
management investment company organized as a Delaware Business
Trust. The Trust's investment adviser is J.P. Morgan
Investment Management, Inc., a registered investment adviser
and a wholly owned subsidiary of J.P. Morgan & Co.,
Incorporated, a
16
<PAGE>
<PAGE>
bank holding company organized under the laws
of Delaware.
The investment objective and policies of the Funds are
summarized below:
BOND PORTFOLIO: This Fund seeks to provide a high total
return consistent with moderate risk of capital and
maintenance of liquidity. The Fund is designed for
investors who seek a total return over time that is
higher than that generally available from a portfolio
of short-term obligations while acknowledging the greater
price fluctuation of longer-term instruments.
SMALL COMPANY PORTFOLIO: The investment objective of
this Fund is to provide high total return from a
portfolio of equity securities of small companies. The
Fund invests at least 65% of the value of its total
assets in the common stock of small U.S. Companies
primarily with market capitalizations less than $1
billion. The Fund is designed for investors who are
willing to assume the somewhat higher risk of investing
in small companies in order to seek a higher return over
time than might be expected from a portfolio of stocks of
large companies.
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
Fidelity Variable Insurance Products Fund ("VIP") is an open-end,
diversified management investment company organized as a
Massachusetts business trust on November 13, 1981. Only the
Funds described in this section of the Prospectus are currently
available as investment choices for this Policy even though
additional Funds may be described in the prospectus for VIP.
VIP shares are purchased by insurance companies to fund
benefits under variable insurance and annuity policies.
Fidelity Management & Research Company ("FMR") of Boston,
Massachusetts is the Funds' Manager.
The investment objectives and policies of each Fund are
summarized below:
EQUITY-INCOME PORTFOLIO: The investment objective of this
Fund is income, obtained by investing primarily in
income-producing equity securities. In choosing these
securities, FMR will also consider the potential for
capital appreciation. The Fund's goal is to achieve a
yield which exceeds the composite yield on the securities
comprising the Standard & Poor's Composite Index of 500
Stocks.
GROWTH PORTFOLIO: The investment objective of this Fund
is capital appreciation. The Fund normally purchases
common stocks, although its investments are not
restricted to any one type of security. Capital
appreciation may also be obtained from other types of
securities, including bonds and preferred stocks.
OVERSEAS PORTFOLIO: The investment objective of this Fund
is long-term growth of capital. The Fund invests
primarily in foreign securities. The Overseas Portfolio
provides a means for investors to diversify their own
portfolios by participation in companies and economies
outside of the United States.
HIGH INCOME PORTFOLIO: The investment objective of this
Fund is a high level of current income. The Fund seeks
to fulfill the objective by investing primarily in high-
yielding, lower-rated, fixed-income securities, while
also considering growth of capital. Lower-rated
securities, commonly referred to as "junk bonds," involve
greater risk of default or price change than securities
assigned a higher quality rating.
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
Fidelity Variable Insurance Products Fund II ("VIP II") is an
open-end, diversified management investment company organized as a
Massachusetts business trust on March 21, 1988. Only the Fund
described in this section of the Prospectus is currently
available as an investment choice for this Policy even though
additional Funds may be described in the prospectus for VIP II.
VIP II shares are purchased by insurance companies to fund
benefits under variable insurance and annuity policies. FMR is
the Fund's manager.
The investment objective and policies of the Funds are
summarized below:
ASSET MANAGER: The investment objective of this Fund is
to seek a high total return with reduced risk over the
long-term by allocating its assets among domestic and
foreign stocks, bonds, and short-term fixed income
instruments.
FIDELITY VARIABLE INSURANCE PRODUCTS FUND III
Fidelity Variable Insurance Products Fund III ("VIP III") is an open-
end, diversified management investment company organized as a
Massachusetts business trust. Only the Fund described in this section
of the Prospectus is currently available as an investment choice for
this Policy even though additional Funds may be described in the
prospectus for VIP III. VIP III shares are purchased by insurance
companies to fund benefits under variable
17
<PAGE>
<PAGE>
insurance and annuity policies. FMR is the Fund's manager.
The investment objective and policies of the Fund are summarized below:
MID CAP EQUITY FUND: This Fund seeks long-term capital growth by
investing primarily in common stocks, with at least 65% of total
assets in securities of companies with medium market
capitalizations, similar to those in the S&P MidCap 400. The fund
may potentially invest in domestic and foreign companies with
smaller or larger market capitalizations, investing in either
"growth" or "value" stocks or both. The fund selects investments
by using fundamental analysis of each issuer's financial condition
and industry position and market and economic conditions.
VAN ECK WORLDWIDE INSURANCE TRUST
Van Eck Worldwide Insurance Trust ("Van Eck") is an open-end
management investment company organized as a Massachusetts
business trust on January 7, 1987. Only the Funds described
in this section of the Prospectus is currently available as an
investment choice for this Policy even though additional Funds
may be described in the prospectus for Van Eck. Shares of Van
Eck are offered only to separate accounts of various insurance
companies to support benefits of variable insurance and annuity
policies. The assets of Van Eck are managed by Van Eck
Associates Corporation of New York, New York.
The investment objectives and policies of the Fund are
summarized below:
WORLDWIDE HARD ASSETS FUND: The investment objective of
the Fund is to seek long-term capital appreciation by investing
in equity and debt securities of companies engaged in the
exploration, development, production, and distribution of one or
more of the following: (i) precious metals, (ii) ferrous and
non-ferrous metals, (iii) oil and gas, (iv) forest products,
(v) real estate, and (vi) other basic non-agricultural commodities
(together, "Hard Assets"). Current income is not an objective.
WORLDWIDE EMERGING MARKETS FUND: The investment
objective of this Fund is to obtain long-term capital
appreciation by investing in equity securities in
emerging markets around the world. The Fund emphasizes
primarily investment in countries that, compared to the
world's major economies, exhibit relatively low gross
national product per capita, as well as the potential for
rapid economic growth.
SEI INSURANCE PRODUCTS TRUST
SEI Investments is a publicly-traded, diversified financial services
firm dedicated to helping investors more effectively manage their
financial assets. SEI Investments was incorporated in Pennsylvania in
1968 under the original name of Simulated Environments, Inc. SEI
Investments Management Corporation (SIMC), SEI Investments Distribution
Company (SIDCO), and SEI Trust Company are the principal wholly-owned
subsidiaries of SEI Investments. SIMC is an investment advisor
registered with the Securities and Exchange Commission (SEC) under the
Investment Advisers Act of 1940. SIDCO is a broker-dealer registered
with the SEC under the Securities Exchange Act of 1934 and a member of
the National Association of Securities Dealers, Inc.
SEI Insurance Products Trust is a mutual fund family that offers shares
in separate investment portfolios (Funds). The Funds have individual
investment goals and strategies and are designed exclusively as funding
vehicles for variable life insurance and variable annuity contracts.
SEI Investments Management Corporation is the Investment Adviser to SEI
Insurance Products Trust.
The investment objectives and policies of the Funds are summarized
below.
LARGE CAP VALUE FUND: This Fund invests primarily in common
stocks of U.S. Companies with market capitalizations of more than
$1 billion. The Fund uses a multi-manager approach, relying on
Sub-Advisers to manage the Fund's portfolio under the general
supervision of SIMC. Each Sub-Adviser, in managing its portions
of the Funds' assets, selects stocks it believes are undervalued
in light of such fundamental characteristics as earnings, book
value or return on equity. The Fund's portfolio is diversified as
to issuers and industries.
LARGE CAP GROWTH FUND: This Fund invests primarily in common
stocks of U.S. companies with market capitalizations of more than
$1 billion. The Fund uses a multi-manager approach, relying on
Sub-Advisers to manage the Fund's portfolio under the general
supervision of SIMC. Each Sub-Adviser, in managing its portion of
the Fund's assets, selects stocks it believes have significant
growth potential in light of such characteristics as revenue and
earnings growth and positive earnings surprises. The
18
<PAGE>
<PAGE>
Fund's portfolio is diversified as to issuers and industries.
SMALL CAP VALUE FUND: This Fund invests primarily in common
stocks of U.S. Companies with market capitalizations of less than
$2 billion. The Fund uses a multi-manager approach, relying on
Sub-Advisers to manage the Fund's portfolio under the general
supervision of SIMC. Each Sub-Adviser, in managing its portions
of the Funds' assets, selects stocks it believes are undervalued
in light of such fundamental characteristics as earnings, book
value or return on equity. The Fund's portfolio is diversified as
to issuers and industries.
SMALL CAP GROWTH FUND: This Fund invests primarily in common
stocks of U.S. companies with market capitalizations of less than
$2 billion. The Fund uses a multi-manager approach, relying on
Sub-Advisers to manage the Fund's portfolio under the general
supervision of SIMC. Each Sub-Adviser, in managing its portion of
the Fund's assets, selects stocks it believes have significant
growth potential in light of such characteristics as revenue and
earnings growth and positive earnings surprises. The Fund's
portfolio is diversified as to issuers and industries.
INTERNATIONAL EQUITY FUND: This Fund invests primarily in common
stocks and other equity securities of foreign companies. The Fund
uses a multi-manager approach, relying on Sub-Advisers to manage
the Fund's portfolio under the general supervision of SIMC. The
Fund's portfolio is diversified as to issuers, markets
capitalization, industry and country. The Fund primarily invests
in companies located in developed countries, but may also invest
in companies located in emerging markets.
EMERGING MARKETS EQUITY FUND: This Fund invests primarily in
common stocks and other equity securities of foreign companies
located in emerging markets countries. The fund uses a multi-
manager approach, relying on Sub-Advisers to manage the Fund's
portfolio under the general supervision of SIMC. The Fund is
diversified as to issuers, market capitalization, industry and
country.
CORE FIXED INCOME FUND: This Fund invests primarily in investment
grade U.S. corporate and government fixed income securities,
including mortgage-backed securities. The Fund uses a multi-
manager approach, relying on Sub-Advisers to manage the Fund's
portfolio under the general supervision of SIMC. Sub-Advisers are
selected for their expertise in managing various kinds of fixed
income securities, and each Sub-Adviser makes investment decisions
based on an analysis of yield trends, credit ratings and other
factors in accordance with its particular discipline. While each
Sub-Adviser chooses securities of different types and maturities,
the Fund in the aggregate generally will have a dollar-weighted
average duration that is consistent with that of the broad U.S.
fixed income market.
HIGH YIELD BOND FUND: This Fund invests primarily in fixed income
securities rated below investment grade ("junk bonds"), including
corporate bonds and debentures, convertible and preferred
securities, and zero coupon obligations. The Sub-Adviser chooses
securities that offer a high current yield as well as total return
potential. The Fund's securities are diversified as to issuers
and industries. The Fund's average weighted maturity may vary,
and will generally not exceed ten years. There is no limit on the
maturity or on the credit quality of any security.
INTERNATIONAL FIXED INCOME FUND: This Fund invests primarily in
foreign government, corporate, and mortgage-backed securities. In
selecting investments for the Fund, the Sub-Adviser chooses
investment grade securities issued by corporations and governments
located in various developed foreign countries, looking for
opportunities for capital appreciation and gain, as well as
current income. There are no restrictions on the Fund's average
portfolio maturity or on the maturity of any specific security.
EMERGING MARKETS DEBT FUND: This Fund invests primarily in U.S.
dollar denominated debt securities of government, government-
related and corporate issuers in emerging markets countries, as
well as entities organized to restructure the outstanding debt of
such issuers. The Sub-Advisor will spread the Fund's holdings
across a number of countries and industries to limit its exposure
to a single emerging market economy. There are no restrictions on
the Fund's average portfolio maturity, or on the maturity of any
specific security. There is no minimum rating standard for the
Fund's securities, and the Fund's securities will generally be in
the lower or lowest rating categories.
19
<PAGE>
<PAGE>
METROPOLITAN SERIES FUND
The Metropolitan Series Fund, Inc. is a "series" type of mutual fund,
which is registered as an open-end management investment company under
the 1940 Act. The fund is divided into Portfolios, each of which
represents a different class of stock in which a corresponding
investment division of Separate Account UL invests. Separate Account UL
was established under New York law on December 13, 1988. It is
registered as a unit investment trust under the Investment Company Act
of 1940.
The investment objectives and policies of the Funds available under your
Policy are summarized below:
JANUS MID CAP PORTFOLIO: The Portfolio seeks long-term growth of
capital. It normally invests at least 65% of its total assets in
common stocks of medium capitalization companies selected for
their growth potential. The portfolio manager defines medium
capitalization ("mid-cap") companies as those whose market
capitalization falls within the range of companies included in the
S&P MidCap 400 Index at the time of the purchase. The Portfolio
is non-diversified, so that it can own larger positions in a
smaller number of issuers. This means that appreciation or
depreciation of a single investment can have a greater impact on
the Portfolio's share price. The portfolio manager generally
takes a "bottom up" approach to building the Portfolio by
identifying the companies with earnings growth potential that may
not be recognized by the market at large, without regard to any
industry sector or other similar selection procedure.
T. ROWE PRICE LARGE CAP GROWTH PORTFOLIO: This Portfolio seeks
long-term growth of capital, with dividend income as a secondary
goal. It normally invests at least 65% of its total assets in a
diversified group of large capitalization growth companies. The
portfolio managers define large capitalization ("large-cap")
companies as those whose market capitalization falls within the
range of the largest 300 companies included in the Russell 3000
Index at the time of the purchase. The Portfolio generally looks
for companies with above-average growth in earnings and cash flow;
the ability to sustain earnings momentum even during economic
slowdowns by operating in industries or service sectors where
earnings and dividends can outpace inflation and the overall
economy; or that have a lucrative niche in the economy where
profit margins widen due to economic factors (rather than one-time
events such as lower taxes). The Portfolio expects to invest in
common stocks of companies that normally (but not always) pay
dividends that are generally expected to rise in future years as
earnings rise.
T. ROWE PRICE SMALL CAP GROWTH PORTFOLIO: The investment
objective of this Portfolio is long-term capital growth. The
Portfolio normally invests at least 65% of its total assets in a
diversified group of small capitalization companies. The
portfolio manager defines small capitalization ("small cap")
companies as those whose market capitalization falls within the
range of companies included in the bottom 10% of the S&P 500 Index
at the time of the purchase. The Portfolio expects to invest
primarily in common stocks and convertible securities of companies
in the development stage of their corporate life cycle with
potential to achieve long-term earnings growth faster than the
overall market.
NEW ENGLAND ZENITH FUND
New England Zenith Fund is an open-end diversified management investment
company, more commonly known as a mutual fund, consisting of multiple
investment portfolios, known as the Series. New England Investment
Management, Inc. (NEIM) was organized in 1994 by New England Financial
to serve as the investment adviser to the Series.
The investment objectives and policies of the Fund available under your
Policy are summarized below:
ALGER EQUITY GROWTH SERIES: Alger invests Equity Growth's assets
primarily in growth stocks. Alger will ordinarily invest at least
65% of Equity Growth's total assets in equity securities of issues
with market capitalization of $1 billion or greater. Alger seeks
out and invests primarily in companies that are traded on domestic
stock exchanges or in the domestic over-the-counter market. The
companies Alger chooses for the portfolio of the Series may still
be in the development stage. They may be older companies that
appear to be entering a new stage of growth progress due to
factors like management changes or development of new
technologies, products or markets, or may be companies providing
products or services with a high unit volume growth rate. Alger
focuses on fundamental characteristics of individual companies and
does not allocate assets based on specific industry sectors.
THERE IS NO ASSURANCE THAT ANY OF THE FUNDS WILL ACHIEVE ITS STATED
OBJECTIVE. It is conceivable that in the future it may be disadvantageous
for Funds to offer shares to separate accounts of various insurance
20
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<PAGE>
companies to serve as the investment medium for their variable products
or for both variable life and annuity separate accounts to invest
simultaneously in a Fund. The Boards of Trustees, the Boards of Directors,
and the respective Advisors of each Fund, and the Company and any other
insurance companies participating in the Funds are required to monitor
events to identify any material irreconcilable conflicts that
may possibly arise, and to determine what action, if any,
should be taken in response to those events or conflicts. A
more detailed description of the Funds, their investment
policies, restrictions, risks, and charges is in the
prospectuses for each Fund, which must accompany or precede
this Prospectus and which should be read carefully.
ADDITION, DELETION, OR SUBSTITUTION OF INVESTMENTS
The Company reserves the right, subject to compliance with applicable
law, to make additions to, deletions from, or substitutions for the shares
that are held by the Separate Account or that the Separate Account may
purchase. The Company reserves the right to eliminate the shares of any
of the Funds and to substitute shares of another Fund if the shares of
a Fund are no longer available for investment or if in its judgment
further investment in any Fund becomes inappropriate in view of the
purposes of the Separate Account. The Company will not substitute any
shares attributable to an Owner's interest in a Division of the Separate
Account without notice to the Owner and prior approval of the SEC, to the
extent required by the 1940 Act or other applicable law. Nothing
contained in this Prospectus shall prevent the Separate Account from
purchasing other securities for other series or classes of policies, or
from permitting a conversion between series or classes of policies on
the basis of requests made by Owners.
The Company also reserves the right to establish additional Divisions
of the Separate Account, each of which would invest in a new Fund with
a specified investment objective. New Divisions may be established when,
in the sole discretion of the Company, marketing needs or investment
conditions warrant. Any new Division will be made available to existing
Owners on a basis to be determined by the Company. To the extent approved
by the SEC, the Company may also eliminate or combine one or more
Divisions, substitute one Division for another Division, or transfer
assets between Divisions if, in its sole discretion, marketing, tax,
or investment conditions warrant.
In the event of a substitution or change, the Company may, if it
considers it necessary, make such changes in the Policy by appropriate
endorsement and offer conversion options required by law, if any.
The Company will notify all Owners of any such changes.
If deemed by the Company to be in the best interests of persons
having voting rights under the Policy, and to the extent any necessary
SEC approvals or Owner votes are obtained, the Separate Account
may be: (a) operated as a management company under the 1940 Act;
(b) de-registered under that Act in the event such registration is
no longer required; or (c) combined with other separate accounts of
the Company. To the extent permitted by applicable law, the Company
may also transfer the assets of the Separate Account associated with
the Policy to another separate account.
POLICY BENEFITS
DEATH BENEFIT
As long as the Policy remains in force (See Payment and
Allocation of Premiums - Policy Lapse and Reinstatement), the
Company will, upon receipt of proof of the Insured's death at its
Home Office, pay the death benefit in a lump sum. The amount of
the death benefit payable will be determined at the end of the
Valuation Period during which the Insured's death occurred. The
death benefit will be paid to the surviving Beneficiary or
Beneficiaries specified in the application or as subsequently
changed.
The Policy provides three death benefit options: "Death
Benefit Option A," "Death Benefit Option B," and "Death Benefit
Option C." The death benefit under all options will never be
less than the current Face Amount of the Policy (less
Indebtedness) as long as the Policy remains in force. (See
Payment and Allocation of Premiums - Policy Lapse and
Reinstatement.) The current minimum Face Amount is
generally $50,000.
<PAGE>
DEATH BENEFIT OPTION A. Under Death Benefit Option A, the
death benefit until the Insured reaches Attained Age 100 is the
current Face Amount of the Policy or, if greater, the
applicable percentage of Cash Value on the date of death. At
Attained Age 100 and above, the death benefit is 101% of the
Cash Value. The applicable percentage is 250% for an Insured
reaching Attained Age 40 or below on the Policy Anniversary
prior to the date of death. For Insureds with an a Attained
Age over 40 on that Policy Anniversary, the percentage is lower
and declines with age as shown in the Applicable Percentage of
Cash Value Table shown below. Accordingly, under Death Benefit
Option A the death benefit will remain level at the Face Amount
unless the applicable percentage of Cash Value exceeds the
current Face Amount, in which case the amount of the
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<PAGE>
<PAGE>
death benefit will vary as the Cash Value varies. (See
Illustrations of Death Benefits and Cash Values, Appendix A.)
DEATH BENEFIT OPTION B. Under Death Benefit Option B, the
death benefit until the Insured reaches Attained Age 100 is
equal to the current Face Amount plus the Cash Value of the
Policy on the date of death or, if greater, the applicable
percentage of the Cash Value on the date of death. At Attained
Age 100 and above, the death benefit is 101% of the Cash Value.
The applicable percentage is the same as under Death Benefit
Option A: 250% for an Insured Attained Age 40 or below on the
Policy Anniversary prior to the date of death, and for Insureds
with an Attained Age over 40 on that Policy Anniversary the
percentage declines as shown in the Applicable Percentage of
Cash Value Table shown below. Accordingly, under Death Benefit
Option B the amount of the death benefit will always vary as
the Cash Value varies (but will never be less than the Face
Amount). (See Illustrations of Death Benefits and Cash Values,
Appendix A.)
- ---------------------------------------------------------------
APPLICABLE PERCENTAGE OF CASH VALUE TABLE
FOR INSUREDS LESS THAN AGE 100<F*>
- ---------------------------------------------------------------
Insured Person's Age Policy Account Multiple Percentage
- ---------------------------------------------------------------
40 or under 250%
- ---------------------------------------------------------------
45 215%
- ---------------------------------------------------------------
50 185%
- ---------------------------------------------------------------
55 150%
- ---------------------------------------------------------------
60 130%
- ---------------------------------------------------------------
65 120%
- ---------------------------------------------------------------
70 115%
- ---------------------------------------------------------------
78 to 90 105%
- ---------------------------------------------------------------
95 to 99 101%
- ---------------------------------------------------------------
[FN]
<F*>For ages that are not shown on this table, the applicable
percentage multiples will decrease by a ratable portion for
each full year.
DEATH BENEFIT OPTION C. Under Death Benefit Option C, the
death benefit is equal to the current Face Amount of the Policy
or, if greater, the Cash Value on the date of death multiplied
by the "Attained Age factor" (a list of sample Attained Age
factors is shown in the Sample Attained Age Factor Table
below). At Attained Age 100 and above, the death benefit is
101% of the Cash Value. Accordingly, under Death Benefit
Option C the death benefit will remain level at the Face Amount
unless the Cash Value multiplied by the Attained Age factor
exceeds the current Face Amount, in which case the amount of
the death benefit will vary as the Cash Value varies. (See
Illustrations of Death Benefits and Cash Values, Appendix A.)
<PAGE>
<TABLE>
- ------------------------------------------------------------------------
DEATH BENEFIT OPTION C
SAMPLE ATTAINED AGE FACTOR TABLE
NON-SMOKER RATES
- ------------------------------------------------------------------------
<CAPTION>
INSURED ATTAINED AGE MALE LIVES FACTOR FEMALE LIVES FACTOR
- ------------------------------------------------------------------------
<S> <C> <C>
20 7.005753 7.978495
- ------------------------------------------------------------------------
25 6.022987 6.777620
- ------------------------------------------------------------------------
30 5.118855 5.739715
- ------------------------------------------------------------------------
35 4.326687 4.852022
- ------------------------------------------------------------------------
40 3.657390 4.105161
- ------------------------------------------------------------------------
45 3.101789 3.489815
- ------------------------------------------------------------------------
50 2.642973 2.978976
- ------------------------------------------------------------------------
55 2.266395 2.555211
- ------------------------------------------------------------------------
60 1.962872 2.203321
- ------------------------------------------------------------------------
65 1.720583 1.909085
- ------------------------------------------------------------------------
70 1.531494 1.672354
- ------------------------------------------------------------------------
75 1.386501 1.480860
- ------------------------------------------------------------------------
80 1.280475 1.337304
- ------------------------------------------------------------------------
85 1.201521 1.231035
- ------------------------------------------------------------------------
90 1.145430 1.156319
- ------------------------------------------------------------------------
95 1.089164 1.090579
- ------------------------------------------------------------------------
</TABLE>
CHANGES IN DEATH BENEFIT OPTION. If the Policy was issued with
either Death Benefit Option A or Death Benefit Option B, the
death benefit option may be changed. A request for change must
be made to the Company in writing. The effective date of such
a change will be the Monthly Anniversary on or following the
date the Company receives the change request. A change in
death benefit option may have Federal income tax consequences.
(See Federal Tax Matters.)
A Death Benefit Option A Policy may be changed to have Death
Benefit Option B. The Face Amount will be decreased to equal
the death benefit less the Cash Value on the effective date of
change. A Death Benefit Option B Policy may be changed to have
Death Benefit Option A. The Face Amount will be increased to
equal the death benefit on the effective date of change. A Policy
issued under Death Benefit Option C may not change to either Death
Benefit Option A or Death Benefit Option B for the entire lifetime
of the Contract. Similarly, a Policy issued under either Death
Benefit Option A or B may not change to Death Benefit Option C
for the lifetime of the Policy.
Satisfactory evidence of insurability must be submitted to the
Company in connection with a request for a change from Death
Benefit Option A to Death Benefit Option B. A change may not
be made
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if it would result in a Face Amount of less than the minimum
Face Amount.
A change in death benefit option will not in itself result in
an immediate change in the amount of a Policy's death benefit
or Cash Value. In addition, if, prior to or accompanying a
change in the death benefit option, there has been an increase
in the Face Amount, the cost of insurance charge may be
different for the increased amount. (See Monthly Deduction -
Cost of Insurance.)
CHANGE IN FACE AMOUNT. Subject to certain limitations set
forth below, an Owner may increase or decrease the Face Amount
of a Policy once each Policy Year but not before the first
Policy Anniversary. A written request is required for a change
in the Face Amount. A change in Face Amount may affect the
cost of insurance rate and the net amount at risk, both of
which affect an Owner's cost of insurance charge. (See Monthly
Deduction - Cost of Insurance.) A change in the Face Amount of
a Policy may have Federal income tax consequences. (See
Federal Tax Matters.)
For an increase in the Face Amount, the Company requires that
satisfactory evidence of insurability be submitted. An
application for an increase must be received by the Company.
If approved, the increase will become effective as of the
Monthly Anniversary on or following receipt of the application
by the Company, but not before the first Policy Anniversary.
In addition, the Insured must have an Attained Age of not
greater than 80 on the effective date of the increase. The
increase may not be less than $5,000 ($2,000 for policies
issued in qualified pension plans). Although an application
for an increase need not be accompanied by an additional
premium, the Cash Surrender Value in effect immediately after
the increase must be sufficient to cover the next monthly
deduction. To the extent the Cash Surrender Value is not
sufficient, an additional premium must be paid. (See Charges
and Deductions - Monthly Deduction.) An increase in the Face
Amount may result in certain additional charges. (See Charges
and Deductions - Monthly Deduction.)
For the Owner's rights upon an increase in Face Amount, see
Policy Rights - Right to Examine Policy. Owners should consult
their sales representative before deciding whether to increase
coverage by increasing the Face Amount of a Policy.
Any decrease in the Face Amount will become effective on the
Monthly Anniversary on or following receipt of the written
request by the Company. The amount of the requested decrease
must be at least $5,000 ($2,000 for policies issued in
qualified pension plans) and the Face Amount remaining in force
after any requested decrease may not be less than minimum Face
Amount. If following a decrease in Face Amount, the Policy
would not comply with the maximum premium limitations required
by Federal tax law (see Payment and Allocation of Premiums),
the decrease may be limited or Cash Value may be returned to
the Owner (at the Owner's election), to the extent necessary to
meet these requirements. Decreases will generally be applied
to prior increases in the Face Amount, if any, in the reverse
order in which such increases occurred, and then to the
original Face Amount. This order of reduction will be used to
determine the amount of subsequent cost of insurance charges
(See Monthly Deduction - Cost of Insurance; and Charges and
Deductions - Contingent Deferred Sales Charge.)
PAYMENT OF THE DEATH BENEFIT. The death benefit under the
Policy will ordinarily be paid in a lump sum within seven days
after the Company receives all documentation required for such
a payment. Payment may, however, be postponed in certain
circumstances. (See General Matters - Postponement of Payment
from the Separate Account.) The death benefit will be
increased by any unpaid dividends determined prior to the
Insured's death, and by the amount of the monthly cost of
insurance for the portion of the month from the date of death
to the end of the month, and reduced by any outstanding
Indebtedness. (See General Matters - Additional Insurance
Benefits, Dividends, and Charges and Deductions.) The Company
will pay interest on the death benefit from the date of the
Insured's death to the date of payment. Interest will be at an
annual rate determined by the Company, but will never be less
than the guaranteed rate of 4%. Provisions for settlement of
proceeds other than a lump sum payment may only be made upon
written agreement with the Company.
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CASH VALUE
The Cash Value of the Policy is equal to the total of the
amounts credited to the Owner in the Separate Account, the Loan
Account (securing Policy Loans), and, in certain contracts, the
General Account. The Policy's Cash Value in the Separate Account
will reflect the investment performance of the chosen Divisions
of the Separate Account as measured by each Division's Net
Investment Factor (defined below), the frequency and amount of
Net Premiums paid, transfers, partial withdrawals, loans and the
charges assessed in connection with the Policy. An Owner may at
any time surrender the Policy and receive the Policy's Cash
Surrender Value. (See Policy Rights - Surrender, Partial Withdrawals,
and Pro-Rata Surrender.) The Policy's Cash Value in the
Separate Account equals the sum of the Policy's Cash
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Values in each Division. There is no guaranteed minimum Cash
Value.
DETERMINATION OF CASH VALUE. For each Division of the Separate
Account, the Cash Value is determined on each Valuation Date.
On the Investment Start Date, the Cash Value in a Division will
equal the portion of any Net Premium allocated to the Division,
reduced by the portion allocated to that Division of the
monthly deduction(s) due from the Issue Date through the
Investment Start Date. (See Payment and Allocation of
Premiums.) Thereafter, on each Valuation Date, the Cash Value
in a Division of the Separate Account will equal:
(1) The Cash Value in the Division on the preceding
Valuation Date, multiplied by the Division's Net
Investment Factor (defined below) for the current
Valuation Period; plus
(2) Any Net Premium payments received during the
current Valuation Period which are allocated to the
Division; plus
(3) Any loan repayments allocated to the Division
during the current Valuation Period; plus
(4) Any amounts transferred to the Division from the
General Account or from another Division during the
current Valuation Period; plus
(5) That portion of the interest credited on
outstanding loans which is allocated to the Division
during the current Valuation Period; minus
(6) Any amounts transferred from the Division to the
General Account, Loan Account, or to another Division
during the current Valuation Period (including any
transfer charges); minus
(7) Any partial withdrawals from the Division during
the current Valuation Period; minus
(8) Any withdrawal due to a Pro-Rata Surrender from the
Division during the current Valuation Period; minus
(9) Any withdrawal or surrender charges incurred during
the current Valuation Period attributed to the Division
in connection with a partial withdrawal or Pro-Rata
Surrender; minus
(10) If a Monthly Anniversary occurs during the current
Valuation Period, the portion of the monthly deduction
allocated to the Division during the current Valuation
Period to cover the Policy Month which starts during that
Valuation Period (See Charges and Deductions.); plus
(11) If a Policy Anniversary occurs during the current
Valuation Period, the portion of the dividend paid, if
any, allocated to the Division.
NET INVESTMENT FACTOR: The Net Investment Factor measures the
investment performance of a Division during a Valuation Period.
The Net Investment Factor for each Division for a Valuation
period is calculated as follows:
(1) The value of the assets at the end of the preceding
Valuation Period; plus
(2) The investment income and capital gains, realized
or unrealized, credited to the assets in the Valuation
Period for which the Net Investment Factor is being
determined; minus
(3) The capital losses, realized or unrealized, charged
against those assets during the Valuation Period; minus
(4) Any amount charged against each Division for taxes,
including any tax or other economic burden resulting from
the application of the tax laws determined by the Company
to be properly attributable to the Divisions of the
Separate Account, or any amount set aside during the
Valuation Period as a reserve for taxes attributable to
the operation or maintenance of each Division; minus
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(5) A charge equal to a percentage of the average net
assets for each day in the Valuation Period. This
charge, for mortality and expense risks, is determined by
the length of time the policy has been in force. It will
not exceed the amounts shown in the following table:
Policy Percentage of Effective
Years Avg. Net Assets Annual Rate
1-10 0.0015027 0.55%
11-20 0.0012301 0.45%
21+ 0.0009572 0.35%;
divided by
(6) The value of the assets at the end of the
preceding Valuation Period.
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POLICY RIGHTS
LOANS
LOAN PRIVILEGES. The Owner may, by written request to General
American, borrow an amount up to the Loan Value of the Policy,
with the Policy serving as sole security for such loan. A loan
taken from, or secured by, a Policy may have Federal income tax
consequences. (See Federal Tax Matters.)
The Loan Value is the Cash Value of the Policy on the date the
loan request is received, less interest to the next loan
interest due date, less anticipated monthly deductions to the
next loan interest due date, less any existing loan, less any
surrender charge, plus interest expected to be earned on the
loan balance to the next loan interest due date. Policy Loan
interest is payable on each Policy Anniversary.
The minimum amount that may be borrowed is $500. The loan may
be completely or partially repaid at any time while the Insured
is living. Any amount due to an Owner under a Policy Loan
ordinarily will be paid within seven days after General
American receives the loan request at its Home Office, although
payments may be postponed under certain circumstances. (See
General Matters - Postponement of Payments from the Separate
Account.)
When a Policy Loan is made, Cash Value equal to the amount of
the loan plus interest due will be transferred to the Loan
Account as security for the loan. A Loan Subaccount exists
within the Loan Account for the General Account and each
Division of the Separate Account. Amounts transferred to the
Loan Account to secure Indebtedness are allocated to the
appropriate Loan Subaccount to reflect its origin. Unless the
Owner requests a different allocation, amounts will be
transferred from the Divisions of the Separate Account and the
General Account in the same proportion that the Policy's Cash
Value in each Division and the General Account, if any, bears
to the Policy's total Cash Value, less the Cash Value in the
Loan Account, at the end of the Valuation Period during which
the request for a Policy Loan is received. This will reduce
the Policy's Cash Value in the General Account and Separate
Account. These transactions will not be considered transfers
for purposes of the limitations on transfers between Divisions
or to or from the General Account.
Cash Value in the Loan Account is expected to earn interest at
a rate ("the earnings rate") which is lower than the rate
charged on the Policy Loan ("the borrowing rate"). Cash Value
in the Loan Account will accrue interest daily at an annual
earnings rate of 4%.
Interest credited on the Cash Value held in the Loan Account
will be allocated on Policy Anniversaries to the General
Account and the Divisions of the Separate Account in the same
proportion that the Cash Value in each Loan Subaccount bears to
the Cash Value in the Loan Account. The interest credited will
also be transferred: (1) when a new loan is made; (2) when a
loan is partially or fully repaid; and (3) when an amount is
needed to meet a monthly deduction.
INTEREST CHARGED. The borrowing rate we charge for Policy Loan
interest will be based on the following schedule:
FOR LOANS ANNUAL
OUTSTANDING DURING INTEREST RATE
Policy Years 1-10 4.50%
Policy Years 11-20 4.25%
Policy Years 21+ 4.15%
General American will inform the Owner of the current borrowing
rate when a Policy Loan is requested.
Policy Loan interest is due and payable annually on each Policy
Anniversary. If the Owner does not pay the interest when it is
due, the unpaid loan interest will be added to the outstanding
Indebtedness as of the due date and will be charged interest at
the same rate as the rest of the Indebtedness. (See Effect of
Policy Loans below.) The amount of Policy Loan interest which
is transferred to the Loan Account will be deducted from the
Divisions of the Separate Account and from the General Account
in the same proportion that the portion of the Cash Value in
each Division and in the General Account, respectively, bears
to the total Cash Value of the Policy minus the Cash Value in
the Loan Account.
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EFFECT OF POLICY LOANS. Whether or not a Policy Loan is
repaid, it will permanently affect the Cash Value of a Policy,
and may permanently affect the amount of the death benefit.
The collateral for the loan (the amount held in the Loan
Account) does not participate in the performance of the
Separate Account while the loan is outstanding. If the Loan
Account earnings rate is less than the investment performance
of the selected Division(s), the Cash Value of the Policy will
be lower as a result of the Policy Loan. Conversely, if the
Loan Account earnings rate is higher than the investment
performance of the Division(s), the Cash Value may be higher.
In addition, if the Indebtedness (See Definitions) exceeds the
Cash Value minus the surrender charge on any Monthly Anniversary,
the Policy will lapse,
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subject to a grace period. (See Payment and Allocation of
Premiums - Policy Lapse and Reinstatement.) A sufficient payment
must be made within the later of the grace period of 62 days from
the Monthly Anniversary immediately before the date Indebtedness
exceeds the Cash Value less any surrender charges, or 31 days after
notice that a Policy will terminate unless a sufficient payment has
been mailed, or the Policy will lapse and terminate without value.
A lapsed Policy, however, may later be reinstated subject to certain
limitations. (See Payment and Allocation of Premiums - Policy Lapse
and Reinstatement.)
Any outstanding Indebtedness will be deducted from the proceeds payable
upon the death of the Insured or the surrender of the Policy. Upon a
complete surrender or lapse of any Policy, if the amount received plus
the amount of outstanding Indebtedness exceeds the total investment in
the Policy, the excess will generally be treated as ordinary income
subject to tax. (See Federal Tax Matters.)
REPAYMENT OF INDEBTEDNESS. A Policy Loan may be repaid in whole or in
part at any time prior to the death of the Insured and as long as a
Policy is in force. When a loan repayment is made, an amount securing
the Indebtedness in the Loan Account equal to the loan repayment will be
transferred to the Divisions of the Separate Account and the General
Account in the same proportion that the Cash Value in each Loan
Subaccount bears to Cash Value in the Loan Account. Amounts paid while
a Policy Loan is outstanding will be treated as premiums unless the
Owner requests in writing that they be treated as repayment of
Indebtedness.
SURRENDER, PARTIAL WITHDRAWALS AND PRO-RATA SURRENDER
At any time during the lifetime of the Insured and while a Policy is in
force, the Owner may surrender the Policy by sending a written request
to the Company. After the first Policy Year, an Owner may make a
partial withdrawal by sending a written request to the Company. The
amount available for surrender is the Cash Surrender Value at the end of
the Valuation Period during which the surrender request is received at
the Company's Home Office. Amounts payable from the Separate Account
upon surrender, partial withdrawal, or a Pro-Rata Surrender will
ordinarily be paid within seven days of receipt of the written request.
(See General Matters - Postponement of Payments from the Separate
Account.)
SURRENDERS. To effect a surrender, either the Policy itself must be
returned to the Company along with the request, or the request must be
accompanied by a completed affidavit of loss, which is available from
the Company. Upon surrender, the Company will pay the Cash Surrender
Value plus any unpaid dividends determined prior to surrender (See
Dividends) to the Owner in a single sum. The Cash Surrender Value
equals the Cash Value on the date of surrender, less any Indebtedness,
and less any surrender charge. (See Charges and Deductions - Contingent
Deferred Sales Charge.) The Company will determine the Cash Surrender
Value as of the date that an Owner's written request is received at the
Company's Home Office. If the request is received on a Monthly
Anniversary, the monthly deduction otherwise deductible will be included
in the amount paid. Coverage under a Policy will terminate as of the
date of surrender. The Insured must be living at the time of a
surrender. A surrender may have Federal income tax consequences. (See
Federal Tax Matters.)
PARTIAL WITHDRAWALS. After the first Policy Year, an Owner may make
partial withdrawals from the Policy's Cash Surrender Value. There is no
transaction charge for the first twelve partial withdrawals or requested
transfers in a Policy Year. General American will impose a charge of
$25 for each partial withdrawal or requested transfer in excess of
twelve in a Policy Year. A partial withdrawal may have Federal income
tax consequences. (See Federal Tax Matters.)
The minimum amount of a partial withdrawal request, net of any
applicable surrender charges, is the lesser of a) $500 from a Division
of the Separate Account, or b) the Policy's Cash Value in a Division.
(See Charges and Deductions - Contingent Deferred Sales Charge.) Partial
withdrawals made during a Policy Year may not exceed the following
limits. The maximum amount that may be withdrawn from a Division of the
Separate Account is the Policy's Cash Value net of any applicable
surrender charges in that Division. The total partial withdrawals and
transfers from the General Account over the Policy Year may not exceed a
maximum amount equal to the greatest of the following: (1) 25% of the
Cash Surrender Value in the General Account at the beginning of the
Policy Year, multiplied by the withdrawal percentage limit shown in the
policy, or (2) the previous Policy Year's maximum amount.
The Owner may allocate the amount withdrawn plus any applicable
surrender charge, subject to the above conditions, among the Divisions
of the Separate Account and the General Account. If no allocation is
specified, then the partial withdrawal will be allocated among the
Divisions of the Separate Account and the General Account in the same
proportion that the Policy's Cash Value in each
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Division and the General Account bears to the total Cash Value of the
Policy, less the Cash Value in the Loan Account, on the date the request
for the partial withdrawal is received. If the limitations on
withdrawals from the General Account will not permit this proportionate
allocation, the Owner will be requested to provide an alternate
allocation. (See The General Account.)
No amount may be withdrawn that would result in there being insufficient
Cash Value to meet any surrender charge that would be payable
immediately following the withdrawal upon the surrender of the remaining
Cash Value.
The death benefit will be affected by a partial withdrawal, unless Death
Benefit Option A or Option C is in effect and the withdrawal is made
under the terms of an anniversary partial withdrawal rider. (See
General Matters - Additional Insurance Benefits.) If Death Benefit
Option A or Death Benefit Option C is in effect and the death benefit
equals the Face Amount, then a partial withdrawal will decrease the Face
Amount by an amount equal to the partial withdrawal plus the applicable
surrender charge resulting from that partial withdrawal. If the death
benefit is based on a percentage of the Cash Value, then a partial
withdrawal will decrease the Face Amount by an amount by which the
partial withdrawal plus the applicable surrender charge exceeds the
difference between the death benefit and the Face Amount. If Death
Option B is in effect, the Face Amount will not change.
The Face Amount remaining in force after a partial withdrawal may not be
less than the minimum Face Amount. Any request for a partial withdrawal
that would reduce the Face Amount below this amount will not be
implemented.
Partial withdrawals may affect the way in which the cost of insurance
charge is calculated and the amount of pure insurance protection
afforded under a Policy. (See Monthly Deduction - Cost of Insurance.)
Partial withdrawals will be applied first to reduce the initial Face
Amount and then to each increase in Face Amount in order, starting with
the first increase. The Company may change the minimum amount required
for a partial withdrawal or the number of times partial withdrawals may
be made.
PRO-RATA SURRENDER. After the first Policy Year, an Owner can make a
Pro-Rata Surrender of the Policy. The Pro-Rata Surrender will reduce
the Face Amount and the Cash Value by a percentage chosen by the Owner.
This percentage must be any whole number. A Pro-Rata Surrender may have
Federal income tax consequences. (See Federal Tax Matters.) The
percentage will be applied to the Face Amount and the Cash Value on the
Monthly Anniversary on or following our receipt of the request.
The Owner may allocate the amount of decrease in Cash Value plus any
applicable surrender charge among the Divisions of the Separate Account
and the General Account. (See Charges and Deductions - Contingent
Deferred Sales Charge.) If no allocation is specified, then the decrease
in Cash Value and any applicable surrender charge will be allocated
among the Divisions of the Separate Account and the General Account in
the same proportion that the Policy's Cash Value in each Division and
the General Account bears to the total Cash Value of the Policy, less
the Cash Value in the Loan Account, on the date the request for Pro-Rata
Surrender is received.
A Pro-Rata Surrender can not be processed if it will reduce the Face
Amount below the minimum Face Amount of the Policy. No Pro-Rata
Surrender will be processed for more Cash Surrender Value than is
available on the date of the Pro-Rata Surrender. A cash payment will be
made to the Owner for the amount of Cash Value reduction less any
applicable surrender charges.
Pro-Rata Surrenders may affect the way in which the cost of insurance
charge is calculated and the amount of the pure insurance protection
afforded under the Policy. (See Monthly Deduction - Cost of Insurance.)
Pro-Rata Surrenders will be applied to prior increases in the Face
Amount, if any, in the reverse order in which such increases occurred,
and then to the original Face Amount.
CHARGES ON SURRENDER, PARTIAL WITHDRAWALS AND PRO-RATA SURRENDER. If a
Policy is surrendered within the first ten Policy Years, the Contingent
Deferred Sales Charge will apply. (See Contingent Deferred Sales
Charge.)
A partial withdrawal or Pro-Rata Surrender may also result in a
Contingent Deferred Sales Charge. The amount of the charge assessed is
a portion of the Contingent Deferred Sales Charge that would be deducted
upon surrender or lapse. Charges are described in more detail under
Charges and Deductions - Contingent Deferred Sales Charge.
While partial withdrawals and Pro-Rata Surrenders are each methods of
reducing a Policy's Cash Value, a Pro-Rata Surrender differs from a
partial withdrawal in that a partial withdrawal does not typically have
a proportionate effect on a Policy's death benefit by reducing the
Policy's Face Amount, while a Pro-Rata Surrender does. Assuming that a
Policy's death benefit is not a percentage of the Policy's Cash Value,
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a Pro-Rata Surrender will reduce the Policy's death benefit in the same
proportion that the Policy's Cash Value is reduced, while a partial
withdrawal will reduce the death benefit by one dollar for each dollar
of Cash Value withdrawn. Partial Withdrawals and Pro-Rata Surrenders
will also result in there being different cost of insurance charges
subsequently deducted. (See Monthly Deduction - Cost of Insurance;
Surrender, Partial Withdrawals and Pro-Rata Surrender - Partial
Withdrawals; and Surrenders, Partial Withdrawals, and Pro-Rata
Surrenders-Pro-Rata Surrender.)
TRANSFERS
Under General American's current practices, a Policy's Cash Value,
except amounts credited to the Loan Account, may be transferred among
the Divisions of the Separate Account and for certain contracts, between
the General Account and the Divisions. Transfers to and from the
General Account are subject to restrictions (See The General Account).
Requests for transfers from or among Divisions of the Separate Account
may be made in writing or by telephone. Transfers from or among the
Divisions of the Separate Account must be in amounts of at least $500
or, if smaller, the Policy's Cash Value in a Division. The first twelve
requested transfers or partial withdrawals per policy year will be
allowed free of charge. Thereafter, the Company will impose a charge of
$25 for each requested transfer or partial withdrawal. General American
ordinarily will make transfers and determine all values in connection
with transfers as of the end of the Valuation Period during which the
transfer request is received.
All requests received on the same Valuation Date will be considered a
single transfer request. Each transfer must meet the minimum
requirement of $500 or the entire Cash Value in a Division, whichever is
smaller. Where a single transfer request calls for more than one
transfer, and not all of the transfers would meet the minimum
requirements, General American will make those transfers that do meet
the requirements. Transfers resulting from Policy Loans will not be
counted for purposes of the limitations on the amount or frequency of
transfers allowed in each Policy Month or Policy Year.
Although General American currently intends to continue to permit
transfers for the foreseeable future, the Policy provides that General
American may at any time revoke, modify, or limit the transfer
privilege, including the minimum amount transferable, the maximum
General Account allocation percent, and the frequency of such transfers.
PORTFOLIO REBALANCING
Over time, the funds in the General Account and the Divisions of the
Separate Account will accumulate at different rates as a result of
different investment returns. The Owner may direct that from time to
time we automatically restore the balance of the Cash Value in the
General Account and in the Divisions of the Separate Account to the
percentages determined in advance. There are two methods of rebalancing
available - periodic and variance.
PERIODIC REBALANCING. Under this option the Owner elects a frequency
(monthly, quarterly, semiannually or annually), measured from the Policy
Anniversary. On each date elected, we will rebalance the funds by
generating transfers to reallocate the funds according to the investment
percentages elected.
VARIANCE REBALANCING. Under this option the Owner elects a specific
allocation percentage for the General Account and each Division of the
Separate Account. For each such account, the allocation percentage (if
not zero) must be a whole percentage and must not be less than five
percent (5%). The Owner also elects a maximum variance percentage (5%,
10%, 15%, or 20% only), and can exclude specific funds from being
rebalanced. On each Monthly Anniversary we will review the current fund
balances to determine whether any fund balance is outside of the
variance range (either above or below) as a percentage of the specified
allocation percentage for that fund. If any fund is outside of the
variance range, we will generate transfers to rebalance all of the
specified funds back to the predetermined percentages.
Owners should consider that portfolio rebalancing entails the transfer
of Cash Value from better performing portfolios to lesser performing
portfolios.
Transfers resulting from portfolio rebalancing will not be counted
against the total number of transfers allowed in a Policy Year before a
charge is applied.
The Owner may elect either form of portfolio rebalancing by specifying
it on the policy application, or may elect it later for an in-force
Policy, or may cancel it, by submitting a change form acceptable to
General American under its administrative rules.
Only one form of portfolio rebalancing may be elected at any one time,
and portfolio rebalancing may not be used in conjunction with dollar
cost averaging (see below).
General American reserves the right to suspend portfolio rebalancing at
any time on any class of
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Policies on a nondiscriminatory basis, or to charge an administrative
fee for election changes in excess of a specified number in a Policy
Year in accordance with its administrative rules.
DOLLAR COST AVERAGING
The Owner may direct the Company to transfer amounts on a monthly basis
from the Money Market Fund to any other Division of the Separate
Account. This service is intended to allow the Owner to utilize "dollar
cost averaging" ("DCA"), a long-term investment technique which provides
for regular, level investments over time. The Company makes no
guarantee that DCA will result in a profit or protect against loss.
The following rules and restrictions apply to DCA transfers:
(1) The minimum DCA transfer amount is $100.
(2) A written election of the DCA service, on a form provided by
the Company, must be completed by the Owner and on file with the
Company in order to begin DCA transfers.
(3) In the written election of the DCA service, the Owner
indicates how DCA transfers are to be allocated among the
Divisions of the Separate Account. For any Division chosen to
receive DCA transfers, the minimum percentage that may be
allocated to a Division is 5% of the DCA transfer amount, and
fractional percentages may not be used.
(4) DCA transfers can only be made from the Money Market Fund,
and DCA transfers will not be allowed to the General Account.
(5) The DCA transfers will not count against the Policy's normal
transfer restrictions. (See Policy Rights -- Transfers.)
(6) The DCA transfer percentages may differ from the allocation
percentages the Owner specifies for the allocation of Net
Premiums. (See Payment and Allocation of Premiums -- Allocation
of Net Premiums and Cash Values.)
(7) Once elected, DCA transfers from the Money Market Fund will
be processed monthly until either the value in the Money Market
Fund is completely depleted or the Owner instructs the Company in
writing to cancel the DCA service.
(8) Transfers as a result of a Policy Loan or repayment, or in
exercise of the conversion privilege, are not subject to the DCA
rules and restrictions. The DCA service terminates at the time
the conversion privilege is exercised, when any outstanding amount
in any Division of the Separate Account is immediately transferred
to the General Account. (See Policy Rights - Loans, and Policy
Rights - Conversion Privilege.)
(9) DCA transfers will not be made until the Right to Examine
Policy period has expired (See Policy Rights - Right to Examine
Policy).
The Company reserves the right to assess a processing fee for the DCA
service. The Company reserves the right to discontinue offering DCA
upon 30 days' written notice to Owners. However, any such
discontinuation will not affect DCA services already commenced. The
Company reserves the right to impose a minimum total Cash Value, less
outstanding Indebtedness, in order to qualify for DCA service. Also,
the Company reserves the right to change the minimum necessary Cash
Value and the minimum required DCA transfer amount.
Transfers made under Dollar Cost Averaging do not count against the
total of twelve requested transfers or partial withdrawals allowed
without charge in a Policy Year.
RIGHT TO EXAMINE POLICY
The Owner may cancel a Policy within 20 days after receiving it (30 days
if the Owner is a resident of California and is age 60 or older) or
within 45 days after the application was signed, whichever is later. If
a Policy is canceled within this time period, a refund will be paid.
Where required by state law, the refund will equal all premiums paid
under the Policy. Where required by state law, General American will
refund an amount equal to the greater of premiums paid or (1) plus (2)
where (1) is the difference between the premiums paid, including any
policy fees or other charges, and the amounts allocated to the Separate
Account under the Policy and (2) is the value of the amounts allocated
to the Separate Account under the Policy on the date the returned Policy
is received by General American or its agent.
To cancel the Policy, the Owner should mail or deliver the Policy to
either General American or the agent who sold it. A refund of premiums
paid by check may be delayed until the Owner's check has cleared the
bank upon which it was drawn. (See General Matters - Postponement of
Payments from the Separate Account.)
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A request for an increase in Face Amount (see Policy Benefits - Death
Benefit) may also be canceled. The request for cancellation must be
made within the later of 20 days from the date the Owner received the
new Policy specifications page for the increase, or 45 days after the
application for the increase was signed.
DEATH BENEFIT AT ATTAINED AGE 100
If the Insured is living and the Policy is in force when the Insured
reaches Attained Age 100, the death benefit will be equal to 101% of the
Cash Value of the Policy unless the Lifetime Coverage Rider is in
effect. (See Additional Insurance Benefits.) At that point, no further
premium payments will be required or accepted, and no further monthly
deductions will be taken to cover the cost of insurance.
PAYMENT AND ALLOCATION OF PREMIUMS
ISSUANCE OF A POLICY
Individuals wishing to purchase a Policy must complete an application
and submit it to an authorized registered agent of General American or
to General American's Home Office. A Policy will generally be issued to
Insureds of Issue Ages 0 through 85 for regularly underwritten
contracts, and to Insureds of Issue Ages 20 through 70 for Policies
issued in qualified pension plans, for guaranteed issue contracts and,
should they become available in the future, for simplified issue
contracts. General American may, in its sole discretion, issue Policies
to individuals falling outside of those Issue Ages. Acceptance of an
application is subject to General American's underwriting rules and
General American reserves the right to reject an application for any
reason.
The Issue Date is determined by General American in accordance with its
standard underwriting procedures for variable life insurance policies.
The Issue Date is used to determine Policy Anniversaries, Policy Years,
and Policy Months. Insurance coverages under a Policy will not take
effect until the Policy has been delivered and the initial premium has
been paid prior to the Insured's death and prior to any change in health
as shown in the application.
PREMIUMS
The initial premium is due on the Issue Date, and may be paid to an
authorized registered agent of General American or to General American
at its Home Office. General American currently requires that the
initial premium for a Policy be at least equal to one-twelfth (1/12) of
the Minimum Premium for the Policy. The Minimum Premium is the amount
specified for each Policy based on the requested initial Face Amount and
the charges under the Policy which vary according to the Issue Age, sex,
underwriting risk class, and smoker status of the Insured. (See Charges
and Deductions.) For policies issued as a result of a term conversion
from certain General American term policies, the Company requires the
Owner to pay an initial premium, which combined with conversion credits
given, if any, will equal one full "Minimum Premium" for the Policy.
Following the initial premium, subject to the limitations described
below, premiums may be paid in any amount and at any interval. Premiums
after the first premium payment must be paid to General American at its
Home Office. An Owner may establish a schedule of planned premiums
which will be billed by the Company at regular intervals. Failure to
pay planned premiums, however, will not itself cause the Policy to
lapse. (See Policy Lapse and Reinstatement.) Premium receipts will be
furnished upon request.
An Owner may make unscheduled premium payments at any time in any
amount, or skip planned premium payments, subject to the minimum and
maximum premium limitations described below.
If a Policy is in the intended Owner's possession but the initial
premium has not been paid, the Policy is not in force. The intended
Owner is deemed to have the Policy for inspection only.
PREMIUM LIMITATIONS. Every premium payment must be at least $10. In no
event may the total of all premiums paid in any Policy Year exceed the
current maximum premium limitations for that Policy Year. Maximum
premium limits for the Policy Year will be shown in an Owner's annual
report.
In general, for policies issued with Death Benefit Option A or Death
Benefit Option B, the maximum premium limit for a Policy Year is the
largest amount of premium that can be paid in that Policy Year such that
the sum of the premiums paid under the Policy will not at any time
exceed the guideline premium limitations needed to comply with the tax
definition of life insurance. For policies issued with Death Benefit
Option C, the company reserves the right to impose other restrictions
upon the amount of premium that may be paid into the Policy. If at any
time a premium is paid which would result in total premiums exceeding
the current maximum premium limitations, the Company will only accept
that portion of the premium which will make total premiums equal the
maximum. Any part of the premium in excess of that amount will be
returned or applied as otherwise
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agreed, and no further premiums will be accepted until allowed under the
current maximum premium limitations.
In addition to the foregoing tax definitional limits on premiums, for
purposes of determining whether distributions (including loans) are a
return of income first, the Company monitors the Policy to detect
whether the "seven pay limit" has been exceeded. If the seven pay limit
is exceeded, the Policy becomes a "Modified Endowment". The Company
has adopted administrative steps designed to notify an Owner when it is
believed that a premium payment will cause a Policy to become a modified
endowment contract. The Owner will be given a limited amount of time to
request that the premium be reversed in order to avoid the Policy's being
classified as a modified endowment contract. (See Federal Tax Matters.)
If the Company receives a premium payment which would cause the death
benefit to increase by an amount that exceeds the Net Premium portion of
the payment, then the Company reserves the right to (1) refuse that
premium payment, or (2) require additional evidence of insurability
before it accepts the premium.
ALLOCATION OF NET PREMIUMS AND CASH VALUE
ALLOCATION OF NET PREMIUMS. In the application for a Policy, the Owner
indicates how Net Premiums are to be allocated among the Divisions of
the Separate Account, to the General Account (if available), or both.
For each Division chosen, the minimum percentage that may be allocated
to a Division is 1% of the Net Premium, and fractional percentages may
not be used. Certain other restrictions apply to allocations made to
the General Account (see General Account). For policies issued with an
allowable percentage to the General Account of more than 1%, the minimum
percentage is 1%, and fractional percentages may not be used.
The allocation for future Net Premiums may be changed without charge at
any time by providing notice to the Company. Any change in allocation
will take effect immediately upon receipt by the Company of written
notice. No charge is imposed for changing the allocations of future
premiums. The initial allocation will be shown on the application which
is attached to the Policy. The Company may at any time modify the
maximum percentage of future Net Premiums that may be allocated to the
General Account.
During the period from the Issue Date to the end of the Right to Examine
Policy Period (See Policy Rights - Right to Examine Policy), Net
Premiums will automatically be allocated to the Division that invests in
the Money Market Fund of Capital Company. When this period expires, the
Policy's Cash Value in that Division will be transferred to the
Divisions of the Separate Account and to the General Account (if
available) in accordance with the allocation requested in the
application for the Policy, or any allocation instructions received
subsequent to receipt of the application. Net Premiums received after
the Right to Examine Policy Period will be allocated according to the
allocation instructions most recently received by the Company unless
otherwise instructed for that particular premium receipt.
The Policy's Cash Value may also be transferred between Divisions of the
Separate Account, and, if the General Account is available under the
Policy, between those Divisions and the General Account. (See Policy
Rights - Transfers.)
The value of amounts allocated to Divisions of the Separate Account will
vary with the investment performance of the chosen Divisions and the
Owner bears the entire investment risk. This will affect the Policy's
Cash Value, and may affect the death benefit as well. Owners should
periodically review their allocations of Net Premiums and the Policy's
Cash Value in light of market conditions and their overall financial
planning requirements.
POLICY LAPSE AND REINSTATEMENT
LAPSE. Unlike conventional whole life insurance policies, the failure
to make a premium payment following the initial premium will not itself
cause a Policy to lapse. If, during the first five Policy Years, the
sum of all premiums paid on the Policy, reduced by any partial
withdrawals and any outstanding loan balance, is greater than or equal
to the sum of the No Lapse Monthly Premiums for the elapsed months since
the Issue Date, the Policy will not lapse as a result of the Cash Value
less any loans, loan interest due, and any surrender charge being
insufficient to pay the monthly deduction. Lapse will occur (except as
described above) when the Cash Surrender Value is insufficient to cover
the monthly deduction, and a grace period expires without a sufficient
payment being made.
The grace period, which is 62 days, begins on the Monthly Anniversary on
which the Cash Surrender Value becomes insufficient to meet the next
monthly deduction. The Company will notify the Owner at the beginning
of the grace period by mail addressed to the last known address on file
with the Company. The notice to the Owner will indicate the amount of
additional premium that must be paid. The amount of
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the premium required to keep the Policy in force will be the amount
to cover the, outstanding monthly deductions and premium expense charges.
(See Charges and Deductions - Monthly Deduction.) If the Company does
not receive the required amount within the grace period, the Policy will
lapse and terminate without Cash Value.
If the Insured dies during the grace period, any overdue monthly
deductions will be deducted from the death benefit otherwise payable.
REINSTATEMENT. The Owner may reinstate a lapsed Policy by written
application any time within five years after the date of lapse and before
the Insured's Attained Age 100. Reinstatement is subject to the following
conditions:
1. Evidence of the insurability of the Insured satisfactory to
the Company (including evidence of insurability of any person
covered by a rider to reinstate the rider).
2. Payment of a premium that, after the deduction of premium
expense charges, is large enough to cover: (a) the monthly
deductions due at the time of lapse, and (b) two times the monthly
deduction due at the time of reinstatement.
3. Payment or reinstatement of any Indebtedness. Any
Indebtedness reinstated will cause Cash Value of an equal amount
also to be reinstated. Any loan interest due and unpaid on the
Policy Anniversary prior to reinstatement must be repaid at the
time of reinstatement. Any loan paid at the time of reinstatement
will cause an increase in Cash Value equal to the amount to be
reinstated.
The Policy cannot be reinstated if it has been surrendered.
The amount of Cash Value on the date of reinstatement will be equal to
the amount of any Policy Loan reinstated, increased by the Net Premiums
paid at reinstatement, any Policy Loan paid at the time of
reinstatement, and the amount of any surrender charge paid at the time
of lapse.
The Insured must be alive on the date the Company approves the
application for reinstatement. If the Insured is not then alive, such
approval is void and of no effect.
The effective date of reinstatement will be the date the Company
approves the application for reinstatement. There will be a full
monthly deduction for the Policy Month which includes that date. (See
Charges and Deductions - Monthly Deduction.)
The surrender charge in effect at the time of reinstatement will equal
the surrender charge in effect at the time of lapse.
CHARGES AND DEDUCTIONS
Charges will be deducted in connection with the Policy to compensate the
Company for providing the insurance benefits set forth in the Policy and
any additional benefits added by rider, administering the Policies,
incurring expenses in distributing the Policies, and assuming certain
risks in connection with the Policy.
PREMIUM EXPENSE CHARGES
Prior to allocation of Net Premiums, premium payments will be reduced by
premium expense charges consisting of a sales charge and a charge for
premium taxes. The premium payment less the premium expense charge
equals the Net Premium.
SALES CHARGE. A sales charge will be deducted from each premium payment
to partially compensate the Company for expenses incurred in
distributing the Policy and any additional benefits provided by riders.
The Company currently intends to deduct a sales charge determined
according to the following schedule:
Policy Year 1 15% of premium up to Target
5% of premium above Target
Policy Years 2-10 5% of all premium paid
Policy Years 11+ 2% of all premium paid
For policies issued in the state of Oregon, the amounts shown above are
increased by 2%. Consistent with the requirements of the Texas non-
forfeiture laws, the guaranteed sales charge varies for policies issued
in Texas. As of the date of this prospectus, the current sales charge
for Texas policies is the same as shown above.
The expenses covered by the sales charge include agent sales
commissions, the cost of printing Prospectuses and sales literature, and
any advertising costs. Where Policies are issued to Insureds with
higher mortality risks or to Insureds who have selected additional
insurance benefits, a portion of the amount deducted for sales charge is
used to pay distribution expenses and other costs associated with these
additional coverages. No increase in this sales charge will occur that
would result in an increase in the sales charge percentage deducted in
any previous Policy year.
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A Contingent Deferred Sales Charge is also imposed under certain
circumstances for expenses incurred in distributing the Policies. That
charge is discussed below.
To the extent that sales expenses are not recovered from the sales
charge and the surrender charge, those expenses may be recovered from
other sources, including the mortality and expense risk charge described
below.
PREMIUM TAXES. Various states or other governing jurisdictions and
their subdivisions impose a tax on premiums received by insurance
companies. Premium taxes vary by jurisdiction. A deduction equal to
the amount of the actual premium tax (if any) is taken from each
premium payment for these taxes. The deduction allows the Company to
pass through the amount of the taxes imposed on the policy by the state
or other governing jurisdiction and any subdivisions thereof. State
premium taxes currently range from 0% to 3.5% (4% in Puerto Rico), with
an average of approximately 2.1%.
FEDERAL TAX CHARGE. This charge is designed to pass through the
equivalent of the federal tax consequences applicable to the policy.
The charge is currently 1.3% of premium paid, and is guaranteed not to
increase except to the extent of any increases in the federal tax.
MONTHLY DEDUCTION
Charges will be deducted monthly from the Cash Value of each Policy
("the monthly deduction") to compensate the Company for (a) certain
administrative costs; (b) the cost of insurance; and (c) the cost of
optional benefits added by rider. The monthly deduction will be taken
on the Investment Start Date and on each Monthly Anniversary. It will
be allocated among the General Account and each Division of the Separate
Account in the same proportion that a Policy's Cash Value in the General
Account and the Policy's Cash Value in each Division bear to the total
Cash Value of the Policy, less the Cash Value in the Loan Account, on
the date the deduction is taken. Because portions of the monthly
deduction, such as the cost of insurance, can vary from month to month,
the monthly deduction itself can vary in amount from month to month.
SELECTION AND ISSUE EXPENSE CHARGE. During the first ten Policy Years,
and during the first ten Policy Years following an increase in Face
Amount, the Company generally assesses a monthly charge to cover the
costs associated with the underwriting and issue of the policy or the
increase. The monthly charge per $1,000 of face amount ranges from
approximately 4 cents to 65 cents, and varies by issue age, risk class,
and (except on unisex Policies) sex of the Insured. The duration of the
guaranteed charges varies for policies issued in Texas to ensure
compliance with the Texas non-forfeiture laws. On a current basis, as
of the date of this prospectus, the duration is the same as described
above.
MONTHLY ADMINISTRATIVE CHARGE. The Company has responsibility for the
administration of the Policies and the Separate Account. Administrative
expenses include premium billing and collection, record keeping,
processing death benefit claims, cash surrenders, partial withdrawals,
Policy changes, and reporting and overhead costs, processing
applications, and establishing Policy records. As reimbursement for
administrative expenses related to the maintenance of each Policy and
the Separate Account, the Company assesses a monthly administration
charge from each Policy. This charge is generally $25 per month in the
first Policy Year, and $6 per month for all Policy Years thereafter, and
is guaranteed not to increase while the Policy is in force.
The Company may administer the Policy itself, or may purchase
administrative services from such sources (including affiliates) as may
be available. Such services will be acquired on a basis which, in the
Company's sole discretion, affords the best services at the lowest cost.
The Company reserves the right to select a company to provide services
which the Company deems, in its sole discretion, is the best able to
perform such services in a satisfactory manner even though the costs for
such services may be higher than would prevail elsewhere.
COST OF INSURANCE. The cost of insurance is deducted on each Monthly
Anniversary for the following Policy Month. Because the cost of
insurance depends upon a number of variables, the cost will vary for
each Policy Month. The cost of insurance is determined separately for
the initial Face Amount and for any subsequent increases in Face Amount.
The Company will determine the cost of insurance charge by multiplying
the applicable cost of insurance rate or rates by the net amount at risk
(defined below) for each Policy Month.
The cost of insurance rates are determined at the beginning of each
Policy Year for the initial Face Amount and each increase in Face
Amount. The rates will be based on the Attained Age, duration, rate
class, and (except for unisex Policies) sex of the Insured at issue or
the date of an increase in Face Amount. (See Unisex Requirements Under
Montana Law.) The cost of insurance rates generally increase as the
Insured's Attained Age increases. The rate
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class of an Insured also will affect the cost of insurance rate. For
the initial Face Amount, the Company will use the rate class on the
Issue Date. For each increase in Face Amount, other than one caused
by a change in the death benefit option, the Company will use the rate
class applicable to that increase. If the death benefit equals a
percentage of Cash Value, an increase in Cash Value will cause an
automatic increase in the death benefit. The rate class for such
increase will be the same as that used for the most recent increase
that required proof of insurability.
The Company currently places Insureds into a preferred rate class, a
standard rate class, or into rate classes involving a higher mortality
risk. The degree of underwriting imposed may vary from full
underwriting, to simplified issue underwriting, to guaranteed issue
underwriting.
Actual cost of insurance rates may change, and the actual monthly cost
of insurance rates will be determined by the Company based on its
expectations as to future mortality experience. However, the actual
cost of insurance rates will not be greater than the guaranteed cost of
insurance rates set forth in the Policy. For fully underwritten,
guaranteed issue and simplified issue Policies which are not in a
substandard risk class, the guaranteed cost of insurance rates are equal
to 100% of the rates set forth in the male/female smoker/non-smoker 1980
CSO Mortality Tables (1980 CSO Tables NA and SA and 1980 CSO Tables NG
and SG for sex distinct; 1980 CSO Tables NB and SB for unisex policies
issued in qualified pension plans; 1980 CSO Tables NA and SA for unisex
policies issued in compliance with Montana law), for the age nearest
birthday. Higher rates apply if the Insured is determined to be in a
substandard risk class.
In two otherwise identical Policies, an Insured in the preferred rate
class will have a lower cost of insurance than an Insured in a rate
class involving higher mortality risk. Each rate class is also divided
into two categories: smokers and nonsmokers. Nonsmoker Insureds will
generally incur a lower cost of insurance than similarly situated
Insureds who smoke. (Insureds under Attained Age 20 are automatically
assigned to the non-smoker rate class.) Policies issued with simplified
underwriting or guaranteed issue will in general incur a higher cost of
insurance than fully underwritten Policies. Guaranteed issue Policies
will in general incur the highest current or actual cost of insurance
rates.
The net amount at risk for a Policy Month is (a) the death benefit at
the beginning of the Policy Month divided by 1.0032737 (which reduces
the net amount at risk, solely for purposes of computing the cost of
insurance, by taking into account assumed monthly earnings at an annual
rate of 4%), less (b) the Cash Value at the beginning of the Policy
Month. If there is an increase in the Face Amount, a net amount at risk
will be calculated separately for the initial Face Amount and for each
increase in Face Amount. If Death Benefit Option A or Death Option C is
in effect, for purposes of determining the net amounts at risk for the
initial Face Amount and for each increase in Face Amount, Cash Value
will first be considered a part of the initial Face Amount. If the Cash
Value is greater than the initial Face Amount, the excess Cash Value
will then be considered a part of each increase in order, starting with
the first increase. If Death Benefit Option B is in effect, the net
amount at risk will be determined separately for the initial Face Amount
and for each increase in Face Amount. In calculating the cost of
insurance charges, the cost of insurance rate for a Face Amount is
applied to the net amount at risk for that Face Amount.
ADDITIONAL INSURANCE BENEFITS. The monthly deduction will include
charges for any additional benefits provided by rider. (See General
Matters - Additional Insurance Benefits.)
CONTINGENT DEFERRED SALES CHARGE ("CDSC")
For a period of up to ten years after the Issue Date, and for a period
of up to ten years following an increase in the Face Amount, the Company
will impose a CDSC upon surrender or lapse of the Policy, upon a partial
withdrawal, or upon a Pro-Rata Surrender. The amount of the charge
assessed will depend upon a number of factors, including the type of
event (a full surrender, lapse, or partial withdrawal), the amount of
any premium payments made under the Policy prior to the event, and the
number of Policy Years having elapsed since the Policy was issued.
The Contingent Deferred Sales Charge compensates the Company for
expenses relating to the distribution of the Policy, including agents'
commissions, advertising, and the printing of the Prospectus and sales
literature.
CALCULATION OF CHARGE. If a Policy is surrendered, the charge will not
exceed the Contingent Deferred Sales Charge Percentage multiplied by the
annual Target Premium attributable to the base policy or to the increase
in Face Amount.
The Contingent Deferred Sales Charge Percentage is shown in the
following table.
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CONTINGENT DEFERRED SALES CHARGE
PERCENTAGE TABLE
IF SURRENDER OR LAPSE THE PERCENTAGE OF THE
OCCURS IN THE LAST MONTH ANNUAL TARGET
OF POLICY YEAR: PREMIUM PAYABLE IS:
1 through 5 45%
6 40%
7 30%
8 20%
9 10%
10 and later 0%
In addition, the percentages are reduced equally for each Policy Month
during the years shown. For example, during the seventh year, the
percentage is reduced equally each month from 40% at the end of the
sixth Year to 30% at the end of the seventh Year. This table may be
modified if required by law or regulation of the governing jurisdiction.
CHARGE ASSESSED UPON PARTIAL WITHDRAWALS OR PRO-RATA SURRENDER. The
amount of the Contingent Deferred Sales Charge deducted upon a partial
withdrawal or Pro-Rata Surrender will equal a fraction of the charge
that would be deducted if the Policy were surrendered at that time.
The fraction will be determined by dividing the amount of the withdrawal
of cash by the Cash Value before the withdrawal and multiplying the
result by the charge. Immediately after a withdrawal, the Policy's
remaining surrender charge will equal the amount of the surrender charge
immediately before the withdrawal less the amount deducted in connection
with the withdrawal.
TRANSACTION CHARGES. There are no transaction charges for processing
the first twelve transfers or partial withdrawals in a policy year.
There is a charge of $25 for each transfer or partial withdrawal in
excess of twelve.
ADJUSTMENT OF CHARGES. The Policy is available for purchase by
individuals, corporations, and other institutions. For certain
individuals and certain corporate or other group or sponsored
arrangements purchasing one or more Policies, General American may waive
or adjust the amount of the Sales Charge, Contingent Deferred Sales
Charge, monthly administrative charge, or other charges where the
expenses associated with the sale of the Policy or Policies or the
underwriting or other administrative costs associated with the Policy or
Policies warrant an adjustment.
Sales, underwriting, or other administrative expenses may be reduced for
reasons such as expected economies resulting from a corporate purchase
or a group or sponsored arrangement; from the amount of the initial
premium payment or payments; or from the amount of projected premium
payments. General American will determine in its discretion if, and in
what amount, an adjustment is appropriate. The Company may modify its
criteria for qualification for adjustment of charges as experience is
gained, subject to the limitation that such adjustments will not be
unfairly discriminatory against the interests of any Owner.
SEPARATE ACCOUNT CHARGES
MORTALITY AND EXPENSE RISK CHARGE. General American will deduct a daily
charge from the Separate Account. The amount of the deduction is
determined as a percentage of the average net assets of each Division of
the Separate Account. The daily deduction percentages, and the
equivalent effective annual rate, are:
POLICY YEARS DAILY CHARGE FACTOR ANNUAL EQUIVALENT
1-10 .0015027% 0.55%
11-20 .0012301% 0.45%
21+ .0009572% 0.35%
This deduction is guaranteed not to increase while the Policy is in
force. General American may realize a profit from this charge.
The mortality risk assumed by General American is that Insureds may die
sooner than anticipated and that therefore General American will pay an
aggregate amount of death benefits greater than anticipated. The
expense risk assumed is that expenses incurred in issuing and
administering the Policy will exceed the amounts realized from the
administrative charges assessed against the Policy.
FUND EXPENSES. The value of the net assets of the Separate Account will
reflect the investment advisory fee and other expenses incurred by the
underlying investment companies. A summary of the annual Fund operating
expenses is provided on page 8 of this prospectus. See the prospectuses
for the respective Funds for a description of investment advisory fees
and other expenses.
TAXES. No charges are currently made to the Separate Account for
Federal, state, or local taxes that the Company incurs which may be
attributable to such Separate Account or to the Policy. The Company may
make such a charge for any such taxes or economic burden resulting from
the application of the tax laws that it determines to be properly
attributable to the Separate Account or to the Policy. (See Federal Tax
Matters.)
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DIVIDENDS
The Policy is issued both as a participating Policy, which provides the
Owner an ownership interest in General American Mutual Holding Company,
the parent company of General American Life Insurance Company and as a
non-participating Policy, which provides no ownership interest in
General American Mutual Holding Company or General American Life
Insurance Company. However, we do not anticipate that the Policy will
share in the divisible surplus of the Company in the form of a dividend.
THE GENERAL ACCOUNT
Because of exemptive and exclusionary provisions, interests in the
General Account have not been registered under the Securities Act of
1933 and the General Account has not been registered as an investment
company under the 1940 Act. Accordingly, neither the General Account
nor any interests therein are subject to the provisions of these Acts
and, as a result, the staff of the SEC has not reviewed the disclosure
in this Prospectus relating to the General Account. The disclosure
regarding the General Account may, however, be subject to certain
generally applicable provisions of the Federal securities laws relating
to the accuracy and completeness of statements made in prospectuses.
GENERAL DESCRIPTION
The General Account consists of all assets owned by General American
other than those in the Separate Account and other separate accounts.
Subject to applicable law, General American has sole discretion over the
investment of the assets of the General Account.
At issue, General American will determine the maximum percentage of the
non-borrowed Cash Value that may be allocated, either initially or by
transfer, to the General Account. The ability to allocate Net Premiums
or to transfer Cash Value to the General Account may not be made
available, in the Company's discretion, under certain Policies.
Further, the option may be limited with respect to some Policies. The
Company may, from time to time, adjust the extent to which premiums or
Cash Value may be allocated to the General Account (the "maximum
allocation percentage"). Such adjustments may not be uniform as to all
Policies. General American may at any time modify the General Account
maximum allocation percent. Subject to this maximum, an Owner may elect
to allocate Net Premiums to the General Account, the Separate Account,
or both. Subject to this maximum, the Owner may also transfer Cash
Value from the Divisions of the Separate Account to the General Account,
or from the General Account to the Divisions of the Separate Account.
The allocation of Net Premiums or the transfer of Cash Value to the
General Account does not entitle an Owner to share in the investment
experience of the General Account. Instead, General American guarantees
that Cash Value allocated to the General Account will accrue interest at
a rate of at least 4%, compounded annually, independent of the actual
investment experience of the General Account.
The Loan Account is part of the General Account.
THE POLICY
This Prospectus describes a flexible premium variable life insurance
policy. This Prospectus is generally intended to serve as a disclosure
document only for the aspects of the Policy relating to the Separate
Account. For complete details regarding the General Account, see the
Policy itself.
GENERAL ACCOUNT BENEFITS
If the Owner allocates all Net Premiums only to the General Account and
makes no transfers, partial withdrawals, Pro-Rata Surrenders, or Policy
Loans, the entire investment risk will be borne by General American, and
General American guarantees that it will pay at least a minimum
specified death benefit. The Owner may select Death Benefit Option A, B
or C under the Policy and may change the Policy's Face Amount subject to
satisfactory evidence of insurability.
GENERAL ACCOUNT CASH VALUE
Net Premiums allocated to the General Account are credited to the Cash
Value. General American bears the full investment risk for these
amounts and guarantees that interest will be credited to each Owner's
Cash Value in the General Account at a rate of no less than 4% per year,
compounded annually. General American may, AT ITS SOLE DISCRETION,
credit a higher rate of interest, although it is not obligated to credit
interest in excess of 4% per year, and might not do so. ANY INTEREST
CREDITED ON THE POLICY'S CASH VALUE IN THE GENERAL ACCOUNT IN EXCESS OF
THE GUARANTEED MINIMUM RATE OF 4% PER YEAR WILL BE DETERMINED IN THE
SOLE DISCRETION OF GENERAL AMERICAN. THE POLICY OWNER ASSUMES THE RISK
THAT INTEREST CREDITED MAY NOT EXCEED THE GUARANTEED MINIMUM RATE OF 4%
PER YEAR. If excess interest is credited, a different rate
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of interest may be applied to the Cash Value in the Loan Account. The
Cash Value in the General Account will be calculated on each Monthly
Anniversary of the Policy.
General American guarantees that, on each Valuation Date, the Cash Value
in the General Account will be the amount of the Net Premiums allocated
or Cash Value transferred to the General Account, plus interest at the
rate of 4% per year, plus any excess interest which General American
credits and any amounts transferred into the General Account, less the
sum of all Policy charges allocable to the General Account and any
amounts deducted from the General Account in connection with partial
withdrawals, Pro-Rata Surrenders, surrender charges or transfers to the
Separate Account.
TRANSFERS, SURRENDERS, PARTIAL WITHDRAWALS AND POLICY LOANS
After the first Policy Year, a portion of Cash Value may be withdrawn
from the General Account or transferred from the General Account to the
Separate Account. A partial withdrawal, net of any applicable surrender
charges, and any transfer must be at least $500 or, the Policy's entire
Cash Value in the General Account if less than $500. No amount may be
withdrawn from the General Account that would result in there being
insufficient Cash Value to meet any surrender charges that would be
payable immediately following the withdrawal upon the surrender of the
remaining Cash Value of the Policy. The total amount of transfers and
withdrawals in a Policy Year may not exceed a Maximum Amount equal to
the greater of (a) 25% of a Policy's Cash Surrender Value in the General
Account at the beginning of the Policy Year, or (b) the previous Policy
Year's Maximum Amount (not to exceed the total Cash Surrender Value of
the Policy).
Transfers to the General Account are limited by the maximum allocation
percentage (described below) in effect for a Policy at the time a
transfer request is made.
Policy Loans may also be made from the Policy's Cash Value in the
General Account.
Loans and withdrawals from the General Account may have Federal income
tax consequences. (See Federal Tax Matters.)
There is no transaction charge for the first twelve partial withdrawals
or requested transfers in a Policy Year. General American will impose a
charge of $25 for each partial withdrawal or requested transfer in
excess of twelve in a Policy Year. General American may revoke or
modify the privilege of transferring amounts to or from the General
Account at any time. Partial withdrawals and Pro-Rata Surrenders will
result in the imposition of the applicable surrender charge.
Transfers, surrenders, partial withdrawals and Pro-Rata Surrenders
payable from the General Account and the payment of Policy Loans
allocated to the General Account may, subject to certain limitations, be
delayed for up to six months. However, if payment is deferred for 30
days or more, General American will pay interest at the rate of 2.5% per
year for the period of the deferment. Amounts from the General Account
used to pay premiums on policies with General American will not be
delayed.
GENERAL MATTERS
POSTPONEMENT OF PAYMENTS FROM THE SEPARATE ACCOUNT
The Company usually pays amounts payable on partial withdrawal, Pro-Rata
Surrender, surrender, or Policy Loan allocated to the Separate Account
Divisions within seven days after written notice is received. Payment
of any amount payable from the Divisions of the Separate Account upon
surrender, partial withdrawals, Pro-Rata Surrender, or death of Insured,
as well as payments of a Policy Loan and transfers, may be postponed
whenever: (1) the New York Stock Exchange is closed other than customary
weekend and holiday closings, or trading on the New York Stock Exchange
is restricted as determined by the SEC; (2) the SEC by order permits
postponement for the protection of Owners; or (3) an emergency exists,
as determined by the SEC, as a result of which disposal of securities is
not reasonably practicable or it is not reasonably practicable to
determine the value of the Separate Account's net assets. The Company
may defer payment of the portion of any Policy Loan from the General
Account for not more than six months.
Payments under the Policy of any amounts derived from premiums paid by
check may be delayed until the Owner's check has cleared the bank upon
which it was drawn.
THE CONTRACT
The Policy, the attached application, any riders, endorsements, any
application for an increase in Face Amount, and any application for
reinstatement constitute the entire contract. All statements made by
the Insured in the application and any supplemental applications can be
used to contest a claim or the validity of the Policy. Any change to
the Policy must
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be in writing and approved by the President, a Vice President, or the
Secretary of the Company. No agent has the authority to alter or
modify any of the terms, conditions, or agreements of the Policy or
to waive any of its provisions.
CONTROL OF POLICY
The Insured is the Owner of the Policy unless another person or entity
is shown as the Owner in the application. Ownership may be changed,
however, as described below. The Owner is entitled to all rights
provided by the Policy. Any person whose rights of ownership depend
upon some future event does not possess any present rights of ownership.
If there is more than one Owner at a given time, all Owners must
exercise the rights of ownership by joint action. If the Owner dies,
and the Owner is not the Insured, the Owner's interest in the Policy
becomes the property of his or her estate unless otherwise provided.
Unless otherwise provided, the Policy is jointly owned by all Owners
named in the Policy or by the survivors of those joint Owners. Unless
otherwise stated in the Policy, the final Owner is the estate of the
last joint Owner to die. The Company may rely on the written request of
any trustee of a trust which is the Owner of the Policy, and the Company
is not responsible for the proper administration of any such trust.
BENEFICIARY
The Beneficiary(ies) is (are) the person(s) specified in the application
or by later designation. Unless otherwise stated in the Policy, the
Beneficiary has no rights in a Policy before the death of the Insured.
If there is more than one Beneficiary at the death of the Insured, each
Beneficiary will receive equal payments unless otherwise provided by the
Owner. If no Beneficiary is living at the death of the Insured, the
proceeds will be payable to the Owner or, if the Owner is not living, to
the Owner's estate.
The Company permits the designation of various types of trusts as
Beneficiary(ies), including trusts for minor beneficiaries, trusts under
a will, and trusts under a separate written agreement. An Owner is also
permitted to designate several types of beneficiaries, including
business beneficiaries.
CHANGE OF OWNER OR BENEFICIARY
The Owner may change the ownership and/or Beneficiary designation by
written request in a form acceptable to the Company at any time during
the Insured's lifetime subject to any restrictions stated in the Policy
and this Prospectus. The Company may require that the Policy be
returned for endorsement of any change. If acceptable to us, the change
will take effect as of the date the request is signed, whether or not
the Insured is living when the request is received at the Company's Home
Office. The Company is not liable for any payment made or action taken
before the Company received the written request for change. If the
Owner is also a Beneficiary of the Policy at the time of the Insured's
death, the Owner may, within sixty days of the Insured's death,
designate another person to receive the Policy proceeds. Any change
will be subject to any assignment of the Policy or any other legal
restrictions.
POLICY CHANGES
The Company reserves the right to limit the number of changes to a
Policy to one per Policy Year and to restrict changes in the first
Policy Year. Currently, only one change is permitted during any Policy
Year and no change may be made during the first Policy Year. For this
purpose, changes include increases or decreases in Face Amount and
changes in the death benefit option. No change will be permitted, if as
a result, the Policy would fail to satisfy the definition of life
insurance in Section 7702 of the Internal Revenue Code or any applicable
successor provision.
CONFORMITY WITH STATUTES
If any provision in a Policy is in conflict with the laws of the state
governing the Policy, the provision will be deemed to be amended to
conform to such laws. In addition, the Company reserves the right to
change the Policy if it determines that a change is necessary to cause
this Policy to comply with, or give the Owner the benefit of any Federal
or state statute, rule, or regulation, including, but not limited to,
requirements of the Internal Revenue Code, or its regulations or
published rulings.
CLAIMS OF CREDITORS
To the extent permitted by law, neither the Policy nor any payment under
it will be subject to the claims of creditors or to any legal process.
INCONTESTABILITY
The Policy is incontestable after it has been in force for two years
from the Issue Date during the lifetime of the Insured. An increase in
Face Amount or addition of a rider after the Issue Date is incontestable
after such increase or addition has been in force for two years from its
effective date during the lifetime of the Insured. Any reinstatement of
a Policy is incontestable only after it has been in force during the
lifetime of the Insured for two years after the effective date of the
reinstatement.
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ASSIGNMENT
The Company will be bound by an assignment of a Policy only if: (a) the
assignment is in writing; (b) the original assignment instrument or a
certified copy thereof is filed with the Company at its Home Office; and
(c) the Company returns an acknowledged copy of the assignment
instrument to the Owner. The Company is not responsible for determining
the validity of any assignment. Payment of Policy proceeds is subject
to the rights of any assignee of record. If a claim is based on an
assignment, the Company may require proof of the interest of the
claimant. A valid assignment will take precedence over the claim of any
Beneficiary.
SUICIDE
Suicide within two years of the Issue Date is not covered by the Policy.
If the Insured dies by suicide, while sane or insane, within two years
from the Issue Date (or within the maximum period permitted by the laws
of the state in which the Policy was delivered, if less than two years),
the amount payable will be limited to premiums paid, less any partial
withdrawals and outstanding Indebtedness subject to certain limitations,
if the Insured, while sane or insane, dies by suicide within two years
after the effective date of an increase in Face Amount, the death
benefit for that increase will be limited to the amount of the monthly
deductions for the increase.
If the Insured is a Missouri citizen when the Policy is issued, this
provision does not apply on the Issue Date of the Policy, or on the
effective date of any increase in Face Amount, unless the Insured
intended suicide when the Policy, or the increase in Face Amount, was
applied for.
MISSTATEMENT OF AGE OR SEX AND CORRECTIONS
If the age or sex (except in unisex Policies, see Unisex Requirements
Under Montana Law) of the Insured has been misstated in the application,
the amount of the death benefit will be that which the most recent cost
of insurance charge would have purchased for the correct age and sex.
Any payment or Policy changes made by the Company in good faith, relying
on its records or evidence supplied with respect to such payment, will
fully discharge the Company's duty. The Company reserves the right to
correct any errors in the Policy.
ADDITIONAL INSURANCE BENEFITS
Subject to certain requirements, one or more of the following additional
insurance benefits may be added to a Policy by rider. The descriptions
below are intended to be general; the terms of the Policy riders
providing the additional benefits may vary from state to state, and the
Policy should be consulted. The cost of any additional insurance
benefits which require additional charges will be deducted as part of
the monthly deduction from the Policy's Cash Value. (See Charges and
Deductions - Monthly Deduction.) Certain restrictions may apply and are
described in the applicable rider. An insurance agent authorized to
sell the Policy can describe these extra benefits further. Samples of
the provisions are available from General American upon written request.
WAIVER OF MONTHLY DEDUCTION RIDER. Provides for the waiver of the
monthly deductions while the Insured is totally disabled, subject to
certain limitations described in the rider. The Insured must have
become disabled after age 5 and before age 65.
WAIVER OF SPECIFIED PREMIUM RIDER. Provides for crediting the Policy's
Cash Value with a specified monthly premium while the Insured is totally
disabled. The monthly premium selected at issue is not guaranteed to
keep the Policy in force. The Insured must have become disabled after
age 5 and before age 65.
ADJUSTABLE BENEFIT TERM RIDER. This rider allows an employer who is the
Owner to provide adjustable term insurance to comply with the terms of
an associated employee benefit plan. The increase in coverage occurs on
each Policy Anniversary.
ANNIVERSARY PARTIAL WITHDRAWAL RIDER. This rider allows the owner to
withdraw up to 15% of the Policy's Cash Surrender Value on any Policy
Anniversary without reducing the Face Amount. A Contingent Deferred
Sales Charge will still apply.
GUARANTEED SURVIVOR PURCHASE OPTION (GSPO-PLUS). This rider grants the
policy Owner or the Insured's Beneficiary the option to purchase, upon
the death of the Insured, on the 10th anniversary of the rider, and on
the rider anniversary nearest the Designated Life's 65th birthday, a
specified amount of additional insurance coverage on the Designated Life
(or Lives) without furnishing evidence of insurability.
SUPPLEMENTAL COVERAGE TERM RIDER. This rider provides level term
insurance on the life of the Insured under the base policy. It can be
added only at issue. It cannot be increased or added to an existing
Policy.
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PRELIMINARY TERM INSURANCE. This rider provides preliminary term
insurance from the date of hire of a new employee until the plan
anniversary when a corporate-sponsored Policy is issued. The rider
provides level term insurance equal to the initial face amount of the
Policy and all attached riders.
ACCELERATED BENEFIT RIDER. This rider provides a benefit to the Owner
if the Insured becomes terminally ill and is not expected to live more
then twelve months. The Owner may receive 25%, 50% or 75% (but no more
than $250,000) of the eligible proceeds in a lump sum. "Eligible
proceeds" means the death benefit that would have been payable had the
insured died on the date the rider is exercised.
CHILDREN'S INSURANCE RIDER. This rider allows the Policy Owner to add
term insurance coverage on his or her children.
SECONDARY GUARANTEE RIDER. This rider guarantees that if, during the
secondary guarantee period, the sum of all premiums paid on the Policy,
reduced by any partial withdrawals and any outstanding loan balance, is
greater than or equal to the sum of the secondary guarantee premiums
required since the Issue Date, the Policy will not lapse as a result of
a Cash Value less any loans, loans interest due, and any surrender
charge being insufficient to pay the monthly deduction.
The secondary guarantee period is the lesser of twenty Policy Years, or
the number of Policy Years until the Insured reaches Attained Age 70.
For Policies issued after Attained Age 60, the secondary guarantee
period is ten Policy Years.
LIFETIME COVERAGE RIDER. This rider provides the continuation of the
Policy's face amount beyond age 100, provided the policy remains in
force to age 100 with a positive cash surrender value. If the Policy is
in force after the Insured's Attained Age 100, the death benefit will be
the greater of the face amount or 101% of the Cash Value.
RECORDS AND REPORTS
The Company will maintain all records relating to the Separate Account
and will mail to the Owner once each Policy Year, at the last known
address of record, a report which shows the current Policy values,
premiums paid, deductions made since the last report, and any
outstanding Policy Loans. The Owner will also be sent a periodic report
for each Fund. Receipt of premium payments, transfers, partial
withdrawals, Pro-Rata Surrenders, Policy Loans, loan repayments, changes
in death benefit options, increases or decreases in Face Amount,
surrenders and reinstatements will be confirmed promptly following each
transaction.
An Owner may request in writing a projection of illustrated future Cash
Surrender Values and death benefits. This projection will be furnished
by the Company for a nominal fee which will not exceed $25.
DISTRIBUTION OF THE POLICIES
The Policy will be sold by individuals who, in addition to being
licensed as life insurance agents for the Company, are also registered
representatives of Walnut Street Securities, Inc. ("Walnut Street"),
the principal underwriter of the Policy, or of broker-dealers who have
entered into written sales agreements with Walnut Street. Walnut Street
was incorporated under the laws of Missouri in 1984 and is a wholly-
owned subsidiary of General American Holding Company, which is, in turn,
a wholly-owned subsidiary of the Company. Walnut Street is registered
with the SEC under the Securities Exchange Act of 1934 as a broker-
dealer and is a member of the National Association of Securities
Dealers, Inc. No director or officer of Walnut Street owns any units in
the Separate Account.
Writing agents will receive commissions based on a commission schedule
and rules. Currently, agent first-year commissions equal 50% of target
premiums and 2.25% of excess premium paid in Policy Year 1. In renewal
years, the agent commissions vary from 1.0% to 2.0% of premiums paid in
Policy Years 2 and later, depending on the agent's contract type. An
additional service fee, determined as a percentage of the Policy's
unloaned Cash Value, is also paid. The percentage varies by Policy Year
from 0% to 0.20% of average monthly unloaned assets. In addition, the
Company, general agent, and writing agent may enter into agreements that
compensate the writing agent for basic expenses, renewal overrides, and
incentive bonuses. Reductions may be possible under the circumstances
outlined in the section entitled Adjustment of Charges. General Agents
receive compensation which may be in part based on the level of agent
commissions in their agencies.
As principal underwriter for the Policies, Walnut Street receives
commission income. Walnut Street receives an administrative fee of 2%
of premium from sales of the Policies.
The general agent commission schedules and rules differ for different
types of agency contracts.
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General American may use other distribution channels to sell the non-
participating version of the Policy.
FEDERAL TAX MATTERS
INTRODUCTION
The following summary provides a general description of the Federal
income tax considerations associated with the Policy and does not
purport to be complete or to cover all situations. This discussion is
not intended as tax advice. Counsel or other competent tax Advisors
should be consulted for more complete information. This discussion is
based upon General American's understanding of the present Federal
income tax laws as they are currently interpreted by the Internal
Revenue Service. No representation is made as to the likelihood of
continuation of the present Federal income tax laws or of the current
interpretations by the Internal Revenue Service.
TAX STATUS OF THE POLICY
Section 7702 of the Internal Revenue Code of 1986, as amended (the
"Code") includes a definition of a life insurance contract for Federal
tax purposes. The Secretary of the Treasury (the "Treasury") issued
proposed regulations which specify what will be considered reasonable
mortality charges under Section 7702. Guidance as to how Section 7702
is to be applied is, however, limited. If a Policy were determined not
to be a life insurance contract for purposes of Section 7702, such
Policy would not provide most of the tax advantages normally provided by
a life insurance policy.
With respect to a Policy issued on a basis of a standard premium class
or on a guaranteed or simplified issue basis, while there is some
uncertainty due to the limited guidance under Section 7702, the Company
believes that such a Policy should meet the Section 7702 definition of a
life insurance contract. However, with respect to a Policy issued on a
substandard basis (i.e., a premium class involving higher than standard
mortality risk), it is not clear whether such a Policy would satisfy
Section 7702, particularly if the Owner pays the full amount of premiums
permitted under the Policy.
If it is subsequently determined that a Policy does not satisfy Section
7702, the Company will take whatever steps are appropriate and necessary
to attempt to cause such a Policy to comply with Section 7702, including
possibly refunding any premiums paid that exceed the limitations
allowable under Section 7702 (together with interest or other earnings
on any such premiums refunded as required by law). For these reasons,
the Company reserves the right to modify the Policy as necessary to
attempt to qualify it as a life insurance contract under Section 7702.
Section 817(h) of the Code authorizes the Treasury to set standards by
regulation or otherwise for the investments of the Separate Account to
be "adequately diversified" in order for the Policy to be treated as a
life insurance contract for Federal tax purposes. The Separate Account,
intends to comply with the diversification requirements prescribed by
the Treasury in Regulation Section 1.817-5, which affect how assets may
be invested. Although General American does not control the Funds, it
has entered into agreements, which require these investment companies to
be operated in compliance with the requirements prescribed by the
Treasury.
The IRS has stated in published rulings that a variable contract owner
will be considered the owner of separate account assets, for federal
income tax purposes, if the contract owner possesses incidents of
ownership in those assets, such as the ability to exercise investment
control over the assets. If that were to be determined to be the case,
income and gains from the separate account assets would be includible in
the variable contract owner's gross income. The Treasury Department has
also announced, in connection with the issuance of regulations
concerning diversification, that those regulations "do not provide
guidance concerning the circumstances in which investor control of the
investments of a segregated asset account may cause the investor (i.e.,
the Owner), rather than the insurance company, to be treated as the
owner of the assets in the account." This announcement also stated that
guidance would be issued by way of regulations or rulings on the "extent
to which policyholders may direct their investments to particular
subaccounts without being treated as owners of the underlying assets."
The ownership rights under the Policy are different in certain respects
from those described by the IRS in rulings in which it was determined
that policy owners were not owners of separate account assets. For
example, the Owner has additional flexibility in allocating Premium
payments and Policy Values. These differences could result in an Owner
being treated as the owner of a pro rata portion of the assets of the
Separate Account. In addition, the Company does not know what standards
will be set forth, if any, in the regulations or rulings which the
Treasury Department has stated it expects to issue. The Company
therefore reserves the right to modify the Policy as necessary to
attempt to prevent an Owner
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from being considered the owner of a pro rata share of the assets of
the Separate Account.
The following discussion assumes that the Policy will qualify as a life
insurance contract for Federal income tax purposes.
l. TAX TREATMENT OF POLICY BENEFITS. In general, the Company
believes that the proceeds and Cash Value increases of a Policy should
be treated in a manner consistent with a fixed-benefit life insurance
policy for Federal income tax purposes. Thus, the death benefit under
the Policy should be excludable from the gross income of the Beneficiary
under Section 101(a)(1) of the Code, unless a transfer for value
(generally a sale of the policy) has occurred.
Many changes or transactions involving a Policy may have tax
consequences, depending on the circumstances. Such changes include, but
are not limited to, the exchange of the Policy, a change of the Policy's
Face Amount, a Policy Loan, an additional premium payment, a Policy
lapse with an outstanding Policy Loan, a partial withdrawal, or a
surrender of the Policy. In addition, Federal estate and state and
local estate, inheritance, and other tax consequences of ownership or
receipt of Policy proceeds depend upon the circumstances of each Owner
or Beneficiary. A competent tax adviser should be consulted for further
information.
A Policy may also be used in various arrangements, including non-
qualified deferred compensation or salary continuation plans, split
dollar insurance plans, executive bonus plans, retiree medical benefit
plans and others. The tax consequences of such plans may vary depending
on the particular facts and circumstances of each individual
arrangement. Therefore, if you are contemplating the use of a Policy in
any arrangement the value of which depends in part on its tax
consequences, you should be sure to consult a qualified tax adviser
regarding the tax attributes of the particular arrangement.
Generally, the Owner will not be deemed to be in constructive receipt of
the Policy's Cash Value, including increments thereof, under the Policy
until there is a distribution. The tax consequences of distributions
from, and Policy Loans taken from or secured by, a Policy depend upon
whether the Policy is classified as a "modified endowment contract".
However, upon a complete surrender or lapse of any Policy, if the amount
received plus the amount of outstanding Indebtedness exceeds the total
investment in the Policy, the excess will generally be treated as
ordinary income subject to tax.
2. MODIFIED ENDOWMENT CONTRACTS. A policy may be treated as a
modified endowment contract depending upon the amount of premiums paid
in relation to the death benefit provided under such Policy. The
premium limitation rules for determining whether a Policy is a modified
endowment contract are extremely complex. In general, however, a Policy
will be a modified endowment contract if the accumulated premiums paid
at any time during the first seven Policy Years exceed the sum of the
net level premiums which would have been paid on or before such time if
the Policy provided for paid-up future benefits after the payment of
seven level annual premiums.
In addition, if a Policy is "materially changed" it may cause such
Policy to be treated as a modified endowment contract. The material
change rules for determining whether a Policy is a modified endowment
contract are also extremely complex. In general, however, the
determination of whether a Policy will be a modified endowment contract
after a material change generally depends upon the relationship among
the death benefit at the time of such change, the Cash Value at the time
of the change and the additional premiums paid in the seven Policy Years
starting with the date on which the material change occurs.
Moreover, a life insurance contract received in exchange for a life
insurance contract classified as a modified endowment contract will also
be treated as a modified endowment contract. A reduction in a Policy's
benefits may also cause such Policy to become a modified endowment
contract.
Due to the Policy's flexibility, classification of a Policy as a
modified endowment contract will depend upon the circumstances of each
Policy. The Company has, however, adopted administrative steps designed
to protect an Owner against the possibility that the Policy might become
a modified endowment contract. The Company believes the safeguards are
adequate for most situations, but it cannot provide complete assurance
that a Policy will not be classified as a modified endowment contract.
At the time a premium is credited which would cause the Policy to become
a modified endowment contract, the Company will notify the Owner that
unless a refund of the excess premium is requested by the Owner, the
Policy will become a modified endowment contract. The Owner will have
30 days after receiving such notification to request the refund. The
excess premium paid will be returned to the Owner upon receipt by the
Company of the refund request. The amount to be refunded will be
deducted from the Policy Cash Value in the Divisions of the Separate
Account and in the General Account in the same
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proportion as the premium payment was allocated to such Divisions.
Accordingly, a prospective Owner should contact a competent tax adviser
before purchasing a Policy to determine the circumstances under which
the Policy would be a modified endowment contract. In addition, an
Owner should contact a competent tax adviser before paying any
additional premiums or making any other change to, including an exchange
of, a Policy to determine whether such premium or change would cause the
Policy (or the new Policy in the case of an exchange) to be treated as a
modified endowment contract.
3. DISTRIBUTIONS FROM POLICIES CLASSIFIED AS MODIFIED ENDOWMENT
CONTRACT. Policies classified as modified endowment contracts will be
subject to the following tax rules: First, all distributions, including
distributions upon surrender, from such a Policy are treated as ordinary
income subject to tax up to the amount equal to the excess (if any) of
the Cash Value immediately before the distribution over the investment
in the Policy (described below) at such time. Second, Policy Loans
taken from, or secured by, such a Policy, as well as due but unpaid
interest thereon, are treated as distributions from such a Policy and
taxed accordingly. Third, a 10 percent additional income tax is imposed
on the portion of any distribution from, or Policy Loan taken from or
secured by, such a Policy that (a) is included in income, except where
the distribution or Policy Loan is made on or after the Owner attains
age 59 1/2, (b) is attributable to the Owner's becoming disabled, or (c)
is part of a series of substantially equal periodic payments for the
life (or life expectancy) of the Owner or the joint lives (or joint life
expectancies) of the Owner and the Owner's Beneficiary.
4. DISTRIBUTIONS FROM POLICIES NOT CLASSIFIED AS MODIFIED ENDOWMENT
CONTRACT. Distributions from Policies not classified as a modified
endowment contracts are generally treated as first recovering the
investment in the Policy (described below) and then, only after the
return of all such investment in the Policy, as distributing taxable
income. An exception to this general rule occurs in the case of a
decrease in the Policy's death benefit (possibly including a partial
withdrawal) or any other change that reduces benefits under the Policy
in the first 15 years after the Policy is issued and that results in
cash distribution to the Owner in order for the Policy to continue
complying with the Section 7702 definitional limits. Such a cash
distribution will be taxed in whole or in part as ordinary income
(to the extent of any gain in the Policy) under rules prescribed in
Section 7702.
Policy Loans from, or secured by, a Policy that is not a modified
endowment contract are not treated as distributions. Instead, such
loans are treated as indebtedness of the Owner.
Upon a complete surrender or lapse of a Policy that is not a modified
endowment contract, if the amount received plus the amount of
indebtedness exceeds the total investment in the Policy, the excess will
generally be treated as ordinary income subject to tax.
Neither distributions (including distributions upon surrender or lapse)
nor Policy Loans from, or secured by, a Policy that is not a modified
endowment contract are subject to the 10 percent additional income tax.
If a Policy which is not a modified endowment contract subsequently
becomes a modified endowment contract, then any distribution made from
the Policy within two years prior to the date of such change in status
may become taxable.
5. POLICY LOAN INTEREST. Generally, interest paid on any loan under
a life insurance Policy owned by an individual is not deductible. In
addition, interest on any loan under a life insurance Policy owned by a
business taxpayer on the life of any individual who is an officer of or
is financially interested in the business carried on by that taxpayer is
deductible only under certain very limited circumstances. AN OWNER
SHOULD CONSULT A COMPETENT TAX ADVISER BEFORE DEDUCTING ANY LOAN
INTEREST.
6. INTEREST EXPENSE ON UNRELATED INDEBTEDNESS. Under provisions
added to the Code in 1997 for policies issued after June 8, 1997, if a
business taxpayer owns or is the beneficiary of a Policy on the life of
any individual who is not an officer, director, employee, or 20 percent
owner of the business, and the taxpayer also has debt unrelated to the
Policy, a portion of the taxpayer's unrelated interest expense
deductions may be lost. No business taxpayer should purchase, exchange,
or increase the death benefit under a Policy on the life of any
individual who is not an officer, director, employee, or 20 percent
owner of the business without first consulting a competent tax Advisor.
7. INVESTMENT IN THE POLICY. Investment in the Policy means (i) the
aggregate amount of any premiums or other consideration paid for a
Policy, minus (ii) the aggregate amount received under the Policy which
is excluded from gross income of the Owner (except that the amount of
any Policy Loan from, or secured by, a Policy that is a modified
endowment contract, to the extent such amount is excluded from gross
income, will be disregarded),
43
<PAGE>
<PAGE>
plus (iii) the amount of any Policy Loan from, or secured by, a Policy
that is a modified endowment contract to the extent that such amount
is included in the gross income of the Owner.
8. MULTIPLE POLICIES. All modified endowment contracts that are
issued by the Company (or its affiliates) to the same Owner during any
calendar year are treated as one modified endowment contract for
purposes of determining the amount includible in gross income under
Section 72(e) of the Code.
9. POSSIBLE CHARGE FOR TAXES. At the present time, the Company makes
no charge to the Separate Account for any Federal, state, or local taxes
(as opposed to Premium Tax Charges which are deducted from premium
payments) that it incurs which may be attributable to such Separate
Account or to the Policies. The Company, however, reserves the right in
the future to make a charge for any such tax or other economic burden
resulting from the application of the tax laws that it determines to be
properly attributable to the Separate Account or to the Policies.
UNISEX REQUIREMENTS UNDER MONTANA LAW
The State of Montana generally prohibits the use of actuarial tables
that distinguish between men and women in determining premiums and
Policy benefits for policies issued on the lives of their residents.
Therefore, all Policies offered by this Prospectus to insure residents
of Montana will have premiums and benefits which are based on actuarial
tables that do not differentiate on the basis of sex.
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS
General American holds the assets of the Separate Account in a custodial
account in its name at the Bank of New York. The Company maintains
records of all purchases and redemptions of applicable Fund shares by
each of the Divisions. Additional protection for the assets of the
Separate Account is afforded by a blanket fidelity bond issued by
Lloyd's Underwriters in the amount of five million dollars, covering all
officers and employees of the Company who have access to the assets of
the Separate Account.
VOTING RIGHTS
Based on its understanding of current applicable legal requirements, the
Company will vote the shares of the Funds held in the Separate Account
at regular and special shareholder meetings of the mutual funds in
accordance with the instructions received from persons having voting
interests in the corresponding Divisions of the Separate Account. If,
however, the 1940 Act or any regulation thereunder should be amended or
if the present interpretation thereof should change, and as a result the
Company determines that it is permitted to vote shares of the Fund in
its own right, it may elect to do so. No voting privileges apply to the
Policies with respect to Cash Value removed from the Separate Account as
a result of a Policy Loan.
The number of votes which an Owner has the right to instruct will be
calculated separately for each Division. Voting rights reflect the
dollar value of the total number of units of each Division of the
Separate Account credited to the Owner at the record date, rather than
the number of units alone. Fractional shares will be counted. The
number of votes of the Fund which the Owner has the right to instruct
will be determined as of the date coincident with the date established
by that Fund for determining shareholders eligible. Voting instructions
will be solicited by written communications prior to such meeting in
accordance with procedures established by the mutual funds.
The company will vote shares of a Fund for which no timely instructions
are received in proportion to the voting instructions which are received
with respect to that Fund. The Company will also vote any shares of the
Funds which are not attributable to Policies in the same proportion.
Each person having a voting interest in a Division will receive any
proxy material, reports, and other materials relating to the appropriate
Fund.
DISREGARD OF VOTING INSTRUCTIONS. The Company may, when required by
state insurance regulatory authorities, disregard voting instructions if
the instructions require that the shares be voted so as to cause a
change in the subclassification or investment objective of the Fund or
to approve or disapprove an investment Advisory contract for a Fund. In
addition, the Company itself may disregard voting instructions in favor
of changes initiated by an Owner in the investment policy or the
investment adviser or sub-adviser of a Fund if the Company reasonably
disapproves of such changes. A proposed change would be disapproved
only if the proposed change is contrary to state law or prohibited by
state regulatory authorities, or the Company determined that the change
would have an adverse effect on its General Account in that the proposed
investment policy for a Fund may result in overly speculative or unsound
investments. If the Company disregards voting instructions, a summary
of that action and the reasons
44
<PAGE>
<PAGE>
for such action will be included in the next annual report to Owners.
STATE REGULATION OF THE COMPANY
The Company, a stock life insurance company organized under the laws of
Missouri, and the Separate Account are subject to regulation by the
Missouri Department of Insurance. An annual statement is filed with the
Director of Insurance on or before March 1st of each year covering the
operations and reporting on the financial condition of the Company as of
December 31 of the preceding year. Periodically, the Director of
Insurance examines the liabilities and reserves of the Company and the
Separate Account and certifies their adequacy, and a full examination of
the Company's operations is conducted by the National Association of
Insurance Commissioners at least once every three years.
In addition, the Company is subject to the insurance laws and
regulations of other states within which it is licensed or may become
licensed to operate. Generally, the insurance departments of other
states apply the laws of the state of domicile in determining
permissible investments.
45
<PAGE>
<PAGE>
<TABLE>
MANAGEMENT OF THE COMPANY
<CAPTION>
PRINCIPAL OCCUPATION (S)
NAME DURING PAST FIVE YEARS<F*>
---- --------------------------
<C> <S>
PRINCIPAL OFFICERS<F**>
- -----------------------
Richard A. Liddy Chairman and CEO, 2/2000-present. Formerly Chairman, President and CEO,
1/95-2/2000; Chairman of the Executive Committee, 5/92-present. Formerly
President and CEO, 5/92-1/95.
Robert J. Banstetter, Sr. Vice President, General Counsel and Secretary, 2/91-present.
John W. Barber Vice President, 12/84-present. Formerly Controller, 12/84-2/2000.
Barry C. Cooper Vice President and Controller, 2/2000-present.
Kevin C. Eichner President, 2/2000-present. Formerly Executive Vice President of General
American, President and Chairman of GenMark, Chairman of Walnut Street
Securities, 10/97-2/2000. President and CEO, Collaborative Strategies,
1983-Present.
E. Thomas Hughes Corporate Actuary and Treasurer, 10/94-present. Formerly Executive Vice
President-Group Pensions, 3/90-10/94
Warren J. Winer Executive Vice President-Group Life and Health, 8/95-present. Formerly
Managing Director, William M. Mercer, Inc., 7/93-8/95; President and
Chief Operating Officer, W. F. Corroon, 1986-7/93.
Bernard H. Wolzenski Executive Vice President-Individual Insurance, 10/91-present.
A. Greig Woodring President and Chief Executive Officer, Reinsurance Group of America,
12/92-present.
<FN>
<F*> All positions listed are with General American unless otherwise
indicated.
<F**> The principal business address of Messrs. Banstetter, Hughes, and
Liddy is General American Life Insurance Company, 700 Market
Street, St. Louis, Missouri 63101. The principal business address
for Messrs. Barber, Winer and Wolzenski is 13045 Tesson Ferry Road,
St. Louis, Missouri 63128. The principal business address for
Mr. Woodring is 1370 Timberlake Manor Parkway, Chesterfield, MO 63017.
The principal business address for Mr. Eichner is 670 Mason Ridge Center
Drive, Suite 100, St. Louis, Missouri 63141.
</TABLE>
46
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATIONS (S)
---- DURING PAST FIVE YEARS<F*>
--------------------------
DIRECTORS
- ---------
<C> <S>
August A. Busch III Chairman of the Board and President, Anheuser-Busch Companies.
Anheuser-Busch Companies, Inc. Inc. (beer business).
One Busch Place
St. Louis, Missouri 63118
William E. Cornelius Retired Chairman and Chief Executive Officer, Union Electric
Union Electric Company Company (electric utility business).
P.O. Box 149
St. Louis, Missouri 63166
John C. Danforth Partner, Bryan Cave (law firm). Formerly, U. S. Senator, State of
Bryan Cave Missouri
One Metropolitan Square, Suite 3600
St. Louis, Missouri 63102
Bernard A. Edison Past President, Edison Brothers Stores, Inc. (retail specialty stores).
Edison Brothers Stores, Inc.
P.O. Box 14020
St. Louis, Missouri 63178
Richard A. Liddy Chairman and CEO, General American
General American Life Insurance Co.
700 Market Street
St. Louis, MO 63101
William E. Maritz Chairman and Chief Executive Officer, Maritz, Inc.
Maritz, Inc. (motivation, travel, communications, training and marketing
1375 North Highway Drive research business).
Fenton, Missouri 63099
Craig D. Schnuck Chairman and Chief Executive Officer, Schnuck Markets, Inc.
Schnuck Markets, Inc. (retail supermarket chain).
11420 Lackland Road
P.O. Box 46928
St. Louis, Missouri 63146
William P. Stiritz Chairman, Chief Executive Officer and President, Agribrands
Agribrands International, Inc. International, Inc. Formerly Chairman, Chief Executive Officer and
9811 So. Forty Drive President, Ralston Purina Company (pet food, batteries, and bread
St. Louis, Missouri 63124 business); Chairman, Ralcorp Holdings, Inc. (ready-to-eat cereal,
baby food, ski resorts).
Andrew C. Taylor Chief Executive Officer and President, Enterprise Rent-A-Car (car
Enterprise Rent-A-Car rental).
600 Corporate Park Drive
St. Louis, Missouri 63105
47
<PAGE>
<PAGE>
<CAPTION>
NAME PRINCIPAL OCCUPATIONS (S)
---- DURING PAST FIVE YEARS<F*>
--------------------------
DIRECTORS (CONTINUED)
- ---------------------
<C> <S>
Robert L. Virgil Principal, Edward Jones (investments).
Edward Jones
12555 Manchester
St. Louis, Missouri 63131-3729
Virginia V. Weldon, M.D. Director, Center for the Study of American Business, Washington
Monsanto Company University. Retired Senior Vice President, Public Policy,
800 North Lindbergh Monsanto Company (chemicals diversified industry,
St. Louis, Missouri 63167 pharmaceuticals, life science products, and food ingredients
business).
Ted C. Wetterau President, Wetterau Associates, L.L.C. Retired Chairman and
Wetterau Associates, L.L.C. Chief Executive Officer, Wetterau Incorporated (retail and
7700 Bonhomme, Suite 750 wholesale grocery, manufacturing business).
St. Louis, Missouri 63105
<FN>
<F*> All positions listed are with General American unless otherwise
indicated.
</TABLE>
48
<PAGE>
<PAGE>
LEGAL MATTERS
All matters of Missouri law pertaining to the Policy, including the
validity of the Policy and General American's right to issue the Policy
under Missouri insurance law, have been passed upon by Matthew P.
McCauley, Vice President and Associate General Counsel of General
American.
LEGAL PROCEEDINGS
There are no legal proceedings to which the Separate Account is a party
or to which the assets of the Separate Account are subject. General
American is not involved in any litigation that is of material
importance in relation to its total assets or that relates to the
Separate Account.
EXPERTS
The audited financial statements of General American and the Separate
Account have been included in this Prospectus in reliance on the reports
of KPMG LLP, independent certified public accountants, and on the authority
of said firm as experts in accounting and auditing.
Actuarial matters included in this Prospectus have been examined by
Susan Benjamin, FSA, MAAA, Senior Product Actuary of General American,
as stated in the opinion filed as an exhibit to the registration
statement.
ADDITIONAL INFORMATION
A registration statement has been filed with the Securities and Exchange
Commission, under the Securities Act of 1933, as amended, with respect
to the Policy offered hereby. This Prospectus does not contain all the
information set forth in the registration statement and the amendments
and exhibits to the registration statement, to all of which reference is
made for further information concerning the Separate Account, General
American and the Policy offered hereby. Statements contained in this
Prospectus as to the contents of the Policy and other legal instruments
are summaries. For a complete statement of the terms thereof reference
is made to such instruments as filed.
Like all financial services providers, General American utilizes systems
that may be affected by the Year 2000 transition issues, and it relies
on services providers, including the Funds, that may also be affected.
The Company has developed, and is in the process of implementing, a Year
2000 transition plan, and is confirming that its services providers are
also so engaged. The resources that are being devoted to this effort
are substantial. It is difficult to predict with precision whether the
amount of resources ultimately devoted, or the outcome of these efforts,
will have any negative impact on the Company. However, as of the date
of this prospectus, we do not anticipate that Policy Owners will
experience negative effects on their investment, or on the services
provided in connection therewith, as a result of Year 2000 transition
implementation. General American currently anticipates that its systems
will be Year 2000 compliant, but there can be no assurance that the
Company will be successful, or that interaction with other service
providers will not impair the Company's services at that time.
FINANCIAL STATEMENTS
The financial statements of General American which are included in this
Prospectus should be distinguished from the financial statements of the
Separate Account, and should be considered only as bearing on the
ability of General American to meet its obligations under the Policy.
They should not be considered as bearing on the investment performance
of the assets held in the Separate Account.
49
<PAGE>
<PAGE>
APPENDIX A
ILLUSTRATIONS OF DEATH BENEFITS AND CASH VALUES
The following tables illustrate how the Cash Value, Cash Surrender
Value, and death benefit of a Policy change with the investment
experience of a Division of the Separate Account. The tables show how
the Cash Value, Cash Surrender Value, and death benefit of a Policy
issued to an insured of a given age and at a given premium would vary
over time if the investment return on the assets held in each Division
of the Separate Account were a uniform, gross, after-tax annual rate of
0%, 6%, or 12%. The tables illustrate Policies issued in Missouri
(using a 2% premium tax rate and a 1.3% federal tax charge) to males,
age 35 and 50 in a preferred nonsmoker rate class. If the insured falls
into a smoker rate class, the Cash Values, Cash Surrender Values, and
death benefits would be lower than those shown in the tables. In
addition, the Cash Values, Cash Surrender Values, and death benefits
would be different from those shown if the gross annual investment rates
of return averaged 0%, 6%, and 12% over a period of years, but
fluctuated above and below those averages for individual Policy Years.
The Cash Value column under the "Guaranteed" heading shows the
accumulated value of the Net Premiums paid at the stated interest rate,
reflecting deduction of all policy charges described in this prospectus
at the guaranteed maximum rate. The Cash Surrender Value column under
the "Guaranteed" heading shows the projected Cash Surrender Value of the
Policy, which is calculated by taking the Cash Value under the
"Guaranteed" heading and deducting any appropriate Contingent Deferred
Sales Charge. The Cash value column under the "Current" heading shows
the accumulated value of the Net Premiums paid at the stated interest
rate, reflecting deduction of all policy charges as described in this
prospectus at the current rate. The Cash Surrender Value column under
the "Current" heading shows the projected Cash Surrender Value of the
Policy, which is calculated by taking the Cash Value under the "Current"
heading and deducting any appropriate Contingent Deferred Sales Charge.
The illustrations of death benefits reflect the above assumptions. The
death benefits also vary between tables depending upon whether Death
Benefit Options A or C (Level Type) or Death Benefit Option B
(Increasing Type) are illustrated.
The amounts deducted from the Cash Value in the illustrations include
the sales charge, premium tax, federal tax charge, selection and issue
expense charge, monthly administrative charge, and cost of insurance.
These charges are described in the prospectus under Charges and
Deductions.
The amounts shown for Cash Value, Cash Surrender Value, and death
benefit reflect charges that produce an investment rate of return that
is lower than the gross return on the assets held in a Division of the
Separate Account. The charges include a charge for mortality and
expense risk (equivalent to .55% for Policy Years 1-10, .45% for Policy
Years 11-20, and .35% thereafter), and an assumed .78% charge for the
investment Advisory fee and Fund administrative expenses combined, based
on the average Fund expense for all available investment Funds. The
actual investment advisory fee applicable to each Division is shown in
the respective Prospectuses of each Fund. After deduction for these
amounts, the illustrated gross annual investment rates of return of 0%,
6%, and 12% correspond to approximate initial net annual rates of -
1.33%, 4.67%, and 10.67%, respectively. The Prospectuses for each Fund
should be consulted for details about the nature and extent of their
expenses.
The hypothetical values shown in the tables do not reflect any charges
for Federal income taxes against the Separate Account (as opposed to
Premium Charges which are deducted from premium payments), since General
American is not currently making any such charges. However, such
charges may be made in the future and, in that event, the gross annual
investment rate of return of the Divisions of the Separate Account would
have to exceed 0%, 6%, and 12% by an amount sufficient to cover the tax
charges in order to produce the death benefit and Cash Value
illustration. (See Federal Tax Matters.)
The tables illustrate the Policy values that would result based upon the
investment rates of return if premiums are paid as indicated, if all Net
Premiums are allocated to the Separate Account, if no Policy Loans have
been made. The tables are also based on the assumptions that the Owner
has not requested an increase or decrease in the Face Amount, that no
partial withdrawals have been made, that no transfer charges were
incurred, and that no optional riders have been requested.
Upon request, General American will provide a comparable illustration
based upon the proposed Insured's age, sex, and rate class, the Face
Amount or premium requested, the proposed frequency of premium payments,
and any available riders requested.
50
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<PAGE>
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION A) ANNUAL PREMIUM = $3,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 0.00% (NET RATE OF -1.33%)
<CAPTION>
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 3,000 3,150 890 1,768 250,000 654 1,531 250,000
2 36 3,000 6,458 3,031 3,909 250,000 2,567 3,444 250,000
3 36 3,000 9,930 5,097 5,975 250,000 4,431 5,308 250,000
4 37 3,000 13,577 7,116 7,994 250,000 6,245 7,123 250,000
5 37 3,000 17,406 9,092 9,970 250,000 8,005 8,883 250,000
6 38 3,000 21,426 11,135 11,915 250,000 9,808 10,588 250,000
7 38 3,000 25,647 13,232 13,817 250,000 11,647 12,232 250,000
8 39 3,000 30,080 15,291 15,681 250,000 13,426 13,816 250,000
9 39 3,000 34,734 17,311 17,506 250,000 15,140 15,335 250,000
10 40 3,000 39,620 19,298 19,298 250,000 16,789 16,789 250,000
11 40 3,000 44,751 21,440 21,440 250,000 18,555 18,555 250,000
12 41 3,000 50,139 23,554 23,554 250,000 20,244 20,244 250,000
13 41 3,000 55,796 25,637 25,637 250,000 21,853 21,853 250,000
14 42 3,000 61,736 27,692 27,692 250,000 23,379 23,379 250,000
15 42 3,000 67,972 29,725 29,725 250,000 24,815 24,815 250,000
16 43 3,000 74,521 31,689 31,689 250,000 26,157 26,157 250,000
17 43 3,000 81,397 33,590 33,590 250,000 27,393 27,393 250,000
18 44 3,000 88,617 35,423 35,423 250,000 28,509 28,509 250,000
19 44 3,000 96,198 37,186 37,186 250,000 29,493 29,493 250,000
20 45 3,000 104,158 38,876 38,876 250,000 30,328 30,328 250,000
21 45 3,000 112,516 40,530 40,530 250,000 31,033 31,033 250,000
22 46 3,000 121,291 42,102 42,102 250,000 31,561 31,561 250,000
23 46 3,000 130,506 43,587 43,587 250,000 31,902 31,902 250,000
24 47 3,000 140,181 44,977 44,977 250,000 32,042 32,042 250,000
25 47 3,000 150,340 46,262 46,262 250,000 31,956 31,956 250,000
26 48 3,000 161,007 47,431 47,431 250,000 31,617 31,617 250,000
27 48 3,000 172,208 48,476 48,476 250,000 30,997 30,997 250,000
28 49 3,000 183,968 49,387 49,387 250,000 30,054 30,054 250,000
29 49 3,000 196,317 50,155 50,155 250,000 28,739 28,739 250,000
30 50 3,000 209,282 50,767 50,767 250,000 26,995 26,995 250,000
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF
INSURANCE RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS
SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN
AND WILL DEPEND UPON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT
ALLOCATION MADE BY THE POLICY OWNER AND THE INVESTMENT RESULTS OF THE
FUNDS SELECTED. THE CASH VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY THE COMPANY, WALNUT STREET SECURITIES, THE
FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS HYPOTHETICAL RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED OVER ANY PERIOD OF
TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE
POLICY ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE
PAID BY THE COMPANY.
51
<PAGE>
<PAGE>
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION A) ANNUAL PREMIUM = $3,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 6.00% (NET RATE OF 4.67%)
<CAPTION>
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 3,000 3,150 1,019 1,897 250,000 775 1,652 250,000
2 36 3,000 6,458 3,419 4,297 250,000 2,925 3,803 250,000
3 36 3,000 9,930 5,884 6,762 250,000 5,153 6,030 250,000
4 37 3,000 13,577 8,445 9,322 250,000 7,459 8,337 250,000
5 37 3,000 17,406 11,109 11,986 250,000 9,844 10,721 250,000
6 38 3,000 21,426 13,990 14,770 250,000 12,406 13,186 250,000
7 38 3,000 25,647 17,084 17,669 250,000 15,144 15,729 250,000
8 39 3,000 30,080 20,301 20,691 250,000 17,965 18,355 250,000
9 39 3,000 34,734 23,648 23,843 250,000 20,866 21,061 250,000
10 40 3,000 39,620 27,134 27,134 250,000 23,853 23,853 250,000
11 40 3,000 44,751 30,978 30,978 250,000 27,134 27,134 250,000
12 41 3,000 50,139 35,007 35,007 250,000 30,521 30,521 250,000
13 41 3,000 55,796 39,226 39,226 250,000 34,019 34,019 250,000
14 42 3,000 61,736 43,649 43,649 250,000 37,630 37,630 250,000
15 42 3,000 67,972 48,289 48,289 250,000 41,355 41,355 250,000
16 43 3,000 74,521 53,115 53,115 250,000 45,197 45,197 250,000
17 43 3,000 81,397 58,141 58,141 250,000 49,151 49,151 250,000
18 44 3,000 88,617 63,374 63,374 250,000 53,214 53,214 250,000
19 44 3,000 96,198 68,824 68,824 250,000 57,382 57,382 250,000
20 45 3,000 104,158 74,499 74,499 250,000 61,649 61,649 250,000
21 45 3,000 112,516 80,488 80,488 250,000 66,077 66,077 250,000
22 46 3,000 121,291 86,731 86,731 250,000 70,607 70,607 250,000
23 46 3,000 130,506 93,241 93,241 250,000 75,245 75,245 250,000
24 47 3,000 140,181 100,030 100,030 250,000 79,991 79,991 250,000
25 47 3,000 150,340 107,109 107,109 250,000 84,842 84,842 250,000
26 48 3,000 161,007 114,493 114,493 250,000 89,793 89,793 250,000
27 48 3,000 172,208 122,198 122,198 250,000 94,843 94,843 250,000
28 49 3,000 183,968 130,244 130,244 250,000 99,983 99,983 250,000
29 49 3,000 196,317 138,654 138,654 250,000 105,203 105,203 250,000
30 50 3,000 209,282 147,454 147,454 250,000 110,496 110,496 250,000
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF
INSURANCE RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS
SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN
AND WILL DEPEND UPON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT
ALLOCATION MADE BY THE POLICY OWNER AND THE INVESTMENT RESULTS OF THE
FUNDS SELECTED. THE CASH VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY THE COMPANY, WALNUT STREET SECURITIES, THE
FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS HYPOTHETICAL RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED OVER ANY PERIOD OF
TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE
POLICY ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE
PAID BY THE COMPANY.
52
<PAGE>
<PAGE>
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION A) ANNUAL PREMIUM = $3,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 12.00% (NET RATE OF 10.67%)
<CAPTION>
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 3,000 3,150 1,148 2,026 250,000 896 1,774 250,000
2 36 3,000 6,458 3,824 4,701 250,000 3,299 4,177 250,000
3 36 3,000 9,930 6,736 7,614 250,000 5,935 6,813 250,000
4 37 3,000 13,577 9,940 10,817 250,000 8,828 9,705 250,000
5 37 3,000 17,406 13,470 14,347 250,000 12,000 12,877 250,000
6 38 3,000 21,426 17,471 18,251 250,000 15,579 16,359 250,000
7 38 3,000 25,647 21,972 22,557 250,000 19,592 20,177 250,000
8 39 3,000 30,080 26,923 27,313 250,000 23,979 24,369 250,000
9 39 3,000 34,734 32,372 32,567 250,000 28,777 28,972 250,000
10 40 3,000 39,620 38,378 38,378 250,000 34,033 34,033 250,000
11 40 3,000 44,751 45,240 45,240 250,000 40,026 40,026 250,000
12 41 3,000 50,139 52,847 52,847 250,000 46,627 46,627 250,000
13 41 3,000 55,796 61,279 61,279 250,000 53,905 53,905 250,000
14 42 3,000 61,736 70,629 70,629 250,000 61,935 61,935 250,000
15 42 3,000 67,972 81,003 81,003 250,000 70,800 70,800 250,000
16 43 3,000 74,521 92,476 92,476 250,000 80,598 80,598 250,000
17 43 3,000 81,397 105,177 105,177 250,000 91,428 91,428 250,000
18 44 3,000 88,617 119,242 119,242 250,000 103,407 103,407 250,000
19 44 3,000 96,198 134,826 134,826 250,000 116,671 116,671 250,000
20 45 3,000 104,158 152,102 152,102 250,000 131,370 131,370 250,000
21 45 3,000 112,516 171,418 171,418 257,126 147,819 147,819 250,000
22 46 3,000 121,291 192,816 192,816 281,512 166,120 166,120 250,000
23 46 3,000 130,506 216,500 216,500 307,430 186,480 186,480 264,801
24 47 3,000 140,181 242,715 242,715 334,946 208,991 208,991 288,407
25 47 3,000 150,340 271,735 271,735 364,124 233,864 233,864 313,378
26 48 3,000 161,007 303,866 303,866 395,026 261,362 261,362 339,771
27 48 3,000 172,208 339,414 339,414 434,450 291,702 291,702 373,378
28 49 3,000 183,968 378,742 378,742 477,215 325,174 325,174 409,719
29 49 3,000 196,317 422,255 422,255 523,597 362,100 362,100 449,004
30 50 3,000 209,282 470,403 470,403 573,891 402,841 402,841 491,466
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF
INSURANCE RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS
SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN
AND WILL DEPEND UPON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT
ALLOCATION MADE BY THE POLICY OWNER AND THE INVESTMENT RESULTS OF THE
FUNDS SELECTED. THE CASH VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY THE COMPANY, WALNUT STREET SECURITIES, THE
FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS HYPOTHETICAL RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED OVER ANY PERIOD OF
TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE
POLICY ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE
PAID BY THE COMPANY.
53
<PAGE>
<PAGE>
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION B) ANNUAL PREMIUM = $3,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 0.00% (NET RATE OF -1.33%)
<CAPTION>
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 3,000 3,150 889 1,766 251,766 650 1,528 251,528
2 36 3,000 6,458 3,026 3,904 253,904 2,557 3,434 253,434
3 36 3,000 9,930 5,086 5,964 255,964 4,410 5,288 255,288
4 37 3,000 13,577 7,096 7,973 257,973 6,210 7,087 257,087
5 37 3,000 17,406 9,060 9,937 259,937 7,951 8,828 258,828
6 38 3,000 21,426 11,088 11,868 261,868 9,729 10,509 260,509
7 38 3,000 25,647 13,168 13,753 263,753 11,537 12,122 262,122
8 39 3,000 30,080 15,205 15,595 265,595 13,280 13,670 263,670
9 39 3,000 34,734 17,201 17,396 267,396 14,950 15,145 265,145
10 40 3,000 39,620 19,160 19,160 269,160 16,549 16,549 266,549
11 40 3,000 44,751 21,271 21,271 271,271 18,256 18,256 268,256
12 41 3,000 50,139 23,349 23,349 273,349 19,874 19,874 269,874
13 41 3,000 55,796 25,393 25,393 275,393 21,401 21,401 271,401
14 42 3,000 61,736 27,405 27,405 277,405 22,833 22,833 272,833
15 42 3,000 67,972 29,392 29,392 279,392 24,160 24,160 274,160
16 43 3,000 74,521 31,301 31,301 281,301 25,380 25,380 275,380
17 43 3,000 81,397 33,136 33,136 283,136 26,475 26,475 276,475
18 44 3,000 88,617 34,894 34,894 284,894 27,431 27,431 277,431
19 44 3,000 96,198 36,569 36,569 286,569 28,235 28,235 278,235
20 45 3,000 104,158 38,157 38,157 288,157 28,865 28,865 278,865
21 45 3,000 112,516 39,692 39,692 289,692 29,337 29,337 279,337
22 46 3,000 121,291 41,128 41,128 291,128 29,603 29,603 279,603
23 46 3,000 130,506 42,457 42,457 292,457 29,654 29,654 279,654
24 47 3,000 140,181 43,669 43,669 293,669 29,474 29,474 279,474
25 47 3,000 150,340 44,750 44,750 294,750 29,036 29,036 279,036
26 48 3,000 161,007 45,687 45,687 295,687 28,313 28,313 278,313
27 48 3,000 172,208 46,467 46,467 296,467 27,276 27,276 277,276
28 49 3,000 183,968 47,078 47,078 297,078 25,885 25,885 275,885
29 49 3,000 196,317 47,508 47,508 297,508 24,091 24,091 274,091
30 50 3,000 209,282 47,741 47,741 297,741 21,844 21,844 271,844
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF
INSURANCE RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS
SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN
AND WILL DEPEND UPON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT
ALLOCATION MADE BY THE POLICY OWNER AND THE INVESTMENT RESULTS OF THE
FUNDS SELECTED. THE CASH VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY THE COMPANY, WALNUT STREET SECURITIES, THE
FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS HYPOTHETICAL RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED OVER ANY PERIOD OF
TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE
POLICY ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE
PAID BY THE COMPANY.
54
<PAGE>
<PAGE>
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION B) ANNUAL PREMIUM = $3,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 6.00% (NET RATE OF 4.67%)
<CAPTION>
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 3,000 3,150 1,017 1,895 251,895 771 1,649 251,649
2 36 3,000 6,458 3,414 4,291 254,291 2,914 3,792 253,792
3 36 3,000 9,930 5,871 6,749 256,749 5,129 6,006 256,006
4 37 3,000 13,577 8,420 9,298 259,298 7,417 8,294 258,294
5 37 3,000 17,406 11,069 11,946 261,946 9,775 10,653 260,653
6 38 3,000 21,426 13,930 14,710 264,710 12,304 13,084 263,084
7 38 3,000 25,647 16,998 17,583 267,583 14,997 15,582 265,582
8 39 3,000 30,080 20,182 20,572 270,572 17,761 18,151 268,151
9 39 3,000 34,734 23,488 23,683 273,683 20,591 20,786 270,786
10 40 3,000 39,620 26,926 26.926 276,926 23,491 23,491 273,491
11 40 3,000 44,751 30,712 30,712 280,712 26,663 26,663 276,663
12 41 3,000 50,139 34,673 34,673 284,673 29,917 29,917 279,917
13 41 3,000 55,796 38,812 38,812 288,812 33,252 33,252 283,252
14 42 3,000 61,736 43,143 43,143 293,143 36,668 36,668 286,668
15 42 3,000 67,972 47,679 47,679 297,679 40,157 40,157 290,157
16 43 3,000 74,521 52,378 52,378 302,378 43,717 43,717 293,717
17 43 3,000 81,397 57,248 57,248 307,248 47,336 47,336 297,336
18 44 3,000 88,617 62,294 62,294 312,294 50,997 50,997 300,997
19 44 3,000 96,198 67,517 67,517 317,517 54,686 54,686 304,686
20 45 3,000 104,158 72,921 72,921 322,921 58,384 58,384 308,384
21 45 3,000 112,516 78,582 78,582 328,582 62,132 62,132 312,132
22 46 3,000 121,291 84,435 84,435 334,435 65,855 65,855 315,855
23 46 3,000 130,506 90,478 90,478 340,478 69,540 69,540 319,540
24 47 3,000 140,181 96,711 96,711 346,711 73,167 73,167 323,167
25 47 3,000 150,340 103,126 103,126 353,126 76,702 76,702 326,702
26 48 3,000 161,007 109,718 109,718 359,718 80,111 80,111 330,111
27 48 3,000 172,208 116,480 116,480 366,480 83,354 83,354 333,354
28 49 3,000 183,968 123,406 123,406 373,406 86,378 86,378 336,378
29 49 3,000 196,317 130,490 130,490 380,490 89,116 89,116 339,116
30 50 3,000 209,282 137,721 137,721 387,721 91,501 91,501 341,501
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF
INSURANCE RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS
SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN
AND WILL DEPEND UPON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT
ALLOCATION MADE BY THE POLICY OWNER AND THE INVESTMENT RESULTS OF THE
FUNDS SELECTED. THE CASH VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY THE COMPANY, WALNUT STREET SECURITIES, THE
FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS HYPOTHETICAL RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED OVER ANY PERIOD OF
TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE
POLICY ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE
PAID BY THE COMPANY.
55
<PAGE>
<PAGE>
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION B) ANNUAL PREMIUM = $3,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 12.00% (NET RATE OF 10.67%)
<CAPTION>
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 3,000 3,150 1,147 2,024 252,024 893 1,770 251,770
2 36 3,000 6,458 3,818 4,695 254,695 3,287 4,165 264,165
3 36 3,000 9,930 6,721 7,599 257,599 5,908 6,786 256,786
4 37 3,000 13,577 9,911 10,788 260,788 8,777 9,655 259,655
5 37 3,000 17,406 13,420 14,298 264,298 11,916 12,793 262,793
6 38 3,000 21,426 17,394 18,174 268,174 15,447 16,227 266,227
7 38 3,000 25,647 21,857 22,442 272,442 19,395 19,980 269,980
8 39 3,000 30,080 26,758 27,148 277,442 23,696 24,086 274,086
9 39 3,000 34,734 32,142 32,337 282,337 28,380 33,488 278,575
10 40 3,000 39,620 38,066 38,066 288,066 33,488 33,488 283,488
11 40 3,000 44,751 44,824 44,824 294,824 39,287 39,287 289,287
12 41 3,000 50,139 52,302 52,302 302,302 45,641 45,641 295,641
13 41 3,000 55,796 60,576 60,576 310,576 52,602 52,602 302,602
14 42 3,000 61,736 69,734 69,734 319,734 60,231 60,231 310,231
15 42 3,000 67,972 79,878 79,878 329,878 68,590 68,590 318,590
16 43 3,000 74,521 91,059 91,059 341,059 77,753 77,753 327,753
17 43 3,000 81,397 103,390 103,390 353,390 87,786 87,786 337,786
18 44 3,000 88,617 116,990 116,990 366,990 98,766 98,766 348,766
19 44 3,000 96,198 131,990 131,990 381,990 110,778 110,778 360,778
20 45 3,000 104,158 148,535 148,535 398,535 123,911 123,911 373,911
21 45 3,000 112,516 166,935 166,935 416,935 138,393 138,393 388,393
22 46 3,000 121,291 187,248 187,248 437,248 154,236 154,236 404,236
23 46 3,000 130,506 209,673 209,673 459,673 171,575 171,575 421,575
24 47 3,000 140,181 234,427 234,427 484,427 190,555 190,555 440,555
25 47 3,000 150,340 261,748 261,748 511,748 211,323 211,323 461,323
26 48 3,000 161,007 291,900 291,900 541,900 234,042 234,042 484,042
27 48 3,000 172,208 325,174 325,174 575,174 258,889 258,889 508,889
28 49 3,000 183,968 361,896 361,896 611,896 286,050 286,050 536,050
29 49 3,000 196,317 402,426 402,426 652,426 315,721 315,721 565,721
30 50 3,000 209,282 447,159 447,159 697,159 348,118 348,118 598,118
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF
INSURANCE RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS
SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN
AND WILL DEPEND UPON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT
ALLOCATION MADE BY THE POLICY OWNER AND THE INVESTMENT RESULTS OF THE
FUNDS SELECTED. THE CASH VALUE, CASH SURRENDER VALUE
AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY THE COMPANY, WALNUT STREET SECURITIES, THE
FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS HYPOTHETICAL RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED OVER ANY PERIOD OF
TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE
POLICY ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE
PAID BY THE COMPANY.
56
<PAGE>
<PAGE>
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION C) ANNUAL PREMIUM = $3,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 0.00% (NET RATE OF -1.33%)
<CAPTION>
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 3,000 3,150 890 1,768 250,000 654 1,531 250,000
2 36 3,000 6,458 3,031 3,909 250,000 2,567 3,444 250,000
3 36 3,000 9,930 5,097 5,975 250,000 4,431 5,308 250,000
4 37 3,000 13,577 7,116 7,994 250,000 6,245 7,123 250,000
5 37 3,000 17,406 9,092 9,970 250,000 8,005 8,883 250,000
6 38 3,000 21,426 11,135 11,915 250,000 9,808 10,588 250,000
7 38 3,000 25,647 13,232 13,817 250,000 11,647 12,232 250,000
8 39 3,000 30,080 15,291 15,681 250,000 13,426 13,816 250,000
9 39 3,000 34,734 17,311 17,506 250,000 15,140 15,335 250,000
10 40 3,000 39,620 19,298 19,298 250,000 16,789 16,789 250,000
11 40 3,000 44,751 21,440 21,440 250,000 18,555 18,555 250,000
12 41 3,000 50,139 23,554 23,554 250,000 20,244 20,244 250,000
13 41 3,000 55,796 25,637 25,637 250,000 21,853 21,853 250,000
14 42 3,000 61,736 27,692 27,692 250,000 23,379 23,379 250,000
15 42 3,000 67,972 29,725 29,725 250,000 24,815 24,815 250,000
16 43 3,000 74,521 31,689 31,689 250,000 26,157 26,157 250,000
17 43 3,000 81,397 33,590 33,590 250,000 27,393 27,393 250,000
18 44 3,000 88,617 35,423 35,423 250,000 28,509 28,509 250,000
19 44 3,000 96,198 37,186 37,186 250,000 29,493 29,493 250,000
20 45 3,000 104,158 38,876 38,876 250,000 30,328 30,328 250,000
21 45 3,000 112,516 40,530 40,530 250,000 31,033 31,033 250,000
22 46 3,000 121,291 42,102 42,102 250,000 31,561 31,561 250,000
23 46 3,000 130,506 43,587 43,587 250,000 31,902 31,902 250,000
24 47 3,000 140,181 44,977 44,977 250,000 32,042 32,042 250,000
25 47 3,000 150,340 46,262 46,262 250,000 31,956 31,956 250,000
26 48 3,000 161,007 47,431 47,431 250,000 31,617 31,617 250,000
27 48 3,000 172,208 48,476 48,476 250,000 30,997 30,997 250,000
28 49 3,000 183,968 49,387 49,387 250,000 30,054 30,054 250,000
29 49 3,000 196,317 50,155 50,155 250,000 28,739 28,739 250,000
30 50 3,000 209,282 50,767 50,767 250,000 26,995 26,995 250,000
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF
INSURANCE RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS
SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN
AND WILL DEPEND UPON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT
ALLOCATION MADE BY THE POLICY OWNER AND THE INVESTMENT RESULTS OF THE
FUNDS SELECTED. THE CASH VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY THE COMPANY, WALNUT STREET SECURITIES, THE
FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS HYPOTHETICAL RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED OVER ANY PERIOD OF
TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE
POLICY ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE
PAID BY THE COMPANY.
57
<PAGE>
<PAGE>
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION C) ANNUAL PREMIUM = $3,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 6.00% (NET RATE OF 4.67%)
<CAPTION>
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 3,000 3,150 1,019 1,897 250,000 775 1,652 250,000
2 36 3,000 6,458 3,419 4,297 250,000 2,925 3,803 250,000
3 36 3,000 9,930 5,884 6,762 250,000 5,153 6,030 250,000
4 37 3,000 13,577 8,445 9,322 250,000 7,459 8,337 250,000
5 37 3,000 17,406 11,109 11,986 250,000 9,844 10,721 250,000
6 38 3,000 21,426 13,990 14,770 250,000 12,406 13,186 250,000
7 38 3,000 25,647 17,084 17,669 250,000 15,144 15,729 250,000
8 39 3,000 30,080 20,301 20,691 250,000 17,965 18,355 250,000
9 39 3,000 34,734 23,648 23,843 250,000 20,866 21,061 250,000
10 40 3,000 39,620 27,134 27,134 250,000 23,853 23,853 250,000
11 40 3,000 44,751 30,978 30,978 250,000 27,134 27,134 250,000
12 41 3,000 50,139 35,007 35,007 250,000 30,521 30,521 250,000
13 41 3,000 55,796 39,226 39,226 250,000 34,019 34,019 250,000
14 42 3,000 61,736 43,649 43,649 250,000 37,630 37,630 250,000
15 42 3,000 67,972 48,289 48,289 250,000 41,355 41,355 250,000
16 43 3,000 74,521 53,115 53,115 250,000 45,197 45,197 250,000
17 43 3,000 81,397 58,141 58,141 250,000 49,151 49,151 250,000
18 44 3,000 88,617 63,374 63,374 250,000 53,214 53,214 250,000
19 44 3,000 96,198 68,824 68,824 250,000 57,382 57,382 250,000
20 45 3,000 104,158 74,499 74,499 250,000 61,649 61,649 250,000
21 45 3,000 112,516 80,488 80,488 250,000 66,077 66,077 250,000
22 46 3,000 121,291 86,731 86,731 250,000 70,607 70,607 250,000
23 46 3,000 130,506 93,241 93,241 250,000 75,245 75,245 250,000
24 47 3,000 140,181 100,030 100,030 250,000 79,991 79,991 250,000
25 47 3,000 150,340 107,109 107,109 250,000 84,842 84,842 250,000
26 48 3,000 161,007 114,493 114,493 250,000 89,793 89,793 250,000
27 48 3,000 172,208 122,198 122,198 250,000 94,843 94,843 250,000
28 49 3,000 183,968 130,244 130,244 250,000 99,983 99,983 250,000
29 49 3,000 196,317 138,653 138,653 251,046 105,203 105,203 250,000
30 50 3,000 209,282 147,411 147,411 260,106 110,496 110,496 250,000
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF
INSURANCE RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS
SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN
AND WILL DEPEND UPON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT
ALLOCATION MADE BY THE POLICY OWNER AND THE INVESTMENT RESULTS OF THE
FUNDS SELECTED. THE CASH VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY THE COMPANY, WALNUT STREET SECURITIES, THE
FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS HYPOTHETICAL RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED OVER ANY PERIOD OF
TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE
POLICY ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE
PAID BY THE COMPANY.
58
<PAGE>
<PAGE>
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION C) ANNUAL PREMIUM = $3,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 12.00% (NET RATE OF 10.67%)
<CAPTION>
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 3,000 3,150 1,148 2,026 250,000 896 1,774 250,000
2 36 3,000 6,458 3,824 4,701 250,000 3,299 4,177 250,000
3 36 3,000 9,930 6,736 7,614 250,000 5,935 6,813 250,000
4 37 3,000 13,577 9,940 10,817 250,000 8,828 9,705 250,000
5 37 3,000 17,406 13,470 14,347 250,000 12,000 12,877 250,000
6 38 3,000 21,426 17,471 18,251 250,000 15,579 16,359 250,000
7 38 3,000 25,647 21,972 22,557 250,000 19,592 20,177 250,000
8 39 3,000 30,080 26,923 27,313 250,000 23,979 24,369 250,000
9 39 3,000 34,734 32,372 32,567 250,000 28,777 28,972 250,000
10 40 3,000 39,620 38,378 38,378 250,000 34,033 34,033 250,000
11 40 3,000 44,751 45,240 45,240 250,000 40,026 40,026 250,000
12 41 3,000 50,139 52,847 52,847 250,000 46,627 46,627 250,000
13 41 3,000 55,796 61,279 61,279 250,000 53,905 53,905 250,000
14 42 3,000 61,736 70,629 70,629 250,000 61,935 61,935 250,000
15 42 3,000 67,972 81,003 81,003 250,000 70,800 70,800 250,000
16 43 3,000 74,521 92,476 92,476 250,000 80,598 80,598 250,000
17 43 3,000 81,397 105,162 105,162 269,361 91,428 91,428 250,000
18 44 3,000 88,617 119,150 119,150 295,836 103,402 103,402 256,736
19 44 3,000 96,198 134,568 134,568 323,999 116,545 116,545 280,605
20 45 3,000 104,158 151,559 151,559 353,967 130,918 130,918 305,759
21 45 3,000 112,516 170,433 170,433 386,270 146,757 146,757 332,611
22 46 3,000 121,291 191,240 191,240 420,785 164,071 164,071 361,005
23 46 3,000 130,506 214,170 214,170 457,702 182,989 182,989 391,066
24 47 3,000 140,181 239,432 239,432 497,180 203,652 203,652 422,883
25 47 3,000 150,340 267,249 267,249 539,442 226,199 226,199 456,583
26 48 3,000 161,007 297,868 297,868 584,685 250,784 250,784 492,265
27 48 3,000 172,208 331,559 331,559 633,211 277,570 277,570 530,103
28 49 3,000 183,968 368,618 368,618 685,262 306,720 306,720 570,192
29 49 3,000 196,317 409,373 409,373 741,211 338,401 338,401 612,709
30 50 3,000 209,282 454,177 454,177 801,396 372,792 372,792 657,791
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF
INSURANCE RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS
SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN
AND WILL DEPEND UPON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT
ALLOCATION MADE BY THE POLICY OWNER AND THE INVESTMENT RESULTS OF THE
FUNDS SELECTED. THE CASH VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY THE COMPANY, WALNUT STREET SECURITIES, THE
FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS HYPOTHETICAL RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED OVER ANY PERIOD OF
TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE
POLICY ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE
PAID BY THE COMPANY.
59
<PAGE>
<PAGE>
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION A) ANNUAL PREMIUM = $6,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 0.00% (NET RATE OF -1.33%)
<CAPTION>
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 6,000 6,300 2,185 3,906 250,000 1,296 3,017 250,000
2 51 6,000 12,915 6,532 8,254 250,000 4,787 6,508 250,000
3 51 6,000 19,861 10,739 12,460 250,000 8,130 9,851 250,000
4 52 6,000 27,154 14,817 16,538 250,000 11,315 13,036 250,000
5 52 6,000 34,811 18,722 20,494 250,000 14,325 16,046 250,000
6 53 6,000 42,852 22,815 24,345 250,000 17,340 18,870 250,000
7 53 6,000 51,295 26,945 28,093 250,000 20,349 21,497 250,000
8 54 6,000 60,159 30,981 31,746 250,000 23,154 23,919 250,000
9 54 6,000 69,467 34,912 35,295 250,000 25,744 26,127 250,000
10 55 6,000 79,241 38,736 38,736 250,000 28,098 28,098 250,000
11 55 6,000 89,503 42,777 42,777 250,000 30,564 30,564 250,000
12 56 6,000 100,278 46,685 46,685 250,000 32,752 32,752 250,000
13 56 6,000 111,592 50,480 50,480 250,000 34,629 34,629 250,000
14 57 6,000 123,471 54,180 54,180 250,000 36,155 36,155 250,000
15 57 6,000 135,945 57,797 57,797 250,000 37,288 37,288 250,000
16 58 6,000 149,042 60,991 60,991 250,000 37,988 37,988 250,000
17 58 6,000 162,794 64,001 64,001 250,000 38,220 38,220 250,000
18 59 6,000 177,234 66,814 66,814 250,000 37,941 37,941 250,000
19 59 6,000 192,396 69,417 69,417 250,000 37,105 37,105 250,000
20 60 6,000 208,316 71,794 71,794 250,000 35,647 35,647 250,000
21 60 6,000 225,031 74,006 74,006 250,000 33,507 33,507 250,000
22 61 6,000 242,583 75,964 75,964 250,000 30,392 30,392 250,000
23 61 6,000 261,012 77,652 77,652 250,000 26,387 26,387 250,000
24 62 6,000 280,363 79,051 79,051 250,000 21,157 21,157 250,000
25 62 6,000 300,681 80,131 80,131 250,000 14,467 14,467 250,000
26 63 6,000 322,015 80,862 80,862 250,000 6,084 6,084 250,000
27 63 6,000 344,415 81,206 81,206 250,000 <F*> <F*> <F*>
28 64 6,000 367,936 81,113 81,113 250,000 <F*> <F*> <F*>
29 64 6,000 392,633 80,532 80,532 250,000 <F*> <F*> <F*>
30 65 6,000 418,565 79,404 79,404 250,000 <F*> <F*> <F*>
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF
INSURANCE RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS
SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN
AND WILL DEPEND UPON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT
ALLOCATION MADE BY THE POLICY OWNER AND THE INVESTMENT RESULTS OF THE
FUNDS SELECTED. THE CASH VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY THE COMPANY, WALNUT STREET SECURITIES, THE
FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS HYPOTHETICAL RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED OVER ANY PERIOD OF
TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE
POLICY ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE
PAID BY THE COMPANY.
[FN]
<F*> UNLESS ADDITIONAL PREMIUM IS PAID, POLICY WILL LAPSE WITHOUT VALUE
60
<PAGE>
<PAGE>
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION A) ANNUAL PREMIUM = $6,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 6.00% (NET RATE OF 4.67%)
<CAPTION>
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 6,000 6,300 2,455 4,176 250,000 1,537 3,258 250,000
2 51 6,000 12,915 7,346 9,068 250,000 5,492 7,213 250,000
3 51 6,000 19,861 12,383 14,104 250,000 9,529 11,250 250,000
4 52 6,000 27,154 17,582 19,303 250,000 13,643 15,364 250,000
5 52 6,000 34,811 22,958 24,679 250,000 17,822 19,543 250,000
6 53 6,000 42,852 28,729 30,259 250,000 22,249 23,779 250,000
7 53 6,000 51,295 34,906 36,053 250,000 26,917 28,064 250,000
8 54 6,000 60,159 41,317 42,082 250,000 31,632 32,397 250,000
9 54 6,000 69,467 47,966 48,348 250,000 36,390 36,772 250,000
10 55 6,000 79,241 54,861 54,861 250,000 41,175 41,175 250,000
11 55 6,000 89,503 62,391 62,391 250,000 46,387 46,387 250,000
12 56 6,000 100,278 70,225 70,225 250,000 51,651 51,651 250,000
13 56 6,000 111,592 78,400 78,400 250,000 56,951 56,951 250,000
14 57 6,000 123,471 86,953 86,953 250,000 62,263 62,263 250,000
15 57 6,000 135,945 95,922 95,922 250,000 67,567 67,567 250,000
16 58 6,000 149,042 105,054 105,054 250,000 72,846 72,846 250,000
17 58 6,000 162,794 114,575 114,575 250,000 78,093 78,093 250,000
18 59 6,000 177,234 124,510 124,510 250,000 83,298 83,298 250,000
19 59 6,000 192,396 134,892 134,892 250,000 88,454 88,454 250,000
20 60 6,000 208,316 145,760 145,760 250,000 93,547 93,547 250,000
21 60 6,000 225,031 157,311 157,311 250,000 98,643 98,643 250,000
22 61 6,000 242,583 169,471 169,471 250,000 103,527 103,527 250,000
23 61 6,000 261,012 182,311 182,311 250,000 108,316 108,316 250,000
24 62 6,000 280,363 195,910 195,910 250,000 112,863 112,863 250,000
25 62 6,000 300,681 210,364 210,364 250,000 117,108 117,108 250,000
26 63 6,000 322,015 225,787 225,787 250,000 121,015 121,015 250,000
27 63 6,000 344,415 242,292 242,292 254,406 124,545 124,545 250,000
28 64 6,000 367,936 259,596 259,596 272,576 127,659 127,659 250,000
29 64 6,000 392,633 277,677 277,677 291,560 130,317 130,317 250,000
30 65 6,000 418,565 296,560 296,560 311,388 132,447 132,447 250,000
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF
INSURANCE RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS
SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN
AND WILL DEPEND UPON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT
ALLOCATION MADE BY THE POLICY OWNER AND THE INVESTMENT RESULTS OF THE
FUNDS SELECTED. THE CASH VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY THE COMPANY, WALNUT STREET SECURITIES, THE
FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS HYPOTHETICAL RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED OVER ANY PERIOD OF
TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE
POLICY ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE
PAID BY THE COMPANY.
61
<PAGE>
<PAGE>
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION A) ANNUAL PREMIUM = $6,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 12.00% (NET RATE OF 10.67%)
<CAPTION>
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 6,000 6,300 2,725 4,447 250,000 1,779 3,501 250,000
2 51 6,000 12,915 8,194 9,916 250,000 6,228 7,949 250,000
3 51 6,000 19,861 14,162 15,884 250,000 11,049 12,770 250,000
4 52 6,000 27,154 20,696 22,417 250,000 16,277 17,998 250,000
5 52 6,000 34,811 27,864 29,586 250,000 21,942 23,663 250,000
6 53 6,000 42,852 35,948 37,478 250,000 28,277 29,807 250,000
7 53 6,000 51,295 45,028 46,176 250,000 35,329 36,476 250,000
8 54 6,000 60,159 55,014 55,779 250,000 42,968 43,733 250,000
9 54 6,000 69,467 66,000 66,382 250,000 51,261 51,644 250,000
10 55 6,000 79,241 78,097 78,097 250,000 60,278 60,278 250,000
11 55 6,000 89,503 91,867 91,867 250,000 70,559 70,559 250,000
12 56 6,000 100,278 107,115 107,115 250,000 81,856 81,856 250,000
13 56 6,000 111,592 124,038 124,038 250,000 94,296 94,296 250,000
14 57 6,000 123,471 142,850 142,850 250,000 108,027 108,027 250,000
15 57 6,000 135,945 163,789 163,789 250,000 123,232 123,232 250,000
16 58 6,000 149,042 186,971 186,971 250,000 140,138 140,138 250,000
17 58 6,000 162,794 212,828 212,828 253,265 159,028 159,028 250,000
18 59 6,000 177,234 241,492 241,492 284,960 180,242 180,242 250,000
19 59 6,000 192,396 273,157 273,157 319,593 204,201 204,201 250,000
20 60 6,000 208,316 308,135 308,135 357,436 231,207 231,207 268,201
21 60 6,000 225,031 347,084 347,084 399,147 261,196 261,196 300,375
22 61 6,000 242,583 390,209 390,209 440,937 294,312 294,312 332,572
23 61 6,000 261,012 437,984 437,984 486,163 330,966 330,966 367,373
24 62 6,000 280,363 490,944 490,944 535,129 371,569 371,569 405,010
25 62 6,000 300,681 549,697 549,697 588,176 416,629 416,629 445,793
26 63 6,000 322,015 614,936 614,936 645,683 466,759 466,759 490,097
27 63 6,000 344,415 687,100 687,100 721,454 522,011 522,011 548,112
28 64 6,000 367,936 766,900 766,900 805,245 582,879 582,879 612,023
29 64 6,000 392,633 855,123 855,123 897,879 649,899 649,899 682,394
30 65 6,000 418,565 952,629 952,629 1,000,260 723,651 723,651 759,834
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF
INSURANCE RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS
SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN
AND WILL DEPEND UPON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT
ALLOCATION MADE BY THE POLICY OWNER AND THE INVESTMENT RESULTS OF THE
FUNDS SELECTED. THE CASH VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY THE COMPANY, WALNUT STREET SECURITIES, THE
FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS HYPOTHETICAL RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED OVER ANY PERIOD OF
TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE
POLICY ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE
PAID BY THE COMPANY.
62
<PAGE>
<PAGE>
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION B) ANNUAL PREMIUM = $6,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 0.00% (NET RATE OF -1.33%)
<CAPTION>
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 6,000 6,300 2,179 3,901 253,901 1,276 2,997 252,997
2 51 6,000 12,915 6,512 8,233 258,233 4,728 6,449 256,449
3 51 6,000 19,861 10,691 12,412 262,412 8,008 9,729 259,729
4 52 6,000 27,154 14,727 16,448 266,448 11,103 12,825 262,825
5 52 6,000 34,811 18,624 20,346 270,346 13,995 15,716 265,716
6 53 6,000 42,852 22,592 24,122 274,122 16,858 18,388 268,388
7 53 6,000 51,295 26,627 27,774 277,774 19,677 20,825 270,825
8 54 6,000 60,159 30,548 31,313 281,313 22,251 23,016 273,016
9 54 6,000 69,467 34,342 34,724 284,724 24,566 24,948 274,948
10 55 6,000 79,241 38,001 38,001 288,001 26,595 26,595 276,595
11 55 6,000 89,503 41,836 41,836 291,836 28,676 28,676 278,676
12 56 6,000 100,278 45,497 45,497 295,497 30,409 30,409 280,409
13 56 6,000 111,592 49,004 49,004 299,004 31,754 31,754 281,754
14 57 6,000 123,471 52,377 52,377 302,377 32,665 32,665 282,665
15 57 6,000 135,945 55,631 55,631 305,631 33,092 33,092 283,092
16 58 6,000 149,042 58,309 58,309 308,309 32,992 32,992 282,992
17 58 6,000 162,794 60,722 60,722 310,722 32,332 32,332 282,332
18 59 6,000 177,234 62,846 62,846 312,846 31,071 31,071 281,071
19 59 6,000 192,396 64,658 64,658 314,658 29,172 29,172 279,172
20 60 6,000 208,316 66,132 66,132 316,132 26,584 26,584 276,584
21 60 6,000 225,031 67,310 67,310 317,310 23,251 23,251 273,251
22 61 6,000 242,583 68,096 68,096 318,096 18,895 18,895 268,895
23 61 6,000 261,012 68,467 68,467 318,467 13,684 13,684 263,684
24 62 6,000 280,363 68,391 68,391 318,391 7,323 7,323 257,323
25 62 6,000 300,681 67,827 67,827 317,827 <F*> <F*> <F*>
26 63 6,000 322,015 66,735 66,735 316,735 <F*> <F*> <F*>
27 63 6,000 344,415 65,062 65,062 315,062 <F*> <F*> <F*>
28 64 6,000 367,936 62,750 62,750 312,750 <F*> <F*> <F*>
29 64 6,000 392,633 59,740 59,740 309,740 <F*> <F*> <F*>
30 65 6,000 418,565 55,974 55,974 305,974 <F*> <F*> <F*>
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF
INSURANCE RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS
SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN
AND WILL DEPEND UPON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT
ALLOCATION MADE BY THE POLICY OWNER AND THE INVESTMENT RESULTS OF THE
FUNDS SELECTED. THE CASH VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY THE COMPANY, WALNUT STREET SECURITIES, THE
FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS HYPOTHETICAL RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED OVER ANY PERIOD OF
TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE
POLICY ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE
PAID BY THE COMPANY.
[FN]
<F*> UNLESS ADDITIONAL PREMIUM IS PAID, POLICY WILL LAPSE WITHOUT VALUE
63
<PAGE>
<PAGE>
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION B) ANNUAL PREMIUM = $6,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 6.00% (NET RATE OF 4.67%)
<CAPTION>
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 6,000 6,300 2,449 4,170 254,170 1,516 3,237 253,237
2 51 6,000 12,915 7,324 9,045 259,045 5,426 7,147 257,147
3 51 6,000 19,861 12,328 14,049 264,049 9,388 11,109 261,109
4 52 6,000 27,154 17,475 19,196 269,196 13,390 15,111 265,111
5 52 6,000 34,811 22,775 24,496 274,496 17,411 19,132 269,132
6 53 6,000 42,852 28,442 29,972 279,972 21,624 23,154 273,154
7 53 6,000 51,295 34,480 35,628 285,628 26,009 27,157 277,157
8 54 6,000 60,159 40,715 41,480 291,480 30,362 31,127 281,127
9 54 6,000 69,467 47,140 47,523 297,523 34,663 35,045 285,045
10 55 6,000 79,241 53,756 53,756 303,756 38,879 38,879 288,879
11 55 6,000 89,503 60,921 60,921 310,921 43,378 43,378 293,378
12 56 6,000 100,278 68,297 68,297 318,297 47,759 47,759 297,759
13 56 6,000 111,592 75,912 75,912 325,912 51,972 51,972 301,972
14 57 6,000 123,471 83,796 83,796 333,796 55,954 55,954 305,954
15 57 6,000 135,945 91,978 91,978 341,978 59,639 59,639 309,639
16 58 6,000 149,042 99,996 99,996 349,996 62,961 62,961 312,961
17 58 6,000 162,794 108,157 108,157 358,157 65,862 65,862 315,862
18 59 6,000 177,234 116,441 116,441 366,441 68,273 68,273 318,273
19 59 6,000 192,396 124,825 124,825 374,825 70,126 70,126 320,126
20 60 6,000 208,316 133,283 133,283 383,283 71,332 71,332 321,332
21 60 6,000 225,031 141,923 141,923 391,923 71,838 71,838 321,838
22 61 6,000 242,583 150,595 150,595 400,595 71,275 71,275 321,275
23 61 6,000 261,012 159,269 159,269 409,269 69,752 69,752 319,752
24 62 6,000 280,363 167,910 167,910 417,910 66,908 66,908 316,908
25 62 6,000 300,681 176,469 176,469 426,469 62,525 62,525 312,525
26 63 6,000 322,015 184,894 184,894 434,894 56,425 56,425 306,425
27 63 6,000 344,415 193,119 193,119 443,119 48,427 48,427 298,427
28 64 6,000 367,936 201,066 201,066 451,066 38,356 38,356 288,356
29 64 6,000 392,633 208,656 208,656 458,656 26,046 26,046 276,046
30 65 6,000 418,565 215,801 215,801 465,801 11,281 11,281 261,281
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF
INSURANCE RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS
SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN
AND WILL DEPEND UPON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT
ALLOCATION MADE BY THE POLICY OWNER AND THE INVESTMENT RESULTS OF THE
FUNDS SELECTED. THE CASH VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY THE COMPANY, WALNUT STREET SECURITIES, THE
FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS HYPOTHETICAL RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED OVER ANY PERIOD OF
TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE
POLICY ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE
PAID BY THE COMPANY.
64
<PAGE>
<PAGE>
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION B) ANNUAL PREMIUM = $6,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 12.00% (NET RATE OF 10.67%)
<CAPTION>
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 6,000 6,300 2,719 4,440 254,440 1,757 3,478 253,478
2 51 6,000 12,915 8,169 9,891 259,891 6,155 7,876 257,876
3 51 6,000 19,861 14,100 15,821 265,821 10,888 12,609 262,609
4 52 6,000 27,154 20,569 22,291 272,291 15,976 17,697 267,697
5 52 6,000 34,811 27,639 29,361 279,361 21,433 23,154 273,154
6 53 6,000 42,852 35,581 37,111 287,111 27,472 29,002 279,002
7 53 6,000 51,295 44,463 45,610 295,610 34,113 35,260 285,260
8 54 6,000 60,159 54,181 54,946 304,946 41,195 41,960 291,960
9 54 6,000 69,467 64,812 65,194 315,194 48,748 49,130 299,130
10 55 6,000 79,241 76,400 76,440 326,440 56,789 56,789 306,789
11 55 6,000 89,503 89,573 89,573 339,573 65,789 65,789 315,789
12 56 6,000 100,278 103,985 103,985 353,985 75,416 75,416 325,416
13 56 6,000 111,592 119,834 119,834 369,834 85,691 85,691 335,691
14 57 6,000 123,471 137,293 137,293 387,293 96,628 96,628 346,628
15 57 6,000 135,945 156,550 156,550 406,550 108,241 108,241 358,241
16 58 6,000 149,042 177,312 177,312 427,312 120,551 120,551 370,551
17 58 6,000 162,794 200,065 200,065 450,065 133,590 133,590 383,590
18 59 6,000 177,234 224,993 224,993 474,993 147,387 147,387 397,387
19 59 6,000 192,396 252,303 252,303 502,303 161,978 161,978 411,978
20 60 6,000 208,316 282,220 282,220 532,220 177,384 177,384 427,384
21 60 6,000 225,031 315,278 315,278 565,278 193,776 193,776 443,776
22 61 6,000 242,583 351,529 351,529 601,529 210,826 210,826 460,826
23 61 6,000 261,012 391,292 391,292 641,292 228,772 228,772 478,772
24 62 6,000 280,363 434,910 434,910 684,910 247,389 247,389 497,389
25 62 6,000 300,681 482,756 482,756 732,756 266,594 266,594 516,594
26 63 6,000 322,015 535,239 535,239 785,239 286,345 286,345 536,345
27 63 6,000 344,415 592,806 592,806 842,806 306,603 306,603 556,603
28 64 6,000 367,936 655,940 655,940 905,940 327,340 327,340 577,340
29 64 6,000 392,633 725,180 725,180 975,180 348,544 348,544 598,544
30 65 6,000 418,565 801,120 801,120 1,051,120 370,157 370,157 620,157
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF
INSURANCE RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS
SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN
AND WILL DEPEND UPON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT
ALLOCATION MADE BY THE POLICY OWNER AND THE INVESTMENT RESULTS OF THE
FUNDS SELECTED. THE CASH VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY THE COMPANY, WALNUT STREET SECURITIES, THE
FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS HYPOTHETICAL RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED OVER ANY PERIOD OF
TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE
POLICY ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE
PAID BY THE COMPANY.
65
<PAGE>
<PAGE>
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION C) ANNUAL PREMIUM = $6,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 0.00% (NET RATE OF -1.33%)
<CAPTION>
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 6,000 6,300 2,185 3,906 250,000 1,296 3,017 250,000
2 51 6,000 12,915 6,532 8,254 250,000 4,787 6,508 250,000
3 51 6,000 19,861 10,739 12,460 250,000 8,130 9,851 250,000
4 52 6,000 27,154 14,817 16,538 250,000 11,315 13,036 250,000
5 52 6,000 34,811 18,772 20,494 250,000 14,325 16,046 250,000
6 53 6,000 42,852 22,815 24,345 250,000 17,340 18,870 250,000
7 53 6,000 51,295 26,945 28,093 250,000 20,349 21,497 250,000
8 54 6,000 60,159 30,981 31,746 250,000 23,154 23,919 250,000
9 54 6,000 69,467 34,912 35,295 250,000 25,744 26,127 250,000
10 55 6,000 79,241 38,736 38,736 250,000 28,098 28,098 250,000
11 55 6,000 89,503 42,777 42,777 250,000 30,564 30,564 250,000
12 56 6,000 100,278 46,685 46,685 250,000 32,752 32,752 250,000
13 56 6,000 111,592 50,480 50,480 250,000 34,629 34,629 250,000
14 57 6,000 123,471 54,180 54,180 250,000 36,155 36,155 250,000
15 57 6,000 135,945 57,797 57,797 250,000 37,288 37,288 250,000
16 58 6,000 149,042 60,991 60,991 250,000 37,988 37,988 250,000
17 58 6,000 162,794 64,001 64,001 250,000 38,220 38,220 250,000
18 59 6,000 177,234 66,814 66,814 250,000 37,941 37,941 250,000
19 59 6,000 192,396 69,417 69,417 250,000 37,105 37,105 250,000
20 60 6,000 208,316 71,794 71,794 250,000 35,647 35,647 250,000
21 60 6,000 225,031 74,006 74,006 250,000 33,507 33,507 250,000
22 61 6,000 242,583 75,964 75,964 250,000 30,392 30,392 250,000
23 61 6,000 261,012 77,652 77,652 250,000 26,387 26,387 250,000
24 62 6,000 280,363 79,051 79,051 250,000 21,157 21,157 250,000
25 62 6,000 300,681 80,131 80,131 250,000 14,467 14,467 250,000
26 63 6,000 322,015 80,862 80,862 250,000 6,084 6,084 250,000
27 63 6,000 344,415 81,206 81,206 250,000 <F*> <F*> <F*>
28 64 6,000 367,936 81,113 81,113 250,000 <F*> <F*> <F*>
29 64 6,000 392,633 80,532 80,532 250,000 <F*> <F*> <F*>
30 65 6,000 418,565 79,404 79,404 250,000 <F*> <F*> <F*>
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF
INSURANCE RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS
SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN
AND WILL DEPEND UPON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT
ALLOCATION MADE BY THE POLICY OWNER AND THE INVESTMENT RESULTS OF THE
FUNDS SELECTED. THE CASH VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY THE COMPANY, WALNUT STREET SECURITIES, THE
FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS HYPOTHETICAL RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED OVER ANY PERIOD OF
TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE
POLICY ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE
PAID BY THE COMPANY.
[FN]
<F*> UNLESS ADDITIONAL PREMIUM IS PAID, POLICY WILL LAPSE WITHOUT VALUE
66
<PAGE>
<PAGE>
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION C) ANNUAL PREMIUM = $6,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 6.00% (NET RATE OF 4.67%)
<CAPTION>
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 6,000 6,300 2,455 4,176 250,000 1,537 3,258 250,000
2 51 6,000 12,915 7,346 9,068 250,000 5,492 7,213 250,000
3 51 6,000 19,861 12,383 14,104 250,000 9,529 11,250 250,000
4 52 6,000 27,154 17,582 19,303 250,000 13,643 15,364 250,000
5 52 6,000 34,811 22,958 24,679 250,000 17,822 19,543 250,000
6 53 6,000 42,852 28,729 30,259 250,000 22,249 23,779 250,000
7 53 6,000 51,295 34,906 36,053 250,000 26,917 28,064 250,000
8 54 6,000 60,159 41,317 42,082 250,000 31,632 32,397 250,000
9 54 6,000 69,467 47,966 48,348 250,000 36,390 36,772 250,000
10 55 6,000 79,241 54,861 54,861 250,000 41,175 41,175 250,000
11 55 6,000 89,503 62,391 62,391 250,000 46,387 46,387 250,000
12 56 6,000 100,278 70,225 70,225 250,000 51,651 51,651 250,000
13 56 6,000 111,592 78,400 78,400 250,000 56,951 56,951 250,000
14 57 6,000 123,471 86,953 86,953 250,000 62,263 62,263 250,000
15 57 6,000 135,945 95,922 95,922 250,000 67,567 67,567 250,000
16 58 6,000 149,042 105,054 105,054 250,000 72,846 72,846 250,000
17 58 6,000 162,794 114,575 114,575 250,000 78,093 78,093 250,000
18 59 6,000 177,234 124,510 124,510 250,000 83,298 83,298 250,000
19 59 6,000 192,396 134,892 134,892 250,000 88,454 88,454 250,000
20 60 6,000 208,316 145,760 145,760 250,000 93,547 93,547 250,000
21 60 6,000 225,031 157,311 157,311 250,000 98,643 98,643 250,000
22 61 6,000 242,583 169,455 169,455 254,013 103,527 103,527 250,000
23 61 6,000 261,012 182,062 182,062 267,359 108,316 108,316 250,000
24 62 6,000 280,363 195,121 195,121 280,858 112,863 112,863 250,000
25 62 6,000 300,681 208,640 208,640 294,621 117,108 117,108 250,000
26 63 6,000 322,015 222,629 222,629 308,697 121,015 121,015 250,000
27 63 6,000 344,415 237,093 237,093 323,086 124,545 124,545 250,000
28 64 6,000 367,936 252,037 252,037 337,806 127,659 127,659 250,000
29 64 6,000 392,633 267,469 267,469 352,871 130,317 130,317 250,000
30 65 6,000 418,565 283,396 283,396 368,245 132,447 132,447 250,000
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF
INSURANCE RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS
SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN
AND WILL DEPEND UPON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT
ALLOCATION MADE BY THE POLICY OWNER AND THE INVESTMENT RESULTS OF THE
FUNDS SELECTED. THE CASH VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY THE COMPANY, WALNUT STREET SECURITIES, THE
FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS HYPOTHETICAL RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED OVER ANY PERIOD OF
TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE
POLICY ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE
PAID BY THE COMPANY.
67
<PAGE>
<PAGE>
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION C) ANNUAL PREMIUM = $6,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 12.00% (NET RATE OF 10.67%)
<CAPTION>
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 6,000 6,300 2,725 4,447 250,000 1,779 3,501 250,000
2 51 6,000 12,915 8,194 9,916 250,000 6,228 7,949 250,000
3 51 6,000 19,861 14,162 15,884 250,000 11,049 12,770 250,000
4 52 6,000 27,154 20,696 22,417 250,000 16,277 17,998 250,000
5 52 6,000 34,811 27,864 29,586 250,000 21,942 23,663 250,000
6 53 6,000 42,852 35,948 37,478 250,000 28,277 29,807 250,000
7 53 6,000 51,295 45,028 46,176 250,000 35,329 36,476 250,000
8 54 6,000 60,159 55,014 55,779 250,000 42,968 43,733 250,000
9 54 6,000 69,467 66,000 66,382 250,000 51,261 51,644 250,000
10 55 6,000 79,241 78,097 78,097 250,000 60,278 60,278 250,000
11 55 6,000 89,503 91,867 91,867 250,000 70,559 70,559 250,000
12 56 6,000 100,278 107,115 107,115 250,000 81,856 81,856 250,000
13 56 6,000 111,592 124,038 124,038 250,000 94,296 94,296 250,000
14 57 6,000 123,471 142,841 142,841 258,628 108,027 108,027 250,000
15 57 6,000 135,945 163,606 163,606 288,683 123,232 123,232 250,000
16 58 6,000 149,042 186,254 186,254 320,469 140,138 140,138 250,000
17 58 6,000 162,794 211,126 211,126 354,480 158,878 158,878 266,757
18 59 6,000 177,234 238,427 238,427 390,877 179,210 179,210 293,797
19 59 6,000 192,396 268,383 268,383 429,869 201,238 201,238 322,323
20 60 6,000 208,316 301,239 301,239 471,679 225,087 225,087 352,441
21 60 6,000 225,031 337,568 337,568 516,985 251,102 251,102 384,562
22 61 6,000 242,583 377,425 377,425 565,760 279,136 279,136 418,424
23 61 6,000 261,012 421,143 421,143 618,448 309,456 309,456 454,436
24 62 6,000 280,363 469,085 469,085 675,200 342,098 342,098 492,416
25 62 6,000 300,681 521,637 521,637 736,603 377,177 377,177 532,611
26 63 6,000 322,015 579,219 579,219 803,145 414,844 414,844 575,223
27 63 6,000 344,415 642,285 642,285 875,242 455,272 455,272 620,399
28 64 6,000 367,936 711,318 711,318 953,380 498,657 498,657 668,350
29 64 6,000 392,633 786,850 786,850 1,038,091 545,229 545,229 719,321
30 65 6,000 418,565 869,465 869,465 1,129,783 595,221 595,221 773,430
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF
INSURANCE RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS
SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN
AND WILL DEPEND UPON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT
ALLOCATION MADE BY THE POLICY OWNER AND THE INVESTMENT RESULTS OF THE
FUNDS SELECTED. THE CASH VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY THE COMPANY, WALNUT STREET SECURITIES, THE
FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS HYPOTHETICAL RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED OVER ANY PERIOD OF
TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE
POLICY ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE
PAID BY THE COMPANY.
68
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
General American Life Insurance Company
and Policyholders of General American
Separate Account Eleven:
We have audited the statements of assets and liabilities, including the
schedule of investments, of the S & P 500 Index, Money Market, Bond
Index, Managed Equity, Asset Allocation, International Index, Mid-Cap
Equity, Small-Cap Equity, Equity Income, Growth, Overseas, Asset
Manager, High Income, Worldwide Hard Assets, Worldwide Emerging Markets,
Multi-Style Equity, Core Bond, Aggressive Equity, Non-US, Income &
Growth, International, Value, Bond Portfolio, and Small Company
Portfolio Fund Divisions of General American Separate Account Eleven as
of December 31, 1999, and the related statements of operations and
changes in net assets for each of the years in the three-year period
then ended. These financial statements are the responsibility of the
management of General American Separate Account Eleven. Our
responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. Investments owned as of December 31, 1999 were
verified by audit of the statements of assets and liabilities of the
underlying portfolios of General American Capital Company and
confirmation by correspondence with respect to the Variable Insurance
Products Fund and the Variable Insurance Products Fund II sponsored by
Fidelity Investments, the Van Eck World Wide Insurance Trust sponsored
by Van Eck Associates Corporation, the Russell Insurance Funds sponsored
by Frank Russell Investment Company, the American Century Variable
Portfolios, Inc. sponsored by American Century Investments, and the J.P.
Morgan Series Trust II sponsored by J.P. Morgan Investment Management,
Inc. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the S & P
500 Index, Money Market, Bond Index, Managed Equity, Asset Allocation,
International Index, Mid-Cap Equity, Small-Cap Equity, Equity Income,
Growth, Overseas, Asset Manager, High Income, Worldwide Hard Assets,
Worldwide Emerging Markets, Multi-Style Equity, Core Bond, Aggressive
Equity, Non-US, Income & Growth, International, Value, Bond Portfolio,
and Small Company Portfolio Fund Divisions of General American Separate
Account Eleven as of December 31, 1999, the results of their operations
and changes in their net assets for each of the years in the three-year
period then ended, in conformity with generally accepted accounting
principles.
/s/ KPMG LLP
St. Louis, Missouri
February 25, 2000
<PAGE>
<PAGE>
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<CAPTION>
S & P 500 MONEY BOND MANAGED ASSET
INDEX MARKET INDEX EQUITY ALLOCATION
FUND DIVISION FUND DIVISION FUND DIVISION FUND DIVISION FUND DIVISION
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments in General American
Capital Company at market value
(see Schedule of Investments): $60,824,360 $ 9,910,022 $6,136,371 $6,380,710 $18,584,088
Receivable from General American Life
Insurance Company 0 2,220 371 3,358 0
----------- ----------- ---------- ---------- -----------
Total assets 60,824,360 9,912,242 6,136,742 6,384,068 18,584,088
----------- ----------- ---------- ---------- -----------
Liabilities:
Payable to General American Life
Insurance Company 71,634 0 0 0 10,917
----------- ----------- ---------- ---------- -----------
Total net assets $60,752,726 $ 9,912,242 $6,136,742 $6,384,068 $18,573,171
=========== =========== ========== ========== ===========
Total net assets represented by:
Individual Variable Universal Life cash
value invested in Separate Account $12,703,649 $ 1,246,838 $2,527,749 $3,074,531 $12,262,707
Individual Variable General Select Plus
cash value invested in Separate Account 19,187,903 4,130,527 1,146,565 1,061,809 2,069,787
Individual Variable Universal Life-100
cash value invested in Separate Account 21,524,430 1,380,971 1,980,671 1,945,998 2,977,444
Individual Variable Universal Life-98
cash value invested in Separate Account 6,350,278 2,778,076 417,810 264,532 1,116,362
Joint and Survivor Variable Universal Life-98
cash value invested in Separate Account 986,466 375,830 63,947 37,198 146,871
----------- ----------- ---------- ---------- -----------
Total net assets $60,752,726 $ 9,912,242 $6,136,742 $6,384,068 $18,573,171
=========== =========== ========== ========== ===========
Total units held - VUL-95 233,474 68,091 114,933 93,519 293,369
Total units held - VGSP 544,284 309,197 84,706 46,308 83,114
Total units held - VUL-100 651,714 109,972 146,452 86,947 120,924
Total units held - VUL-98 446,086 261,895 42,413 21,648 76,984
Total units held - JSVUL-98 69,296 35,430 6,492 3,044 10,128
VUL-95 Net unit value $ 54.41 $ 18.31 $ 21.99 $ 32.88 $ 41.80
VGSP Net unit value $ 35.25 $ 13.36 $ 13.54 $ 22.93 $ 24.90
VUL-100 Net unit value $ 33.03 $ 12.56 $ 13.52 $ 22.38 $ 24.62
VUL-98 Net unit value $ 14.24 $ 10.61 $ 9.85 $ 12.22 $ 14.50
JSVUL-98 Net unit value $ 14.24 $ 10.61 $ 9.85 $ 12.22 $ 14.50
Cost of investments $48,750,561 $10,202,347 $6,585,233 $6,269,958 $13,925,762
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<CAPTION>
INTERNATIONAL MID-CAP SMALL-CAP EQUITY
INDEX EQUITY EQUITY INCOME GROWTH
FUND DIVISION<F*> FUND DIVISION<F**> FUND DIVISION FUND DIVISION FUND DIVISION
----------------- ------------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments in General American
Capital Company at market value
(see Schedule of Investments): $13,006,687 $8,364,930 $2,918,058 $ 0 $ 0
Investments in Variable Insurance
Products Fund, at market value
(see Schedule of Investments): 0 0 0 24,166,662 55,713,063
Receivable from General American
Life Insurance Company 0 0 0 0 0
----------- ---------- ---------- ----------- -----------
Total assets 13,006,687 8,364,930 2,918,058 24,166,662 55,713,063
----------- ---------- ---------- ----------- -----------
Liabilities:
Payable to General American Life
Insurance Company 13,075 10,949 514 12,225 338
----------- ---------- ---------- ----------- -----------
Total net assets $12,993,612 $8,353,981 $2,917,544 $24,154,437 $55,712,725
=========== ========== ========== =========== ===========
Total net assets represented by:
Individual Variable Universal Life cash
value invested in Separate Account $ 4,025,567 $3,729,884 $ 558,241 $ 7,440,063 $15,655,055
Individual Variable General Select Plus
cash value invested in Separate Account 1,686,926 2,288,366 1,040,052 8,176,358 17,355,764
Individual Variable Universal Life-100
cash value invested in Separate Account 2,100,227 1,946,132 974,170 7,073,312 18,399,393
Individual Variable Universal Life-98
cash value invested in Separate Account 271,117 341,179 281,822 1,279,572 3,896,211
Joint and Survivor Variable Universal Life-98
cash value invested in Separate Account 65,926 48,420 63,259 185,132 406,302
General American Life Insurance
Company seed money 4,843,849 0 0 0 0
----------- ---------- ---------- ----------- -----------
Total net assets $12,993,612 $8,353,981 $2,917,544 $24,154,437 $55,712,725
=========== ========== ========== =========== ===========
Total units held - VUL-95 168,206 162,788 50,288 286,243 385,323
Total units held - VGSP 81,255 99,514 93,318 312,888 450,926
Total units held - VUL-100 119,341 93,049 87,872 314,896 522,933
Total units held - VUL-98 18,571 25,584 26,642 107,162 232,411
Total units held - JSVUL-98 4,516 3,631 5,980 15,505 24,236
Total units held - Seed Money 200,000 0 0 0 0
VUL-95 Net unit value $ 23.93 $ 22.91 $ 11.10 $ 25.99 $ 40.63
VGSP Net unit value $ 20.76 $ 23.00 $ 11.15 $ 26.13 $ 38.49
VUL-100 Net unit value $ 17.60 $ 20.92 $ 11.09 $ 22.46 $ 35.19
VUL-98 Net unit value $ 14.60 $ 13.34 $ 10.58 $ 11.94 $ 16.76
JSVUL-98 Net unit value $ 14.60 $ 13.34 $ 10.58 $ 11.94 $ 16.76
Cost of investments $ 9,240,024 $7,224,432 $3,357,966 $21,605,411 $37,093,325
<FN>
<F*>This fund was formerly known as the International Equity Fund.
<F**>This fund was formerly known as the Special Equity Fund.
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<CAPTION>
WORLDWIDE WORLDWIDE
OVERSEAS ASSET MANAGER HIGH INCOME HARD ASSETS EMERGING MARKETS
FUND DIVISION FUND DIVISION FUND DIVISION FUND DIVISION<F*> FUND DIVISION<F**>
------------- ------------- ------------- ----------------- ------------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments in Variable Insurance
Products Fund, at market value
(see Schedule of Investments): $15,052,006 $ 0 $4,375,944 $ 0 $ 0
Investments in Variable Insurance
Products Fund II, at market value
(see Schedule of Investments): 0 2,419,380 0 0 0
Investments in Van Eck Worldwide
Insurance Trust at market value
(see Schedule of Investments): 0 0 0 317,077 260,096
Receivable from General American
Life Insurance Company 0 0 0 0 8,698
----------- ---------- ---------- -------- --------
Total assets 15,052,006 2,419,380 4,375,944 317,077 268,794
----------- ---------- ---------- -------- --------
Liabilities:
Payable to General American Life
Insurance Company 655 1,459 3,325 735 0
----------- ---------- ---------- -------- --------
Total net assets $15,051,351 $2,417,921 $4,372,619 $316,342 $268,794
=========== ========== ========== ======== ========
Total net assets represented by:
Individual Variable Universal Life
cash value invested in Separate Account $ 6,592,733 $ 195,708 $ 205,386 $ 88,804 $ 42,630
Individual Variable General Select Plus
cash value invested in Separate Account 5,056,946 444,493 897,255 65,379 151,366
Individual Variable Universal Life-100
cash value invested in Separate Account 2,786,964 1,159,079 2,732,153 151,848 25,825
Individual Variable Universal Life-98
cash value invested in Separate Account 568,261 617,041 470,891 10,311 41,241
Joint and Survivor Variable Universal Life-98
cash value invested in Separate Account 46,447 1,600 66,934 0 7,732
----------- ---------- ---------- -------- --------
Total net assets $15,051,351 $2,417,921 $4,372,619 $316,342 $268,794
=========== ========== ========== ======== ========
Total units held - VUL-95 240,894 10,752 14,177 9,525 2,679
Total units held - VGSP 205,835 24,259 61,511 6,967 9,503
Total units held - VUL-100 130,771 63,821 189,022 16,322 1,623
Total units held - VUL-98 36,151 49,859 41,713 837 1,689
Total units held - JSVUL-98 2,955 129 5,929 0 317
VUL-95 Net unit value $ 27.37 $ 18.20 $ 14.49 $ 9.32 $ 15.91
VGSP Net unit value $ 24.57 $ 18.32 $ 14.59 $ 9.38 $ 15.93
VUL-100 Net unit value $ 21.31 $ 18.16 $ 14.45 $ 9.30 $ 15.91
VUL-98 Net unit value $ 15.72 $ 12.38 $ 11.29 $ 12.32 $ 24.42
JSVUL-98 Net unit value $ 15.72 $ 12.38 $ 11.29 $ 12.32 $ 24.42
Cost of investments $10,501,533 $2,240,585 $4,403,352 $345,171 $216,086
<FN>
<F*>This fund was formerly known as the Gold & Natural Resources Fund.
<F**>This fund began operations on September 15, 1998.
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<CAPTION>
MULTI-STYLE AGGRESSIVE
EQUITY CORE BOND EQUITY NON-US
FUND DIVISION FUND DIVISION FUND DIVISION FUND DIVISION
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Assets:
Investments in Russell Insurance
Fund at market value
(see Schedule of Investments): $17,038,971 $ 9,823,042 $4,871,881 $5,011,427
Receivable from General American Life
Insurance Company 0 0 0 0
----------- ----------- ---------- ----------
Total assets 17,038,971 9,823,042 4,871,881 5,011,427
----------- ----------- ---------- ----------
Liabilities:
Payable to General American Life
Insurance Company 46,404 13,372 3,883 12,824
----------- ----------- ---------- ----------
Total net assets $16,992,567 $ 9,809,670 $4,867,998 $4,998,603
=========== =========== ========== ==========
Total net assets represented by:
Individual Variable Universal Life cash
value invested in Separate Account $ 486,907 $ 65,234 $ 181,480 $ 200,109
Individual Variable General Select Plus
cash value invested in Separate Account 10,828,931 7,499,806 2,498,284 2,989,925
Individual Variable Universal Life-100
cash value invested in Separate Account 526,082 81,451 145,500 129,020
Russell Variable Universal Life
cash value invested in Separate Account 4,285,907 1,828,353 1,590,579 1,450,251
Individual Variable Universal Life-98
cash value invested in Separate Account 765,958 272,395 419,622 192,687
Joint and Survivor Variable Universal Life-98
cash value invested in Separate Account 98,782 62,431 32,533 36,611
----------- ----------- ---------- ----------
Total net assets $16,992,567 $ 9,809,670 $4,867,998 $4,998,603
=========== =========== ========== ==========
Total units held - VUL-95 38,212 6,322 19,010 15,191
Total units held - VGSP 567,887 647,045 176,979 195,624
Total units held - VUL-100 41,321 7,901 15,254 9,803
Total units held - Russell VUL 224,387 158,452 111,536 97,420
Total units held - VUL-98 55,512 27,180 34,927 12,805
Total units held - JSVUL-98 7,159 6,230 2,708 2,433
VUL-95 Net unit value $ 12.74 $ 10.32 $ 9.55 $ 13.17
VGSP Net unit value $ 19.07 $ 11.59 $ 14.12 $ 15.28
VUL-100 Net unit value $ 12.73 $ 10.31 $ 9.54 $ 13.16
Russell VUL Net unit value $ 19.10 $ 11.54 $ 14.26 $ 14.89
VUL-98 Net unit value $ 13.80 $ 10.02 $ 12.01 $ 15.05
JSVUL-98 Net unit value $ 13.80 $ 10.02 $ 12.01 $ 15.05
Cost of investments $14,920,743 $10,474,158 $4,552,906 $3,878,857
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<CAPTION>
INCOME & BOND SMALL COMPANY
GROWTH INTERNATIONAL VALUE PORTFOLIO PORTFOLIO
FUND DIVISION<F*> FUND DIVISION<F*> FUND DIVISION<F*> FUND DIVISION<F*> FUND DIVISION<F*>
----------------- ----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments in American Century
Variable Portfolios, at market value
(see Schedule of Investments): $736,269 $604,334 $96,178 $ 0 $ 0
Investments in J.P. Morgan Series
Trust II, at market value 0 0 0 141,513 596,119
(see Schedule of Investments):
Receivable from General American
Life Insurance Company 0 0 700 0 1,318
-------- -------- ------- -------- --------
Total assets 736,269 604,334 96,878 141,513 597,437
-------- -------- ------- -------- --------
Liabilities:
Payable to General American Life
Insurance Company 953 140 0 53 0
-------- -------- ------- -------- --------
Total net assets $735,316 $604,194 $96,878 $141,460 $597,437
======== ======== ======= ======== ========
Total net assets represented by:
Individual Variable Universal
Life cash value invested in
Separate Account $ 31,112 $ 15,398 $ 0 $ 3,470 $ 36,948
Individual Variable General
Select Plus cash value invested
in Separate Account 20,209 69,946 7,257 9,120 144,671
Individual Variable Universal
Life-100 cash value invested
in Separate Account 27,018 109,478 0 3,258 51,290
Individual Variable Universal
Life-98 cash value invested
in Separate Account 616,396 390,766 87,054 121,401 319,153
Joint and Survivor Variable
Universal Life-98 cash value
invested in Separate Account 40,581 18,606 2,567 4,211 45,375
-------- -------- ------- -------- --------
Total net assets $735,316 $604,194 $96,878 $141,460 $597,437
======== ======== ======= ======== ========
Total units held - VUL-95 2,800 998 0 353 2,580
Total units held - VGSP 1,817 4,531 795 926 10,091
Total units held - VUL-100 2,432 7,101 0 331 3,582
Total units held - VUL-98 43,920 22,549 8,130 12,134 19,051
Total units held - JVUL-98 2,892 1,074 240 421 2,709
VUL-95 Net unit value $ 11.11 $ 15.42 $ 9.12 $ 9.84 $ 14.32
VGSP Net unit value $ 11.12 $ 15.44 $ 9.13 $ 9.85 $ 14.34
VUL-100 Net unit value $ 11.11 $ 15.42 $ 9.11 $ 9.84 $ 14.32
VUL-98 Net unit value $ 14.03 $ 17.33 $ 10.71 $ 10.00 $ 16.75
JSVUL-98 Net unit value $ 14.03 $ 17.33 $ 10.71 $ 10.00 $ 16.75
Cost of investments $692,594 $483,662 $94,343 $143,528 $499,509
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<CAPTION>
S & P 500 INDEX MONEY MARKET
FUND DIVISION FUND DIVISION
----------------------------------------- --------------------------------------
1999 1998 1997 1999 1998 1997
----------- ---------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investment income<F*> $ -- $ -- $ -- $ -- $ -- $ --
Expenses:
Mortality and expense charges - VUL-95 (101,368) (81,198) (59,320) (7,041) (6,050) (7,951)
Mortality and expense charges - VGSP (127,636) (75,004) (29,674) (24,057) (23,497) (12,872)
Mortality and expense charges - VUL-100 (161,227) (89,773) (36,234) (13,766) (15,324) (13,566)
Mortality and expense charges -
Russell VUL 0 0 0 0 (183) (1,626)
Mortality and expense charges - VUL-98 (12,586) (50) 0 (13,814) (465) 0
Mortality and expense charges - JSVUL-98 (1,944) 0 0 (1,371) (85) 0
----------- ---------- ---------- --------- --------- ---------
Total expenses (404,761) (246,025) (125,228) (60,049) (45,604) (36,015)
----------- ---------- ---------- --------- --------- ---------
Net investment expense (404,761) (246,025) (125,228) (60,049) (45,604) (36,015)
----------- ---------- ---------- --------- --------- ---------
Net realized gain on investments:
Realized gain from distributions 3,826,572 2,339,803 913,559 501,472 263,305 121,801
Realized gain (loss) on sales 2,194,234 802,928 1,570,537 46,905 172,314 (48,325)
----------- ---------- ---------- --------- --------- ---------
Net realized gain on investments: 6,020,806 3,142,731 2,484,096 548,377 435,619 73,476
----------- ---------- ---------- --------- --------- ---------
Net unrealized gain (loss) on investments:
Unrealized gain (loss) on investments,
beginning of period 8,332,257 3,509,114 1,982,215 (183,578) (72,985) (256,852)
Unrealized gain (loss) on investments,
end of period 12,073,799 8,332,257 3,509,114 (292,325) (183,578) (72,985)
----------- ---------- ---------- --------- --------- ---------
Net unrealized gain (loss) on
investments 3,741,542 4,823,143 1,526,899 (108,747) (110,593) 183,867
----------- ---------- ---------- --------- --------- ---------
Net gain on investments 9,762,348 7,965,874 4,010,995 439,630 325,026 257,343
----------- ---------- ---------- --------- --------- ---------
Net increase in net assets
resulting from operations $ 9,357,587 $7,719,849 $3,885,767 $ 379,581 $ 279,422 $ 221,328
=========== ========== ========== ========= ========= =========
<FN>
<F*>See Note 2C
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<CAPTION>
BOND INDEX MANAGED EQUITY
FUND DIVISION FUND DIVISION
--------------------------------------- --------------------------------------
1999 1998 1997 1999 1998 1997
--------- -------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income<F*> $ -- $ -- $ -- $ -- $ -- $ --
Expenses:
Mortality and expense charges - VUL-95 (21,090) (19,385) (14,601) (26,939) (23,907) (20,327)
Mortality and expense charges - VGSP (7,750) (5,292) (3,943) (6,933) (10,512) (4,370)
Mortality and expense charges - VUL-100 (17,629) (8,452) (4,363) (16,278) (5,764) (4,815)
Mortality and expense charges - VUL-98 (2,506) (1) 0 (485) (4) 0
Mortality and expense charges - JSVUL-98 (112) 0 0 (39) 0 0
--------- -------- --------- --------- -------- --------
Total expenses (49,087) (33,130) (22,907) (50,674) (40,187) (29,512)
--------- -------- --------- --------- -------- --------
Net investment expense (49,087) (33,130) (22,907) (50,674) (40,187) (29,512)
--------- -------- --------- --------- -------- --------
Net realized gain (loss) on investments:
Realized gain from distributions 370,745 251,095 165,804 302,748 629,297 251,405
Realized gain (loss) on sales (13,113) 20,497 (176,276) 169,830 71,424 95,532
--------- -------- --------- --------- -------- --------
Net realized gain (loss) on investments: 357,632 271,592 (10,472) 472,578 700,721 346,937
--------- -------- --------- --------- -------- --------
Net unrealized gain (loss) on investments:
Unrealized gain (loss) on investments,
beginning of period 79,646 15,812 (234,659) 436,496 485,000 116,769
Unrealized gain (loss) on investments,
end of period (448,862) 79,646 15,812 110,752 436,496 485,000
--------- -------- --------- --------- -------- --------
Net unrealized gain (loss) on
investments (528,508) 63,834 250,471 (325,744) (48,504) 368,231
--------- -------- --------- --------- -------- --------
Net gain (loss) on investments (170,876) 335,426 239,999 146,834 652,217 715,168
--------- -------- --------- --------- -------- --------
Net increase (decrease) in net assets
resulting from operations $(219,963) $302,296 $ 217,092 $ 96,160 $612,030 $685,656
========= ======== ========= ========= ======== ========
<FN>
<F*>See Note 2C
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<CAPTION>
ASSET ALLOCATION INTERNATIONAL INDEX
FUND DIVISION FUND DIVISION<F*>
---------------------------------------- ---------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investment income<F**> $ -- $ -- $ -- $ -- $ -- $ --
Expenses:
Mortality and expense charges - VUL-95 (93,831) (75,604) (67,466) (29,351) (25,562) (23,446)
Mortality and expense charges - VGSP (14,195) (9,318) (7,499) (9,868) (8,370) (5,564)
Mortality and expense charges - VUL-100 (20,890) (12,005) (5,279) (16,070) (11,491) (6,468)
Mortality and expense charges - VUL-98 (1,724) (2) 0 (531) (3) 0
Mortality and expense charges - JSVUL-98 (167) 0 0 (83) 0 0
Mortality and expense charges -
Seed Money 0 0 0 (34,396) (29,672) (27,476)
---------- ---------- ---------- ---------- ---------- ---------
Total expenses (130,807) (96,929) (80,244) (90,299) (75,098) (62,954)
---------- ---------- ---------- ---------- ---------- ---------
Net investment expense (130,807) (96,929) (80,244) (90,299) (75,098) (62,954)
---------- ---------- ---------- ---------- ---------- ---------
Net realized gain on investments:
Realized gain from distributions 287,031 1,145,796 311,438 164,897 120,664 220,590
Realized gain on sales 804,253 230,635 195,821 295,829 220,991 136,741
---------- ---------- ---------- ---------- ---------- ---------
Net realized gain on investments: 1,091,284 1,376,431 507,259 460,726 341,655 357,331
---------- ---------- ---------- ---------- ---------- ---------
Net unrealized gain on investments:
Unrealized gain on investments,
beginning of period 2,336,704 1,762,536 657,734 1,297,560 69,016 268,331
Unrealized gain on investments,
end of period 4,658,326 2,336,704 1,762,536 3,766,663 1,297,560 69,016
---------- ---------- ---------- ---------- ---------- ---------
Net unrealized gain (loss) on
investments 2,321,622 574,168 1,104,802 2,469,103 1,228,544 (199,315)
---------- ---------- ---------- ---------- ---------- ---------
Net gain on investments 3,412,906 1,950,599 1,612,061 2,929,829 1,570,199 158,016
---------- ---------- ---------- ---------- ---------- ---------
Net increase in net assets
resulting from operations $3,282,099 $1,853,670 $1,531,817 $2,839,530 $1,495,101 $ 95,062
========== ========== ========== ========== ========== =========
<FN>
<F*>This fund was formerly known as the International Equity Fund.
<F**>See Note 2C
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<CAPTION>
MID-CAP EQUITY SMALL-CAP EQUITY
FUND DIVISION<F*> FUND DIVISION
---------------------------------------- ----------------------------------------
1999 1998 1997 1999 1998 1997<F***>
---------- --------- ---------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investment income<F**> $ -- $ -- $ -- $ -- $ -- $ --
Expenses:
Mortality and expense charges - VUL-95 (28,421) (29,781) (26,828) (4,815) (4,514) (787)
Mortality and expense charges - VGSP (13,677) (13,465) (7,567) (6,607) (4,623) (869)
Mortality and expense charges - VUL-100 (14,697) (11,694) (6,142) (8,869) (5,535) (627)
Mortality and expense charges - VUL-98 (524) (2) 0 (674) (2) 0
Mortality and expense charges - JSVUL-98 (108) (2) 0 (173) (2) 0
---------- --------- ---------- --------- --------- ---------
Total expenses (57,427) (54,944) (40,537) (21,138) (14,676) (2,283)
---------- --------- ---------- --------- --------- ---------
Net investment expense (57,427) (54,944) (40,537) (21,138) (14,676) (2,283)
---------- --------- ---------- --------- --------- ---------
Net realized gain (loss) on investments:
Realized gain from distributions 16,722 208,897 262,603 116,957 112,685 149,353
Realized gain (loss) on sales 239,296 192,934 188,905 (200,146) (67,010) 1,064
---------- --------- ---------- --------- --------- ---------
Net realized gain (loss) on
investments: 256,018 401,831 451,508 (83,189) 45,675 150,417
---------- --------- ---------- --------- --------- ---------
Net unrealized gain (loss) on investments:
Unrealized gain (loss) on investments,
beginning of period 389,305 969,578 24,121 (414,321) (133,375) 0
Unrealized gain (loss) on investments,
end of period 1,140,498 389,305 969,578 (439,908) (414,321) (133,375)
---------- --------- ---------- --------- --------- ---------
Net unrealized gain (loss) on
investments 751,193 (580,273) 945,457 (25,587) (280,946) (133,375)
---------- --------- ---------- --------- --------- ---------
Net gain (loss) on investments 1,007,211 (178,442) 1,396,965 (108,776) (235,271) 17,042
---------- --------- ---------- --------- --------- ---------
Net increase (decrease) in net assets
resulting from operations $ 949,784 $(233,386) $1,356,428 $(129,914) $(249,947) $ 14,759
========== ========= ========== ========= ========= =========
<FN>
<F*>This fund was formerly known as the Special Equity Fund.
<F**>See Note 2C
<F***>The Small-Cap Equity Fund began operations on May 1, 1997.
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<CAPTION>
EQUITY INCOME GROWTH
FUND DIVISION FUND DIVISION
---------------------------------------- ----------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividend income $ 314,148 $ 247,254 $ 186,680 $ 64,208 $ 116,859 $ 94,061
Expenses:
Mortality and expense charges - VUL-95 (66,672) (59,688) (49,108) (114,678) (86,045) (65,287)
Mortality and expense charges - VGSP (54,738) (42,329) (27,082) (93,832) (56,854) (37,459)
Mortality and expense charges - VUL-100 (63,116) (63,128) (34,605) (132,573) (84,948) (42,613)
Mortality and expense charges - VUL-98 (3,380) (9) 0 (6,291) (12) 0
Mortality and expense charges - JSVUL-98 (250) (2) 0 (559) 0 0
---------- ---------- ---------- ----------- ----------- ----------
Total expenses (188,156) (165,156) (110,795) (347,933) (227,859) (145,359)
---------- ---------- ---------- ----------- ----------- ----------
Net investment income (expense) 125,992 82,098 75,885 (283,725) (111,000) (51,298)
---------- ---------- ---------- ----------- ----------- ----------
Net realized gain on investments:
Realized gain from distributions 694,432 879,933 938,582 4,037,056 3,056,780 421,033
Realized gain on sales 803,421 1,352,865 310,747 1,981,320 1,016,065 381,175
---------- ---------- ---------- ----------- ----------- ----------
Net realized gain on investments: 1,497,853 2,232,798 1,249,329 6,018,376 4,072,845 802,208
---------- ---------- ---------- ----------- ----------- ----------
Net unrealized gain on investments:
Unrealized gain on investments,
beginning of period 3,031,759 3,330,524 1,528,943 10,185,551 4,728,383 2,039,425
Unrealized gain on investments,
end of period 2,561,251 3,031,759 3,330,524 18,619,738 10,185,551 4,728,383
---------- ---------- ---------- ----------- ----------- ----------
Net unrealized gain (loss) on
investments (470,508) (298,765) 1,801,581 8,434,187 5,457,168 2,688,958
---------- ---------- ---------- ----------- ----------- ----------
Net gain on investments 1,027,345 1,934,033 3,050,910 14,452,563 9,530,013 3,491,166
---------- ---------- ---------- ----------- ----------- ----------
Net increase in net assets
resulting from operations $1,153,337 $2,016,131 $3,126,795 $14,168,838 $ 9,419,013 $3,439,868
========== ========== ========== =========== =========== ==========
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<CAPTION>
OVERSEAS ASSET MANAGER
FUND DIVISION FUND DIVISION
---------------------------------------- -------------------------------------
1999 1998 1997 1999 1998 1997
---------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividend income $ 155,887 $163,318 $ 98,942 $ 41,846 $ 21,154 $ 9,219
Expenses:
Mortality and expense charges - VUL-95 (44,402) (38,993) (32,823) (1,503) (806) (219)
Mortality and expense charges - VGSP (25,313) (20,879) (15,095) (2,528) (1,194) (597)
Mortality and expense charges - VUL-100 (19,996) (15,142) (9,246) (9,469) (5,819) (2,776)
Mortality and expense charges - VUL-98 (1,027) (1) 0 (1,934) (4) 0
Mortality and expense charges - JSVUL-98 (102) (2) 0 (4) 0 0
---------- -------- -------- -------- -------- -------
Total expenses (90,840) (75,017) (57,164) (15,438) (7,823) (3,592)
---------- -------- -------- -------- -------- -------
Net investment income 65,047 88,301 41,778 26,408 13,331 5,627
---------- -------- -------- -------- -------- -------
Net realized gain on investments:
Realized gain from distributions 251,431 481,359 392,769 53,005 63,464 23,126
Realized gain on sales 344,512 205,251 73,551 31,755 11,108 10,620
---------- -------- -------- -------- -------- -------
Net realized gain on investments: 595,943 686,610 466,320 84,760 74,572 33,746
---------- -------- -------- -------- -------- -------
Net unrealized gain on investments:
Unrealized gain on investments,
beginning of period 898,037 701,980 639,437 93,508 54,259 19,793
Unrealized gain on investments,
end of period 4,550,473 898,037 701,980 178,795 93,508 54,259
---------- -------- -------- -------- -------- -------
Net unrealized gain on investments 3,652,436 196,057 62,543 85,287 39,249 34,466
---------- -------- -------- -------- -------- -------
Net gain on investments 4,248,379 882,667 528,863 170,047 113,821 68,212
---------- -------- -------- -------- -------- -------
Net increase in net assets
resulting from operations $4,313,426 $970,968 $570,641 $196,455 $127,152 $73,839
========== ======== ======== ======== ======== =======
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<CAPTION>
HIGH INCOME WORLDWIDE HARD ASSETS
FUND DIVISION FUND DIVISION<F*>
-------------------------------------- --------------------------------------
1999 1998 1997 1999 1998 1997
--------- --------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividend income $ 282,249 $ 162,896 $ 91,441 $ 3,217 $ 1,564 $ 3,388
Expenses:
Mortality and expense charges - VUL-95 (2,058) (2,432) (2,255) (722) (759) (754)
Mortality and expense charges - VGSP (6,873) (7,426) (4,993) (316) (180) (186)
Mortality and expense charges - VUL-100 (19,402) (10,806) (6,583) (1,242) (1,123) (917)
Mortality and expense charges - VUL-98 (938) (3) 0 (23) 0 0
Mortality and expense charges - JSVUL-98 (284) (2) 0 0 0 0
--------- --------- -------- --------- --------- --------
Total expenses (29,555) (20,669) (13,831) (2,303) (2,062) (1,857)
--------- --------- -------- --------- --------- --------
Net investment income (expense) 252,694 142,227 77,610 914 (498) 1,531
--------- --------- -------- --------- --------- --------
Net realized gain (loss) on investments:
Realized gain from distributions 10,551 103,507 11,302 0 38,415 4,590
Realized gain (loss) on sales (195,235) 17,158 17,736 (40,905) (23,214) (1,380)
--------- --------- -------- --------- --------- --------
Net realized gain (loss) on investments: (184,684) 120,665 29,038 (40,905) 15,201 3,210
--------- --------- -------- --------- --------- --------
Net unrealized gain (loss) on investments:
Unrealized gain (loss) on investments,
beginning of period (198,858) 220,773 57,062 (115,608) (10,760) 3,346
Unrealized gain (loss) on investments,
end of period (27,408) (198,858) 220,773 (28,094) (115,608) (10,760)
--------- --------- -------- --------- --------- --------
Net unrealized gain (loss) on
investments 171,450 (419,631) 163,711 87,514 (104,848) (14,106)
--------- --------- -------- --------- --------- --------
Net gain (loss) on investments (13,234) (298,966) 192,749 46,609 (89,647) (10,896)
--------- --------- -------- --------- --------- --------
Net increase (decrease) in net assets
resulting from operations $ 239,460 $(156,739) $270,359 $ 47,523 $ (90,145) $ (9,365)
========= ========= ======== ========= ========= ========
<FN>
<F*>This fund was formerly known as the Gold & Natural Resources Fund.
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF OPERATIONS
PERIOD AND YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<CAPTION>
WORLDWIDE
EMERGING MARKETS MULTI-STYLE EQUITY
FUND DIVISION FUND DIVISION<F**>
------------------- -------------------------------------
1999 1998<F*> 1999 1998 1997
-------- -------- ---------- ---------- -------
<S> <C> <C> <C> <C> <C>
Investment income $ 0 $ 0 $ 104,649 $ 34,444 $ 599
Expenses:
Mortality and expense charges - VUL-95 (32) 0 (3,542) (344) 0
Mortality and expense charges - VGSP (88) 0 (65,628) (27,236) (996)
Mortality and expense charges - VUL-100 (340) 0 (3,741) (164) 0
Mortality and expense charges - Russell VUL 0 0 (19,658) (12,992) (1,582)
Mortality and expense charges - VUL-98 (115) (2) (1,847) (20) 0
Mortality and expense charges - JSVUL-98 (8) 0 (282) (4) 0
------- ----- ---------- ---------- -------
Total expenses (583) (2) (94,698) (40,760) (2,578)
------- ----- ---------- ---------- -------
Net investment income (expense) (583) (2) 9,951 (6,316) (1,979)
------- ----- ---------- ---------- -------
Net realized gain on investments:
Realized gain from distributions 0 0 1,357,954 72,664 0
Realized gain (loss) on sales 29,159 0 281,283 66,462 5,224
------- ----- ---------- ---------- -------
Net realized gain on investments: 29,159 0 1,639,237 139,126 5,224
------- ----- ---------- ---------- -------
Net unrealized gain (loss) on investments:
Unrealized gain on investments,
beginning of period 143 0 1,504,566 1,553 0
Unrealized gain (loss) on investments,
end of period 44,010 143 2,118,228 1,504,566 1,553
------- ----- ---------- ---------- -------
Net unrealized gain (loss) on investments 43,867 143 613,662 1,503,013 1,553
------- ----- ---------- ---------- -------
Net gain (loss) on investments 73,026 143 2,252,899 1,642,139 6,777
------- ----- ---------- ---------- -------
Net increase (decrease) in net assets
resulting from operations $72,443 $ 141 $2,262,850 $1,635,823 $ 4,798
======= ===== ========== ========== =======
<FN>
<F*>The Worldwide Emerging Markets Fund began operations on September 15, 1998.
<F**>The Multi-Style Equity Fund and the Core Bond Fund began operations on January 2, 1997. (continued)
See accompanying notes to the financial statements.
<PAGE>
<CAPTION>
CORE BOND
FUND DIVISION<F**>
----------------------------------
1999 1998 1997
--------- -------- -------
<S> <C> <C> <C>
Investment income $ 476,170 $157,233 $ 2,483
Expenses:
Mortality and expense charges - VUL-95 (500) (84) 0
Mortality and expense charges - VGSP (36,113) (17,465) (408)
Mortality and expense charges - VUL-100 (1,424) (20) 0
Mortality and expense charges - Russell VUL (8,800) (6,579) (1,146)
Mortality and expense charges - VUL-98 (1,426) (2) 0
Mortality and expense charges - JSVUL-98 (118) (2) 0
--------- -------- -------
Total expenses (48,381) (24,152) (1,554)
--------- -------- -------
Net investment income (expense) 427,789 133,081 929
--------- -------- -------
Net realized gain on investments:
Realized gain from distributions 292,845 8,034 0
Realized gain (loss) on sales (62,678) 27,645 705
--------- -------- -------
Net realized gain on investments: 230,167 35,679 705
--------- -------- -------
Net unrealized gain (loss) on investments:
Unrealized gain on investments,
beginning of period 99,544 27,482 0
Unrealized gain (loss) on investments,
end of period (651,116) 99,544 27,482
--------- -------- -------
Net unrealized gain (loss) on investments (750,660) 72,062 27,482
--------- -------- -------
Net gain (loss) on investments (520,493) 107,741 28,187
--------- -------- -------
Net increase (decrease) in net assets
resulting from operations $ (92,704) $240,822 $29,116
========= ======== =======
<FN>
<F**>The Multi-Style Equity Fund and the Core Bond Fund began operations on January 2, 1997. (continued)
See accompanying notes to the financial statements.
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<CAPTION>
AGGRESSIVE EQUITY NON-US
FUND DIVISION<F*> FUND DIVISION<F*>
----------------------------------- --------------------------------------
1999 1998 1997 1999 1998 1997
-------- -------- ------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividend income $ 13,632 $ 3,204 $ 23 $ 75,751 $ 18,758 $ 0
Expenses:
Mortality and expense charges - VUL-95 (1,191) (233) 0 (1,218) (207) 0
Mortality and expense charges - VGSP (15,730) (9,648) (505) (16,258) (9,418) (496)
Mortality and expense charges - VUL-100 (891) (47) 0 (1,045) (21) 0
Mortality and expense charges -
Russell VUL (6,519) (5,729) (682) (5,664) (3,734) (649)
Mortality and expense charges - VUL-98 (1,111) (18) 0 (458) (3) 0
Mortality and expense charges - JSVUL-98 (84) 0 0 (98) (2) 0
-------- -------- ------- ---------- -------- --------
Total expenses (25,526) (15,675) (1,187) (24,741) (13,385) (1,145)
-------- -------- ------- ---------- -------- --------
Net investment income (expense) (11,894) (12,471) (1,164) 51,010 5,373 (1,145)
-------- -------- ------- ---------- -------- --------
Net realized gain (loss) on investments:
Realized gain from distributions 21,933 103,600 0 104,370 5,331 0
Realized gain (loss) on sales (47,751) (61,039) 2,158 109,735 (18,787) 78
-------- -------- ------- ---------- -------- --------
Net realized gain (loss) on
investments: (25,818) 42,561 2,158 214,105 (13,456) 78
-------- -------- ------- ---------- -------- --------
Net unrealized gain (loss) on investments:
Unrealized gain (loss) on investments,
beginning of period (22,415) 23,627 0 160,666 (57,317) 0
Unrealized gain (loss) on investments,
end of period 318,975 (22,415) 23,627 1,132,570 160,666 (57,317)
-------- -------- ------- ---------- -------- --------
Net unrealized gain (loss) on
investments 341,390 (46,042) 23,627 971,904 217,983 (57,317)
-------- -------- ------- ---------- -------- --------
Net gain (loss) on investments 315,572 (3,481) 25,785 1,186,009 204,527 (57,239)
-------- -------- ------- ---------- -------- --------
Net increase (decrease) in net assets
resulting from operations $303,678 $(15,952) $24,621 $1,237,019 $209,900 $(58,384)
======== ======== ======= ========== ======== ========
<FN>
<F*>The Aggressive Equity Fund and the Non-US Fund began operations on January 2, 1997.
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1999, AND 1998
<CAPTION>
INCOME & GROWTH INTERNATIONAL VALUE
FUND DIVISION FUND DIVISION FUND DIVISION
--------------------- ---------------------- ----------------------
1999 1998<F*> 1999 1998<F*> 1999 1998<F*>
------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividend income $ 8 $ 35 $ 0 $ 0 $ 48 $ 0
Expenses:
Mortality and expense charges - VUL-95 (39) 0 (12) 0 0 0
Mortality and expense charges - VGSP (31) 0 (92) 0 (22) 0
Mortality and expense charges - VUL-100 (680) 0 (389) 0 (305) 0
Mortality and expense charges - VUL-98 (1,556) (3) (475) 0 (208) (1)
Mortality and expense charges - JSVUL-98 (58) 0 (21) 0 (6) 0
------- ----- -------- ----- -------- -----
Total expenses (2,364) (3) (989) 0 (541) (1)
------- ----- -------- ----- -------- -----
Net investment income (expense) (2,356) 32 (989) 0 (493) (1)
------- ----- -------- ----- -------- -----
Net realized gain on investments:
Realized gain from distributions 0 0 0 0 450 0
Realized gain (loss) on sales 34,901 12 49,932 5 (14,864) 0
------- ----- -------- ----- -------- -----
Net realized gain (loss) on investments: 34,901 12 49,932 5 (14,414) 0
------- ----- -------- ----- -------- -----
Net unrealized gain on investments:
Unrealized gain on investments,
beginning of period 471 0 45 0 85 0
Unrealized gain on investments,
end of period 43,675 471 120,672 45 1,835 85
------- ----- -------- ----- -------- -----
Net unrealized gain on investments 43,204 471 120,627 45 1,750 85
------- ----- -------- ----- -------- -----
Net gain (loss) on investments 78,105 483 170,559 50 (12,664) 85
------- ----- -------- ----- -------- -----
Net increase (decrease) in net assets
resulting from operations $75,749 $ 515 $169,570 $ 50 $(13,157) $ 84
======= ===== ======== ===== ======== =====
<FN>
<F*>The Income & Growth Fund, International Fund, and Value Fund began operations on September 15, 1998. (continued)
See accompanying notes to the financial statements.
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1999, AND 1998
<CAPTION>
BOND PORTFOLIO SMALL COMPANY
FUND DIVISION FUND DIVISION
--------------------- ----------------------
1999 1998<F*> 1999 1998<F*>
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Investment income:
Dividend income $ 2,328 $ 0 $ 104 $ 4
Expenses:
Mortality and expense charges - VUL-95 (15) 0 (36) 0
Mortality and expense charges - VGSP (20) 0 (91) 0
Mortality and expense charges - VUL-100 (8) 0 (32) 0
Mortality and expense charges - VUL-98 (171) (1) (519) (4)
Mortality and expense charges - JSVUL-98 (7) 0 (53) 0
------- ----- -------- -----
Total expenses (221) (1) (731) (4)
------- ----- -------- -----
Net investment income (expense) 2,107 (1) (627) 0
------- ----- -------- -----
Net realized gain (loss) on investments:
Realized gain from distributions 40 0 11,337 71
Realized gain (loss) on sales (262) 0 4,540 9
------- ----- -------- -----
Net realized gain (loss) on investments: (222) 0 15,877 80
------- ----- -------- -----
Net unrealized gain (loss) on investments:
Unrealized gain on investments,
beginning of period 3 0 187 0
Unrealized gain (loss) on investments,
end of period (2,015) 3 96,610 187
------- ----- -------- -----
Net unrealized gain (loss) on investments (2,018) 3 96,423 187
------- ----- -------- -----
Net gain (loss) on investments (2,240) 3 112,300 267
------- ----- -------- -----
Net increase (decrease) in net assets
resulting from operations $ (133) $ 2 $111,673 $ 267
======= ===== ======== =====
<FN>
<F*>The Bond Portfolio Fund and Small Company Portfolio Fund began operations on September 15, 1998.
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<CAPTION>
S & P 500 INDEX MONEY MARKET
FUND DIVISION FUND DIVISION
----------------------------------------- --------------------------------------
1999 1998 1997 1999 1998 1997
----------- ----------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment expense $ (404,761) $ (246,025) $ (125,228) $ (60,049) $ (45,604) $ (36,015)
Net realized gain on investments 6,020,806 3,142,731 2,484,096 548,377 435,619 73,476
Net unrealized gain (loss) on
investments 3,741,542 4,823,143 1,526,899 (108,747) (110,593) 183,867
----------- ----------- ----------- ---------- ---------- ----------
Net increase in net assets
resulting from operations 9,357,587 7,719,849 3,885,767 379,581 279,422 221,328
Net deposits into (deductions from)
Separate Account 8,977,500 14,119,467 2,209,424 2,797,074 (2,860,090) 932,501
----------- ----------- ----------- ---------- ---------- ----------
Increase (decrease) in net assets 18,335,087 21,839,316 6,095,191 3,176,655 (2,580,668) 1,153,829
Net assets, beginning of period 42,417,639 20,578,323 14,483,132 6,735,587 9,316,255 8,162,426
----------- ----------- ----------- ---------- ---------- ----------
Net assets, end of period $60,752,726 $42,417,639 $20,578,323 $9,912,242 $6,735,587 $9,316,255
=========== =========== =========== ========== ========== ==========
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<CAPTION>
BOND INDEX MANAGED EQUITY
FUND DIVISION FUND DIVISION
--------------------------------------- --------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment expense $ (49,087) $ (33,130) $ (22,907) $ (50,674) $ (40,187) $ (29,512)
Net realized gain (loss) on investments 357,632 271,592 (10,472) 472,578 700,721 346,937
Net unrealized gain (loss) on
investments (528,508) 63,834 250,471 (325,744) (48,504) 368,231
---------- ---------- ----------- ---------- ---------- ----------
Net increase in net assets
resulting from operations (219,963) 302,296 217,092 96,160 612,030 685,656
Net deposits into (deductions from)
Separate Account 1,249,584 1,356,281 (3,532,130) 761,498 679,065 779,803
---------- ---------- ----------- ---------- ---------- ----------
Increase (decrease) in net assets 1,029,621 1,658,577 (3,315,038) 857,658 1,291,095 1,465,459
Net assets, beginning of period 5,107,121 3,448,544 6,763,582 5,526,410 4,235,315 2,769,856
---------- ---------- ----------- ---------- ---------- ----------
Net assets, end of period $6,136,742 $5,107,121 $ 3,448,544 $6,384,068 $5,526,410 $4,235,315
========== ========== =========== ========== ========== ==========
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<CAPTION>
ASSET ALLOCATION INTERNATIONAL INDEX
FUND DIVISION FUND DIVISION<F*>
----------------------------------------- ---------------------------------------
1999 1998 1997 1999 1998 1997
----------- ----------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment expense $ (130,807) $ (96,929) $ (80,244) $ (90,299) $ (75,098) $ (62,954)
Net realized gain on investments 1,091,284 1,376,431 507,259 460,726 341,655 357,331
Net unrealized gain (loss) on
investments 2,321,622 574,168 1,104,802 2,469,103 1,228,544 (199,315)
----------- ----------- ----------- ----------- ---------- ----------
Net increase in net assets
resulting from operations 3,282,099 1,853,670 1,531,817 2,839,530 1,495,101 95,062
Net deposits into
Separate Account 1,858,100 1,102,997 909,812 237,255 557,433 979,833
----------- ----------- ----------- ----------- ---------- ----------
Increase in net assets 5,140,199 2,956,667 2,441,629 3,076,785 2,052,534 1,074,895
Net assets, beginning of period 13,432,972 10,476,305 8,034,676 9,916,827 7,864,293 6,789,398
----------- ----------- ----------- ----------- ---------- ----------
Net assets, end of period $18,573,171 $13,432,972 $10,476,305 $12,993,612 $9,916,827 $7,864,293
=========== =========== =========== =========== ========== ==========
<FN>
<F*>This fund was formerly known as the International Equity Fund.
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<CAPTION>
MID-CAP EQUITY SMALL-CAP EQUITY
FUND DIVISION<F*> FUND DIVISION
-------------------------------------- --------------------------------------
1999 1998 1997 1999 1998 1997<F**>
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment expense $ (57,427) $ (54,944) $ (40,537) $ (21,138) $ (14,676) $ (2,283)
Net realized gain (loss) on investments 256,018 401,831 451,508 (83,189) 45,675 150,417
Net unrealized gain (loss) on
investments 751,193 (580,273) 945,457 (25,587) (280,946) (133,375)
---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations 949,784 (233,386) 1,356,428 (129,914) (249,947) 14,759
Net deposits into (deductions from)
Separate Account 26,099 1,376,768 793,111 672,746 1,480,805 1,129,095
---------- ---------- ---------- ---------- ---------- ----------
Increase in net assets 975,883 1,143,382 2,149,539 542,832 1,230,858 1,143,854
Net assets, beginning of period 7,378,098 6,234,716 4,085,177 2,374,712 1,143,854 0
---------- ---------- ---------- ---------- ---------- ----------
Net assets, end of period $8,353,981 $7,378,098 $6,234,716 $2,917,544 $2,374,712 $1,143,854
========== ========== ========== ========== ========== ==========
<FN>
<F*>This fund was formerly known as the Special Equity Fund.
<F**>The Small-Cap Equity Fund began operations on May 1, 1997.
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<CAPTION>
EQUITY INCOME GROWTH
FUND DIVISION FUND DIVISION
----------------------------------------- -----------------------------------------
1999 1998 1997 1999 1998 1997
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income (expense) $ 125,992 $ 82,098 $ 75,885 $ (283,725) $ (111,000) $ (51,298)
Net realized gain on investments 1,497,853 2,232,798 1,249,329 6,018,376 4,072,845 802,208
Net unrealized gain (loss) on
investments (470,508) (298,765) 1,801,581 8,434,187 5,457,168 2,688,958
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets
resulting from operations 1,153,337 2,016,131 3,126,795 14,168,838 9,419,013 3,439,868
Net deposits into
Separate Account 2,171,008 1,818,144 3,516,214 6,264,467 3,631,816 5,418,111
----------- ----------- ----------- ----------- ----------- -----------
Increase in net assets 3,324,345 3,834,275 6,643,009 20,433,305 13,050,829 8,857,979
Net assets, beginning of period 20,830,092 16,995,817 10,352,808 35,279,420 22,228,591 13,370,612
----------- ----------- ----------- ----------- ----------- -----------
Net assets, end of period $24,154,437 $20,830,092 $16,995,817 $55,712,725 $35,279,420 $22,228,591
=========== =========== =========== =========== =========== ===========
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<CAPTION>
OVERSEAS ASSET MANAGER
FUND DIVISION FUND DIVISION
--------------------------------------- ------------------------------------
1999 1998 1997 1999 1998 1997
----------- ---------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income $ 65,047 $ 88,301 $ 41,778 $ 26,408 $ 13,331 $ 5,627
Net realized gain on investments 595,943 686,610 466,320 84,760 74,572 33,746
Net unrealized gain on investments 3,652,436 196,057 62,543 85,287 39,249 34,466
----------- ---------- ---------- ---------- ---------- --------
Net increase in net assets
resulting from operations 4,313,426 970,968 570,641 196,455 127,152 73,839
Net deposits into
Separate Account 765,467 830,006 2,154,913 984,955 531,902 227,154
----------- ---------- ---------- ---------- ---------- --------
Increase in net assets 5,078,893 1,800,974 2,725,554 1,181,410 659,054 300,993
Net assets, beginning of period 9,972,458 8,171,484 5,445,930 1,236,511 577,457 276,464
----------- ---------- ---------- ---------- ---------- --------
Net assets, end of period $15,051,351 $9,972,458 $8,171,484 $2,417,921 $1,236,511 $577,457
=========== ========== ========== ========== ========== ========
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<CAPTION>
HIGH INCOME WORLDWIDE HARD ASSETS
FUND DIVISION FUND DIVISION<F*>
-------------------------------------- --------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income (expense) $ 252,694 $ 142,227 $ 77,610 $ 914 $ (498) $ 1,531
Net realized gain (loss) on investments (184,684) 120,665 29,038 (40,905) 15,201 3,210
Net unrealized gain (loss) on
investments 171,450 (419,631) 163,711 87,514 (104,848) (14,106)
---------- ---------- ---------- -------- -------- --------
Net increase (decrease) in net assets
resulting from operations 239,460 (156,739) 270,359 47,523 (90,145) (9,365)
Net deposits into
Separate Account 1,146,113 970,866 711,529 47,731 41,428 92,851
---------- ---------- ---------- -------- -------- --------
Increase (decrease) in net assets 1,385,573 814,127 981,888 95,254 (48,717) 83,486
Net assets, beginning of period 2,987,046 2,172,919 1,191,031 221,088 269,805 186,319
---------- ---------- ---------- -------- -------- --------
Net assets, end of period $4,372,619 $2,987,046 $2,172,919 $316,342 $221,088 $269,805
========== ========== ========== ======== ======== ========
<FN>
<F*>This fund was formerly known as the Gold & Natural Rescources Fund.
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<CAPTION>
WORLDWIDE
EMERGING MARKETS MULTI-STYLE EQUITY
FUND DIVISION FUND DIVISION<F**>
--------------------- ------------------------------------------
1999 1998<F*> 1999 1998 1997
-------- -------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Operations:
Net investment income (expense) $ (583) $ (2) $ 9,951 $ (6,316) $ (1,979)
Net realized gain on investments 29,159 0 1,639,237 139,126 5,224
Net unrealized gain (loss) on investments 43,867 143 613,662 1,503,013 1,553
-------- ------ ----------- ----------- ----------
Net increase (decrease) in net assets
resulting from operations 72,443 141 2,262,850 1,635,823 4,798
Net deposits into
Separate Account 194,510 1,700 3,014,155 7,540,459 2,534,482
-------- ------ ----------- ----------- ----------
Increase in net assets 266,953 1,841 5,277,005 9,176,282 2,539,280
Net assets, beginning of period 1,841 0 11,715,562 2,539,280 0
-------- ------ ----------- ----------- ----------
Net assets, end of period $268,794 $1,841 $16,992,567 $11,715,562 $2,539,280
======== ====== =========== =========== ==========
<CAPTION>
CORE BOND
FUND DIVISION<F**>
--------------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Operations:
Net investment income (expense) $ 427,789 $ 133,081 $ 929
Net realized gain on investments 230,167 35,679 705
Net unrealized gain (loss) on investments (750,660) 72,062 27,482
---------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations (92,704) 240,822 29,116
Net deposits into
Separate Account 3,244,804 5,262,341 1,125,291
---------- ---------- ----------
Increase in net assets 3,152,100 5,503,163 1,154,407
Net assets, beginning of period 6,657,570 1,154,407 0
---------- ---------- ----------
Net assets, end of period $9,809,670 $6,657,570 $1,154,407
========== ========== ==========
<FN>
<F*>The Worldwide Emerging Markets Fund Fund began operations on September 15,1998.
<F**>The Multi-Style Equity Fund, and Core Bond Fund began operations on January 2, 1997.
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<CAPTION>
AGGRESSIVE EQUITY NON-US
FUND DIVISION<F*> FUND DIVISION<F*>
-------------------------------------- ------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income (expense) $ (11,894) $ (12,471) $ (1,164) $ 51,010 $ 5,373 $ (1,145)
Net realized gain (loss) on investments (25,818) 42,561 2,158 214,105 (13,456) 78
Net unrealized gain (loss) on investments 341,390 (46,042) 23,627 971,904 217,983 (57,317)
---------- ---------- ---------- ---------- ---------- --------
Net increase (decrease) in net assets
resulting from operations 303,678 (15,952) 24,621 1,237,019 209,900 (58,384)
Net deposits into
Separate Account 607,124 2,627,723 1,320,804 349,703 2,418,138 842,227
---------- ---------- ---------- ---------- ---------- --------
Increase in net assets 910,802 2,611,771 1,345,425 1,586,722 2,628,038 783,843
Net assets, beginning of period 3,957,196 1,345,425 0 3,411,881 783,843 0
---------- ---------- ---------- ---------- ---------- --------
Net assets, end of period $4,867,998 $3,957,196 $1,345,425 $4,998,603 $3,411,881 $783,843
========== ========== ========== ========== ========== ========
<FN>
<F*>The Aggressive Equity Fund and Non-U.S. Fund began operations on January 2, 1997.
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999, AND 1998
<CAPTION>
INCOME & GROWTH INTERNATIONAL VALUE
FUND DIVISION FUND DIVISION FUND DIVISION
--------------------- --------------------- ---------------------
1999 1998<F*> 1999 1998<F*> 1999 1998<F*>
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income (expense) $ (2,356) $ 32 $ (989) $ 0 $ (493) $ (1)
Net realized gain (loss) on investments 34,901 12 49,932 5 (14,414) 0
Net unrealized gain on investments 43,204 471 120,627 45 1,750 85
-------- ------ -------- ---- -------- ------
Net increase (decrease) in net assets
resulting from operations 75,749 515 169,570 50 (13,157) 84
Net deposits into
Separate Account 652,207 6,845 433,721 853 106,165 3,786
-------- ------ -------- ---- -------- ------
Increase in net assets 727,956 7,360 603,291 903 93,008 3,870
Net assets, beginning of period 7,360 0 903 0 3,870 0
-------- ------ -------- ---- -------- ------
Net assets, end of period $735,316 $7,360 $604,194 $903 $ 96,878 $3,870
======== ====== ======== ==== ======== ======
<FN>
<F*>The Income & Growth Fund, International Fund, and Value Fund began operations on September 15, 1998.
See accompanying notes to the financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999, AND 1998
<CAPTION>
BOND PORTFOLIO SMALL COMPANY
FUND DIVISION FUND DIVISION
-------------------- ---------------------
1999 1998<F*> 1999 1998<F*>
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Operations:
Net investment income (expense) $ 2,107 $ (1) $ (627) $ 0
Net realized gain (loss) on investments (222) 0 15,877 80
Net unrealized gain (loss) on investments (2,018) 3 96,423 187
-------- ------ -------- ------
Net increase (decrease) in net assets
resulting from operations (133) 2 111,673 267
Net deposits into
Separate Account 138,293 3,299 482,575 2,922
-------- ------ -------- ------
Increase in net assets 138,160 3,301 594,248 3,189
Net assets, beginning of period 3,301 0 3,189 0
-------- ------ -------- ------
Net assets, end of period $141,461 $3,301 $597,437 $3,189
======== ====== ======== ======
<FN>
<F*>The Bond Portfolio Fund and Small Company Fund began operations on September 15, 1998.
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - ORGANIZATION
General American Separate Account Eleven (the Separate Account)
commenced operations on September 15, 1987 and is registered under the
Investment Company Act of 1940 (1940 Act) as a unit investment trust.
The Separate Account offers six products: Variable Universal Life
(VUL-95), Variable General Select Plus (VGSP), Variable Universal Life
(VUL-100), Russell Variable Universal Life (Russell VUL) Variable
Universal Life (VUL-98), and Joint and Survivor Universal Life (JSVUL-98)
that receive and invest net premiums for flexible premium variable
life insurance policies that are issued by General American Life
Insurance Company (General American). The Separate Account is divided
into twenty-four Divisions. Each Division invests exclusively in shares
of a single Fund of either General American Capital Company, Variable
Insurance Products Fund, Variable Insurance Products Fund II, Van Eck
Worldwide Insurance Trust, Russell Insurance Funds, American Century
Variable Portfolios, Inc. or J.P. Morgan Series Trust II which are
open-end, diversified management companies. The Funds of the General
American Capital Company, sponsored by General American, are the
S & P 500 Index (formerly Equity Index), Money Market, Bond Index, Managed
Equity, Asset Allocation, International Index (formerly International
Equity), Mid-Cap Equity (formerly Special Equity), and the Small-Cap
Equity Fund Divisions. The Funds of the Variable Insurance Products
Fund, managed by Fidelity Management & Research Company, are the Equity
Income, Growth, Overseas, and the High Income Fund Divisions. The Funds
of the Variable Insurance Products Fund II, managed by Fidelity
Management and Research Company is the Asset Manager Fund. The Funds of
the Van Eck Worldwide Insurance Trust, managed by Van Eck Associates
Corporation, are the Worldwide Hard Assets Fund, formerly known as the
Gold and Natural Resources Fund and the Worldwide Emerging Markets Fund
Divisions. The Funds of the Russell Variable Insurance Product, managed
by Frank Russell Investment Management Company are the Multi-style
Equity, Core Bond, Aggressive Equity, and Non-US Fund Divisions. The
Funds of the American Century Variable Portfolios, Inc. managed by
American Century Investments are the Income & Growth, International, and
Value Fund Divisions. The Funds of the J.P. Morgan Trust II, managed by
J.P. Morgan Investment Management, Inc. are the Bond Portfolio and Small
Company Portfolio Fund Divisions. Policyholders have the option of
directing their premium payments into one or all of the Funds as well as
into the general account of General American, which is not generally
subject to regulation under the Securities Act of 1933 or the 1940 Act.
On January 6, 2000, Metropolitan Life Insurance Company (Metlife),
headquartered in New York City, purchased 100% of GenAmerica Corporation
(the Company) for $1.2 billion in cash. The acquisition was a result of
liquidity problems encountered by the Company's wholly-owned subsidiary
General American Life Insurance Company (General American) during 1999.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
by the Separate Account in the preparation of its financial statements.
The policies are in conformity with generally accepted accounting
principles.
A. Investments
The Separate Accounts' investments in the twenty-four Funds are
valued daily based on the net asset values of the respective Fund
shares held as reported to General American by General American
Capital Company, Variable Insurance Products Fund, Variable
Insurance Products Fund II, Van Eck Worldwide Insurance Trust,
Russell Insurance Funds, American Century Portfolios, and J.P.
Morgan Series Trust II. The specific identification method is
used in determining the cost of shares sold on withdrawals by the
Separate Account. Share transactions are recorded on the trade
date, which is the same as the settlement date.
B. Federal Income Taxes
Under current federal income tax law, capital gains from sales of
investments of the Separate Account are not taxable. Therefore,
no federal income tax expense has been provided.
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
C. Distribution of Income and Realized Capital Gains
General American Capital Company follows the federal income tax
practice known as consent dividending, whereby substantially all
of its net investment income and realized gains are deemed to be
passed through to the Separate Account. As a result, General
American Capital Company does not pay any dividends or capital
gain distributions. During December of each year, accumulated
investment income and capital gains of the underlying Capital
Company Fund are allocated to the Separate Account by increasing
the cost basis and recognizing a capital gain in the Separate
Account. The Variable Insurance Products Fund, Variable Insurance
Products Fund II, Van Eck Worldwide Insurance Trust, Russell
Insurance Funds, American Century Variable Portfolios, and J.P.
Morgan Series Trust II intend to pay out all of their net
investment income and net realized capital gains each year.
Dividends from the funds are distributed at least annually on a
per share basis and are recorded on the ex dividend date.
Normally, net realized capital gains, if any, are distributed each
year for each fund. Such income and capital gain distributions
are automatically reinvested in additional shares of the funds.
D. Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of increase and decrease in net assets from
operations during the period. Actual results could differ from
those estimates.
NOTE 3 - POLICY CHARGES
Charges are deducted from premiums and paid to General American for
providing the insurance benefits set forth in the contracts and any
additional benefits added by rider, administering the policies,
reimbursement of expenses incurred in distributing the policies, and
assuming certain risks in connection with the policies.
Prior to the allocation of net premiums among General American's general
account and the Fund Divisions of the Separate Account, premium
payments are reduced by premium expense charges, which consist of a
sales charge and a charge for premium taxes. The premium payment, less
the premium expense charge, equals the net premium.
Sales Charge: A sales charge equal to 6% is deducted from each
-------------
VUL-95 premium paid. A sales charge of 5% in years one through
ten and 2.25% thereafter is deducted from each VGSP premium paid.
A maximum sales charge of 5% in years one through ten and a
maximum 2.25% thereafter based on initial deposit is deducted from
each Russell VUL premium paid. A sales charge equal to 15% up to
the target premium and 5% on the excess in the first policy year
is deducted from each VUL-98 and JSVUL-98 premium paid. The sales
charge is 5% on all premiums in policy years two to ten, and 2%
on all premiums in policy years eleven or later. This charge is
deducted to partially reimburse General American for expenses
incurred in distributing the policy and any additional benefits
provided by rider. No sales charge is deducted from VUL-100
premiums.
Premium Taxes: Various state and political subdivisions impose a
--------------
tax on premiums received by insurance companies. Premium taxes
vary from state to state. A deduction of 2% of each VUL-95
premium, 2.5% of each VGSP premium, 2.10% of each VUL-100 premium,
2.5% of each Russell VUL premium, and the actual tax rate for VUL-98
and JSVUL-98 is made from each premium payment for these taxes.
In addition, a 1.25% deduction is taken from VUL-100 premiums and
a 1.3% deduction is taken from VUL-98 and JSVUL-98 to cover the
company's Federal income tax costs attributable to the amount of
premium received.
Charges are deducted monthly from the cash value of each policy to
compensate General American for (a) certain administrative costs; (b)
insurance underwriting and acquisition expenses in connection with
issuing a policy; (c) the cost of insurance, and (d) the cost of
optional benefits added by rider.
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
Administrative Charge: General American has responsibility for
----------------------
the administration of the policies and the Separate Account. As
reimbursement for administrative expenses related to the
maintenance of each policy and the Separate Account, General
American assesses a monthly administrative charge against each
policy. This charge is $10 per month for a standard policy and
$12 per month for a pension policy during the first 12 policy
months and $4 (standard) and $6 (pension) per month for all policy
months beyond the 12th for VUL-95 contracts. The charge is $4 per
month for VGSP and Russell VUL contracts. The charge is $13 per
month during the first 12 policy months and $6 per month
thereafter for VUL-100 contracts. The charge is $25 per month in
the first policy year and $6 per month in each subsequent policy
year for VUL-98 and JSVUL-98 contracts.
Insurance Underwriting and Acquisition Expense Charge: An
------------------------------------------------------
additional administrative charge is deducted from the policy cash
value for VUL-95 as part of the monthly deduction during the first
12 policy months and for the first 12 policy months following an
increase in the face amount. The charge is $0.08 per month
multiplied by the face amount divided by 1,000. For VUL-100, the
charge during the first 12 policy months is $0.16 per month
multiplied by the face amount divided by 1,000, and in all policy
years thereafter, the charge is $0.01 per month multiplied by the
face amount divided by 1,000. For VUL-98 and JSVUL-98, there is a
charge per $1,000 of face amount, determined by age, sex, and
smoker class, payable for ten years following the policy issue or
an increase in the face amount.
Cost of Insurance: The cost of insurance is deducted on each
------------------
monthly anniversary date for the following policy month. Because
the cost of insurance depends upon a number of variables, the cost
varies for each policy month. The cost of insurance is
determined separately for the initial face amount and for any
subsequent increases in face amount. General American determines
the monthly cost of insurance charge by multiplying the applicable
cost of insurance rate or rates by the net amount at risk for each
policy month.
Optional Rider Benefits Charge: This monthly deduction includes
-------------------------------
charges for any additional benefits provided by rider.
Contingent Deferred Sales Charge: During the first ten policy
---------------------------------
years for VUL-95, VGSP, and Russell VUL, and the first fifteen
years for VUL-100, General American also assesses a charge upon
surrender or lapse of a policy, a requested decrease in face
amount, or a partial withdrawal that causes the face amount to
decrease. The amount of the charge assessed depends on a number
of factors, including whether the event is a full surrender or
lapse or only a decrease in face amount, the amount of premiums
received to date by General American, and the policy year in which
the surrender or other event takes place. For VUL-98 and JSVUL-
98, the charge is bases on the annual target premium, rather than
the premiums actually received by General American.
Mortality and Expense Charge: In addition to the above charges, a
-----------------------------
daily charge is made at the separate account level for the mortality
and expense risks assumed by General American. General American
deducts a daily charge from the Separate Account at the rate of
.002319% for VUL-95, .0019111% for VGSP, .002455% for VUL-100,
.001366% for Russell VUL, and .0015027% for VUL-98 and JSVUL-98 of
the net assets of each division of the Separate Account, which equals
an annual rate of .85%, .70%, .90%, .50%, .55%, and .55% for VUL-95,
VGSP, VUL-100, Russell VUL, VUL 98, and JSVUL-98, respectively.
VUL-95, VGSP, VUL-100, Russell VUL, VUL-98, and JSVUL-98 mortality
and expense charges for 1999 were $583,872, $528,396, $524,079,
$40,641, $54,323, and $5,931 respectively. The mortality risk
assumed by General American is the risk that those insured may die
sooner than anticipated and therefore, that General American will
pay an aggregate amount of death benefits greater than anticipated.
The expense risk assumed is that expenses incurred in issuing and
administering the policy will exceed the amounts realized from the
administrative charges assessed against the policy.
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 4 - INVESTMENT OBJECTIVES, MANAGER CHANGES AND NEW DIVISIONS
Effective April 30, 1998, the four divisions of the Frank Russell funds
became available for Variable Universal Life (VUL-95) and Variable
Universal Life (VUL 100).
On September 15, 1998, six new divisions and two new products - VUL-98
and JSVUL-98 were added to Separate Account Eleven. Three of the new
divisions are the Income & Growth Fund, the International Fund, and the
Value Fund. The underlying funds in these divisions are offered by
American Century Variable Portfolios and managed by American Century
Investments. Two of the new divisions are the Bond Portfolio Fund and
the Small Company Portfolio Fund. The underlying funds in these
divisions are offered by J.P. Morgan Trust II and managed by J.P. Morgan
Investment Management, Inc. The Worldwide Emerging Markets Fund
Division is offered by Van Eck World Wide Insurance Trust and managed by
Van Eck Associates Corporation. The investment objectives of each of
these new divisions are as follows:
Income & Growth Fund - To provide dividend growth, current income and
- --------------------
capital appreciation by investing in common stocks.
International Fund - To provide capital growth by investing primarily in
- ------------------
an internationally diversified portfolio of common stocks that are
considered by management to have prospects for appreciation.
Value Fund - To provide long-term capital growth by investing in
- ----------
securities that management believes to be undervalued at the time of
purchase.
Bond Portfolio Fund - To provide a high total return consistent with
- -------------------
moderate risk of capital and maintenance of liquidity.
Small Company Portfolio Fund - To provide a high total return from a
- ----------------------------
portfolio of equity securities of small companies.
Worldwide Emerging Markets Fund - To provide long-term capital
- -------------------------------
appreciation by investing primarily in equity securities in emerging
markets around the world.
Effective April 30, 1999, the three divisions of the American Century
funds, the two divisions of the J. P. Morgan funds, and the Worldwide
Emerging Markets Division offered by Van Eck Associates became available
for Variable Universal Life (VUL-95), Variable General Select Plus
(VGSP), and Variable Universal Life (VUL-100).
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 5 - PURCHASES AND SALES
During the year ended December 31, 1999, purchases including net
realized gain and income from distribution and proceeds from sales of
General American Capital Company shares were as follows:
<TABLE>
<CAPTION>
S & P 500 MONEY BOND MANAGED ASSET INTERNATIONAL MID-CAP SMALL-CAP
INDEX MARKET INDEX EQUITY ALLOCATION INDEX EQUITY EQUITY
FUND FUND FUND FUND FUND FUND FUND FUND
----------- ----------- ---------- ---------- ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Purchases $17,996,914 $20,864,176 $2,462,394 $1,821,337 $4,740,174 $1,395,034 $1,564,641 $1,455,784
=========== =========== ========== ========== ========== ========== ========== ==========
Sales $ 5,552,782 $17,520,562 $ 896,592 $ 809,643 $2,550,835 $1,076,698 $1,568,690 $ 678,628
=========== =========== ========== ========== ========== ========== ========== ==========
</TABLE>
During the year ended December 31, 1999, purchases (including dividend
reinvestment) and proceeds from sales of Variable Insurance Products
Fund Shares were as follows:
<TABLE>
<CAPTION>
EQUITY INCOME GROWTH OVERSEAS HIGH INCOME
FUND FUND FUND FUND
------------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Purchases $5,903,602 $13,832,577 $2,346,334 $3,304,883
========== =========== ========== ==========
Sales $2,961,663 $ 3,848,234 $1,263,050 $1,892,920
========== =========== ========== ==========
</TABLE>
During the year ended December 31, 1999, purchases (including dividend
reinvestment) and proceeds from sales of Variable Insurance Products
Fund II shares were as follows:
<TABLE>
<CAPTION>
ASSET MANAGER
FUND
-------------
<S> <C>
Purchases $1,731,627
==========
Sales $ 664,603
==========
</TABLE>
During the year ended December 31, 1999, purchases (including dividend
reinvestment) and proceeds from sales of Van Eck Worldwide Insurance
Trust shares were as follows:
<TABLE>
<CAPTION>
WORLDWIDE WORLDWIDE
HARD ASSETS EMERGING
FUND MARKETS FUND
----------- ------------
<S> <C> <C>
Purchases $122,599 $529,983
======== ========
Sales $ 72,844 $344,809
======== ========
</TABLE>
During the year ended December 31, 1999, purchases (including dividend
reinvestment) and proceeds from sales of Russell Insurance Funds shares
were as follows:
<TABLE>
<CAPTION>
MULTI-STYLE CORE BOND AGGRESSIVE NON-US
EQUITY FUND FUND EQUITY FUND FUND
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Purchases $6,023,787 $5,542,508 $1,238,176 $1,216,509
========== ========== ========== ==========
Sales $1,281,297 $1,342,535 $ 630,824 $ 703,797
========== ========== ========== ==========
</TABLE>
<PAGE>
<PAGE>
During the period ended December 31, 1999, purchases (including dividend
reinvestment) and proceeds from sales of American Century Variable
Portfolios shares were as follows:
<TABLE>
<CAPTION>
INCOME & INTERNATIONAL
GROWTH FUND FUND VALUE FUND
----------- ------------- ----------
<S> <C> <C> <C>
Purchases $1,164,782 $792,441 $399,886
========== ======== ========
Sales $ 514,040 $359,568 $293,873
========== ======== ========
</TABLE>
During the period ended December 31, 1999, purchases (including dividend
reinvestment) and proceeds from sales of J.P. Morgan Series Trust II
shares were as follows:
<TABLE>
<CAPTION>
SMALL
BOND PORTFOLIO COMPANY
FUND PORTFOLIO FUND
-------------- --------------
<S> <C> <C>
Purchases $154,493 $541,150
======== ========
Sales $ 14,002 $ 49,236
======== ========
</TABLE>
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY
The following is a summary of the accumulation unit activity for the
years ended December 31, 1999, 1998, and 1997:
<TABLE>
<CAPTION>
S & P 500 INDEX MONEY MARKET
FUND DIVISION FUND DIVISION
----------------------------------- ---------------------------------------
1999 1998 1997 1999 1998 1997
-------- ------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Variable Universal Life - 95:
Deposits 40,318 53,610 70,404 56,074 63,693 98,719
Withdrawals (51,800) (44,959) (29,686) (31,779) (66,600) (110,821)
Outstanding units, beginning of year 244,956 236,305 195,587 43,796 46,703 58,805
-------- ------- -------- -------- ---------- --------
Outstanding units, end of year 233,474 244,956 236,305 68,091 43,796 46,703
======== ======= ======== ======== ========== ========
Variable General Select Plus:
Deposits 143,955 313,540 146,632 636,987 1,380,901 942,448
Withdrawals (105,975) (55,730) (305,772) (500,114) (1,744,430) (900,950)
Outstanding units, beginning of year 506,304 248,494 407,634 172,324 535,853 494,355
-------- ------- -------- -------- ---------- --------
Outstanding units, end of year 544,284 506,304 248,494 309,197 172,324 535,853
======== ======= ======== ======== ========== ========
Variable Universal Life - 100:
Deposits 195,193 384,015 212,106 343,675 825,392 738,912
Withdrawals (130,533) (89,826) (41,462) (400,299) (824,924) (707,676)
Outstanding units, beginning of year 587,054 292,865 122,221 166,596 166,128 134,892
-------- ------- -------- -------- ---------- --------
Outstanding units, end of year 651,714 587,054 292,865 109,972 166,596 166,128
======== ======= ======== ======== ========== ========
Russell Variable Universal Life:<F*>
Deposits 0 36,281 435,785
Withdrawals 0 (44,828) (427,238)
Outstanding units, beginning of year 0 8,547 0
-------- ---------- --------
Outstanding units, end of year 0 0 8,547
======== ========== ========
<FN>
<F*>The Russell Variable Universal Life product was introduced in 1997, and the first deposit was received
on May 6, 1997. (continued)
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the
years ended December 31, 1999, and 1998:
<CAPTION>
S & P 500 INDEX MONEY MARKET
FUND DIVISION FUND DIVISION
---------------------- --------------------------
1999 1998 1999 1998
------- ------ ---------- -------
<S> <C> <C> <C> <C>
Variable Universal Life - 98:<F*>
Deposits 493,771 12,188 1,665,714 190,317
Withdrawals (59,617) (256) (1,553,256) (40,880)
Outstanding units, beginning of year 11,932 0 149,437 0
------- ------ ---------- -------
Outstanding units, end of year 446,086 11,932 261,895 149,437
======= ====== ========== =======
Joint and Survivor Variable Universal Life - 98:<F*>
Deposits 93,119 105 206,783 27,427
Withdrawals (23,926) (2) (195,215) (3,565)
Outstanding units, beginning of year 103 0 23,862 0
------- ------ ---------- -------
Outstanding units, end of year 69,296 103 35,430 23,862
======= ====== ========== =======
<FN>
<F*>The Variable Universal Life 98 and Joint And Survivor Variable Universal Life products were introduced in 1998,
and the first deposits were received on September 29, 1998 and October 14, 1998, respectively. (continued)
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY, (CONTINUED)
The following is a summary of the accumulation unit activity for the
years ended December 31, 1999, 1998, and 1997:
<CAPTION>
BOND INDEX MANAGED EQUITY
FUND DIVISION FUND DIVISION
----------------------------------- ---------------------------------
1999 1998 1997 1999 1998 1997
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Variable Universal Life - 95:
Deposits 19,306 25,406 45,996 12,253 16,942 20,213
Withdrawals (14,321) (12,912) (19,985) (14,768) (13,618) (19,170)
Outstanding units, beginning of year 109,948 97,454 71,443 96,034 92,710 91,667
------- ------- ------- ------- ------- -------
Outstanding units, end of year 114,933 109,948 97,454 93,519 96,034 92,710
======= ======= ======= ======= ======= =======
Variable General Select Plus:
Deposits 23,730 29,830 26,599 11,280 12,156 22,411
Withdrawals (9,825) (9,429) (398,540) (6,022) (8,587) (10,526)
Outstanding units, beginning of year 70,801 50,400 422,341 41,050 37,481 25,596
------- ------- -------- ------- ------- -------
Outstanding units, end of year 84,706 70,801 50,400 46,308 41,050 37,481
======= ======= ======== ======= ======= =======
Variable Universal Life - 100:
Deposits 63,648 84,402 38,781 34,949 40,129 38,918
Withdrawals (30,779) (26,455) (8,471) (16,792) (15,741) (8,793)
Outstanding units, beginning of year 113,583 55,636 25,326 68,790 44,402 14,277
------- ------- -------- ------- ------- -------
Outstanding units, end of year 146,452 113,583 55,636 86,947 68,790 44,402
======= ======= ======== ======= ======= =======
(continued)
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the
years ended December 31, 1999, and 1998:
<CAPTION>
BOND INDEX MANAGED EQUITY
FUND DIVISION FUND DIVISION
------------------- -------------------
1999 1998 1999 1998
------- ---- ------ ----
<S> <C> <C> <C> <C>
Variable Universal Life - 98:<F*>
Deposits 65,154 558 23,377 727
Withdrawals (23,294) (5) (2,443) (13)
Outstanding units, beginning of year 553 0 714 0
------- --- ------ ---
Outstanding units, end of year 42,413 553 21,648 714
======= === ====== ===
Joint and Survivor Variable Universal Life - 98:<F*>
Deposits 6,676 88 3,213 0
Withdrawals (270) (2) (169) 0
Outstanding units, beginning of year 86 0 0 0
------- --- ------ ---
Outstanding units, end of year 6,492 86 3,044 0
======= === ====== ===
<FN>
<F*>The Variable Universal Life 98 and Joint And Survivor Variable Universal Life products
were introduced in 1998, and the first deposits were received on September 29, 1998 and
October 14, 1998, respectively. (continued)
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY, (CONTINUED)
The following is a summary of the accumulation unit activity for the
years ended December 31, 1999, 1998, and 1997:
<CAPTION>
ASSET ALLOCATION INTERNATIONAL INDEX
FUND DIVISION FUND DIVISION<F*>
---------------------------------- -----------------------------------
1999 1998 1997 1999 1998 1997
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Variable Universal Life - 95:
Deposits 36,270 44,015 58,255 24,166 35,296 56,157
Withdrawals (37,511) (32,243) (49,785) (30,239) (36,243) (45,488)
Outstanding units, beginning of year 294,610 282,838 274,368 174,279 175,226 164,557
------- ------- ------- ------- ------- -------
Outstanding units, end of year 293,369 294,610 282,838 168,206 174,279 175,226
======= ======= ======= ======= ======= =======
Variable General Select Plus:
Deposits 62,080 29,160 21,682 15,664 42,140 35,709
Withdrawals (56,513) (24,120) (10,372) (11,959) (34,648) (10,776)
Outstanding units, beginning of year 77,547 72,507 61,197 77,550 70,058 45,125
------- ------- ------- ------- ------- -------
Outstanding units, end of year 83,114 77,547 72,507 81,255 77,550 70,058
======= ======= ======= ======= ======= =======
Variable Universal Life - 100:
Deposits 58,534 49,412 44,721 43,793 54,490 56,601
Withdrawals (25,963) (16,133) (11,617) (41,530) (20,835) (15,926)
Outstanding units, beginning of year 88,353 55,074 21,970 117,078 83,423 42,748
------- ------- ------- ------- ------- -------
Outstanding units, end of year 120,924 88,353 55,074 119,341 117,078 83,423
======= ======= ======= ======= ======= =======
General American Life Insurance Company
seed money:
Deposits 0 0 0
Withdrawals 0 0 0
Outstanding units, beginning of year 200,000 200,000 200,000
------- ------- -------
Outstanding units, end of year 200,000 200,000 200,000
======= ======= =======
<FN>
<F*>This fund was formerly known as the International Equity Fund.
(continued)
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the
years ended December 31, 1999, and 1998:
<CAPTION>
ASSET ALLOCATION INTERNATIONAL INDEX
FUND DIVISION FUND DIVISION<F*>
--------------------- -------------------
1999 1998 1999 1998
------ ----- ------ ----
<S> <C> <C> <C> <C>
Variable Universal Life - 98:<F**>
Deposits 77,838 1,037 19,887 710
Withdrawals (1,877) (14) (2,009) (17)
Outstanding units, beginning of year 1,023 0 693 0
------ ----- ------ ---
Outstanding units, end of year 76,984 1,023 18,571 693
====== ===== ====== ===
Joint and Survivor Variable Universal Life - 98:<F**>
Deposits 10,560 0 4,680 83
Withdrawals (432) 0 (245) (2)
Outstanding units, beginning of year 0 0 81 0
------ ----- ------ ---
Outstanding units, end of year 10,128 0 4,516 81
====== ===== ====== ===
<FN>
<F*>This fund was formerly known as the International Equity Fund.
<F**>The Variable Universal Life 98 and Joint And Survivor Variable Universal Life products
were introduced in 1998, and the first deposits were received on September 29, 1998 and
October 14, 1998, respectively. (continued)
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY, (CONTINUED)
The following is a summary of the accumulation unit activity for the
years ended December 31, 1999, 1998, and 1997 for the Mid-Cap Equity
Fund Division and the year ended December 31, 1999, 1998 and period
ended December 31, 1997 for the Small-Cap Equity Fund Division.
<CAPTION>
MID-CAP EQUITY SMALL-CAP EQUITY
FUND DIVISION<F*> FUND DIVISION
----------------------------------- ----------------------------------
1999 1998 1997 1999 1998 1997<F**>
------- ------- ------- ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C>
Variable Universal Life - 95:
Deposits 23,187 33,622 50,013 8,482 19,324 35,503
Withdrawals (35,782) (32,360) (61,032) (7,148) (5,547) (326)
Outstanding units, beginning of period 175,383 174,121 185,140 48,954 35,177 0
------- ------- ------- ------ ------ ------
Outstanding units, end of period 162,788 175,383 174,121 50,288 48,954 35,177
======= ======= ======= ====== ====== ======
Variable General Select Plus:
Deposits 23,177 58,976 43,764 45,417 65,121 30,298
Withdrawals (31,804) (28,754) (14,054) (23,263) (23,984) (271)
Outstanding units, beginning of period 108,141 77,919 48,209 71,164 30,027 0
------- ------- ------- ------ ------ ------
Outstanding units, end of period 99,514 108,141 77,919 93,318 71,164 30,027
======= ======= ======= ====== ====== ======
Variable Universal Life - 100:
Deposits 46,286 56,900 36,664 43,499 70,656 23,110
Withdrawals (40,979) (22,387) (15,674) (38,432) (10,421) (540)
Outstanding units, beginning of period 87,742 53,229 32,239 82,805 22,570 0
------- ------- ------- ------ ------ ------
Outstanding units, end of period 93,049 87,742 53,229 87,872 82,805 22,570
======= ======= ======= ====== ====== ======
<FN>
<F*>This fund was formerly known as the Special Equity Fund.
<F**>The Small-Cap Equity Fund began operations on May 1, 1997. (continued)
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the
years ended December 31, 1999, and 1998:
<CAPTION>
MID-CAP EQUITY SMALL-CAP EQUITY
FUND DIVISION<F*> FUND DIVISION
------------------- -------------------
1999 1998 1999 1998
------ ---- ------ ----
<S> <C> <C> <C> <C>
Variable Universal Life - 98:<F**>
Deposits 27,940 595 30,720 644
Withdrawals (2,928) (23) (4,697) (25)
Outstanding units, beginning of year 572 0 619 0
------ ---- ------ ---
Outstanding units, end of year 25,584 572 26,642 619
====== ==== ====== ===
Joint and Survivor Variable Universal Life - 98:<F**>
Deposits 4,042 168 6,826 168
Withdrawals (574) (5) (1,009) (5)
Outstanding units, beginning of year 163 0 163 0
------ ---- ------ ---
Outstanding units, end of year 3,631 163 5,980 163
====== ==== ====== ===
<FN>
<F*>This fund was formerly known as the Special Equity Fund.
<F**> The Variable Universal Life 98 and Joint And Survivor Variable Universal Life products were introduced in 1998,
and the first deposits were received on September 29, 1998 and October 14, 1998, respectively. (continued)
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY, (CONTINUED)
The following is a summary of the accumulation unit activity for the
years ended December 31, 1999, 1998, and 1997:
<CAPTION>
EQUITY INCOME GROWTH
FUND DIVISION FUND DIVISION
------------------------------------ ------------------------------------
1999 1998 1997 1999 1998 1997
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Variable Universal Life - 95:
Deposits 54,849 59,416 73,369 58,832 69,876 110,237
Withdrawals (72,847) (47,519) (68,932) (78,887) (72,411) (69,361)
Outstanding units, beginning of year 304,241 292,344 287,907 405,378 407,913 367,037
------- ------- ------- ------- ------- -------
Outstanding units, end of year 286,243 304,241 292,344 385,323 405,378 407,913
======= ======= ======= ======= ======= =======
Variable General Select Plus:
Deposits 97,662 99,382 107,293 158,244 99,249 151,169
Withdrawals (67,788) (42,509) (41,943) (93,901) (40,684) (56,898)
Outstanding units, beginning of year 283,014 226,141 160,791 386,583 328,018 233,747
------- ------- ------- ------- ------- -------
Outstanding units, end of year 312,888 283,014 226,141 450,926 386,583 328,018
======= ======= ======= ======= ======= =======
Variable Universal Life - 100:
Deposits 99,022 179,653 161,018 158,445 226,944 227,448
Withdrawals (79,710) (166,343) (42,604) (109,918) (114,919) (64,065)
Outstanding units, beginning of year 295,584 282,274 163,860 474,406 362,381 198,998
------- ------- ------- ------- ------- -------
Outstanding units, end of year 314,896 295,584 282,274 522,933 474,406 362,381
======= ======= ======= ======= ======= =======
(continued)
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the
year ended December 31, 1999, and 1998:
<CAPTION>
EQUITY INCOME GROWTH
FUND DIVISION FUND DIVISION
--------------------- ---------------------
1999 1998 1999 1998
------- ----- ------- -----
<S> <C> <C> <C> <C>
Variable Universal Life - 98:<F*>
Deposits 113,215 2,270 250,110 3,901
Withdrawals (8,208) (115) (21,492) (108)
Outstanding units, beginning of year 2,155 0 3,793 0
------- ----- ------- -----
Outstanding units, end of year 107,162 2,155 232,411 3,793
======= ===== ======= =====
Joint and Survivor Variable Universal Life - 98:<F*>
Deposits 16,121 247 26,076 79
Withdrawals (856) (7) (1,917) (2)
Outstanding units, beginning of year 240 0 77 0
------- ----- ------- -----
Outstanding units, end of year 15,505 240 24,236 77
======= ===== ======= =====
<FN>
<F*>The Variable Universal Life 98 and Joint And Survivor Variable Universal Life products
were introduced in 1998, and the first deposits were received on September 29, 1998 and
October 14, 1998, respectively. (continued)
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY, (CONTINUED)
The following is a summary of the accumulation unit activity for the
years ended December 31, 1999, 1998, and 1997:
<CAPTION>
OVERSEAS ASSET MANAGER
FUND DIVISION FUND DIVISION
----------------------------------- --------------------------------
1999 1998 1997 1999 1998 1997
------- ------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Variable Universal Life-95:
Deposits 32,130 46,762 73,211 6,173 7,584 1,053
Withdrawals (38,877) (41,684) (33,419) (4,532) (605) (364)
Outstanding units, beginning of year 247,641 242,563 202,771 9,111 2,132 1,443
------- ------- ------- ------ ------ ------
Outstanding units, end of year 240,894 247,641 242,563 10,752 9,111 2,132
======= ======= ======= ====== ====== ======
Variable General Select Plus:
Deposits 50,014 60,426 78,015 14,236 7,255 4,792
Withdrawals (24,381) (48,932) (24,003) (4,489) (423) (1,323)
Outstanding units, beginning of year 180,202 168,708 114,696 14,512 7,680 4,211
------- ------- ------- ------ ------ ------
Outstanding units, end of year 205,835 180,202 168,708 24,259 14,512 7,680
======= ======= ======= ====== ====== ======
Variable Universal Life-100:
Deposits 47,585 62,350 61,939 34,209 30,521 19,775
Withdrawals (52,739) (27,368) (16,003) (21,189) (9,795) (6,893)
Outstanding units, beginning of year 135,925 100,943 55,007 50,801 30,075 17,193
------- ------- ------- ------ ------ ------
Outstanding units, end of year 130,771 135,925 100,943 63,821 50,801 30,075
======= ======= ======= ====== ====== ======
(continued)
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the
year ended December 31, 1999, and 1998:
<CAPTION>
OVERSEAS ASSET MANAGER
FUND DIVISION FUND DIVISION
------------------- -------------------
1999 1998 1999 1998
------ ---- ------ ----
<S> <C> <C> <C> <C>
Variable Universal Life - 98:<F*>
Deposits 39,237 601 53,511 697
Withdrawals (3,669) (18) (4,287) (62)
Outstanding units, beginning of year 583 0 635 0
------ --- ------ ---
Outstanding units, end of year 36,151 583 49,859 635
====== === ====== ===
Joint and Survivor Variable Universal Life - 98:<F*>
Deposits 3,258 168 431 0
Withdrawals (466) (5) (302) 0
Outstanding units, beginning of year 163 0 0 0
------ --- ------ ---
Outstanding units, end of year 2,955 163 129 0
====== === ====== ===
<FN>
<F*>The Variable Universal Life 98 and Joint And Survivor Variable Universal Life products
were introduced in 1998, and the first deposits were received on September 29, 1998 and
October 14, 1998, respectively. (continued)
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY, (CONTINUED)
The following is a summary of the accumulation unit activity for the
years ended December 31, 1999, 1998,and 1997:
<CAPTION>
HIGH INCOME WORLDWIDE HARD ASSET
FUND DIVISION FUND DIVISION<F*>
----------------------------------- --------------------------------
1999 1998 1997 1999 1998 1997
------- ------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Variable Universal Life-95:
Deposits 2,853 6,498 8,197 865 3,234 5,256
Withdrawals (11,513) (2,233) (10,956) (1,622) (3,278) (857)
Outstanding units, beginning of period 22,837 18,572 21,331 10,282 10,326 5,927
------- ------- ------- ------ ------ ------
Outstanding units, end of period 14,177 22,837 18,572 9,525 10,282 10,326
======= ======= ======= ====== ====== ======
Variable General Select Plus:
Deposits 21,266 28,629 36,763 4,811 513 1,994
Withdrawals (47,125) (5,891) (8,788) (312) (937) (3,232)
Outstanding units, beginning of year 87,370 64,632 36,657 2,468 2,892 4,130
------- ------- ------- ------ ------ ------
Outstanding units, end of year 61,511 87,370 64,632 6,967 2,468 2,892
======= ======= ======= ====== ====== ======
Variable Universal Life-100:
Deposits 143,496 57,671 39,145 7,343 8,405 7,159
Withdrawals (64,124) (17,259) (9,470) (6,724) (3,275) (2,531)
Outstanding units, beginning of year 109,650 69,238 39,563 15,703 10,573 5,945
------- ------- ------- ------ ------ ------
Outstanding units, end of year 189,022 109,650 69,238 16,322 15,703 10,573
======= ======= ======= ====== ====== ======
<CAPTION>
WORLDWIDE
EMERGING MARKETS
FUND DIVISION<F**>
--------------------
1999
------
<S> <C>
Variable Universal Life-95:
Deposits 4,159
Withdrawals (1,480)
Outstanding units, beginning of period 0
------
Outstanding units, end of period 2,679
======
Variable General Select Plus:
Deposits 9,565
Withdrawals (62)
Outstanding units, beginning of year 0
------
Outstanding units, end of year 9,503
======
Variable Universal Life-100:
Deposits 11,327
Withdrawals (9,704)
Outstanding units, beginning of year 0
------
Outstanding units, end of year 1,623
======
<FN>
<F*>This fund was formerly known as the Gold & Natural Resources Fund.
<F**>The Worldwide Emerging Markets Fund began operations on September 15, 1998. (continued)
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the
year ended December 31, 1999, and 1998:
<CAPTION>
WORLDWIDE
HIGH INCOME WORLDWIDE HARD ASSETS EMERGING MARKETS
FUND DIVISION FUND DIVISION<F**> FUND DIVISION
------------------ --------------------- -------------------
1999 1998 1999 1998 1999 1998<F***>
------ ------ ------ ------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Variable Universal Life - 98:<F*>
Deposits 44,520 1,163 950 11 1,992 159
Withdrawals (3,941) (29) (124) 0 (453) (9)
Outstanding units, beginning of year 1,134 0 11 0 150 0
------ ----- ---- -- ----- ---
Outstanding units, end of year 41,713 1,134 837 11 1,689 150
====== ===== ==== == ===== ===
Joint and Survivor Variable Universal Life - 98:<F*>
Deposits 6,839 175 345 0
Withdrawals (1,080) (5) (28) 0
Outstanding units, beginning of year 170 0 0 0
------ ----- ----- ---
Outstanding units, end of year 5,929 170 317 0
====== ===== ===== ===
<FN>
<F*>The Variable Universal Life 98 and Joint And Survivor Variable Universal Life products were introduced in 1998,
and the first deposits were received on September 29, 1998 and October 14, 1998, respectively.
<F**>This fund was formerly known as the Gold & Natural Resources Fund.
<F***> The Worldwide Emerging Markets Fund began operations on September 15, 1998. (continued)
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the
period ended December 31, 1999, 1998 and 1997:
<CAPTION>
MULTI-STYLE EQUITY CORE BOND
FUND DIVISION<F*> FUND DIVISION<F*>
----------------------------------- -----------------------------------
1999 1998 1997 1999 1998 1997
------- ------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Variable Universal Life - 95:<F**>
Deposits 25,719 15,537 0 2,587 4,116 0
Withdrawals (2,365) (679) 0 (335) (46) 0
Outstanding units, beginning of period 14,858 0 0 4,070 0 0
------- ------- ------- ------- ------- ------
Outstanding units, end of period 38,212 14,858 0 6,322 4,070 0
======= ======= ======= ======= ======= ======
Variable General Select Plus:<F***>
Deposits 167,069 456,763 47,597 310,229 450,004 21,805
Withdrawals (72,422) (30,453) (667) (60,786) (73,816) (391)
Outstanding units, beginning of period 473,240 46,930 0 397,602 21,414 0
------- ------- ------- ------- ------- ------
Outstanding units, end of period 567,887 473,240 46,930 647,045 397,602 21,414
======= ======= ======= ======= ======= ======
Variable Universal Life - 100:<F****>
Deposits 56,809 8,637 0 39,861 807 0
Withdrawals (22,765) (1,360) 0 (32,644) (123) 0
Outstanding units, beginning of year 7,277 0 0 684 0 0
------- ------- ------- ------- ------- ------
Outstanding units, end of year 41,321 7,277 0 7,901 684 0
======= ======= ======= ======= ======= ======
Russell Variable Universal Life: <F*****>
Deposits 9,282 81,464 153,054 3,615 91,724 86,149
Withdrawals (8,686) (9,164) (1,563) (10,478) (10,534) (2,024)
Outstanding units, beginning of period 223,791 151,491 0 165,315 84,125 0
------- ------- ------- ------- ------- ------
Outstanding units, end of period 224,387 223,791 151,491 158,452 165,315 84,125
======= ======= ======= ======= ======= ======
<FN>
<F*>The Multi-style Equity Fund and Core Bond Fund began operations on January 2, 1997.
<F**>The Variable Universal Life - 95 product was introduced to the Frank Russell funds on April 30, 1998, and the first deposit
was received on May 14, 1998.
<F***>The Variable General Select Plus product was introduced in 1997, and the first deposit was received on June 26, 1997.
<F****>The Variable Universal Life - 100 product was introduced to the Frank Russell funds on April 30, 1998, and the first deposit
was received on May 22, 1998.
<F*****>The Russell Variable Universal Life product was introduced in 1997, and the first deposit was received on June 6, 1997.
(continued)
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the
year ended December 31, 1999, and 1998:
<CAPTION>
MULTI-STYLE EQUITY CORE BOND
FUND DIVISION<F*> FUND DIVISION<F*>
--------------------- ---------------------
1999 1998 1999 1998
------ ----- ------ -----
<S> <C> <C> <C> <C>
Variable Universal Life - 98:<F**>
Deposits 59,760 4,052 36,182 788
Withdrawals (8,199) (101) (9,781) (9)
Outstanding units, beginning of year 3,951 0 779 0
------ ----- ------ ---
Outstanding units, end of year 55,512 3,951 27,180 779
====== ===== ====== ===
Joint and Survivor Variable Universal Life - 98:<F**>
Deposits 7,599 410 6,321 169
Withdrawals (838) (12) (255) (5)
Outstanding units, beginning of year 398 0 164 0
------ ----- ------ ---
Outstanding units, end of year 7,159 398 6,230 164
====== ===== ====== ===
<FN>
<F*>The Multi-style Equity Fund and Core Bond Fund began operations on January 2, 1997.
<F**>The Variable Universal Life 98 and Joint And Survivor Variable Universal Life products were introduced in 1998,
and the first deposits were received on September 29, 1998 and October 14, 1998, respectively. (continued)
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the
period ended December 31, 1999, 1998 and 1997:
<CAPTION>
AGGRESSIVE EQUITY NON-US
FUND DIVISION<F*> FUND DIVISION<F*>
---------------------------------- ---------------------------------
1999 1998 1997 1999 1998 1997
------- ------- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Variable Universal Life - 95:<F**>
Deposits 6,833 14,484 0 7,044 10,028 0
Withdrawals (1,715) (592) 0 (1,673) (208) 0
Outstanding units, beginning of period 13,892 0 0 9,820 0 0
------- ------- ------ ------- ------- ------
Outstanding units, end of period 19,010 13,892 0 15,191 9,820 0
======= ======= ====== ======= ======= ======
Variable General Select Plus:<F***>
Deposits 62,730 192,091 25,379 33,941 188,887 28,863
Withdrawals (59,340) (43,602) (279) (26,047) (29,735) (285)
Outstanding units, beginning of period 173,589 25,100 0 187,730 28,578 0
------- ------- ------ ------- ------- ------
Outstanding units, end of period 176,979 173,589 25,100 195,624 187,730 28,578
======= ======= ====== ======= ======= ======
Variable Universal Life - 100:<F****>
Deposits 16,636 3,083 0 21,192 1,576 0
Withdrawals (4,051) (414) 0 (12,838) (127) 0
Outstanding units, beginning of year 2,669 0 0 1,449 0 0
------- ------- ------ ------- ------- ------
Outstanding units, end of year 15,254 2,669 0 9,803 1,449 0
======= ======= ====== ======= ======= ======
Russell Variable Universal Life: <F*****>
Deposits 8,286 34,380 75,650 3,570 56,596 50,101
Withdrawals (3,252) (3,034) (494) (6,141) (5,688) (1,018)
Outstanding units, beginning of period 106,502 75,156 0 99,991 49,083 0
------- ------- ------ ------- ------- ------
Outstanding units, end of period 111,536 106,502 75,156 97,420 99,991 49,083
======= ======= ====== ======= ======= ======
<FN>
<F*>The Aggressive Equity Fund and Non-US Fund began operations on January 2, 1997.
<F**>The Variable Universal Life - 95 product was introduced to the Frank Russell funds on April 30, 1998, and the first deposit
was received on May 14, 1998.
<F***>The Variable General Select Plus product was introduced in 1997, and the first deposit was received on June 26, 1997.
<F****>The Variable Universal Life - 100 product was introduced to the Frank Russell funds on April 30, 1998, and the first deposit
was received on May 22, 1998.
<F*****>The Russell Variable Universal Life product was introduced in 1997, and the first deposit was received on June 6, 1997.
(continued)
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the
year ended December 31, 1999 and 1998:
<CAPTION>
AGGRESSIVE EQUITY NON-US
FUND DIVISION<F*> FUND DIVISION<F*>
--------------------- ---------------------
1999 1998 1999 1998
------ ----- ------ -----
<S> <C> <C> <C> <C>
Variable Universal Life - 98:<F**>
Deposits 36,276 3,760 14,411 885
Withdrawals (5,039) (70) (2,475) (16)
Outstanding units, beginning of year 3,690 0 869 0
------ ----- ------ ---
Outstanding units, end of year 34,927 3,690 12,805 869
====== ===== ====== ===
Joint and Survivor Variable Universal Life - 98:<F**>
Deposits 3,172 0 2,535 165
Withdrawals (464) 0 (262) (5)
Outstanding units, beginning of year 0 0 160 0
------ ----- ------ ---
Outstanding units, end of year 2,708 0 2,433 160
====== ===== ====== ===
<FN>
<F*>The Aggressive Equity Fund and Non-US Fund began operations on January 2, 1997.
<F**>The Variable Universal Life 98 and Joint And Survivor Variable Universal Life products were introduced in 1998,
and the first deposits were received on September 29, 1998 and October 14, 1998, respectively.
(continued)
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the
year ended December 31, 1999:
<CAPTION>
INCOME & GROWTH INTERNATIONAL VALUE
FUND DIVISION<F*> FUND DIVISION<F*> FUND DIVISION<F*>
------------------- ------------------ ------------------
1999 1999 1999
------- ------- -------
<S> <C> <C> <C>
Variable Universal Life - 95:<F**>
Deposits 2,824 1,001 0
Withdrawals (24) (3) 0
Outstanding units, beginning of year 0 0 0
------- ------- -------
Outstanding units, end of year 2,800 998 0
======= ======= =======
Variable General Select Plus:<F**>
Deposits 1,838 5,156 805
Withdrawals (21) (625) (10)
Outstanding units, beginning of year 0 0 0
------- ------- -------
Outstanding units, end of year 1,817 4,531 795
======= ======= =======
Variable Universal Life - 100:<F**>
Deposits 19,391 17,730 10,510
Withdrawals (16,959) (10,629) (10,510)
Outstanding units, beginning of year 0 0 0
------- ------- -------
Outstanding units, end of year 2,432 7,101 0
======= ======= =======
<FN>
<F*>The Income & Growth Fund, International Fund, and Value Fund began operations on September 15, 1998.
<F**>The Variable Universal Life - 95, Variable General Select Plus, and Variable Universal Life - 100 products were introduced to
the American Century funds on April 30, 1999, and the first deposits were received on July 7, 1999, May 17, 1999, and June 18,
1999, respectively.
(continued)
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the
period ended December 31, 1999 and 1998:
<CAPTION>
INCOME & GROWTH INTERNATIONAL VALUE
FUND DIVISION FUND DIVISION FUND DIVISION
-------------------- --------------------- --------------------
1999 1998<F*> 1999 1998<F*> 1999 1998<F*>
------ -------- ------ -------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Variable Universal Life - 98:<F**>
Deposits 48,580 631 24,488 92 9,149 360
Withdrawals (5,275) (16) (2,024) (7) (1,376) (3)
Outstanding units, beginning of period 615 0 85 0 357 0
------ --- ------ -- ------ ---
Outstanding units, end of period 43,920 615 22,549 85 8,130 357
====== === ====== == ====== ===
Joint and Survivor Variable Universal Life - 98:
Deposits 3,433 0 1,188 0 302 0
Withdrawals (541) 0 (114) 0 (62) 0
Outstanding units, beginning of year 0 0 0 0 0 0
------ --- ------ -- ------ ---
Outstanding units, end of year 2,892 0 1,074 0 240 0
====== === ====== == ====== ===
<FN>
<F*>The Income & Growth Fund, International Fund, and Value Fund began operations on September 15, 1998.
<F**>The Variable Universal Life 98 product was introduced in 1998, and the first deposit was received on September 29, 1998.
(continued)
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the
year ended December 31, 1999:
<CAPTION>
BOND PORTFOLIO SMALL COMPANY
FUND DIVISION<F*> FUND DIVISION<F*>
-------------------- --------------------
1999 1999
----- ------
<S> <C> <C>
Variable Universal Life-95:<F**>
Deposits 896 4,033
Withdrawals (543) (1,453)
Outstanding units, beginning of year 0 0
---- ------
Outstanding units, end of year 353 2,580
==== ======
Variable General Select Plus:<F**>
Deposits 932 10,153
Withdrawals (6) (62)
Outstanding units, beginning of year 0 0
---- ------
Outstanding units, end of year 926 10,091
==== ======
Variable Universal Life-100:<F**>
Deposits 340 3,598
Withdrawals (9) (16)
Outstanding units, beginning of year 0 0
---- ------
Outstanding units, end of year 331 3,582
==== ======
<FN>
<F*>The Bond Portfolio Fund and Small Company Fund began operations on September 15, 1998.
<F**>The Variable Universal Life - 95, Variable General Select Plus, and Variable Universal Life - 100 products were introduced to
the J. P. Morgan funds on April 30, 1999, and the first deposits were received on July 1, 1999, May 17, 1999, and May 19, 1999,
respectively.
(continued)
<PAGE>
<PAGE>
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the
years ended December 31, 1999 and 1998:
<CAPTION>
BOND PORTFOLIO SMALL COMPANY
FUND DIVISION FUND DIVISION
--------------------- ------------------------
1999 1998<F*> 1999 1998<F*>
------ -------- ------ --------
<S> <C> <C> <C> <C>
Variable Universal Life - 98:<F**>
Deposits 12,486 330 22,053 292
Withdrawals (680) (2) (3,275) (19)
Outstanding units, beginning of period 328 0 273 0
------ --- ------ ---
Outstanding units, end of period 12,134 328 19,051 273
====== === ====== ===
Joint and Survivor Variable Universal Life - 98:
Deposits 528 0 3,035 0
Withdrawals (107) 0 (326) 0
Outstanding units, beginning of year 0 0 0 0
------ --- ------ ---
Outstanding units, end of year 421 0 2,709 0
====== === ====== ===
<FN>
<F*>The Bond Portfolio Fund and Small Company Fund began operations on September 15, 1998.
<F**>The Variable Universal Life 98 product was introduced in 1998, and the first deposit was received on September 29, 1998.
(continued)
</TABLE>
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT
Deposits into the Separate Account are used to purchase shares in the
Capital Company, Variable Insurance Products Funds, Variable Insurance
Products Fund II, Van Eck Worldwide Insurance Trust, Russell Insurance
Funds, American Century Variable Portfolios, or J.P. Morgan Series Trust
II. Net deposits represent the amounts available for investment in such
shares after deduction of sales charges, premium taxes, administrative
costs, insurance, underwriting and acquisition expense, cost of
insurance, and cost of optional benefits by rider. Realized and
unrealized capital gains (losses) have been excluded from net deposits
into the Separate Account because they have been included in increase
(decrease) in net assets resulting from operations in the Statements of
Changes in Net Assets.
Variable Universal Life - 95:
- -----------------------------
<TABLE>
<CAPTION>
S & P 500 INDEX MONEY MARKET
FUND DIVISION FUND DIVISION
---------------------------------------- ---------------------------------------
1999 1998 1997 1999 1998 1997
---------- ----------- ----------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $ 185,198 $1,456,349 $1,099,723 $ 70,185 $ 813,595 $ 1,794,475
Transfers between fund divisions and
General American 42,863 150,022 931,860 248,848 (578,617) (1,471,521)
Surrenders and withdrawals (254,901) (471,926) (144,131) (1,251) (1,674) (20,934)
--------- ---------- ---------- -------- --------- -----------
Total gross deposits, transfers, and
surrenders between fund divisions (26,840) 1,134,445 1,887,452 317,782 233,304 302,020
--------- ---------- ---------- -------- --------- -----------
Deductions:
Premium load charges 87,826 115,481 84,994 18,195 63,307 371,169
Cost of insurance and administrative
expenses 64,409 702,222 481,051 6,770 217,403 135,973
--------- ---------- ---------- -------- --------- -----------
Total deductions 152,235 817,703 566,045 24,965 280,710 507,142
--------- ---------- ---------- -------- --------- -----------
Net deposits into (withdrawals from)
Separate Account $(179,075) $ 316,742 $1,321,407 $292,817 $ (47,406) $ (205,122)
========= ========== ========== ======== ========= ===========
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life - 95:
- -----------------------------
<CAPTION>
BOND INDEX MANAGED EQUITY
FUND DIVISION FUND DIVISION
--------------------------------------- -------------------------------------
1999 1998 1997 1999 1998 1997
--------- --------- ---------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $ 61,294 $443,018 $ 312,433 $62,997 $364,076 $ 359,432
Transfers between fund divisions and
General American (33,145) 39,732 504,481 5,215 1,644 53,604
Surrenders and withdrawals (762) (48,407) (161,856) (8,463) (48,475) (162,045)
-------- -------- --------- ------- -------- ---------
Total gross deposits, transfers, and
surrenders between fund divisions 27,387 434,343 655,058 59,749 317,245 250,991
-------- -------- --------- ------- -------- ---------
Deductions:
Premium load charges 20,736 33,733 24,355 25,178 28,257 27,564
Cost of insurance and administrative
expenses 9,997 124,148 111,704 21,239 197,695 191,337
-------- -------- --------- ------- -------- ---------
Total deductions 30,733 157,881 136,059 46,417 225,952 218,901
-------- -------- --------- ------- -------- ---------
Net deposits into (withdrawals from)
Separate Account $ (3,346) $276,462 $ 518,999 $13,332 $ 91,293 $ 32,090
======== ======== ========= ======= ======== =========
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life - 95:
- -----------------------------
<CAPTION>
ASSET ALLOCATION INTERNATIONAL INDEX
FUND DIVISION FUND DIVISION<F*>
---------------------------------------- -------------------------------------
1999 1998 1997 1999 1998 1997
---------- ----------- ----------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $ 185,694 $1,409,425 $1,571,785 $ 92,422 $ 577,527 $ 674,809
Transfers between fund divisions and
General American (110,411) (240,301) (542,327) (38,915) (287,016) (244,489)
Surrenders and withdrawals (5,907) (237,885) (261,445) (24,993) (53,267) (27,295)
--------- ---------- ---------- -------- ---------- ---------
Total gross deposits, transfers, and
surrenders between fund divisions 69,376 931,239 768,013 28,514 237,244 403,025
--------- ---------- ---------- -------- ---------- ---------
Deductions:
Premium load charges 71,154 101,603 115,555 32,153 45,221 53,326
Cost of insurance and administrative
expenses 38,489 453,887 472,278 18,992 203,189 206,172
--------- ---------- ---------- -------- ---------- ---------
Total deductions 109,643 555,490 587,833 51,145 248,410 259,498
--------- ---------- ---------- -------- ---------- ---------
Net deposits into (withdrawals from)
Separate Account $ (40,267) $ 375,749 $ 180,180 $(22,631) $ (11,166) $ 143,527
========= ========== ========== ======== ========= =========
<FN>
<F*>This fund was formerly known as the International Equity Fund. (continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life - 95:
- -----------------------------
<CAPTION>
MID-CAP EQUITY SMALL-CAP EQUITY
FUND DIVISION<F*> FUND DIVISION
--------------------------------------- ------------------------------------
1999 1998 1997 1999 1998 1997<F**>
--------- ---------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $ 73,750 $ 535,140 $ 731,205 $ 14,728 $ 92,984 $ 81,175
Transfers between fund divisions and
General American (11,030) (161,251) (545,250) (24,848) 123,494 386,732
Surrenders and withdrawals (23,853) (60,979) (30,828) 0 (13,142) 0
-------- --------- --------- -------- -------- --------
Total gross deposits, transfers, and
surrenders between fund divisions 38,867 312,910 155,127 (10,120) 203,336 467,907
-------- --------- --------- -------- -------- --------
Deductions:
Premium load charges 28,879 40,775 55,258 4,367 7,292 6,341
Cost of insurance and administrative
expenses 17,499 229,610 226,846 1,828 23,300 4,229
-------- --------- --------- -------- -------- --------
Total deductions 46,378 270,385 282,104 6,195 30,592 10,570
-------- --------- --------- -------- -------- --------
Net deposits into (withdrawals from)
Separate Account $ (7,511) $ 42,525 $(126,977) $(16,315) $172,744 $457,337
======== ========= ========= ======== ======== ========
<FN>
<F*>This fund was formerly known as the Special Equity Fund.
<F**>The Small-Cap Equity Fund began operations on May 1, 1997. (continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life - 95:
- -----------------------------
<CAPTION>
EQUITY-INCOME GROWTH
FUND DIVISION FUND DIVISION
---------------------------------------- --------------------------------------
1999 1998 1997 1999 1998 1997
---------- ----------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $ 198,741 $1,154,929 $1,258,958 $ 241,466 $1,514,732 $1,700,056
Transfers between fund divisions and
General American (227,879) (50,446) (346,404) (157,307) (487,503) 124,428
Surrenders and withdrawals (163,472) (247,987) (243,196) (316,618) (324,276) (260,054)
--------- ---------- ---------- --------- ---------- ----------
Total gross deposits, transfers, and
surrenders between fund divisions (192,610) 856,496 669,358 (232,459) 702,953 1,564,430
--------- ---------- ---------- --------- ---------- ----------
Deductions:
Premium load charges 81,278 91,178 98,808 114,323 118,852 134,071
Cost of insurance and administrative
expenses 37,192 484,812 470,011 72,257 664,659 606,328
--------- ---------- ---------- --------- ---------- ----------
Total deductions 118,470 575,990 568,819 186,580 783,511 740,399
--------- ---------- ---------- --------- ---------- ----------
Net deposits into (withdrawals from)
Separate Account $(311,080) $ 280,506 $ 100,539 $(419,039) $ (80,558) $ 824,031
========= ========== ========== ========= ========== ==========
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life - 95:
- -----------------------------
<CAPTION>
OVERSEAS ASSET MANAGER
FUND DIVISION FUND DIVISION
---------------------------------------- -----------------------------------
1999 1998 1997 1999 1998 1997
--------- ---------- ----------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $105,041 $ 792,155 $ 927,173 $ 9,248 $ 28,935 $ 9,236
Transfers between fund divisions and
General American (65,913) (249,954) 262,454 (1,899) 85,499 3,098
Surrenders and withdrawals (1,091) (84,661) (121,639) 0 (1,077) 0
-------- --------- ---------- ------- -------- -------
Total gross deposits, transfers, and
surrenders between fund divisions 38,037 457,540 1,067,988 7,349 113,357 12,334
-------- --------- ---------- ------- -------- -------
Deductions:
Premium load charges 47,051 60,018 71,458 3,698 2,699 706
Cost of insurance and administrative
expenses 28,789 304,803 302,840 1,120 8,127 1,874
-------- --------- ---------- ------- -------- -------
Total deductions 75,840 364,821 374,298 4,818 10,826 2,580
-------- --------- ---------- ------- -------- -------
Net deposits into (withdrawals from)
Separate Account $(37,803) $ 92,719 $ 693,690 $ 2,531 $102,531 $ 9,754
======== ========= ========== ======= ======== =======
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life - 95:
- -----------------------------
<CAPTION>
HIGH INCOME WORLDWIDE HARD ASSETS
FUND DIVISION FUND DIVISION<F*>
-------------------------------------- ----------------------------------
1999 1998 1997 1999 1998 1997
--------- -------- --------- -------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $ 5,222 $52,060 $ 61,425 $ 12 $ 21,677 $29,642
Transfers between fund divisions and
General American (20,051) 34,487 (76,243) (1,088) (21,580) 31,281
Surrenders and withdrawals 0 (29) 0 0 (10) 0
-------- ------- -------- ------- -------- -------
Total gross deposits, transfers, and
surrenders between fund divisions (14,829) 86,518 (14,818) (1,076) 87 60,923
-------- ------- -------- ------- -------- -------
Deductions:
Premium load charges 2,499 4,139 4,910 310 1,790 2,223
Cost of insurance and administrative
expenses 1,345 22,068 19,821 287 3,541 5,330
-------- ------- -------- ------- -------- -------
Total deductions 3,844 26,207 24,731 597 5,331 7,553
-------- ------- -------- ------- -------- -------
Net deposits into (withdrawals from)
Separate Account $(18,673) $60,311 $(39,549) $(1,673) $ (5,244) $53,370
======== ======= ======== ======= ======== =======
<FN>
<F*>This fund was formerly known as the Gold & Natural Resources Fund. (continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life - 95:
- -----------------------------
<CAPTION>
WORLDWIDE
EMERGING MARKETS MULTI-STYLE EQUITY CORE BOND
FUND DIVISION FUND DIVISION FUND DIVISION
---------------- --------------------- --------------------
1999<F**> 1999 1998<F*> 1999 1998<F*>
--------- ------- -------- ------ --------
<S> <C> <C> <C> <C> <C>
Total gross deposits $ 632 $11,094 $ 11,160 $1,310 $ 558
Transfers between fund divisions and
General American 26,701 0 129,908 0 42,124
Surrenders and withdrawals (20,109) 0 (1,571) 0 0
-------- ------- -------- ------ -------
Total gross deposits, transfers, and
surrenders between fund divisions 7,224 11,094 139,497 1,310 42,682
-------- ------- -------- ------ -------
Deductions:
Premium load charges 22 3,558 1,059 314 33
Cost of insurance and administrative expenses 271 1,703 2,418 261 479
-------- ------- -------- ------ -------
Total deductions 293 5,261 3,477 575 512
-------- ------- -------- ------ -------
Net deposits into Separate Account $ 6,931 $ 5,833 $136,020 $ 735 $42,170
======== ======= ======== ====== =======
<FN>
<F*>The Variable Universal Life - 95 product became available to these funds on April 30, 1998. (continued)
<F**>The Variable Universal Life - 95 product became available to this fund on April 30, 1999.
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life - 95:
- -----------------------------
<CAPTION>
AGGRESSIVE EQUITY NON-US INCOME & GROWTH
FUND DIVISION FUND DIVISION FUND DIVISION
--------------------- -------------------- ---------------
1999 1998<F*> 1999 1998<F*> 1999<F**>
------ --------- ------ -------- ---------
<S> <C> <C> <C> <C> <C>
Total gross deposits $5,123 $ 3,900 $8,286 $ 5,027 $ 350
Transfers between fund divisions and
General American 0 111,676 0 81,549 4,916
Surrenders and withdrawals 0 (721) 0 0 0
------ -------- ------ ------- ------
Total gross deposits, transfers, and
surrenders between fund divisions 5,123 114,855 8,286 86,576 5,266
------ -------- ------ ------- ------
Deductions:
Premium load charges 1,837 512 1,307 536 45
Cost of insurance and administrative expenses 1,058 2,054 596 1,957 93
------ -------- ------ ------- ------
Total deductions 2,895 2,566 1,903 2,493 138
------ -------- ------ ------- ------
Net deposits into Separate Account $2,228 $112,289 $6,383 $84,083 $5,128
====== ======== ====== ======= ======
<FN>
<F*>The Variable Universal Life - 95 product became available to these funds on April 30, 1998.
<F**>The Variable Universal Life - 95 product became available to this fund on April 30, 1999.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life - 95:
- -----------------------------
<CAPTION>
SMALL COMPANY
INTERNATIONAL BOND PORTFOLIO PORTFOLIO
FUND DIVISION FUND DIVISION FUND DIVISION
------------- ---------------- ---------------
1999<F*> 1999<F*> 1999<F*>
-------- -------- --------
<S> <C> <C> <C>
Total gross deposits $ 150 $ 18 $ 871
Transfers between fund divisions and
General American 6,911 3,471 21,899
Surrenders and withdrawals 0 0 (18,684)
------ ------ --------
Total gross deposits, transfers, and
surrenders between fund divisions 7,061 3,489 4,086
------ ------ --------
Deductions:
Premium load charges 16 0 22
Cost of insurance and administrative expenses 14 0 269
------ ------ --------
Total deductions 30 0 291
------ ------ --------
Net deposits into Separate Account $7,031 $3,489 $ 3,795
====== ====== ========
<FN>
<F*>The Variable Universal Life - 95 product became available to these funds on April 30, 1999. (continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable General Select Plus:
- -----------------------------
<CAPTION>
S & P 500 INDEX MONEY MARKET
FUND DIVISION FUND DIVISION
----------------------------------------- -----------------------------------------
1999 1998 1997 1999 1998 1997
------------ ----------- ------------ ---------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $ 9,516,696 $1,357,475 $ 1,229,167 $3,414,103 $ 16,933,833 $11,949,827
Transfers between fund divisions and
General American 60,389 5,431,739 1,639,191 27,242 (20,254,746) (6,333,824)
Surrenders and withdrawals (1,040,805) (152,414) (5,100,149) 0 (214,226) (4,042,319)
----------- ---------- ----------- ---------- ------------ -----------
Total gross deposits, transfers, and
surrenders between fund divisions 8,536,280 6,636,800 (2,231,791) 3,441,345 (3,535,139) 1,573,684
----------- ---------- ----------- ---------- ------------ -----------
Deductions:
Premium load charges 172,275 99,759 88,924 544,962 1,299,538 870,893
Cost of insurance and administrative
expenses 38,868 293,438 158,092 7,722 221,400 158,166
----------- ---------- ----------- ---------- ------------ -----------
Total deductions 211,143 393,197 247,016 552,684 1,520,938 1,029,059
----------- ---------- ----------- ---------- ------------ -----------
Net deposits into (withdrawals from)
Separate Account $ 8,325,137 $6,243,603 $(2,478,807) $2,888,661 $ (5,056,077) $ 544,625
=========== ========== =========== ========== ============ ===========
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable General Select Plus:
- -----------------------------
<CAPTION>
BOND INDEX MANAGED EQUITY
FUND DIVISION FUND DIVISION
---------------------------------------- -----------------------------------
1999 1998 1997 1999 1998 1997
----------- --------- ------------ --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $1,499,923 $146,938 $ 170,971 $686,238 $185,192 $225,421
Transfers between fund divisions and
General American (51,332) 205,041 109,381 (5,378) (477) 49,038
Surrenders and withdrawals (8,668) (27,635) (4,675,478) (1,579) (44,810) (28,866)
---------- -------- ----------- -------- -------- --------
Total gross deposits, transfers, and
surrenders between fund divisions 1,439,923 324,344 (4,395,126) 679,281 139,905 245,593
---------- -------- ----------- -------- -------- --------
Deductions:
Premium load charges 17,017 10,813 12,639 14,026 12,749 16,872
Cost of insurance and administrative
expenses 3,507 29,846 24,838 2,662 29,578 24,211
---------- -------- ----------- -------- -------- --------
Total deductions 20,524 40,659 37,477 16,688 42,327 41,083
---------- -------- ----------- -------- -------- --------
Net deposits into (withdrawals from)
Separate Account $1,419,399 $283,685 $(4,432,603) $662,593 $ 97,578 $204,510
========== ======== =========== ======== ======== ========
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable General Select Plus:
- -----------------------------
<CAPTION>
ASSET ALLOCATION INTERNATIONAL INDEX
FUND DIVISION FUND DIVISION<F*>
--------------------------------------- -----------------------------------
1999 1998 1997 1999 1998 1997
----------- ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $1,791,144 $ 231,397 $225,188 $347,511 $244,143 $273,454
Transfers between fund divisions and
General American (4,461) 160,811 92,485 (30,925) (26,160) 190,371
Surrenders and withdrawals (21,717) (166,928) (48,400) (18,143) (16,419) (47,175)
---------- --------- -------- -------- -------- --------
Total gross deposits, transfers, and
surrenders between fund divisions 1,764,966 225,280 269,273 298,443 201,564 416,650
---------- --------- -------- -------- -------- --------
Deductions:
Premium load charges 22,493 14,905 17,168 15,706 16,859 19,728
Cost of insurance and administrative
expenses 8,155 84,944 67,268 4,823 44,378 37,091
---------- --------- -------- -------- -------- --------
Total deductions 30,648 99,849 84,436 20,529 61,237 56,819
---------- --------- -------- -------- -------- --------
Net deposits into Separate Account $1,734,318 $ 125,431 $184,837 $277,914 $140,327 $359,831
========== ========= ======== ======== ======== ========
<FN>
<F*>This fund was formerly known as the International Equity Fund. (continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable General Select Plus:
- -----------------------------
<CAPTION>
MID-CAP EQUITY SMALL-CAP EQUITY
FUND DIVISION<F*> FUND DIVISION
--------------------------------------- -----------------------------------
1999 1998 1997 1999 1998 1997<F**>
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $190,421 $338,015 $376,253 $826,906 $263,673 $ 59,270
Transfers between fund divisions and
General American (54,387) 458,678 301,956 (43,257) 330,151 326,392
Surrenders and withdrawals (16,526) (25,379) (53,267) 0 0 0
-------- -------- -------- -------- -------- --------
Total gross deposits, transfers, and
surrenders between fund divisions 119,508 771,314 624,942 783,649 593,824 385,662
-------- -------- -------- -------- -------- --------
Deductions:
Premium load charges 22,927 24,362 29,256 24,112 19,071 4,711
Cost of insurance and administrative
expenses 5,491 67,262 40,346 2,329 19,764 3,518
-------- -------- -------- -------- -------- --------
Total deductions 28,418 91,624 69,602 26,441 38,835 8,229
-------- -------- -------- -------- -------- --------
Net deposits into Separate Account $ 91,090 $679,690 $555,340 $757,208 $554,989 $377,433
======== ======== ======== ======== ======== ========
<FN>
<F*>This fund was formerly known as the Special Equity Fund.
<F**>The Small-Cap Equity Fund began operations on May 1, 1997.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable General Select Plus:
- -----------------------------
<CAPTION>
EQUITY-INCOME GROWTH
FUND DIVISION FUND DIVISION
----------------------------------------- -----------------------------------------
1999 1998 1997 1999 1998 1997
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $2,525,240 $1,492,223 $1,043,306 $5,816,419 $1,297,862 $1,354,928
Transfers between fund divisions and
General American (83,685) 748,006 658,129 361,192 891,558 957,813
Surrenders and withdrawals (50,381) (183,143) (148,279) (74,872) (255,377) (268,257)
---------- ---------- ---------- ---------- ---------- ----------
Total gross deposits, transfers, and
surrenders between fund divisions 2,391,174 2,057,086 1,553,156 6,102,739 1,934,043 2,044,484
---------- ---------- ---------- ---------- ---------- ----------
Deductions:
Premium load charges 80,926 82,617 78,543 108,587 84,087 101,854
Cost of insurance and administrative
expenses 21,370 216,335 163,469 34,735 250,176 206,497
---------- ---------- ---------- ---------- ---------- ----------
Total deductions 102,296 298,952 242,012 143,322 334,263 308,351
---------- ---------- ---------- ---------- ---------- ----------
Net deposits into Separate Account $2,288,878 $1,758,134 $1,311,144 $5,959,417 $1,599,780 $1,736,133
========== ========== ========== ========== ========== ==========
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable General Select Plus:
- -----------------------------
<CAPTION>
OVERSEAS ASSET MANAGER
FUND DIVISION FUND DIVISION
------------------------------------ ----------------------------------
1999 1998 1997 1999 1998 1997
--------- ---------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $616,304 $ 557,583 $763,625 $869,266 $ 27,818 $53,004
Transfers between fund divisions and
General American 86,786 (150,747) 265,722 (2,696) 93,342 3,027
Surrenders and withdrawals (16,745) (55,531) (56,432) 0 0 (2,184)
-------- --------- -------- -------- -------- -------
Total gross deposits, transfers, and
surrenders between fund divisions 686,345 351,305 972,915 866,570 121,160 53,847
-------- --------- -------- -------- -------- -------
Deductions:
Premium load charges 46,057 40,327 57,640 4,522 1,654 3,927
Cost of insurance and administrative
expenses 8,922 79,907 71,616 1,055 6,502 3,625
-------- --------- -------- -------- -------- -------
Total deductions 54,979 120,234 129,256 5,577 8,156 7,552
-------- --------- -------- -------- -------- -------
Net deposits into Separate Account $631,366 $ 231,071 $843,659 $860,993 $113,004 $46,295
======== ========= ======== ======== ======== =======
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable General Select Plus:
- -----------------------------
<CAPTION>
HIGH INCOME WORLDWIDE HARD ASSETS
FUND DIVISION FUND DIVISION<F*>
----------------------------------- ---------------------------------
1999 1998 1997 1999 1998 1997
--------- --------- --------- ------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $941,150 $241,925 $201,994 $51,609 $ 6,454 $ 22,621
Transfers between fund divisions and
General American 11,214 156,540 207,353 0 (6,638) 1,823
Surrenders and withdrawals (10,166) (16,195) (6,433) 0 (841) (36,871)
-------- -------- -------- ------- ------- --------
Total gross deposits, transfers, and
surrenders between fund divisions 942,198 382,270 402,914 51,609 (1,025) (12,427)
-------- -------- -------- ------- ------- --------
Deductions:
Premium load charges 16,895 17,692 15,004 447 376 1,715
Cost of insurance and administrative
expenses 2,659 34,790 25,526 159 1,055 890
-------- -------- -------- ------- ------- --------
Total deductions 19,554 52,482 40,530 606 1,431 2,605
-------- -------- -------- ------- ------- --------
Net deposits into (withdrawals from)
Separate Account $922,644 $329,788 $362,384 $51,003 $(2,456) $(15,032)
======== ======== ======== ======= ======= ========
<CAPTION>
WORLDWIDE
EMERGING MARKETS
FUND DIVISION
-----------------
1999<F**>
-----------
<S> <C>
Total gross deposits $159,565
Transfers between fund divisions and
General American 27,490
Surrenders and withdrawals 0
--------
Total gross deposits, transfers, and
surrenders between fund divisions 187,055
--------
Deductions:
Premium load charges 61
Cost of insurance and administrative
expenses 578
--------
Total deductions 639
--------
Net deposits into (withdrawals from)
Separate Account $186,416
========
<FN>
<F*>This fund was formerly known as the Gold & Natural Resources Fund.
<F**>The Variable General Select Plus product became available to these funds on April 30, 1999. (continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable General Select Plus:
- -----------------------------
<CAPTION>
MULTI-STYLE EQUITY CORE BOND
FUND DIVISION FUND DIVISION
-------------------------------------- --------------------------------------
1999 1998 1997<F*> 1999 1998 1997<F*>
----------- ----------- -------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $3,354,781 $1,940,731 $ 80,451 $3,385,014 $1,482,889 $ 17,978
Transfers between fund divisions and
General American (238,145) 4,822,163 532,364 109,400 3,101,165 215,118
Surrenders and withdrawals 0 (187) 0 0 0 0
---------- ---------- -------- ---------- ---------- --------
Total gross deposits, transfers, and
surrenders between fund divisions 3,116,636 6,762,707 612,815 3,494,414 4,584,054 233,096
---------- ---------- -------- ---------- ---------- --------
Deductions:
Premium load charges 192,138 204,842 5,866 162,629 117,137 1,346
Cost of insurance and administrative
expenses 33,513 255,638 8,425 21,037 182,736 2,474
---------- ---------- -------- ---------- ---------- --------
Total deductions 225,651 460,480 14,291 183,666 299,873 3,820
---------- ---------- -------- ---------- ---------- --------
Net deposits into Separate Account $2,890,985 $6,302,227 $598,524 $3,310,748 $4,284,181 $229,276
========== ========== ======== ========== ========== ========
<FN>
<F*>The Multi-style Equity Fund, Core Bond Fund, Aggressive Equity Fund, and Non-US Fund began operations on January 2, 1997.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable General Select Plus:
- -----------------------------
<CAPTION>
AGGRESSIVE EQUITY NON-US
FUND DIVISION FUND DIVISION
-------------------------------------- --------------------------------------
1999 1998 1997<F*> 1999 1998 1997<F*>
-------- ---------- -------- --------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $686,381 $ 502,264 $ 54,099 $ 453,079 $ 264,324 $ 42,059
Transfers between fund divisions and
General American (84,039) 1,704,740 281,507 (109,436) 1,609,166 276,242
Surrenders and withdrawals 0 (116) 0 0 (119) 0
-------- ---------- -------- --------- ---------- --------
Total gross deposits, transfers, and
surrenders between fund divisions 602,342 2,206,888 335,606 343,643 1,873,371 318,301
-------- ---------- -------- --------- ---------- --------
Deductions:
Premium load charges 47,306 71,141 3,761 26,226 34,958 3,283
Cost of insurance and administrative
expenses 6,671 47,691 3,632 7,300 38,906 3,028
-------- ---------- -------- --------- ---------- --------
Total deductions 53,977 118,832 7,393 33,526 73,864 6,311
-------- ---------- -------- --------- ---------- --------
Net deposits into Separate Account $548,365 $2,088,056 $328,213 $ 310,117 $1,799,507 $311,990
======== ========== ======== ========= ========== ========
<FN>
<F*>The Multi-style Equity Fund, Core Bond Fund, Aggressive Equity Fund, and Non-US Fund began operations on January 2, 1997.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable General Select Plus:
- -----------------------------
<CAPTION>
INCOME & GROWTH INTERNATIONAL VALUE BOND PORTFOLIO SMALL COMPANY
FUND DIVISION FUND DIVISION FUND DIVISION FUND DIVISION FUND DIVISION
--------------- ------------- ------------- -------------- -------------
1999<F*> 1999<F*> 1999<F*> 1999<F*> 1999<F*>
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Total gross deposits $584,148 $306,558 $89,282 $128,073 $375,118
Transfers between fund divisions and
General American 10,803 9,583 0 0 36,269
Surrenders and withdrawals 0 0 0 0 0
-------- -------- ------- -------- --------
Total gross deposits, transfers, and
surrenders between fund divisions 594,951 316,141 89,282 128,073 411,387
-------- -------- ------- -------- --------
Deductions:
Premium load charges 57 57 70 0 72
Cost of insurance and administrative expenses 41 126 18 18 566
-------- -------- ------- -------- --------
Total deductions 98 183 88 18 638
-------- -------- ------- -------- --------
Net deposits into Separate Account $594,853 $315,958 $89,194 $128,055 $410,749
======== ======== ======= ======== ========
<FN>
<F*>The Variable General Select Plus product became available to these funds on April 30, 1999.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life - 100:
- ------------------------------
<CAPTION>
S & P 500 INDEX MONEY MARKET
FUND DIVISION FUND DIVISION
--------------------------------------- ---------------------------------------
1999 1998 1997 1999 1998 1997
--------- ---------- ---------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $ 497,709 $3,774,275 $1,995,433 $ 144,058 $ 9,507,851 $ 8,679,144
Transfers between fund divisions and
General American (19,257) 5,484,204 2,177,143 (223,896) (8,000,842) (7,303,949)
Surrenders and withdrawals (140,100) (299,771) (68,513) 0 (11,635) (3,421)
--------- ---------- ---------- --------- ----------- -----------
Total gross deposits, transfers, and
surrenders between fund divisions 338,352 8,958,708 4,104,063 (79,838) 1,495,374 1,371,774
--------- ---------- ---------- --------- ----------- -----------
Deductions:
Premium load charges 157,232 126,277 66,092 121,639 296,413 286,729
Cost of insurance and administrative
expenses 140,651 1,411,705 671,147 9,414 639,686 599,119
--------- ---------- ---------- --------- ----------- -----------
Total deductions 297,883 1,537,982 737,239 131,053 936,099 885,848
--------- ---------- ---------- --------- ----------- -----------
Net deposits into (withdrawals from)
Separate Account $ 40,469 $7,420,726 $3,366,824 $(210,891) $ 559,275 $ 485,926
========= ========== ========== ========= =========== ===========
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life - 100:
- ------------------------------
<CAPTION>
BOND INDEX MANAGED EQUITY
FUND DIVISION FUND DIVISION
------------------------------------- -------------------------------------
1999 1998 1997 1999 1998 1997
------- -------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $27,523 $279,989 $184,259 $78,693 $488,098 $228,756
Transfers between fund divisions and
General American (7,468) 613,426 265,500 3,494 247,910 432,012
Surrenders and withdrawals (1,636) (10,480) (4,282) (2,376) (59,153) (13,613)
------- -------- -------- ------- -------- --------
Total gross deposits, transfers, and
surrenders between fund divisions 18,419 882,935 445,477 79,811 676,855 647,155
------- -------- -------- ------- -------- --------
Deductions:
Premium load charges 10,567 9,514 6,186 16,793 16,604 7,603
Cost of insurance and administrative
expenses 7,925 83,804 57,817 14,086 178,243 96,349
------- -------- -------- ------- -------- --------
Total deductions 18,492 93,318 64,003 30,879 194,847 103,952
------- -------- -------- ------- -------- --------
Net deposits into (withdrawals from)
Separate Account $ (73) $789,617 $381,474 $48,932 $482,008 $543,203
======= ======== ======== ======= ======== ========
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life - 100:
- ------------------------------
<CAPTION>
ASSET ALLOCATION INTERNATIONAL INDEX
FUND DIVISION FUND DIVISION<F*>
-------------------------------------- --------------------------------------
1999 1998 1997 1999 1998 1997
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $174,486 $652,869 $297,431 $ 30,589 $542,245 $380,598
Transfers between fund divisions and
General American (14,732) 212,547 423,970 (74,184) 82,381 259,917
Surrenders and withdrawals (1,320) (16,485) (7,250) (1,545) (13,406) (12,338)
-------- -------- -------- -------- -------- --------
Total gross deposits, transfers, and
surrenders between fund divisions 158,434 848,931 714,151 (45,140) 611,220 628,177
-------- -------- -------- -------- -------- --------
Deductions:
Premium load charges 31,177 21,971 10,273 19,041 18,719 12,990
Cost of insurance and administrative
expenses 29,388 237,042 159,083 13,745 172,801 138,712
-------- -------- -------- -------- -------- --------
Total deductions 60,565 259,013 169,356 32,786 191,520 151,702
-------- -------- -------- -------- -------- --------
Net deposits into (withdrawals from)
Separate Account $ 97,869 $589,918 $544,795 $(77,926) $419,700 $476,475
======== ======== ======== ======== ======== ========
<FN>
<F*>This fund was formerly known as the International Equity Fund.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life - 100:
- ------------------------------
<CAPTION>
MID-CAP EQUITY SMALL-CAP EQUITY
FUND DIVISION<F*> FUND DIVISION
--------------------------------------- ---------------------------------------
1999 1998 1997 1999 1998 1997<F**>
--------- -------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $ 60,351 $694,795 $405,467 $ 37,239 $390,118 $ 48,912
Transfers between fund divisions and
General American (121,007) 218,584 129,102 (118,733) 485,204 254,044
Surrenders and withdrawals (2,516) (36,811) (15,375) 0 (2,420) 0
--------- -------- -------- --------- -------- --------
Total gross deposits, transfers, and
surrenders between fund divisions (63,172) 876,568 519,194 (81,494) 872,902 302,956
--------- -------- -------- --------- -------- --------
Deductions:
Premium load charges 22,088 23,485 13,537 15,661 13,324 1,579
Cost of insurance and administrative
expenses 14,426 206,508 140,909 8,182 114,663 7,052
--------- -------- -------- --------- -------- --------
Total deductions 36,514 229,993 154,446 23,843 127,987 8,631
--------- -------- -------- --------- -------- --------
Net deposits into (withdrawals from)
Separate Account $ (99,686) $646,575 $364,748 $(105,337) $744,915 $294,325
========= ======== ======== ========= ======== ========
<FN>
<F*>This fund was formerly known as the Special Equity Fund.
<F**>The Small-Cap Equity Fund began operations on May 1, 1997.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life - 100:
- ------------------------------
<CAPTION>
EQUITY INCOME GROWTH
FUND DIVISION FUND DIVISION
-------------------------------------- ---------------------------------------
1999 1998 1997 1999 1998 1997
-------- ----------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $191,931 $ 2,136,531 $1,996,233 $ 345,160 $2,942,824 $2,402,233
Transfers between fund divisions and
General American (87,709) (1,236,416) 792,184 122,542 694,369 1,492,743
Surrenders and withdrawals (9,312) (127,426) (44,826) (341,338) (279,188) (114,282)
-------- ----------- ---------- --------- ---------- ----------
Total gross deposits, transfers, and
surrenders between fund divisions 94,910 772,689 2,743,591 126,364 3,358,005 3,780,694
-------- ----------- ---------- --------- ---------- ----------
Deductions:
Premium load charges 62,308 78,973 66,340 101,279 103,369 80,190
Cost of insurance and administrative
expenses 45,170 940,207 572,720 106,234 1,188,418 842,557
-------- ----------- ---------- --------- ---------- ----------
Total deductions 107,478 1,019,180 639,060 207,513 1,291,787 922,747
-------- ----------- ---------- --------- ---------- ----------
Net deposits into (withdrawals from)
Separate Account $(12,568) $ (246,491) $2,104,531 $ (81,149) $2,066,218 $2,857,947
======== =========== ========== ========= ========== ==========
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life - 100:
- ------------------------------
<CAPTION>
OVERSEAS ASSET MANAGER
FUND DIVISION FUND DIVISION
-------------------------------------- -------------------------------------
1999 1998 1997 1999 1998 1997
-------- -------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $ 60,624 $630,759 $508,810 $36,199 $317,439 $147,295
Transfers between fund divisions and
General American 86,259 143,337 313,710 2,278 146,214 109,004
Surrenders and withdrawals (4,693) (59,595) (22,505) (1,984) (26,187) (5,778)
-------- -------- -------- ------- -------- --------
Total gross deposits, transfers, and
surrenders between fund divisions 142,190 714,501 800,015 36,493 437,466 250,521
-------- -------- -------- ------- -------- --------
Deductions:
Premium load charges 21,350 21,503 17,197 11,474 10,729 4,955
Cost of insurance and administrative
expenses 16,685 195,007 165,254 10,603 117,605 74,461
-------- -------- -------- ------- -------- --------
Total deductions 38,035 216,510 182,451 22,077 128,334 79,416
-------- -------- -------- ------- -------- --------
Net deposits into Separate Account $104,155 $497,991 $617,564 $14,416 $309,132 $171,105
======== ======== ======== ======= ======== ========
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life - 100:
- ------------------------------
<CAPTION>
HIGH INCOME WORLDWIDE HARD ASSETS
FUND DIVISION FUND DIVISION<F*>
-------------------------------------- -------------------------------------
1999 1998 1997 1999 1998 1997
-------- -------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $ 61,798 $469,183 $300,761 $ 4,754 $60,696 $63,004
Transfers between fund divisions and
General American 174,344 256,832 224,109 (3,654) 10,164 18,216
Surrenders and withdrawals 0 (12,240) (20,348) 0 (2,562) (4,909)
-------- -------- -------- ------- ------- -------
Total gross deposits, transfers, and
surrenders between fund divisions 236,142 713,775 504,522 1,100 68,298 76,311
-------- -------- -------- ------- ------- -------
Deductions:
Premium load charges 23,688 15,948 10,110 1,670 2,007 2,147
Cost of insurance and administrative
expenses 15,033 130,579 105,718 1,229 17,277 19,651
-------- -------- -------- ------- ------- -------
Total deductions 38,721 146,527 115,828 2,899 19,284 21,798
-------- -------- -------- ------- ------- -------
Net deposits into (withdrawals from)
Separate Account $197,421 $567,248 $388,694 $(1,799) $49,014 $54,513
======== ======== ======== ======= ======= =======
<FN>
<F*>This fund was formerly known as the Gold & Natural Resources Fund.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life - 100:
- ------------------------------
<CAPTION>
WORLDWIDE
EMERGING MARKETS MULTI-STYLE EQUITY CORE BOND
FUND DIVISION FUND DIVISION FUND DIVISION
---------------- ------------------------- -------------------------
1999<F**> 1999 1998<F*> 1999 1998<F*>
--------- ------- -------- ------ --------
<S> <C> <C> <C> <C> <C>
Total gross deposits $ 52 $29,816 $11,281 $7,874 $1,071
Transfers between fund divisions and
General American 2,925 (584) 62,902 (56) 7,124
Surrenders and withdrawals (3,567) 114 (69) 1,463 0
------- ------- ------- ------ ------
Total gross deposits, transfers, and
surrenders between fund divisions (590) 29,346 74,114 9,281 8,195
------- ------- ------- ------ ------
Deductions:
Premium load charges 7 6,946 460 886 40
Cost of insurance and administrative expenses 88 5,732 5,703 475 1,266
------- ------- ------- ------ ------
Total deductions 95 12,678 6,163 1,361 1,306
------- ------- ------- ------ ------
Net deposits into (withdrawals from)
Separate Account $ (685) $16,668 $67,951 $7,920 $6,889
======= ======= ======= ====== ======
<FN>
<F*>The Variable Universal Life - 100 product became available to these funds on April 30, 1998.
<F**>The Variable Universal Life - 100 product became available to this fund on April 30, 1999.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life - 100:
- ------------------------------
<CAPTION>
AGGRESSIVE EQUITY NON-US
FUND DIVISION FUND DIVISION
---------------------- -----------------------
1999 1998<F*> 1999 1998<F*>
------ -------- ------- --------
<S> <C> <C> <C> <C>
Total gross deposits $5,962 $(3,957) $ 5,131 $ 1,368
Transfers between fund divisions and
General American (656) 20,863 (194) 12,106
Surrenders and withdrawals 0 0 (1,225) 0
------ ------- ------- -------
Total gross deposits, transfers, and
surrenders between fund divisions 5,306 16,906 3,712 13,474
------ ------- ------- -------
Deductions:
Premium load charges 1,972 167 1,252 103
Cost of insurance and administrative expenses 2,098 3,404 1,797 1,186
------ ------- ------- -------
Total deductions 4,070 3,571 3,049 1,289
------ ------- ------- -------
Net deposits into Separate Account $1,236 $13,335 $ 663 $12,185
====== ======= ======= =======
<FN>
<F*>The Variable Universal Life - 100 product became available to these funds on April 30, 1998.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life - 100:
- ------------------------------
<CAPTION>
SMALL COMPANY
INCOME & GROWTH INTERNATIONAL VALUE BOND PORTFOLIO PORTFOLIO
FUND DIVISION FUND DIVISION FUND DIVISION FUND DIVISION FUND DIVISION
--------------- ------------- ------------- -------------- -------------
1999<F*> 1999<F*> 1999<F*> 1999<F*> 1999<F*>
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Total gross deposits $ 7,302 $ 4,437 $(2,632) $ 68 $ 1,074
Transfers between fund divisions and
General American (13,611) 89,802 0 0 30,306
Surrenders and withdrawals (872) (524) 704 0 0
-------- ------- ------- ----- -------
Total gross deposits, transfers, and
surrenders between fund divisions (7,181) 93,715 (1,928) 68 31,380
-------- ------- ------- ----- -------
Deductions:
Premium load charges 428 90 0 7 39
Cost of insurance and administrative expenses 169 15 2 29 72
-------- ------- ------- ----- -------
Total deductions 597 105 2 36 111
-------- ------- ------- ----- -------
Net deposits into (withdrawals from)
Separate Account $ (7,778) $93,610 $(1,930) $ 32 $31,269
======== ======= ======= ===== =======
<FN>
<F*>The Variable Universal Life - 100 product became available to these funds on April 30, 1999.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Russell Variable Universal Life:<F*>
- ------------------------------------
<CAPTION>
MONEY MARKET MULTI-STYLE EQUITY
FUND DIVISION FUND DIVISION
--------------------------- --------------------------------------------
1998 1997 1999 1998 1997<F**>
--------- ----------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Total gross deposits $ 415,709 $ 4,627,386 $ 11,757 $1,037,690 $ 19,255
Transfers between fund divisions and
General American (469,090) (4,374,607) 0 154,284 1,937,967
Surrenders and withdrawals 0 0 0 (13,263) (328)
--------- ----------- -------- ---------- ----------
Total gross deposits, transfers, and
surrenders between fund divisions (53,381) 252,779 11,757 1,178,711 1,956,894
--------- ----------- -------- ---------- ----------
Deductions:
Premium load charges 27,188 72,762 11,910 75,029 1,369
Cost of insurance and administrative expenses 10,537 72,945 11,989 108,054 19,567
--------- ----------- -------- ---------- ----------
Total deductions 37,725 145,707 23,899 183,083 20,936
--------- ----------- -------- ---------- ----------
Net deposits into (withdrawals from)
Separate Account $ (91,106) $ 107,072 $(12,142) $ 995,628 $1,935,958
========= =========== ======== ========== ==========
<CAPTION>
CORE BOND
FUND DIVISION
-----------------------------------------------
1999 1998 1997<F**>
------- ---------- ---------
<S> <C> <C> <C>
Total gross deposits $ 2,104 $ 932,874 $ 3,472
Transfers between fund divisions and
General American 0 167,553 914,278
Surrenders and withdrawals 0 (15,205) 0
------- ---------- --------
Total gross deposits, transfers, and
surrenders between fund divisions 2,104 1,085,222 917,750
------- ---------- --------
Deductions:
Premium load charges 2,839 62,053 0
Cost of insurance and administrative expenses 9,047 102,484 21,735
------- ---------- --------
Total deductions 11,886 164,537 21,735
------- ---------- --------
Net deposits into (withdrawals from)
Separate Account $(9,782) $ 920,685 $896,015
======= ========== ========
<FN>
<F*>Russell Variable Universal Life product was introduced in 1997, and the first deposit was received on June 6, 1997.
<F**>The Multi-style Equity Fund and Core Bond Fund began operations on January 2, 1997.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Russell Variable Universal Life:<F*>
- ------------------------------------
<CAPTION>
AGGRESSIVE EQUITY NON-US
FUND DIVISION FUND DIVISION
-------------------------------------- --------------------------------------
1999 1998 1997<F**> 1999 1998 1997<F**>
------- -------- --------- ------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $ 6,989 $397,370 $ 12,641 $ 2,513 $514,239 $ 8,990
Transfers between fund divisions and
General American 0 54,038 987,308 0 91,705 532,277
Surrenders and withdrawals 0 (3,526) (94) 0 (6,050) (137)
------- -------- -------- ------- -------- --------
Total gross deposits, transfers, and
surrenders between fund divisions 6,989 447,882 999,855 2,513 599,894 541,130
------- -------- -------- ------- -------- --------
Deductions:
Premium load charges 7,446 28,279 822 3,137 36,821 548
Cost of insurance and administrative
expenses 3,346 35,589 6,442 5,864 50,919 10,345
------- -------- -------- ------- -------- --------
Total deductions 10,792 63,868 7,264 9,001 87,740 10,893
------- -------- -------- ------- -------- --------
Net deposits into (withdrawals from)
Separate Account $(3,803) $384,014 $992,591 $(6,488) $512,154 $530,237
======= ======== ======== ======= ======== ========
<FN>
<F*>Russell Variable Universal Life product was introduced in 1997, and the first deposit was received on June 6, 1997.
<F**>The Aggressive Equity Fund and Non-US Fund began operations on January 2, 1997.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life Insurance - 98:<F*>
- -------------------------------------------
<CAPTION>
S & P 500 INDEX MONEY MARKET
FUND DIVISION FUND DIVISION
----------------------- --------------------------
1999 1998 1999 1998
-------- -------- ----------- ----------
<S> <C> <C> <C> <C>
Total gross deposits $445,984 $ 4,307 $ 3,382,823 $2,186,833
Transfers between fund divisions and
General American 306,257 136,331 (1,591,945) (337,148)
Surrenders and withdrawals (611) 0 (5,968) 0
-------- -------- ----------- ----------
Total gross deposits, transfers, and
surrenders between fund divisions 751,630 140,638 1,784,910 1,849,685
-------- -------- ----------- ----------
Deductions:
Premium load charges 178,933 555 1,942,937 262,833
Cost of insurance and administrative expenses 77,279 2,864 65,472 52,876
-------- -------- ----------- ----------
Total deductions 256,212 3,419 2,008,409 315,709
-------- -------- ----------- ----------
Net deposits into (withdrawals from)
Separate Account $495,418 $137,219 $ (223,499) $1,533,976
======== ======== =========== ==========
<FN>
<F*>The Variable Universal Life Insurance 98 product was introduced in 1998, and the first
deposit was received on September 29, 1998.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life Insurance - 98:<F*>
- -------------------------------------------
<CAPTION>
BOND INDEX MANAGED EQUITY
FUND DIVISION FUND DIVISION
------------------------ -----------------------
1999 1998 1999 1998
---------- ------ ------- ------
<S> <C> <C> <C> <C>
Total gross deposits $ 23,548 $ 86 $14,479 $ 186
Transfers between fund divisions and
General American (187,277) 5,616 11,989 8,181
Surrenders and withdrawals (195) 0 0 0
--------- ------ ------- ------
Total gross deposits, transfers, and
surrenders between fund divisions (163,924) 5,702 26,468 8,367
--------- ------ ------- ------
Deductions:
Premium load charges 7,871 14 10,119 27
Cost of insurance and administrative expenses 3,174 52 3,388 154
--------- ------ ------- ------
Total deductions 11,045 66 13,507 181
--------- ------ ------- ------
Net deposits into (withdrawals from)
Separate Account $(174,969) $5,636 $12,961 $8,186
========= ====== ======= ======
<FN>
<F*>The Variable Universal Life Insurance 98 product was introduced in 1998, and the first
deposit was received on September 29, 1998. (continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life Insurance - 98:<F*>
- -------------------------------------------
<CAPTION>
ASSET ALLOCATION INTERNATIONAL INDEX
FUND DIVISION FUND DIVISION<F**>
------------------------- -----------------------
1999 1998 1999 1998
------- ------- ------- ------
<S> <C> <C> <C> <C>
Total gross deposits $23,556 $ 294 $22,587 $ 398
Transfers between fund divisions and
General American 33,414 11,801 37,150 7,529
Surrenders and withdrawals 0 0 (173) 0
------- ------- ------- ------
Total gross deposits, transfers, and
surrenders between fund divisions 56,970 12,095 59,564 7,927
------- ------- ------- ------
Deductions:
Premium load charges 8,354 30 8,623 44
Cost of insurance and administrative expenses 4,085 166 3,251 192
------- ------- ------- ------
Total deductions 12,439 196 11,874 236
------- ------- ------- ------
Net deposits into Separate Account $44,531 $11,899 $47,690 $7,691
======= ======= ======= ======
<FN>
<F*>The Variable Universal Life Insurance 98 product was introduced in 1998, and the
first deposit was received on September 29, 1998.
<F**>This fund was formerly known as the International Equity Fund. (continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life Insurance - 98:<F*>
- -------------------------------------------
<CAPTION>
MID-CAP EQUITY SMALL-CAP EQUITY
FUND DIVISION<F**> FUND DIVISION
---------------------- -----------------------
1999 1998 1999 1998
-------- ------ ------- ------
<S> <C> <C> <C> <C>
Total gross deposits $18,623 $ 269 $20,399 $ 506
Transfers between fund divisions and
General American 21,442 6,292 16,055 6,347
Surrenders and withdrawals (330) 0 (277) 0
------- ------ ------- ------
Total gross deposits, transfers, and
surrenders between fund divisions 39,735 6,561 36,177 6,853
------- ------ ------- ------
Deductions:
Premium load charges 11,545 34 10,879 68
Cost of insurance and administrative expenses 3,828 247 4,124 265
------- ------ ------- ------
Total deductions 15,373 281 15,003 333
------- ------ ------- ------
Net deposits into Separate Account $24,362 $6,280 $21,174 $6,520
======= ====== ======= ======
<FN>
<F*>The Variable Universal Life Insurance 98 product was introduced in 1998, and the
first deposit was received on September 29, 1998.
<F**>This fund was formerly known as the Special Equity Fund.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life Insurance - 98:<F*>
- -------------------------------------------
<CAPTION>
EQUITY INCOME GROWTH
FUND DIVISION FUND DIVISION
------------------------- ------------------------
1999 1998 1999 1998
--------- ------- --------- -------
<S> <C> <C> <C> <C>
Total gross deposits $ 69,744 $ 2,126 $264,768 $ 3,312
Transfers between fund divisions and
General American 159,840 22,773 639,837 43,658
Surrenders and withdrawals (44) 0 (2,741) 0
-------- ------- -------- -------
Total gross deposits, transfers, and
surrenders between fund divisions 229,540 24,899 901,864 46,970
-------- ------- -------- -------
Deductions:
Premium load charges 32,639 235 99,411 248
Cost of insurance and administrative expenses 13,365 1,202 38,779 1,227
-------- ------- -------- -------
Total deductions 46,004 1,437 138,190 1,475
-------- ------- -------- -------
Net deposits into Separate Account $183,536 $23,462 $763,674 $45,495
======== ======= ======== =======
<FN>
<F*>The Variable Universal Life Insurance 98 product was introduced in 1998, and the
first deposit was received on September 29, 1998.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life Insurance - 98:<F*>
- -------------------------------------------
<CAPTION>
OVERSEAS ASSET MANAGER
FUND DIVISION FUND DIVISION
------------------------ -----------------------
1999 1998 1999 1998
------- ------ --------- ------
<S> <C> <C> <C> <C>
Total gross deposits $46,521 $ 550 $ 25,593 $1,890
Transfers between fund divisions and
General American 32,045 6,272 94,012 6,091
Surrenders and withdrawals 0 0 (403) 0
------- ------ -------- ------
Total gross deposits, transfers, and
surrenders between fund divisions 78,566 6,822 119,202 7,981
------- ------ -------- ------
Deductions:
Premium load charges 18,594 55 7,359 111
Cost of insurance and administrative expenses 5,846 195 4,946 635
------- ------ -------- ------
Total deductions 24,440 250 12,305 746
------- ------ -------- ------
Net deposits into Separate Account $54,126 $6,572 $106,897 $7,235
======= ====== ======== ======
<FN>
<F*>The Variable Universal Life Insurance 98 product was introduced in 1998, and the
first deposit was received on September 29, 1998.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life Insurance - 98:<F*>
- -------------------------------------------
<CAPTION>
WORLWIDE
HIGH INCOME HARD ASSETS
FUND DIVISION FUND DIVISION
------------------------- --------------------
1999 1998 1999 1998
-------- ------- ---- ----
<S> <C> <C> <C> <C>
Total gross deposits $24,835 $ 582 $584 $ 74
Transfers between fund divisions and
General American 26,973 11,663 211 56
Surrenders and withdrawals (193) 0 0 0
------- ------- ---- ----
Total gross deposits, transfers, and
surrenders between fund divisions 51,615 12,245 795 130
------- ------- ---- ----
Deductions:
Premium load charges 12,198 84 359 12
Cost of insurance and administrative expenses 3,939 300 236 4
------- ------- ---- ----
Total deductions 16,137 384 595 16
------- ------- ---- ----
Net deposits into Separate Account $35,478 $11,861 $200 $114
======= ======= ==== ====
<FN>
<F*>The Variable Universal Life Insurance 98 product was introduced in 1998, and the
first deposit was received on September 29, 1998.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life Insurance - 98:<F*>
- -------------------------------------------
<CAPTION>
WORLDWIDE MULTI-STYLE
EMERGING MARKETS EQUITY
FUND DIVISION FUND DIVISION
------------------------- -----------------------
1999<F**> 1998 1999 1998
--------- ------ -------- -------
<S> <C> <C> <C> <C>
Total gross deposits $3,360 $ 45 $ 68,210 $26,946
Transfers between fund divisions and
General American 3,702 1,753 78,386 12,531
Surrenders and withdrawals 0 0 (198) 0
------ ------ -------- -------
Total gross deposits, transfers, and
surrenders between fund divisions 7,062 1,798 146,398 39,477
------ ------ -------- -------
Deductions:
Premium load charges 1,161 7 30,461 3,877
Cost of insurance and administrative expenses 861 91 11,758 1,140
------ ------ -------- -------
Total deductions 2,022 98 42,219 5,017
------ ------ -------- -------
Net deposits into Separate Account $5,040 $1,700 $104,179 $34,460
====== ====== ======== =======
<FN>
<F*>The Variable Universal Life Insurance 98 product was introduced in 1998, and the
first deposit was received on September 29, 1998.
<F**>The Variable Universal Life Insurance 98 product became available to these funds
on April 30, 1999.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life Insurance - 98:<F*>
- -------------------------------------------
<CAPTION>
AGGRESSIVE
CORE BOND EQUITY
FUND DIVISION FUND DIVISION
------------------------ ------------------------
1999 1998 1999 1998
-------- ------ ------- -------
<S> <C> <C> <C> <C>
Total gross deposits $ 20,212 $2,978 $41,552 $23,310
Transfers between fund divisions and
General American (72,338) 4,298 39,906 10,915
-------- ------ ------- -------
Total gross deposits and transfers
between fund divisions (52,126) 7,276 81,458 34,225
-------- ------ ------- -------
Deductions:
Premium load charges 9,225 420 19,244 3,441
Cost of insurance and administrative expenses 2,396 98 5,509 755
-------- ------ ------- -------
Total deductions 11,621 518 24,753 4,196
-------- ------ ------- -------
Net deposits into (withdrawals from)
Separate Account $(63,747) $6,758 $56,705 $30,029
======== ====== ======= =======
<F*>The Variable Universal Life Insurance 98 product was introduced in 1998, and the
first deposit was received on September 29, 1998.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life Insurance - 98:<F*>
- -------------------------------------------
<CAPTION>
NON-US INCOME & GROWTH
FUND DIVISION FUND DIVISION
---------------------- -----------------------
1999 1998 1999<F**> 1998
------- ------ --------- ------
<S> <C> <C> <C> <C>
Total gross deposits $24,901 $3,248 $51,993 $ 126
Transfers between fund divisions and
General American 24,138 5,871 27,806 6,880
------- ------ ------- ------
Total gross deposits, transfers, and
surrenders between fund divisions 49,039 9,119 79,799 7,006
------- ------ ------- ------
Deductions:
Premium load charges 8,263 448 17,313 29
Cost of insurance and administrative expenses 3,119 184 7,281 132
------- ------ ------- ------
Total deductions 11,382 632 24,594 161
------- ------ ------- ------
Net deposits into Separate Account $37,657 $8,487 $55,205 $6,845
======= ====== ======= ======
<FN>
<F*>The Variable Universal Life Insurance 98 product was introduced in 1998, and the
first deposit was received on September 29, 1998.
<F**>The Variable Universal Life Insurance 98 product became available to this fund
on April 30, 1999.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life Insurance - 98:<F*>
- -------------------------------------------
<CAPTION>
INTERNATIONAL VALUE
FUND DIVISION FUND DIVISION
------------------------ -----------------------
1999<F**> 1998 1999<F**> 1998
--------- ---- --------- ------
<S> <C> <C> <C> <C>
Total gross deposits $10,629 $258 $25,993 $ 93
Transfers between fund divisions and
General American 14,268 713 1,261 3,740
Surrenders and withdrawals 0 0 0 0
------- ---- ------- ------
Total gross deposits, transfers, and
surrenders between fund divisions 24,897 971 27,254 3,833
------- ---- ------- ------
Deductions:
Premium load charges 4,785 44 7,137 17
Cost of insurance and administrative expenses 3,739 74 1,689 30
------- ---- ------- ------
Total deductions 8,524 118 8,826 47
------- ---- ------- ------
Net deposits into Separate Account $16,373 $853 $18,428 $3,786
======= ==== ======= ======
<FN>
<F*>The Variable Universal Life Insurance 98 product was introduced in 1998, and the
first deposit was received on September 29, 1998.
<F**>The Variable Universal Life Insurance 98 product became available to these funds
on April 30, 1999.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Variable Universal Life Insurance - 98:<F*>
- -------------------------------------------
<CAPTION>
SMALL COMPANY
BOND PORTFOLIO PORTFOLIO
FUND DIVISION FUND DIVISION
----------------------- -----------------------
1999<F**> 1998 1999<F**> 1998
--------- ------ --------- ------
<S> <C> <C> <C> <C>
Total gross deposits $ 9,118 $ 117 $18,644 $ 54
Transfers between fund divisions and
General American 1,306 3,219 26,022 3,034
------- ------ ------- ------
Total gross deposits and transfers
between fund divisions 10,424 3,336 44,666 3,088
------- ------ ------- ------
Deductions:
Premium load charges 3,529 14 5,354 12
Cost of insurance and administrative expenses 860 23 3,005 154
------- ------ ------- ------
Total deductions 4,389 37 8,359 166
------- ------ ------- ------
Net deposits into Separate Account $ 6,035 $3,299 $36,307 $2,922
======= ====== ======= ======
<F*>The Variable Universal Life Insurance 98 product was introduced in 1998, and the
first deposit was received on September 29, 1998.
<F**>The Variable Universal Life Insurance 98 product became available to these funds
on April 30, 1999.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Joint and Survivor Variable Universal Life Insurance - 98:<F*>
- --------------------------------------------------------------
<CAPTION>
S & P 500 INDEX MONEY MARKET
FUND DIVISION FUND DIVISION
----------------------- ------------------------
1999 1998 1999 1998
-------- ------ --------- --------
<S> <C> <C> <C> <C>
Total gross deposits $148,524 $ 0 $ 646,197 $327,992
Transfers between fund divisions and
General American 183,394 1,201 (251,824) (21,803)
-------- ------ --------- --------
Total gross deposits and transfers
between fund divisions 331,918 1,201 394,373 306,189
-------- ------ --------- --------
Deductions:
Premium load charges 21,033 0 327,573 50,777
Cost of insurance and administrative expenses 15,334 24 16,814 14,164
-------- ------ --------- --------
Total deductions 36,367 24 344,387 64,941
-------- ------ --------- --------
Net deposits into Separate Account $295,551 $1,177 $ 49,986 $241,248
======== ====== ========= ========
<FN>
<F*>The Joint and Survivor Variable Universal Life Insurance 98 product was introduced in 1998,
and the first deposit was received on October 14, 1998.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Joint and Survivor Variable Universal Life Insurance - 98:<F*>
- --------------------------------------------------------------
<CAPTION>
BOND INDEX MANAGED EQUITY ASSET ALLOCATION
FUND DIVISION FUND DIVISION FUND DIVISION
---------------------- -------------- ----------------
1999 1998 1999 1999
------- ---- ------- -------
<S> <C> <C> <C> <C>
Total gross deposits $10,088 0 $ 5,156 $ 6,904
Transfers between fund divisions and
General American 55 $905 19,546 17,414
------- ---- ------- -------
Total gross deposits and transfers
between fund divisions 10,143 905 24,702 24,318
------- ---- ------- -------
Deductions:
Premium load charges 934 0 702 1,074
Cost of insurance and administrative expenses 636 24 320 1,595
------- ---- ------- -------
Total deductions 1,570 24 1,022 2,669
------- ---- ------- -------
Net deposits into Separate Account $ 8,573 $881 $23,680 $21,649
======= ==== ======= =======
<FN>
<F*>The Joint and Survivor Variable Universal Life Insurance 98 product was introduced in 1998,
and the first deposit was received on October 14, 1998.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Joint and Survivor Variable Universal Life Insurance - 98:<F*>
- --------------------------------------------------------------
<CAPTION>
INTERNATIONAL INDEX MID-CAP EQUITY
FUND DIVISION FUND DIVISION
---------------------- ----------------------
1999 1998 1999 1998
------- ---- ------- ------
<S> <C> <C> <C> <C>
Total gross deposits $12,937 $ 0 $20,543 $ 0
Transfers between fund divisions and
General American 734 905 0 1,752
------- ---- ------- ------
Total gross deposits and transfers
between fund divisions 13,671 905 20,543 1,752
------- ---- ------- ------
Deductions:
Premium load charges 1,043 0 2,004 0
Cost of insurance and administrative expenses 420 24 695 54
------- ---- ------- ------
Total deductions 1,463 24 2,699 54
------- ---- ------- ------
Net deposits into Separate Account $12,208 $881 $17,844 $1,698
======= ==== ======= ======
<FN>
<F*>The Joint and Survivor Variable Universal Life Insurance 98 product was introduced in 1998,
and the first deposit was received on October 14, 1998.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Joint and Survivor Variable Universal Life Insurance - 98:<F*>
- --------------------------------------------------------------
<CAPTION>
SMALL-CAP EQUITY EQUITY INCOME
FUND DIVISION FUND DIVISION
---------------------- ----------------------
1999 1998 1999 1998
------- ------ ------- ------
<S> <C> <C> <C> <C>
Total gross deposits $19,313 $ 0 $18,515 $ 0
Transfers between fund divisions and
General American 347 1,692 8,184 2,609
------- ------ ------- ------
Total gross deposits and transfers
between fund divisions 19,660 1,692 26,699 2,609
------- ------ ------- ------
Deductions:
Premium load charges 2,807 0 2,920 0
Cost of insurance and administrative expenses 837 53 1,537 76
------- ------ ------- ------
Total deductions 3,644 53 4,457 76
------- ------ ------- ------
Net deposits into Separate Account $16,016 $1,639 $22,242 $2,533
======= ====== ======= ======
<FN>
<F*>The Joint and Survivor Variable Universal Life Insurance 98 product was introduced in 1998,
and the first deposit was received on October 14, 1998.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Joint and Survivor Variable Universal Life Insurance - 98:<F*>
- --------------------------------------------------------------
<CAPTION>
GROWTH OVERSEAS ASSET MANAGER
FUND DIVISION FUND DIVISION FUND DIVISION
--------------------- ---------------------- -------------
1999 1998 1999 1998 1999
------- ---- ------- ------ ----
<S> <C> <C> <C> <C> <C>
Total gross deposits $43,496 $ 0 $15,097 $ 0 $144
Transfers between fund divisions and
General American 11,264 905 1,000 1,706 0
------- ---- ------- ------ ----
Total gross deposits and transfers
between fund divisions 54,760 905 16,097 1,706 144
------- ---- ------- ------ ----
Deductions:
Premium load charges 8,888 0 1,866 0 0
Cost of insurance and administrative expenses 4,308 24 608 53 26
------- ---- ------- ------ ----
Total deductions 13,196 24 2,474 53 26
------- ---- ------- ------ ----
Net deposits into Separate Account $41,564 $881 $13,623 $1,653 $118
======= ==== ======= ====== ====
<FN>
<F*>The Joint and Survivor Variable Universal Life Insurance 98 product was introduced in 1998,
and the first deposit was received on October 14, 1998.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Joint and Survivor Variable Universal Life Insurance - 98:<F*>
- --------------------------------------------------------------
<CAPTION>
HIGH INCOME MULTI-SYTLE EQUITY
FUND DIVISION FUND DIVISION
---------------------- ----------------------
1999 1998 1999 1998
------- ------ ------- ------
<S> <C> <C> <C> <C>
Total gross deposits $10,880 $ 0 $ 9,127 $ 0
Transfers between fund divisions and
General American 0 1,711 4,922 4,306
------- ------ ------- ------
Total gross deposits and transfers
between fund divisions 10,880 1,711 14,049 4,306
------- ------ ------- ------
Deductions:
Premium load charges 913 0 4,155 0
Cost of insurance and administrative expenses 724 53 1,262 133
------- ------ ------- ------
Total deductions 1,637 53 5,417 133
------- ------ ------- ------
Net deposits into Separate Account $ 9,243 $1,658 $ 8,632 $4,173
======= ====== ======= ======
<FN>
<F*>The Joint and Survivor Variable Universal Life Insurance 98 product was introduced in 1998,
and the first deposit was received on October 14, 1998.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Joint and Survivor Variable Universal Life Insurance - 98:<F*>
- --------------------------------------------------------------
<CAPTION>
WORLDWIDE
EMERGING MARKETS CORE BOND
FUND DIVISION FUND DIVISION
---------------- ----------------------
1999 1999 1998
------- ------- ------
<S> <C> <C> <C>
Total gross deposits $(3,046) $ 263 $ 0
Transfers between fund divisions and
General American 0 128 1,708
------- ------- ------
Total gross deposits and transfers
between fund divisions (3,046) 391 1,708
------- ------- ------
Deductions:
Premium load charges 0 1,166 0
Cost of insurance and administrative expenses 146 295 50
------- ------- ------
Total deductions 146 1,461 50
------- ------- ------
Net deposits into (withdrawals from) Separate Account $(3,192) $(1,070) $1,658
======= ======= ======
<FN>
<F*>The Joint and Survivor Variable Universal Life Insurance 98 product was introduced in 1998,
and the first deposit was received on October 14, 1998.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Joint and Survivor Variable Universal Life Insurance - 98:<F*>
- --------------------------------------------------------------
<CAPTION>
AGGRESSIVE EQUITY NON-US
FUND DIVISION FUND DIVISION
----------------- ---------------------
1999 1999 1998
------- ------ ------
<S> <C> <C> <C>
Total gross deposits $5,046 $3,039 $ 0
Transfers between fund divisions and
General American 3 (110) 1,774
------ ------ ------
Total gross deposits and transfers
between fund divisions 5,049 2,929 1,774
------ ------ ------
Deductions:
Premium load charges 2,119 1,260 0
Cost of insurance and administrative expenses 537 298 52
------ ------ ------
Total deductions 2,656 1,558 52
------ ------ ------
Net deposits into Separate Account $2,393 $1,371 $1,722
====== ====== ======
<FN>
<F*>The Joint and Survivor Variable Universal Life Insurance 98 product was introduced in 1998,
and the first deposit was received on October 14, 1998.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Joint and Survivor Variable Universal Life Insurance - 98:<F*>
- --------------------------------------------------------------
<CAPTION>
INCOME & GROWTH INTERNATIONAL VALUE
FUND DIVISION FUND DIVISION FUND DIVISION
--------------- ------------- -------------
1999 1999 1999<F**>
------ ------ ---------
<S> <C> <C> <C>
Total gross deposits $2,399 $1,597 $1,014
Transfers between fund divisions and
General American 4,943 0 0
------ ------ ------
Total gross deposits and transfers
between fund divisions 7,342 1,597 1,014
------ ------ ------
Deductions:
Premium load charges 1,930 510 422
Cost of insurance and administrative expenses 613 338 119
------ ------ ------
Total deductions 2,543 848 541
------ ------ ------
Net deposits into Separate Account $4,799 $ 749 $ 473
====== ====== ======
<FN>
<F*>The Joint and Survivor Variable Universal Life Insurance 98 product was introduced in 1998,
and the first deposit was received on October 14, 1998.
(continued)
<PAGE>
<PAGE>
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT, (CONTINUED)
Joint and Survivor Variable Universal Life Insurance - 98:<F*>
- --------------------------------------------------------------
<CAPTION>
BOND PORTFOLIO SMALL COMPANY
FUND DIVISION FUND DIVISION
-------------- -------------
1999 1999
------ ----
<S> <C> <C>
Total gross deposits $1,551 $981
Deductions:
Premium load charges 632 211
Cost of insurance and administrative expenses 237 315
------ ----
Total deductions 869 526
------ ----
Net deposits into Separate Account $ 682 $455
====== ====
<FN>
<F*>The Joint and Survivor Variable Universal Life Insurance 98 product was introduced in 1998,
and the first deposit was received on October 14, 1998.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1999
<CAPTION>
No. of Shares Market Value
--------------- --------------
<S> <C> <C>
S & P 500 Index Fund
General American Capital Company <F*> 999,187 $60,824,360
Money Market Fund
General American Capital Company <F*> 489,328 9,910,022
Bond Index Fund
General American Capital Company <F*> 250,830 6,136,371
Managed Equity Fund
General American Capital Company <F*> 173,817 6,380,710
Asset Allocation Fund
General American Capital Company <F*> 401,176 18,584,088
International Index Fund <F**>
General American Capital Company <F*> 507,022 13,006,687
Mid-Cap Equity Fund <F***>
General American Capital Company <F*> 337,135 8,364,930
Small-Cap Equity Fund
General American Capital Company <F*> 69,740 2,918,058
Equity-Income Fund
Variable Insurance Products Fund 939,971 24,166,662
Growth Fund
Variable Insurance Products Fund 1,014,256 55,713,063
Overseas Fund
Variable Insurance Products Fund 548,542 15,052,006
Asset Manager Fund
Variable Insurance Products Fund II 129,586 2,419,380
High Income Fund
Variable Insurance Products Fund 386,909 4,375,944
Worldwide Hard Assets Fund <F****>
Van Eck Worldwide Insurance Trust 28,930 317,077
Worldwide Emerging Markets Fund
Van Eck Worldwide Insurance Trust 18,240 260,096
<FN>
<F*>These funds use consent dividending. See Note 2C.
<F**>This fund was formerly known as the International Equity Fund.
<F***>This fund was formerly known as the Special Equity Fund.
<F****>This fund was formerly known as the Gold & Natural Resources Fund
See accompanying notes to financial statements. (continued)
<PAGE>
<PAGE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1999
<CAPTION>
No. of Shares Market Value
--------------- --------------
<S> <C> <C>
Multi-Style Equity Fund
Russell Insurance Funds 1,014,829 $17,038,971
Core Bond Fund
Russell Insurance Funds 1,018,988 9,823,042
Aggressive Equity Fund
Russell Insurance Funds 364,662 4,871,881
Non-US Fund
Russell Insurance Funds 353,166 5,011,427
Income & Growth Fund
American Century Variable Portfolios 92,034 736,269
International Fund
American Century Variable Portfolios 48,347 604,334
Value Fund
American Century Variable Portfolios 16,164 96,178
Bond Portfolio
J.P. Morgan Series Trust II 12,590 141,513
Small Company Portfolio
J.P. Morgan Series Trust II 35,632 596,119
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<PAGE>
LEGAL COUNSEL
Stephen E. Roth
Sutherland, Asbill & Brennan, Washington, D.C.
INDEPENDENT AUDITORS
KPMG LLP
If distributed to prospective investors, this report must be preceded or
accompanied by a current prospectus.
The prospectus is incomplete without reference to the financial data
contained in the annual report.
<PAGE>
<PAGE>
GENERAL AMERICAN LIFE INSURANCE
COMPANY AND SUBSIDIARIES
Consolidated Financial Statements
December 31, 1999 and 1998
(With Independent Auditors' Report Thereon)
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors and Members of General American Life Insurance
Company:
We have audited the accompanying consolidated balance sheets of General
American Life Insurance Company and subsidiaries as of December 31, 1999
and 1998, and the related consolidated statements of operations,
comprehensive income, stockholder equity, and cash flows for each of the
years in the three-year period ended December 31, 1999. These
consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
General American Life Insurance Company and subsidiaries as of December
31, 1999 and 1998, and the results of their operations and their cash
flows for each of the years in the three-year period ended December 31,
1999, in conformity with generally accepted accounting principles.
St. Louis, Missouri
February 4, 2000
<PAGE>
<PAGE>
<TABLE>
General American Life Insurance Company and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(dollars in millions, except share data)
<CAPTION>
As of December 31
-----------------
1999 1998
--------- --------
<S> <C> <C>
ASSETS
- ----------------------------------------------------------------
Fixed maturities:
Available-for-sale, at fair value $ 6,826.1 11,068.3
Mortgage loans, net 1,678.9 2,337.5
Real estate, net 127.2 129.9
Equity securities, at fair value 49.3 48.6
Policy loans 2,243.9 2,151.0
Short-term investments 292.4 195.3
Other invested assets 898.8 457.6
--------- --------
Total investments 12,116.6 16,388.2
Cash and cash equivalents 790.0 591.1
Accrued investment income 153.9 205.6
Reinsurance recoverables 863.3 905.0
Other contract deposits 325.5 4,094.8
Deferred tax asset, net 197.6 -
Deferred policy acquisition costs 1,286.1 773.8
Other assets 781.1 675.7
Separate account assets 6,915.6 5,214.8
--------- --------
Total assets $23,429.7 28,849.0
========= ========
LIABILITIES AND STOCKHOLDER EQUITY
- ----------------------------------------------------------------
Policy and contract liabilities:
Future policy benefits $ 5,995.6 5,589.5
Policyholder account balances:
Universal life 3,032.1 2,960.9
Annuities 3,709.8 3,714.5
Pension funds and interest sensitive contract liabilities 556.8 7,581.3
Policy and contract claims 702.1 591.1
Dividends payable to policyholders 120.6 121.7
--------- --------
Total policy and contract liabilities 14,117.0 20,559.0
Amounts payable to reinsurers 79.2 201.4
Long-term debt and notes payable 216.6 221.9
Other liabilities and accrued expenses 825.0 912.4
Deferred tax liability, net - 75.4
Separate account liabilities 6,892.0 5,194.9
--------- --------
Total liabilities 22,129.8 27,165.0
Minority interests 420.0 383.1
Stockholder equity:
Common stock, $1 par value, 5,000,000 shares authorized,
3,000,000 shares issued and outstanding 3.0 3.0
Additional paid in capital 71.1 3.0
Retained earnings 1,074.1 1,242.0
Accumulated other comprehensive (loss) income (268.3) 52.9
--------- --------
Total stockholder equity 879.9 1,300.9
--------- --------
Total liabilities and stockholder equity $23,429.7 28,849.0
========= ========
See accompanying notes to consolidated financial statements.
</TABLE>
2
<PAGE>
<PAGE>
<TABLE>
General American Life Insurance Company and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in millions)
<CAPTION>
Years ended December 31
-----------------------
1999 1998 1997
-------- ------- -------
<S> <C> <C> <C>
REVENUES
- -------------------------------------------------------
Insurance premiums $2,207.6 2,028.0 1,671.3
Other considerations 183.2 173.6 135.8
Net investment income 1,157.2 1,135.8 945.5
Ceded commissions 21.7 39.9 44.9
Other income 386.0 323.0 362.3
Net realized investment (losses) gains (200.6) 13.7 28.5
-------- ------- -------
Total revenues 3,755.1 3,714.0 3,188.3
-------- ------- -------
BENEFITS AND EXPENSES
- -------------------------------------------------------
Policy benefits 1,978.4 1,832.9 1,517.7
Interest credited to policyholder account balances 533.9 516.8 399.4
-------- ------- -------
Total policyholder benefits 2,512.3 2,349.7 1,917.1
Dividends to policyholders 191.6 192.1 182.1
Policy acquisition costs 154.0 240.7 171.1
Other insurance and operating expenses 917.5 713.7 712.8
Interest expense 17.7 17.9 20.2
Demutualization expense 13.3 - -
Fees to exit funding agreement business 141.4 - -
-------- ------- -------
Total benefits and expenses 3,947.8 3,514.1 3,003.3
-------- ------- -------
(Loss) income before provision for income taxes (192.7) 199.9 185.0
-------- ------- -------
Income tax (benefit) provision:
Current (23.6) 35.2 65.8
Deferred (40.7) 18.4 (0.1)
-------- ------- -------
Total income tax (benefit) provision (64.3) 53.6 65.7
-------- ------- -------
(Loss) income before minority interest (128.4) 146.3 119.3
Minority interest in earnings of consolidated subsidiaries (24.8) (29.2) (22.1)
-------- ------- -------
Net (loss) income $ (153.2) 117.1 97.2
======== ======= =======
See accompanying notes to consolidated financial statements.
</TABLE>
3
<PAGE>
<PAGE>
<TABLE>
General American Life Insurance Company and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(dollars in millions)
<CAPTION>
Years ended December 31
-----------------------
1999 1998 1997
------- ----- -----
<S> <C> <C> <C>
Net (loss) income $(153.2) 117.1 97.2
Other comprehensive (loss) income (321.2) (54.0) 75.6
------- ----- -----
Comprehensive (loss) income $(474.4) 63.1 172.8
======= ===== =====
See accompanying notes to consolidated financial statements.
</TABLE>
4
<PAGE>
<PAGE>
<TABLE>
General American Life Insurance Company and Subsidiaries
CONSOLIDATED STATEMENTS OF STOCKHOLDER EQUITY
(dollars in millions)
<CAPTION>
ACCUMULATED
OTHER
ADDITIONAL COMPREHENSIVE TOTAL
COMMON PAID-IN RETAINED (LOSS) STOCKHOLDER
STOCK CAPITAL EARNINGS INCOME EQUITY
------ ---------- -------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1996 $ - - 966.5 31.3 997.8
Net income 97.2 97.2
Other comprehensive income 75.6 75.6
Issuance of common stock 3.0 3.0 (6.0) -
Dividend to parent (4.5) (4.5)
Other, net 4.4 4.4
---- ---- ------- ------ -------
Balance at December 31, 1997 3.0 3.0 1,057.6 106.9 1,170.5
Net income 117.1 117.1
Other comprehensive loss (54.0) (54.0)
Parent's share of subsidiary's
issuance of non-voting stock 68.6 68.6
Other, net (1.3) (1.3)
---- ---- ------- ------ -------
Balance at December 31, 1998 3.0 3.0 1,242.0 52.9 1,300.9
Net loss (153.2) (153.2)
Other comprehensive loss (321.2) (321.2)
Parent's share of subsidiaries'
capital stock transactions 25.3 25.3
Capital contribution from parent 68.1 68.1
Dividends (40.0) (40.0)
---- ---- ------- ------ -------
Balance at December 31, 1999 $3.0 71.1 1,074.1 (268.3) 879.9
==== ==== ======= ====== =======
See accompanying notes to consolidated financial statements.
</TABLE>
5
<PAGE>
<PAGE>
<TABLE>
General American Life Insurance Company and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
<CAPTION>
Years ended December 31
-----------------------
1999 1998 1997
--------- ------- -------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
- ----------------------------------------------------------------
Net (loss) income $ (153.2) 117.1 97.2
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Change in:
Accrued investment income 50.9 (37.4) (20.6)
Reinsurance recoverables and
other contract deposits 463.9 496.1 203.7
Deferred policy acquisition costs (165.9) (102.1) (113.0)
Other assets (39.5) (172.1) (61.8)
Future policy benefits 406.2 655.5 693.1
Policy and contract claims 111.0 132.5 105.5
Other liabilities and accrued expenses (78.1) 48.2 319.8
Deferred income tax provision (40.7) 18.4 (0.1)
Policyholder considerations (183.2) (173.6) (135.8)
Interest credited to policyholder account balances 533.9 516.8 399.4
Amortization and depreciation (32.5) 34.6 32.7
Net realized investment losses (gains) 200.6 (13.7) (28.5)
Other, net 12.0 7.4 0.4
--------- ------- -------
Net cash provided by operating activities 1,085.4 1,527.7 1,492.0
--------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
- ----------------------------------------------------------------
Proceeds from investments sold or redeemed:
Fixed maturities available-for-sale 10,891.4 2,027.4 2,070.7
Mortgage loans 1,442.8 370.4 594.2
Equity securities 10.3 2.1 31.6
Cost of investments purchased:
Fixed maturities available-for-sale (8,110.5) (4,251.1) (4,463.1)
Mortgage loan originations (800.2) (594.5) (439.0)
Equity securities (19.2) (17.4) (47.3)
Maturity of fixed maturities available-for-sale 310.6 145.3 281.7
Increase in policy loans, net (92.9) (77.9) (153.4)
Increase in short-term and other invested assets, net (521.8) (215.2) (130.4)
Investments in subsidiaries 81.3 (24.5) (6.0)
--------- ------- -------
Net cash provided by (used in) investing activities 3,191.8 (2,635.4) (2,261.0)
--------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
- ----------------------------------------------------------------
Net policyholder account and contract (withdrawals) deposits (4,186.7) 1,108.8 1,024.5
Proceeds from subsidiary stock offering 124.9 221.8 -
Issuance of debt - 2.3 1.9
Repayment of debt (0.7) (0.4) (80.6)
Dividends (45.8) (3.8) (2.1)
Other, net 28.9 27.5 46.8
--------- ------- -------
Net cash (used in) provided by financing activities (4,079.4) 1,356.2 990.5
--------- ------- -------
Effect of exchange rate changes 1.1 (16.3) (5.3)
--------- ------- -------
Net increase in cash and cash equivalents 198.9 232.2 216.2
Cash and cash equivalents at beginning of year 591.1 358.9 142.7
--------- ------- -------
Cash and cash equivalents at end of year $ 790.0 591.1 358.9
========= ======= =======
See accompanying notes to consolidated financial statements.
</TABLE>
6
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
(1) BASIS OF PRESENTATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
ACQUISITION BY METLIFE
On January 6, 2000, Metropolitan Life Insurance Company (MetLife),
headquartered in New York City, purchased 100% of GenAmerica Corporation
(GenAmerica), General American Life Insurance Company's (General American
or the Company) parent, for $1.2 billion in cash. The acquisition was a
result of liquidity problems encountered by General American.
On August 10, 1999, at management's request, the Missouri Department of
Insurance placed the Company under an order of administrative supervision
(the order). The immediate cause of the order was the Company's inability
to immediately satisfy approximately $4 billion in institutional funding
agreement contract surrenders. The funding agreements guaranteed the
holder a return on principal at a stated interest rate for a specified
period of time. The contracts also allowed the holder to "put" the
contract to the Company for a payout of principal and interest within
designated time periods of 7, 30 or 90 days. The Company had reinsured 50%
of the funding agreement contracts with ARM Financial Group, Inc. (ARM).
In July 1999, Moody's Investors Services, Inc. downgraded the claims paying
ability rating of ARM due to the relative illiquidity of certain of its
invested assets, which resulted in the Company recapturing the obligations
and assets related to the funding agreements reinsured by ARM. As a result
of the recapture, Moody's downgraded the Company's claims paying ability
rating. Upon announcement of the downgrade, a large number of funding
agreement holders surrendered their contracts. The Company was unable to
liquidate sufficient assets in an orderly fashion without incurring
significant losses and therefore management requested the order.
In connection with the acquisition, MetLife offered each holder of a
General American funding agreement the option to exchange its funding
agreement for a MetLife funding agreement with substantially identical
terms and conditions or receive cash equal to the principal amount plus
accrued interest. In consideration of this exchange offer, the Company
transferred to MetLife assets having a market value equal to the market
value of the funding agreement liabilities, approximately $5.7 billion.
As a result of its efforts to raise liquidity to meet the funding agreement
requests and the transfer of assets to MetLife, the Company incurred
approximately $214.7 million in pretax capital losses. In addition to the
capital losses, the Company incurred $141.4 million in fees associated with
the recapture and transfer of the funding agreement business. With the
transfer, the Company fully exited the funding agreement business.
GenAmerica will operate as a wholly-owned stock subsidiary of MetLife.
The $1.2 billion purchase price was paid to GenAmerica's parent General
American Mutual Holding Company (GAMHC) and deposited in an account for the
benefit of the Company's policyholders. Ultimately, these funds, minus
adjustments, will be distributed to participating General American
policyholders, with accumulated interest and GAMHC will be dissolved.
7
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
REORGANIZATION
In September 1996, the Board of Directors of General American adopted the
Plan which authorized the reorganization (Reorganization) of the Company
into a mutual insurance holding company structure. The Missouri Department
of Insurance held a public hearing on the Reorganization on December 19,
1996 and approved the Plan on January 24, 1997. The policyholders of the
Company approved the Plan on January 28, 1997 and the Reorganization became
effective on April 24, 1997 (effective date). The Company was the first
company to obtain approval and to form a mutual insurance holding company
under the Missouri Mutual Holding Company Statute.
Pursuant to the Reorganization, the Company (i) formed GAMHC as a mutual
insurance holding company under the insurance laws of the State of
Missouri, (ii) formed GenAmerica as an intermediate stock holding company
under the general laws of the State of Missouri, and (iii) amended and
restated its Charter and Articles of Incorporation to authorize the
issuance of capital stock and the continuance of its existence as a stock
life insurance company under the same name. GAMHC may, among other things,
elect all of the directors of GenAmerica and approve matters submitted for
shareholder approval. As of the effective date of the Reorganization, the
membership interests and the contractual rights of the policyholders of the
Company were separated - the membership interests automatically became, by
operation of law, membership interests in GAMHC and the contractual rights
remained with the Company. Each person who became the owner of a
designated policy or contract of insurance or annuity issued by the Company
after the effective date of the Reorganization (subject to certain
exceptions and conditions set forth in the Articles of Incorporation of
GAMHC) became a member of GAMHC and had a membership interest in GAMHC by
operation of law so long as such policy or contract remains in force. The
membership interests in GAMHC follow, and are not severable, from the
insurance or annuity policy or contract from which the membership interest
in GAMHC is derived.
On the effective date, the Company issued three million shares of its
authorized shares of capital stock to GAMHC. GAMHC then contributed all of
these to GenAmerica in exchange for one thousand shares of its common
stock. As a result, GenAmerica directly owned the Company, and GAMHC
indirectly owned the Company, through GenAmerica. The Reorganization was
accounted for at historical cost in a manner similar to a pooling of
interests.
The consolidated financial statements include the assets, liabilities, and
results of operations of the Company and the following wholly owned
insurance subsidiaries: Cova Corporation (COVA), an insurance holding
company, Paragon Life Insurance Company, Security Equity Life Insurance
Company, General Life Insurance Company of America, General Life Insurance
Company (GLIC), GenAm Benefits Insurance Company, and its 48.3 percent
owned subsidiary, Reinsurance Group of America, Incorporated (RGA), an
insurance holding company. In addition, the financial statements include
the assets, liabilities, and results of operations of the following wholly
owned non-insurance subsidiaries: Red Oak Realty Company, White Oak
Royalty Company, GenMark, Inc., and its 60.4 percent owned subsidiary,
Conning Corporation (Conning).
The Company's principal lines of business, conducted through General
American or one of its subsidiaries, are: Individual Life Insurance,
Annuities, Group Life and Health Insurance, Asset Management, and
Reinsurance. The Company distributes its products and services primarily
through a nationwide network of general agencies, independent brokers, and
group sales and claims offices. The Company and its subsidiaries are
licensed to do business in all fifty states, ten Canadian provinces, Puerto
Rico, and the District of Columbia. Through its subsidiaries, the Company
has operations in Europe, Pacific Rim countries, Latin America, and Africa.
INITIAL PUBLIC OFFERING
In December 1997, Conning successfully completed an Initial Public Offering
of 2.875 million shares of its common stock. Conning received net proceeds
of approximately $34.5 million from the offering. The
8
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
Company owned 60.4 and 62.7 percent of the total shares outstanding of
Conning's common stock at December 31, 1999 and 1998 respectively. The
publicly held stock of Conning is listed on the NASDAQ National Market
System.
OTHER OFFERINGS
At RGA's annual stockholders' meeting on May 27, 1998, a new class of non-
voting common stock was authorized. In June 1998, RGA completed a
secondary public offering in which it sold 7,417,500 million shares of non-
voting common stock traded on the New York Stock Exchange under the symbol
RGA.A. The offering provided net proceeds of approximately $221.8 million,
which have been utilized to finance the continued growth of RGA's
operations domestically and internationally. After the subsequent
offering, the Company's ownership percentage decreased from 63.8% to 53.3%.
On September 14, 1999 RGA held a special shareholder's meeting at which an
amendment to its restated articles of incorporation, as amended, was
approved which converted 7,417,496 shares of non-voting common stock into
7,194,971 shares of voting common stock, with cash paid in lieu of any
fractional shares. After the non-voting stock conversion, the Company's
ownership percentage was 53.5%.
On November 23, 1999, RGA completed a private placement of securities in
which it sold 4,784,689 shares of its common stock, $0.01 par value per
share to MetLife. The price per share was $26.125, and the aggregate value
of the transaction was approximately $125 million. Proceeds from the
private placement will be used for general corporate purposes, including
the immediate capital needs associated with the Company's primary
businesses. After the private offering, the Company's ownership percentage
was 48.3%.
SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements are prepared on the
basis of generally accepted accounting principles (GAAP) and include the
accounts of the Company and its majority owned subsidiaries. Less than
majority-owned entities in which the Company has at least a 20 percent
interest are reported on the equity basis. The Company continues to
consolidate the financial statements of RGA even though its ownership
percentage has declined to below 50 percent since the Company has retained
control of RGA through a majority representation on RGA's Board of
Directors at December 31, 1999 and through January 6, 2000. All
significant intercompany accounts and transactions have been eliminated in
consolidation. The preparation of financial statements requires the use of
estimates by management, which affect the amounts reflected in the
financial statements. Actual results could differ from those estimates.
Accounts that the Company deems to be sensitive to changes in estimates
include future policy benefits and policy and contract claims, deferred
acquisition costs, and investment and deferred tax valuation allowances.
The significant accounting policies of the Company are as follows:
RECOGNITION OF REVENUE
For traditional life insurance policies, including participating
businesses, premiums are recognized when due, less allowances for estimated
uncollectible balances. For limited payment contracts, net premiums are
recorded as revenue, and the difference between the gross premium and the
net premium is deferred and recognized in income in a constant relationship
to insurance in force over the estimated policy life.
For universal life and annuity products, contract charges for mortality,
surrender, and expense, other than front-end expense charges, are reported
as income when charged to policyholders' accounts.
Other income represents the fees generated from the Company's non-insurance
operations, primarily service and contract fees relating to concessions,
asset management, system development, and third-party administration.
Amounts are recognized when earned.
9
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
INVESTED ASSETS
FIXED MATURITIES AND EQUITY SECURITIES: All of the Company's securities are
classified as available-for-sale. Fixed maturities available-for-sale are
reported at fair value and are so classified based on the possibility that
such securities could be sold prior to maturity if that action enables the
Company to execute its investment philosophy and appropriately match
investment results to operating and liquidity needs. Equity securities are
carried at fair value.
Realized gains or losses on the sale of securities are determined on the
basis of specific identification. Unrealized gains and losses are
recorded, net of related income tax effects as well as related adjustments
to deferred acquisition costs, in accumulated other comprehensive income, a
separate component of stockholder equity.
The Company recognizes its proportionate share of the resultant gains or
losses on the issuance or repurchase of its subsidiaries' stock as a direct
credit or charge to retained earnings.
MORTGAGE LOANS: Mortgage loans on real estate are stated at an unpaid
principal balance, net of unamortized discounts, and valuation allowances
for possible impairment in value. The Company discontinues the accrual of
interest on mortgage loans which are more than 90 days delinquent.
Interest received on nonaccrual mortgage loans is generally reported as
interest income.
POLICY LOANS, REAL ESTATE AND OTHER INVESTED ASSETS: Policy loans are
carried at an unpaid principal balance and are generally secured by the
cash surrender value of the underlying contracts. Investment real estate
which the Company intends to hold for the production of income is carried
at depreciated cost, net of writedowns for other than temporary declines in
fair value and encumbrances. Properties held for sale (primarily acquired
through foreclosure) are carried at the lower of depreciated cost (fair
value at foreclosure plus capital additions less accumulated depreciation
and encumbrances) or fair value. Adjustments to carrying value of
properties held for sale are recorded in a valuation reserve when the fair
value is below depreciated cost. The accumulated depreciation and
encumbrances on real estate amounted to $44.0 million and $52.4 million at
December 31, 1999 and 1998, respectively. Direct valuation allowances
amounted to $4.7 million and $7.3 million at December 31, 1999 and 1998,
respectively. Other invested assets are principally recorded at fair
value.
SHORT-TERM INVESTMENTS: Short-term investments, consisting primarily of
money market instruments and other debt issues purchased with an original
maturity of less than a year, are carried at amortized cost, which
approximates fair value.
INVESTED ASSET IMPAIRMENT AND VALUATION ALLOWANCES: Invested assets are
considered impaired when the Company determines that collection of all
amounts due under the contractual terms is doubtful. The Company adjusts
invested assets to their estimated net realizable value at the point at
which it determines an impairment is other than temporary. In addition,
the Company has established valuation allowances for mortgage loans and
other invested assets. Valuation allowances for other than temporary
impairments in value are netted against the asset categories to which they
apply. Additions to valuation allowances are included in realized gains
and losses.
10
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
CASH AND CASH EQUIVALENTS: For purposes of reporting cash flows, cash and
cash equivalents represent cash, demand deposits, and highly liquid short-
term investments, which include U.S. Treasury bills, commercial paper, and
repurchase agreements with original or remaining maturities of 90 days or
less when purchased.
INVESTMENT INCOME
Fixed maturity premium and discounts are amortized into income using the
scientific yield method over the term of the security. Amortization of the
premium or discount on mortgage-backed securities is recognized using a
scientific yield method which considers the estimated timing and amount of
prepayments of underlying mortgage loans. Actual prepayment experience is
periodically reviewed and effective yields are adjusted when differences
arise between the prepayments originally anticipated and the actual
prepayments received and those prepayments currently anticipated. When
such differences occur, the net investment in the mortgage-backed security
is adjusted to the amount that would have existed had the new effective
yield been applied since the acquisition of the security with a
corresponding charge or credit to interest income (the "retrospective
method").
POLICY AND CONTRACT LIABILITIES
For traditional life insurance policies, future policy benefits are
computed using a net level premium method taking into account actuarial
assumptions as to mortality, persistency, and interest established at
policy issue. Assumptions established at policy issue as to mortality and
persistency are based on industry standards and the Company's historical
experience which, together with interest and expense assumptions, provide a
margin for adverse deviation. Interest rate assumptions generally range
from 2.5 percent to 11.0 percent. When the liabilities for future policy
benefits plus the present value of expected future gross premiums are
insufficient to provide for expected policy benefits and expenses,
unrecoverable deferred policy acquisition costs are written off and
thereafter a premium deficiency reserve is established through a charge to
earnings.
For participating policies, future policy benefits are computed using a net
level premium method based on the guaranteed cash value basis for mortality
and interest. Mortality rates are similar to those used for statutory
valuation purposes. Interest rates generally range from 2.5 percent to 6.0
percent. Dividend liabilities are established when earned.
Policyholder account balances for universal life and annuity policies are
equal to the policyholder account value before deduction of any surrender
charges. The policyholder account value represents an accumulation of
gross premium payments plus credited interest less expense, mortality
charges, and withdrawals. These expense charges are recognized in income
as earned.
The range of weighted average interest crediting rates used by the
Company's life insurance subsidiaries were as follows:
1999 1998 1997
Universal life 4.00-8.00% 5.25-7.10% 6.00-7.10%
Annuities 3.00-9.10% 4.00-9.20% 5.70-9.30%
Accident and health benefits for active lives are calculated using the net
level premium method and assumptions as to future morbidity, withdrawals,
and interest, which provide a margin for adverse deviation. Benefit
liabilities for disabled lives are calculated using the present value of
future benefits and experience assumptions for claim termination, expense,
and interest which also provide a margin for adverse deviation.
11
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
POLICY AND CONTRACT CLAIMS
The Company establishes a liability for unpaid claims based on estimates of
the ultimate cost of claims incurred, which is comprised of aggregate case
basis estimates, average claim costs for reported claims, and estimates of
incurred but not reported losses based on past experience. Policy and
contract claims include a provision for both life and accident and health
claims. Management believes the liabilities for unpaid claims are adequate
to cover the ultimate liability; however, due to the underlying risks and
the high degree of uncertainty associated with the determination of the
liability for unpaid claims, the amounts which will ultimately be paid to
settle these liabilities cannot be precisely determined and may vary from
the estimated amount included in the consolidated balance sheets.
DEFERRED POLICY ACQUISITION COSTS
The costs, which vary with and are primarily related to the production of
new and renewal business, have been deferred to the extent that such costs
are deemed recoverable from future profitability of the underlying
business. Such costs include commissions, premium taxes, as well as
certain other costs of policy issuance and underwriting.
For limited payment and other nonparticipating traditional life insurance
policies, the deferred policy acquisition costs are amortized, with
interest, in proportion to the ratio of the expected annual premium revenue
to the expected total premium revenue. Expected future premium revenue is
estimated utilizing the same assumptions used for computing liabilities for
future policy benefits for these policies.
For participating life insurance, universal life, and annuity type
contracts, the deferred policy acquisition costs are amortized over a
period of not more than thirty years in relation to the present value of
estimated gross profits arising from interest margin, cost of insurance,
policy administration, and surrender charges.
The range of average rates of assumed interest used by the Company's
insurance subsidiaries in estimated gross margins were as follows:
1999 1998 1997
Participating life 7.76% 8.25% 8.17%
Universal life 6.00-9.20% 6.25-7.50% 6.25-7.79%
Annuities 3.00-7.00% 7.00-7.83% 7.00-7.84%
The estimates of expected gross margins are evaluated regularly and are
revised if actual experience or other evidence indicates that revision is
appropriate. Upon revision, total amortization recorded to date is
adjusted by a charge or credit to current earnings. Deferred policy
acquisition costs are adjusted for the impact on estimated gross margins as
if the net unrealized gains and losses on securities had actually been
realized.
REINSURANCE AND OTHER CONTRACT DEPOSITS
In the normal course of business, the Company seeks to limit its exposure
to loss on any single insured by ceding risks to other insurance
enterprises or reinsurers under various types of contracts including
coinsurance and excess coverage. The Company's retention level per
individual life ranges between $50 thousand and $2.5 million depending on
the entity writing the policy.
The Company assumes and retrocedes financial reinsurance contracts, which
represent low mortality risk reinsurance treaties. These contracts are
reported as deposits and are included in other contract deposits in the
consolidated balance sheets. The amount of revenue reported on these
contracts represents fees and the cost of insurance under the terms of the
reinsurance agreement.
12
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
Reinsurance activities are accounted for consistent with terms of the
underlying contracts. Premiums ceded to other companies have been reported
as a reduction of premiums. Amounts applicable to reinsurance ceded for
future policy benefits and claim liabilities have been reported as assets
for these items, and commissions and expense allowances received in
connection with reinsurance ceded have been accounted for in income as
earned. Reinsurance does not relieve the Company from its primary
responsibility to meet claim obligations. The Company evaluates the
financial conditions of its reinsurers annually.
FEDERAL INCOME TAXES
The Company and certain of its U.S. subsidiaries file consolidated federal
income tax returns. Any acquired life insurance company is not included in
the consolidated return until the acquired company has been a member of the
consolidated group for five years. Prior to satisfying the five-year
requirement, the subsidiary files a separate federal return. RGA Barbados,
a subsidiary of RGA, also files a U.S. tax return. The Company's foreign
subsidiaries are taxed under applicable local statutes. No deferred tax
liabilities have been recognized for the foreign subsidiaries per
Accounting Principles Board (APB) Opinion 23, Accounting for Income Taxes -
Special Areas.
The Company uses the asset and liability method to record deferred income
taxes. Accordingly, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases, using enacted tax rates, expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled. The Company has not recognized a
deferred tax liability for the excess of financial statement carrying
amount over the tax basis of its less-than-80 percent owned domestic
subsidiaries as the tax law provides a means by which the reported amount
of that investment can be recovered tax-free and the Company expects that
it will ultimately use that means.
SEPARATE ACCOUNT BUSINESS
The assets and liabilities of the separate account represent segregated
funds administered and invested by the Company for purposes of funding
variable life insurance and annuity contracts for the exclusive benefit of
the contractholders.
The Company charges the separate account for cost of insurance and
administrative expense associated with a contract and charges related to
early withdrawals by contractholders. The assets and liabilities of the
separate account are carried at fair value. The Company's participation in
the separate account (seed money) is carried at fair value in the separate
account, and amounted to $27.2 million and $19.9 million at December 31,
1999 and 1998, respectively.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value estimates are made at a specific point in time, based on
relevant market information and information about the financial instrument.
These estimates do not reflect any premium or discount that could result
from offering for sale at one time the Company's entire holdings of a
particular financial instrument. Although fair value estimates are
calculated using assumptions that management believes are appropriate,
changes in assumptions could significantly affect the estimates and such
estimates should be used with care. The following assumptions were used to
estimate the fair value of each class of financial instrument for which it
was practicable to estimate fair value:
INVESTMENT SECURITIES: Fixed maturities are valued using quoted market
prices, if available. For securities not actively traded, fair values are
estimated using values obtained from independent pricing services or in the
case of private placements are estimated by discounting expected future
cash flows using a current market rate applicable to the yield, credit
quality, and maturity of investments. The fair values of equity securities
are based on quoted market prices.
13
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
DERIVATIVES: Derivatives are valued using quoted market prices, if
available. For derivatives not actively traded, fair values are estimated
using values obtained from independent pricing services.
MORTGAGE LOANS: The fair values of mortgage loans are estimated using
discounted cash flow analyses and interest rates currently being offered
for similar loans to borrowers with similar credit ratings. Loans with
similar characteristics are aggregated for purposes of the calculations.
POLICY LOANS: The fair value of policy loans approximates the carrying
value. The majority of these loans are indexed, with a yield tied to a
stated return.
POLICYHOLDER ACCOUNT BALANCES ON INVESTMENT TYPE CONTRACTS: Fair values for
the Company's liabilities under investment-type contracts are estimated
using cash surrender values. For contracts with no defined maturity date,
the carrying value approximates fair value.
PENSION FUNDS AND INTEREST SENSITIVE CONTRACT LIABILITIES: Fair values for
the Company's interest sensitive contract liabilities are estimated using
cash surrender values. For contracts with no defined maturity date, the
carrying value approximates fair value.
SEPARATE ACCOUNT ASSETS AND LIABILITIES: The separate account assets and
liabilities are carried at fair value as determined by the market value of
the underlying segregated investments.
SHORT-TERM INVESTMENTS AND CASH AND CASH EQUIVALENTS: The carrying amount
approximates fair value.
LONG-TERM DEBT AND NOTES PAYABLE: The fair value of long-term debt and
notes payable is estimated using discounted cash flow calculations based on
interest rates currently being offered for similar instruments.
Refer to Note 3 & Note 4 for additional information on fair value of
financial instruments.
NEW ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative
Instruments and Hedging Activities, effective for fiscal years beginning
after June 15, 2000, and is effective for interim periods in the initial
year of adoption. SFAS No. 133 requires companies to record derivatives on
the balance sheet as assets or liabilities, measured at fair value. It
also requires that gains or losses resulting from changes in the values of
those derivatives be reported depending on the use of the derivative and
whether it qualifies for hedge accounting. The Company has not yet
determined the effect of the implementation of SFAS No. 133 on the results
of operation, financial position, or liquidity. The Company plans to adopt
the provisions of SFAS No. 133 in 2001.
RECLASSIFICATION
The Company has reclassified the presentation of certain prior period
information to conform to the 1999 presentation.
(2) ACQUISITIONS AND DIVESTITURES
On September 30, 1999, the Company sold its 100 percent ownership in
Consultec, LLC to ACS Enterprise Solutions, Inc. Proceeds received net of
expenses were $65.7 million and the realized gain, net of tax, on the sale
was $28.4 million.
14
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
(3) INVESTMENTS
Fixed Maturities and Equity Securities
The amortized cost and estimated fair value of fixed maturities and equity
securities at December 31, 1999 and 1998 are as follows (in millions):
<TABLE>
<CAPTION>
1999
- ---------------------------------------------------------------------------------------------
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Available-for-sale:
U. S. Treasury securities $ 88.6 0.2 (4.8) 84.0
Government agency
obligations 686.8 55.3 (54.8) 687.3
Corporate securities 4,298.6 104.6 (318.2) 4,085.0
Mortgage-backed securities 970.3 1.2 (106.7) 864.8
Asset-backed securities 1,441.5 1.0 (337.5) 1,105.0
-------- ----- ------ -------
Total fixed maturities
available-for-sale $7,485.8 162.3 (822.0) 6,826.1
======== ===== ====== =======
Equity securities $ 42.7 9.5 (2.9) 49.3
======== ===== ====== =======
<CAPTION>
1998
- ---------------------------------------------------------------------------------------------
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Available-for-sale:
U. S. Treasury securities $ 20.7 0.4 -- 21.1
Government agency
obligations 1,151.5 122.5 (11.2) 1,262.8
Corporate securities 6,889.9 380.1 (164.1) 7,105.9
Mortgage-backed securities 1,812.4 34.0 (38.5) 1,807.9
Asset-backed securities 861.7 13.1 (4.2) 870.6
--------- ----- ------ --------
Total fixed maturities
available-for-sale $10,736.2 550.1 (218.0) 11,068.3
========= ===== ====== ========
Equity securities $ 39.1 9.5 -- 48.6
========= ===== ====== ========
</TABLE>
The Company manages its credit risk associated with fixed maturities by
diversifying its portfolio. At December 31, 1999, the Company held no
corporate debt securities or foreign government debt securities of a
single issuer, which had a carrying value in excess of ten percent of
stockholder equity.
15
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
The amortized cost and estimated fair value of fixed maturity
investments at December 31, 1999 are shown by contractual maturity for
all securities except, U.S. Government agencies mortgage-backed
securities which are distributed by maturity year based on the Company's
estimate of the rate of future prepayments of principal over the
remaining lives of the securities (in millions). These estimates are
developed using prepayment speeds provided in broker consensus data.
Such estimates are derived from prepayment speed experience at the
interest rate levels projected for the applicable underlying collateral
and can be expected to vary from actual experience. Expected maturities
may differ from contractual maturities because borrowers may have the
right to call or prepay obligations with or without call or prepayment
penalties.
ESTIMATED
AMORTIZED FAIR
COST VALUE
--------- ---------
Due in one year or less $ 147.8 149.0
Due after one year through five years 1,122.9 1,086.1
Due after five years through ten years 1,641.7 1,482.9
Due after ten years through twenty years 3,603.1 3,243.3
Mortgage-backed securities 970.3 864.8
-------- -------
Total $7,485.8 6,826.1
======== =======
The sources of net investment income follow (in millions):
1999 1998 1997
-------- ------- -----
Fixed maturities $ 749.6 744.3 561.7
Mortgage loans 175.4 188.8 194.5
Real estate 25.0 25.7 34.1
Equity securities 2.0 1.2 1.3
Policy loans 144.9 152.2 148.3
Short-term investments 46.5 22.4 16.6
Other 33.0 18.9 14.0
-------- ------- -----
Investment revenue 1,176.4 1,153.5 970.5
Investment expenses (19.2) (17.7) (25.0)
-------- ------- -----
Net investment income $1,157.2 1,135.8 945.5
======== ======= =====
16
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
Net realized gains (losses) from sales of investments consist of the
following (in millions):
1999 1998 1997
------- ----- -----
Fixed maturities:
Realized gains $ 70.4 19.0 24.0
Realized losses (330.8) (14.0) (16.8)
Equity securities:
Realized gains 48.2 2.0 1.8
Realized losses (0.4) (0.2) (1.5)
Other investments, net 12.0 6.9 21.0
------- ----- -----
Net realized investment gains $(200.6) 13.7 28.5
======= ===== =====
Included in net realized losses are permanent write-downs of
approximately $67.6 million and $5.5 million during 1999 and 1998,
respectively.
A summary of the components of the net unrealized appreciation
(depreciation) on invested assets carried at fair value is as follows
(in millions):
1999 1998
------- ------
Unrealized (depreciation) appreciation:
Fixed maturities available-for-sale $(659.7) 332.1
Equity securities 6.6 9.5
Derivatives (33.8) (5.3)
Effect of unrealized appreciation (depreciation) on:
Deferred policy acquisition costs 186.0 (155.7)
Present value of future profits 14.6 (0.5)
Deferred income taxes 169.7 (69.1)
Other 1.5 (2.9)
Minority interest, net of taxes 69.4 (19.6)
------- ------
Net unrealized (depreciation) appreciation $(245.7) 88.5
======= ======
The Company has securities on deposit with various state insurance
departments and regulatory authorities with an amortized cost of
approximately $881.8 million and $545.7 million at December 31, 1999 and
1998, respectively.
The Company's credit review procedures are designed to promote timely
identification of investments that require a higher-than-normal degree
of scrutiny. Each quarter a review is performed of impaired assets.
Factors considered in the evaluation include the collateral values,
credit quality of the issuer, amount of the exposure, our ability to
reduce exposure in situations of deteriorating credit worthiness, and
loss probabilities. Once a charge-off is taken, income is no longer
accrued, all cash is applied to principal. The Company's total impaired
assets amount to $31.8 million and $35.6 million at December 31, 1999
and 1998, respectively.
17
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
MORTGAGE LOANS
The Company originates mortgage loans on income-producing properties,
such as apartments, retail and office buildings, light warehouses, and
light industrial facilities. Loan to value ratios at the time of loan
approval are 75 percent or less. The Company minimizes risk through a
thorough credit approval process and through geographic and property
type diversification.
During 1999, the Company entered into an agreement whereby approximately
$625.6 million of mortgage loans were sold by the Company for
securitization and resale by a financial institution as mortgage pass-
through certificates. The sale of these mortgage loans resulted in a
net gain of approximately $0.6 million. These amounts are reflected
within net investment income in the consolidated statement of
operations.
The Company's mortgage loans were distributed as follows (in millions):
<TABLE>
<CAPTION>
1999 1998
-------------------- --------------------
PERCENT PERCENT
CARRYING OF CARRYING OF
VALUE TOTAL VALUE TOTAL
-------------------- --------------------
<S> <C> <C> <C> <C>
Arizona $ 125.6 7.4% $ 167.6 7.1%
California 298.0 17.4 395.3 16.6
Colorado 150.5 8.8 228.1 9.6
Florida 134.0 7.9 171.6 7.2
Georgia 137.6 8.1 176.1 7.4
Illinois 91.9 5.4 162.2 6.8
Maryland 78.2 4.6 102.9 4.3
Missouri 98.1 5.7 93.5 3.9
Texas 157.8 9.2 197.4 8.3
Washington 69.1 4.0 99.6 4.2
Other 367.2 21.5 581.7 24.6
-------------------- --------------------
Subtotal 1,708.0 100.0% 2,376.0 100.0%
===== =====
Valuation reserve (29.1) (38.5)
-------- --------
Total $1,678.9 $2,337.5
======== ========
<CAPTION>
1999 1998
-------------------- --------------------
PERCENT PERCENT
CARRYING OF CARRYING OF
VALUE TOTAL VALUE TOTAL
-------------------- --------------------
<S> <C> <C> <C> <C>
Property type:
Apartment $ 143.0 8.4% $ 77.1 3.2%
Retail 490.8 28.7 872.2 36.7
Office building 604.6 35.4 747.8 31.5
Industrial 391.6 22.9 422.6 17.8
Other commercial 78.0 4.6 256.3 10.8
-------------------- --------------------
Subtotal 1,708.0 100.0% 2,376.0 100.0%
===== =====
Valuation reserve (29.1) (38.5)
-------- --------
Total $1,678.9 $2,337.5
======== ========
</TABLE>
18
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
An impaired loan is measured at the present value of expected future
cash flows or, alternatively, the observable market price or the fair
value of the collateral.
Mortgage loans which have been non-income producing for the preceding
twelve months were $6.5 million and $20.1 million at December 31, 1999
and 1998, respectively. At December 31, 1999 and 1998, the recorded
investment in mortgage loans that were considered impaired was $48.8
million and $100.7 million, respectively, with related allowances for
credit losses of $4.0 million and $12.6 million, respectively. The
average recorded investment in impaired loans during 1999 and 1998 was
$74.8 million and $110.2 million, respectively.
For the years ended December 31, 1999, 1998, and 1997, the Company
recognized $3.6 million, $6.8 million, and $9.7 million, respectively,
of interest income on those impaired loans, which included $3.6 million,
$7.0 million, and $9.9 million, respectively, of interest income
recognized using the cash basis method of income recognition.
As of December 31, 1999, the Company has outstanding fixed rate
Commercial mortgage loan commitments totaling $68.9 million with a
market value of $67.0 million at rates ranging from 7.125% to 8.50%, and
total variable rate commitments totaling $143.3 million with a market
value of $140.9 million.
SECURITIES LENDING
The Company participates in a securities lending program. In the
Company's agreements, collateral is held on certain fixed maturity
securities loaned to other institutions through a lending agreement.
The minimum collateral on securities loaned is 102% of the market value
of the loaned securities, marked to market daily. The Company retains
full ownership of the loaned securities and is indemnified by the
lending agent in the event a borrower becomes insolvent or fails to
return the securities. The amount on loan at December 31, 1999 and 1998
was $60.3 million and $122.5 million, respectively, and was
appropriately collateralized.
DERIVATIVES
The Company has a variety of reasons to use derivative instruments, such
as to attempt to protect the Company against possible changes in the
market value of its portfolio as a result of interest rate changes and
to manage the portfolio's effective yield, maturity, and duration. The
Company does not invest in derivatives for speculative purposes. Upon
disposition, a realized gain or loss is recognized accordingly, except
when exercising an option contract or taking delivery of a security
underlying a futures contract. In these instances, the recognition of
gain or loss is postponed until the disposal of the security underlying
the option of futures contract.
Summarized below are the specific types of derivative instruments used
by the Company:
INTEREST RATE SWAPS: The Company manages interest rate risk on certain
contracts, primarily through the utilization of interest rate swaps.
Under interest rate swaps, the Company agrees with counterparties to
exchange, at specified intervals, the payments between floating and
fixed-rate interest amounts calculated by reference to notional amounts.
Net interest payments are recognized within net investment income in the
consolidated statements of operations.
At December 31, 1999, the Company had 19 outstanding interest rate swap
agreements which expire at various dates through 2024. Under 18 of the
agreements, the Company receives a fixed rate ranging from 6.065 percent
to 6.842 percent on a notional amount of $1.5 billion and pays a
floating rate based on London Interbank Offered Rate (LIBOR). Under the
remaining outstanding interest rate swap agreement, the Company receives
a floating rate based on LIBOR on a notional amount of $2 million and
pays a fixed rate of 6.495 percent. The estimated fair value of the
agreements at December 31, 1999 was a net loss of approximately $33.8
million, which is recognized in accumulated other comprehensive income.
19
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
At December 31, 1998, the Company had 35 outstanding interest rate swap
agreements which expire at various dates through 2025. Under 19
outstanding interest rate swap agreements, the Company receives a
floating rate based on LIBOR on a notional amount of $116.0 million and
pays a fixed rate ranging from 3.13 percent to 8.56 percent. Under 15
of the agreements, the Company receives a fixed rate ranging from 5.79
percent to 7.57 percent on a notional amount of $80.5 million and pays a
floating rate based on LIBOR. On the remaining swap agreement, the
Company receives a floating rate based on LIBOR on a notional amount of
$5 million and pays a floating rate based on LIBOR. The estimated fair
value of the agreements at December 31, 1998 was a net loss of
approximately $4.7 million, which is recognized in accumulated other
comprehensive income.
CURRENCY, SWAPS AND CROSS CURRENCY SWAPS: Under foreign currency swaps,
the Company agrees with other parties to exchange at specified
intervals, the difference between two currencies on an exchange rate
basis the interest amounts calculated by reference to an agreed notional
principal amount. Under cross currency swaps, the Company swaps the
difference between two currencies and between floating and fixed-rate
interest amounts calculated by reference to notional amounts. The
Company uses this technique for foreign denominated assets to match
dollar denominated liabilities of various fixed income products. Net
interest payments are recognized within net investment income in the
consolidated statements of operations.
At December 31, 1999, the Company held no currency or cross currency
swaps. At December 31, 1998 the Company had one outstanding currency
swap agreement and five outstanding cross currency swaps which expire at
various dates through 2016. The notional amount was $34.2 million. The
1998 estimated fair value of the agreements was a net loss of $5.5
million and is recognized in accumulated other comprehensive income.
TOTAL RETURN SWAP: The Company uses the total return swap to construct a
structured product that resembles an equity linked note. The total
return swap is used to obtain equity participation. The Company agrees
with other parties to pay at specified intervals, floating-rate interest
amounts calculated by reference to an agreed notional principal amount.
In return the Company receives equity participation, which is calculated
by reference to an agreed equity market index and a notional principal
amount. If the amount is positive at the termination date, the Company
receives such amount. If the amount is negative at the termination date,
the Company pays out such amount to the counterparty.
At December 31, 1999, the Company held no total return swap agreements.
At December 31, 1998, the Company had one outstanding total return swap,
which expires in 2028. The notional amount was $14.0 million and the
estimated fair value of the agreement was a net profit of $1.9 million,
which is recognized in accumulated other comprehensive income.
FUTURES: A futures contract is an agreement involving the delivery of a
particular asset on a specified future date at an agreed upon price.
The Company generally invests in futures on U.S. Treasury Bonds, U.S.
Treasury Notes, and the S&P 500 Index and typically closes the contract
prior to the delivery date. These contracts are generally used to manage
the portfolio's effective maturity and duration.
At December 31, 1999, the Company held no futures contracts. At
December 31, 1998, futures contracts outstanding were as follows (in
millions):
Net Sold Notional Fair Unrealized
Position Amount Value Gain
-------- -------- ----- -----------
(0.3) $33.1 $32.9 $0.2
The 1998 unrealized gain was recognized in accumulated other
comprehensive income.
20
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
The Company is exposed to credit related risk in the event of
nonperformance by counterparties to financial instruments but does not
expect any counterparties to fail to meet their obligations. Where
appropriate, master netting agreements are arranged and collateral is
obtained in the form of rights to securities to lower the Company's
exposure to credit risk. It is the Company's policy to deal only with
highly rated companies. At December 31, 1999 and 1998, there were not
any significant concentrations with counterparties.
(4) FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of a financial instrument is the amount at which the
instrument could be exchanged in a current transaction between willing
parties. The following table presents the carrying amounts and estimated
fair values of the Company's financial instruments at December 31, 1999
and 1998 (in millions). Refer to Note 3 for the estimated fair values
of the Company's derivative instruments.
<TABLE>
<CAPTION>
1999 1998
-------------------- --------------------
ESTIMATED ESTIMATED
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
-------------------- --------------------
<S> <C> <C> <C> <C>
Assets:
Fixed maturities $6,826.1 6,826.1 11,068.3 11,068.3
Mortgage loans 1,678.9 1,691.7 2,337.5 2,472.5
Policy loans 2,243.9 2,243.9 2,151.0 2,151.0
Short-term investments 292.4 292.4 195.3 195.3
Other invested assets 898.8 898.8 457.6 457.6
Separate account assets 6,915.6 6,915.6 5,214.8 5,214.8
Liabilities:
Policyholder account balances
relating to investment
Contracts $5,179.4 5,279.8 5,044.8 4,929.7
Pension funds and other
interest sensitive liabilities 556.8 551.2 7,581.3 7,592.0
Long-term debt and
notes payable 216.6 209.8 221.9 216.6
Separate account liabilities 6,892.0 6,892.0 5,194.9 5,194.9
======== ======= ======== ========
</TABLE>
(5) REINSURANCE
The Company is a reinsurer to the life and health industry. The effect
of reinsurance on premiums and other considerations is as follows
(in millions):
<TABLE>
<CAPTION>
1999 1998 1997
-------- ------- -------
<S> <C> <C> <C>
Direct $1,139.5 1,210.8 1,159.1
Assumed 1,667.7 1,422.3 996.9
Ceded (416.4) (431.5) (348.9)
-------- ------- -------
Net insurance premiums and other
considerations $2,390.8 2,201.6 1,807.1
======== ======= =======
</TABLE>
21
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
(6) FEDERAL INCOME TAXES
Income tax (benefit) expense attributable to income from operations
consists of the following (in millions):
<TABLE>
<CAPTION>
1999 1998 1997
------ ---- ----
<S> <C> <C> <C>
Current income tax (benefit) expense $(23.6) 35.2 65.8
Deferred income tax (benefit) expense (40.7) 18.4 (0.1)
------ ---- ----
Provision for income taxes $(64.3) 53.6 65.7
====== ==== ====
</TABLE>
Income tax (benefit) expense attributable to income from operations
differed from the amounts computed by applying the U.S. federal
income tax rate of 35 percent to pre-tax income as a result of
the following (in millions):
<TABLE>
<CAPTION>
1999 1998 1997
------ ----- ----
<C> <C> <C> <C>
Computed "expected" tax (benefit) expense $(67.4) 70.0 64.8
Increase (decrease) in income tax resulting
from:
Surplus (benefit) tax on mutual life
insurance companies - (7.5) 5.3
Foreign tax rate in excess of U.S. tax
rate 1.0 0.8 0.6
Tax preferred investment income (11.4) (10.9) (6.6)
State tax net of federal benefit 1.7 1.6 0.8
Corporate owned life insurance (3.3) (3.6) -
Foreign tax credit - (1.3) (0.6)
Goodwill amortization 1.9 1.5 1.0
Difference in book vs. tax basis in
domestic subsidiaries 1.6 2.8 2.2
Valuation allowance for loss
carryforwards 5.7 - -
Capitalized acquisition costs 2.4 - -
Other, net 3.5 0.2 (1.8)
------ ---- ----
Provision for income taxes $(64.3) 53.6 65.7
====== ==== ====
</TABLE>
Total income taxes were allocated as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------- ----- -----
<S> <C> <C> <C>
Provision for income taxes $ (64.3) 53.6 65.7
Income tax from stockholder equity:
Unrealized investment (loss) gain
recognized for financial reporting
purposes (237.0) (22.6) 55.9
Foreign currency translation 7.8 (9.4) (12.1)
Other (2.4) (1.4) (0.5)
------- ----- -----
Provision for income taxes $(295.9) 20.2 109.0
======= ===== =====
</TABLE>
22
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and liabilities at December 31, 1999
and 1998 are presented below (in millions):
<TABLE>
<CAPTION>
1999 1998
------ -----
<S> <C> <C>
Deferred tax assets:
Reserve for future policy benefits $158.9 90.9
Deferred acquisition costs capitalized for tax 147.4 128.8
Employee benefits 41.5 28.2
Investments 46.2 -
Net operating and capital loss 57.2 46.8
Unrealized loss on investments 163.9 -
Other, net 95.5 98.5
------ -----
Gross deferred tax assets 710.6 393.2
Less valuation allowance 7.2 1.5
------ -----
Total deferred tax assets after valuation allowance $703.4 391.7
====== =====
<CAPTION>
1999 1998
------- -----
<S> <C> <C>
Deferred tax liabilities:
Unrealized gain on investments $ - 79.1
Deferred acquisition costs capitalized for financial
reporting 385.0 274.5
Investments - 3.7
Other, net 120.8 109.8
------- -----
Total deferred tax liabilities 505.8 467.1
------- -----
Total deferred tax (asset) liability $(197.6) 75.4
======= =====
</TABLE>
The Company has not recognized a deferred tax liability for the
undistributed earnings of its wholly owned domestic and foreign
subsidiaries because the Company currently does not expect those
unremitted earnings to become taxable to the Company in the foreseeable
future. In addition, the Company has not recognized a deferred tax
liability of approximately $106 million for the excess of financial
statement carrying amount over the tax basis of its less-than-80-percent
owned domestic subsidiaries. This is because the unremitted earnings of
foreign subsidiaries will not be repatriated in the foreseeable future,
or because the excess of the financial statement carrying amount over
the tax basis of its less-that-80 percent owned domestic subsidiaries
will not become taxable as the tax law provides a means by which the
reported amount of that investment can be recovered tax-free and the
Company expects that it will ultimately use that means.
The Company believes that it is more likely than not that the deferred
tax assets established will be realized except for the amount of the
valuation allowance. As of December 31, 1999 and 1998, the Company has
provided for a 100 percent valuation allowance against the deferred tax
asset related to the net operating losses of the Company's foreign
subsidiaries including RGA's Australian, Argentine, South African and UK
subsidiaries and NaviSys' Mexican subsidiary. At December 31, 1999, the
Company's subsidiaries had capital loss carryforwards of $89.4 million,
and net operating loss carryforwards of $146.7 million. The capital and
net operating losses are expected to be utilized during the period
allowed for carryforwards.
23
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
The Company has been audited by the Internal Revenue Service for the
years through and including 1994. The Company is currently being
audited for the years 1995 and 1996. The Company believes that any
adjustments that might be required for open years will not have a
material effect on the Company's consolidated financial statements.
During 1999, 1998, and 1997 the Company paid income taxes totaling
approximately $77.0 million, $59.6 million, and $70.8 million,
respectively.
(7) DEFERRED POLICY ACQUISITION COSTS
A summary of the policy acquisition costs deferred and amortized is as
follows (in millions):
<TABLE>
<CAPTION>
1999 1998 1997
-------- ------ ------
<S> <C> <C> <C>
Balance at beginning of year $ 773.8 695.3 652.3
Transfer of present value of future profits -- -- 19.3
Prior year adjustment due to change in
reserving methods -- (0.2) --
Policy acquisition costs deferred 324.6 332.9 267.0
Policy acquisition cost amortized (214.4) (280.0) (211.9)
Interest credited 60.4 39.3 40.8
Deferred policy acquisition costs relating to
change in unrealized (gain) loss on
investments available-for-sale 341.7 (13.5) (72.2)
-------- ------ ------
Balance at end of year $1,286.1 773.8 695.3
======== ====== ======
</TABLE>
(8) ASSOCIATE BENEFIT PLANS AND POSTRETIREMENT BENEFITS
The Company has a defined benefit plan covering substantially all
associates. The benefits are based on years of service and each
associate's compensation level. The Company's funding policy is to
contribute annually the maximum amount deductible for federal income tax
purposes. Contributions provide for benefits attributed to service to
date and for those expected to be earned in the future.
Associates of the Company also are offered several non-qualified,
defined benefit, and defined contribution plans for directors and
management associates. The plans are unfunded and are deductible for
federal income tax purposes when the benefits are paid. Effective April
30, 1999, the liabilities that relate to these plans are managed at
GenAmerica Management Corporation, a subsidiary of GenAmerica. The
Company recognized expense of $12.9 million, $8.2 million, and $7.7
million for the years ended December 31, 1999, 1998, and 1997,
respectively, related to these plans.
In addition to pension benefits, the Company provides certain health
care and life insurance benefits for retired employees. Substantially
all employees may become eligible for these benefits if they reach
retirement age while working for the Company. Alternatively, retirees
may elect certain prepaid health care benefit plans.
The Company uses the accrual method to account for the costs of its
retiree plans and amortizes its transition obligation for retirees and
fully eligible or vested employees over 20 years. The unamortized
transition obligation was $13.4 million and $14.4 million at December
31, 1999 and 1998, respectively.
24
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
The Board of Directors has adopted an associate incentive plan
applicable to full-time salaried associates with at least one year of
service. Contributions to the plan are determined annually by the Board
of Directors and are based upon salaries of eligible associates. Full
vesting occurs after five years of continuous service. The Company's
contribution to the plan was $4.3 million, $10.4 million, and $10.4
million for 1999, 1998, and 1997 respectively.
At December 31, 1999, plan assets were invested 79.2% in the S&P Stock
Fund, 6.9% in the Small-Cap Stock Fund, 9.1% in the Separately Managed
Account Fund, and 4.8% in the Long-Term Bond Fund. At December 31, 1998
plan assets were invested 70.1% in the S&P 500 Stock Fund, 7.4% in the
Small-Cap Stock Fund, 17.3% in the Separately Managed Account Fund, and
5.2% in the Long-Term Bond Fund. These assets are invested in General
American separate accounts and held in a trust by an unrelated third
party administrator.
The following tables summarize the Company's associate benefit plans and
postretirement benefits (in millions):
<TABLE>
<CAPTION>
Pension Benefits Other Benefits
------------------ -----------------
1999 1998 1999 1998
------ ----- ----- ----
<S> <C> <C> <C> <C>
Change in benefit obligation:
Benefit obligation at beginning of year $149.1 129.8 $45.7 37.7
Service cost 6.5 5.8 1.7 1.7
Interest cost 10.3 9.2 2.8 2.9
Participant contributions -- -- 0.2 0.2
Plan amendments 0.3 (0.4) -- (1.3)
Curtailments 2.4 -- -- --
Special termination benefits 1.2 -- -- --
Benefits paid (8.0) (6.6) (1.9) (1.4)
Actuarial (gain) loss (1.9) 11.3 (7.8) 5.9
------ ----- ----- ----
Benefit obligation at end of year 159.9 149.1 40.7 45.7
------ ----- ----- ----
Change in plan assets:
Fair value of plan assets at
beginning of year 174.8 150.5 -- --
Actual return on plan assets 10.5 29.2 -- --
Employer contributions 2.1 1.7 1.7 1.2
Associates contributions -- -- 0.2 0.2
Benefits paid (8.0) (6.6) (1.9) (1.4)
------ ----- ----- ----
Fair value of plan assets at end of year $179.4 174.8 $-- --
====== ===== ===== ====
</TABLE>
25
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
<TABLE>
<CAPTION>
Pension Benefits Other Benefits
1999 1998 1997 1999 1998 1997
------ ----- ----- ------ ----- -----
<S> <C> <C> <C> <C> <C> <C>
Reconciliation of funded status:
Funded status $ 19.4 25.7 20.7 $(40.7) (45.7) (37.7)
Unrecognized actuarial gain (12.3) (14.5) (8.2) (9.6) (1.9) (7.8)
Unrecognized transition
obligation 0.2 0.3 1.1 13.4 14.4 16.8
Unrecognized prior service
cost (0.3) (0.8) (2.2) -- -- --
------ ----- ----- ------ ----- -----
Net amount recognized at end
of year 7.0 10.7 11.4 (36.9) (33.2) (28.7)
------ ----- ----- ------ ----- -----
Amounts recognized in the
statement of financial
position consist of:
Prepaid benefit cost 40.6 37.9 35.9 -- -- --
Accrued benefit liability (38.2) (32.2) (28.2) (36.9) (33.2) (28.7)
Intangible asset 0.1 0.9 0.9 -- -- --
Accumulated other
comprehensive loss 4.5 4.1 2.8 -- -- --
------ ----- ----- ------ ----- -----
Net amount recognized at end
of year $ 7.0 10.7 11.4 $(36.9) (33.2) (28.7)
====== ===== ===== ====== ===== =====
Other comprehensive loss
(income) attributable to
change in additional
minimum liability
recognition $ 0.3 1.3 (0.5) $ -- -- --
====== ===== ===== ====== ===== =====
</TABLE>
26
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
<TABLE>
<CAPTION>
Pension Benefits Other Benefits
1999 1998 1997 1999 1998 1997
------ ----- ----- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Additional year-end
information for plans with
benefit obligations in
excess of plan assets:
Benefit obligation 47.6 36.6 32.2 40.7 45.7 37.7
Additional year-end
information for pension
plans with accumulated
benefit obligations in
excess of plan assets:
Projected benefit
obligation 40.5 36.6 32.2 -- -- --
Accumulated benefit
obligation 37.8 32.1 28.0 -- -- --
Fair value of plan assets 0.1 0.1 -- -- -- --
====== ===== ===== ==== ==== ====
Components of net periodic
benefit cost:
Service cost 6.5 5.8 5.9 1.7 1.7 1.7
Interest cost 10.3 9.2 8.6 2.8 2.9 2.5
Expected return on plan
assets (15.3) (13.2) (11.1) -- -- --
Amortization of prior
service cost (0.1) (0.1) 0.1 -- -- --
Amortization of
transitional
obligation 0.1 0.1 0.3 1.0 1.0 1.1
Recognized actuarial
loss (gain) 0.6 0.4 0.4 (0.1) -- (0.2)
------ ----- ----- ---- ---- ----
Net periodic benefit cost $ 2.1 2.2 4.2 5.4 5.6 5.1
====== ===== ===== ==== ==== ====
Additional loss recognized due to:
Curtailment $ 2.3 0.1 -- -- -- --
Special Termination Benefit 1.4 -- -- -- -- --
====== ===== ===== ==== ==== ====
Weighted-average assumptions as
of December 31:
Discount rate 7.50% 6.75% 7.25% 7.50% 6.75% 7.25%
Expected long-term rate of
return on plan assets 9.00% 9.00% 9.00% -- -- --
Rate of compensation
increase (qualified plan) 4.95% 4.20% 4.20% -- -- --
====== ===== ===== ==== ==== ====
</TABLE>
27
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
ASSUMED HEALTH CARE COST TREND: For measurement purposes, a 7.0% annual
rate of increase in the per capita cost of covered health care benefits
was assumed for 1999. The rate assumed to decrease gradually to 5% for
2003 and remain at that level thereafter.
Assumed health care cost trend rates have a significant effect on the
amounts reported for the health care plan. A one-percentage point change
in assumed health care cost trend rates would have the following effects
(in thousands):
One Percentage One Percentage
Point Increase Point Decrease
-------------- --------------
Effect on total service and interest cost
components for 1999 $0.9 (0.7)
Effect on end of year 1999
postretirement benefit obligation $5.8 (4.7)
(9) DEBT
The Company's long-term debt and notes payable consists of the
following (in millions):
<TABLE>
<CAPTION>
Face Value at December 31,
Description Rate Maturity 1999 1998
- ----------- ---- -------- ---- ----
<S> <C> <C> <C> <C>
Long-term debt:
General American surplus note 7.625% January 2024 $107.0 107.0
RGA senior note 7.250% April 2006 100.0 100.0
Notes payable:
RGA Australia Hldgs. 5.180% April 2000 9.5 8.9
------ -----
Total long-term debt and notes payable $216.5 215.9
====== =====
</TABLE>
The difference between the face value of debt and the carrying value per
the consolidated balance sheets is unamortized discount.
General American's surplus note pays interest on January 15 and July 15
of each year. The note is not subject to redemption prior to maturity.
Payment of principal and interest on the note may be made only with the
approval of the Missouri Director of Insurance.
The RGA senior note pays interest semiannually on April 1 and October 1.
The ability of RGA to make debt principal and interest payments as well
as make dividend payments to shareholders is ultimately dependent on the
earnings and surplus of its subsidiaries and the investment earnings on
the undeployed debt proceeds. The transfer of funds from the insurance
subsidiaries to RGA is subject to applicable insurance laws and
regulations. Principal repayments are due in April 2000 and are
expected to be renewed under the terms of the line of credit. This
agreement contained various restrictive covenants which primarily
pertain to limitations on the quality and types of investments, minimum
requirements of net worth, and minimum rating requirements.
Interest paid on debt during 1999, 1998, and 1997 amounted to $17.8
million, $17.0 million, and $20.0 million, respectively.
As of December 31, 1999, the Company was in compliance with all
covenants under its debt agreements.
28
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
(10) COMPREHENSIVE INCOME
In June 1997, the Financial Accounting Standards Board issued SFAS No.
130, Reporting Comprehensive Income, effective for years beginning after
December 15, 1997. SFAS No. 130 establishes standards for reporting and
display of comprehensive income but does not affect results of
operations. Effective January 1, 1998, the Company adopted SFAS No. 130.
The components of comprehensive income, other than net income, are as
follows (in millions):
<TABLE>
<CAPTION>
1999
---------------------------------------------
TAX NET-
BEFORE-TAX (EXPENSE) OF-TAX
AMOUNT BENEFIT AMOUNT
---------------------------------------------
<S> <C> <C> <C>
Foreign currency translation adjustments $ 19.5 (6.8) 12.7
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during
period (753.1) 266.9 (486.2)
Less: Reclassification adjustment for gains
(losses) realized in net income (233.5) 81.5 (152.0)
---------------------------------------------
Net unrealized gains (losses) on securities (519.6) 185.4 (334.2)
Minimum benefit liability (1.0) 1.3 0.3
---------------------------------------------
Total other comprehensive (loss) income $(501.1) 179.9 (321.2)
=============================================
<CAPTION>
1998
---------------------------------------------
TAX NET-
BEFORE-TAX (EXPENSE) OF-TAX
AMOUNT BENEFIT AMOUNT
---------------------------------------------
<S> <C> <C> <C>
Foreign currency translation adjustments $(20.6) 7.2 (13.4)
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during
period (56.6) 19.3 (37.3)
Less: Reclassification adjustment for gains
(losses) realized in net income 4.7 (1.7) 3.0
--------------------------------------------
Net unrealized gains (losses) on securities (61.3) 21.0 (40.3)
Minimum benefit liability (0.3) -- (0.3)
--------------------------------------------
Total other comprehensive (loss) income $(82.2) 28.2 (54.0)
============================================
</TABLE>
29
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
<TABLE>
<CAPTION>
1997
---------------------------------------------
TAX NET-
BEFORE-TAX (EXPENSE) OF-TAX
AMOUNT BENEFIT AMOUNT
---------------------------------------------
<S> <C> <C> <C>
Foreign currency translation adjustments $(14.3) 10.6 (3.7)
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during
period 132.3 (49.1) 83.2
Less: Reclassification adjustment for gains
(losses) realized in net income 7.4 (2.6) 4.8
---------------------------------------------
Net unrealized gains (losses) on securities 124.9 (46.5) 78.4
Minimum benefit liability 0.9 -- 0.9
---------------------------------------------
Total other comprehensive (loss) income $111.5 (35.9) 75.6
=============================================
</TABLE>
The following schedule reflects the change in net accumulated other
comprehensive (loss) income for the periods ending December 31, 1999
and 1998 (in millions):
<TABLE>
<CAPTION>
CURRENT
BALANCE AS PERIOD BALANCE AS
OF 12/31/98 CHANGE OF 12/31/99
----------- ------- -----------
<S> <C> <C> <C>
Foreign currency adjustments $(32.9) 12.7 (20.2)
Unrealized gains (losses) on securities 88.5 (334.2) (245.7)
Minimum benefit liability (2.7) 0.3 (2.4)
----------- ------- -----------
Total accumulated other comprehensive
(loss) income $ 52.9 (321.2) (268.3)
----------- ------- -----------
<CAPTION>
CURRENT
BALANCE AS PERIOD BALANCE AS
OF 12/31/97 CHANGE OF 12/31/98
----------- ------- -----------
<S> <C> <C> <C>
Foreign currency adjustments $(19.5) (13.4) (32.9)
Unrealized gains (losses) on securities 128.8 (40.3) 88.5
Minimum benefit liability (2.4) (0.3) (2.7)
----------- ------- -----------
Total accumulated other comprehensive
(loss) income $106.9 (54.0) 52.9
=========== ======= ===========
</TABLE>
30
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
(11) REGULATORY MATTERS
The Company and its insurance subsidiaries are subject to financial
statement filing requirements in their respective state of domicile, as
well as the states in which they transact business. Such financial
statements, generally referred to as statutory financial statements, are
prepared on a basis of accounting which varies in some respects from
GAAP. Statutory accounting practices include: (1) charging of policy
acquisition costs to income as incurred; (2) establishment of a
liability for future policy benefits computed using required valuation
standards; (3) nonprovision of deferred federal income taxes resulting
from temporary differences between financial reporting and tax bases of
assets and liabilities; (4) recognition of statutory liabilities for
asset impairments and yield stabilization on fixed maturity dispositions
prior to maturity with asset valuation reserves based on statutorily
determined formulas; and (5) valuation of investments in bonds at
amortized cost.
Combined net income and policyholders' surplus of the Company and its
consolidated insurance subsidiaries, for the years ended and at December
31, 1999, 1998, and 1997, as determined in accordance with statutory
accounting practices, are as follows (in millions):
1999 1998 1997
------- ------- -----
Net (loss) income $(190.8) 60.8 39.7
Policyholders' surplus 741.3 1,147.4 844.1
======= ======= =====
For the year ended December 31, 1999, General American has changed its
method for recording equity in earnings of subsidiaries on a statutory
basis to reflect such earnings as a direct charge or credit to surplus,
and not a component of investment income.
Under Risk-Based Capital (RBC) requirements, General American and its
insurance subsidiaries are required to measure their solvency against
certain parameters. As of December 31, 1999, the Company's insurance
subsidiaries exceeded the established RBC minimums. In addition, the
Company's insurance subsidiaries exceeded the minimum statutory capital
and surplus requirements of their respective states of domicile.
The Company's insurance subsidiaries are subject to limitations on the
payment of dividends to the Company. Generally, dividends during any
year may not be paid without prior regulatory approval, in excess of the
lessor of (and with respect to life and health subsidiaries in Missouri,
in excess of the greater of): (a) ten percent of the insurance
subsidiaries' statutory surplus as of the preceding December 31 or (b)
the insurance subsidiaries' statutory gain from operations for the
preceding year.
31
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
(12) PARTICIPATING POLICIES AND DIVIDENDS TO POLICYHOLDERS
Over 18.9 percent and 22.8 percent of the Company's business in force
relates to participating policies as of December 31, 1999 and 1998,
respectively. These participating policies allow the policyholders to
receive dividends based on actual interest, mortality, and expense
experience for the related policies. These dividends are distributed to
the policyholders through an annual dividend, using current dividend
scales which are approved by the Board of Directors.
(13) CONTINGENT LIABILITIES
The Company was named as a defendant in a lawsuit that was filed in 1996
in Arizona State Court. The lawsuit claimed benefits under a disability
policy and damages for bad faith termination of such benefits. In
November 1998, the jury entered a verdict against the Company, awarding
the plaintiff approximately $59 million in damages, including $58
million in punitive damages. In January 1999, the Company filed a motion
for judgment notwithstanding the verdict, a motion for a new trial, and
a request for reduction of the punitive damages awarded. The Trial
Court reduced the punitive damage award to $18 million. The Company has
appealed the verdict and the award of the Court.
The Company was named as a defendant in a lawsuit filed in a federal
district court in Phoenix, Arizona along with Paul Revere Life Insurance
Company. The lawsuit claimed that Paul Revere denied benefits which was
a breach of the implied duty of good faith and that both companies were
liable due to being in a joint venture relationship. The jury found for
the plaintiff and assessed punitive damages against the company in the
sum of $10.2 million and against Paul Revere in the sum of $6.8 million.
Both companies have filed post-trial motions aimed at setting aside the
jury verdict and/or reducing the jury awards. The Company intends to
vigorously appeal the verdict if it is allowed to stand.
The Company was named as defendant in the following purported class
action lawsuits: Chain v. General American Life Insurance Company (filed
in the U.S. District Court for the Northern District of Mississippi in
1996); Newburg Trust v. General American Life Insurance Company (filed
in the U.S. District Court for the District of Massachusetts in 1996);
and Ludwig, Sippil, DAllesandro and Cunningham v. General American Life
Insurance Company (filed in the U.S. District Court for the Southern
District of Illinois in 1997). These lawsuits allege that the Company
engaged in deceptive sales practices in connection with the sale of
certain life insurance policies. None of these lawsuits has been
certified as a class action. Although the claims asserted in each
lawsuit are not identical, the plaintiffs seek unspecified actual and
punitive damages under similar claims, including breach of contract,
fraud, intentional or negligent misrepresentation, breach of fiduciary
duty and unjust enrichment. The Company filed a motion to dismiss all
of the claims in each of the lawsuits. The Court in each of these
lawsuits has dismissed certain of the plaintiffs' claims while allowing
others to proceed. These three cases have been consolidated with one
individual case in the U.S. District Court for the Eastern District of
Missouri. The Company has negotiated a settlement agreement with counsel
for plaintiffs which resolves all matters concerning the relief for the
class. There is, however, no agreement on the attorneys' fees or
expenses of class counsel. This settlement is in the process of being
finalized. It will then be submitted to the Court for review and
approval along with the issue of attorneys' fees and expenses. If the
settlement is not approved the Company intends to continue to oppose the
lawsuits vigorously.
In addition to the matters discussed above, the Company is involved in
pending and threatened litigation in the normal course of its business.
While the outcome of these matters cannot be predicted with certainty,
at the present time and based on information currently available,
management does not believe that the Company's liability arising from
pending or threatened litigation will have a material adverse affect on
the Company's financial condition or results of operations.
32
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
(14) RELATED PARTY TRANSACTIONS
In 1999, GenAmerica made capital contributions to the Company of $38.0
million, $10.1 million of NaviSys Incorporated's (NaviSys) equity, and
$20.0 million of NaviSys' bonds. The $38.0 million contribution
consisted of a promissory note from ARM, and was expensed by the Company
after it became uncollectible.
The following related party transactions occurred in the connection with
MetLife's acquisition of GenAmerica.
The Company paid and expensed approximately $20 million to MetLife
as consideration for MetLife's willingness to accept the funding
agreement business of General American as described in Note 1.
The Company paid $40 million to MetLife during 1999 which
ultimately was returned to GAMHC at the closing on January 6,
2000. This transaction has been recorded as a dividend by the
Company to GAMHC in the accompanying financial statements.
Subsequent to December 31, 1999 an additional $40 million was paid
to MetLife on behalf of GAMHC.
During 1999, GenAmerica paid and expensed $12 million of
investment advisory fees for which GAMHC and GenAmerica were
jointly and severably liable.
RGA also has reinsurance transactions between MetLife and certain of its
subsidiaries. Under these agreements, RGA reflected earned premiums of
approximately $108 million and $113 million in 1999 and 1998,
respectively. The earned premiums reflect the net of business assumed
from and ceded to MetLife and its subsidiaries. Underwriting gain
(loss) on this business was approximately $12 million and $13 million in
1999 and 1998, respectively.
(15) SUBSEQUENT EVENTS
On January 1, 2000, the Company exited the Group Health business through
the Asset Purchase Agreement and related reinsurance arrangements with
Great-West Life & Annuity Insurance Company (Great-West). This
agreement also includes any life business that is directly associated to
the health business.
The Company is required to reimburse Great-West for up to $10 million in
net operating losses incurred during 2000. These amounts have been
fully accrued in the 1999 consolidated financial statements of the
Company. The Company must also compensate Great-West for certain
receivables related to this business should they be deemed uncollectible.
On January 18, 2000, MetLife proposed to acquire all of Conning's
outstanding shares of common stock not already controlled by MetLife for
$10.50 per share in cash. MetLife acquired a beneficial interest of
approximately 61% in Conning as a result of its January 6, 2000
acquisition of GenAmerica. Conning has received MetLife's proposal and
the Conning Board of Directors is evaluating the proposed transaction.
33
<PAGE>
<PAGE>
General American Life Insurance Company and Subsidiaries
On January 24, 2000, Conning announced that it had learned of a
complaint purporting to be a shareholder class action suit that has been
filed in the Supreme Court of the State of New York, naming Conning and
MetLife as co-defendants. The complaint follows the January 18, 2000
announcement of MetLife's proposal to acquire all of the outstanding
shares of common stock not already controlled by MetLife for $10.50 per
share in cash. The complaint alleges that MetLife's proposal to acquire
the remaining equity interest in Conning fails to offer a fair price to
Conning's shareholders and lacks adequate procedural protections.
Additionally, the complaint alleges that as a result of MetLife's
proposal, the defendants have engaged in acts of self-dealing and
breeches of fiduciary duty in connection with the proposed transaction.
Conning was subsequently served with the complaint and believes the
plaintiff's claims are without merit.
34
<PAGE>
<PAGE>
PART II
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the
Securities and Exchange Act of 1934, the undersigned registrant
hereby undertakes to file with the Securities and Exchange
Commission such supplementary and periodic information,
documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore, or hereafter duly
adopted pursuant to authority conferred in that section.
RULE 484 UNDERTAKING
Section 351.355 of the Missouri General and Business
Corporation Law, in brief, allows a corporation to indemnify
any person who is a party or is threatened to be made a party
to any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, or
investigative by reason of the fact that he is or was a
director, officer, employee, or agent of the corporation,
against expenses, including attorneys' fees, judgments, fines,
and amounts paid in settlement actually and reasonably incurred
by him in connection with such action if he acted in good faith
and in a manner he reasonably believed to be in or not opposed
to the best interests of the corporation. When any person was
or is a party or is threatened to be made a party in an action
or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the Fact that he is or was a
director, officer, employee, or agent of the corporation,
indemnification may be paid unless such person shall have been
adjudged to be liable for negligence or misconduct in the
performance of his duty to the corporation. In the event of
such a determination indemnification is allowed if a court
determines that the person is fairly and reasonably entitled to
indemnity. A corporation has the power to give any further
indemnity to any person who is or was a director, officer,
employee, or agent, provided for in the articles of
incorporation or as authorized by any by-law which has been
adopted by vote of the shareholders, provided that no such
indemnity shall indemnify any person's conduct which was
finally adjudged to have been knowingly fraudulent,
deliberately dishonest, or willful misconduct.
In accordance with Missouri law, General American's Board of
Directors, at its meeting on 19 November 1987, and the
policyholders of General American at the annual meeting held on
26 January 1988, adopted the following resolutions:
"BE IT RESOLVED THAT
1. The company shall indemnify any person who is, or was a
director, officer, or employee of the company, or is or
was serving at the request of the company as a director,
officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise,
against any and all expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement,
actually and reasonably incurred by him or her in
connection with any civil, criminal, administrative, or
investigative action, proceeding, or claim
II-1
<PAGE>
<PAGE>
(including an action by or in the right of the company),
by reason of the fact that he or she was serving in such
capacity if he or she acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to
the best interests of the company; provided that such
person's conduct is not finally adjudged to have been
knowingly fraudulent, deliberately dishonest, or willful
misconduct.
2. The indemnification provided herein shall not be
deemed exclusive of any other rights to which a director,
officer, or employee may be entitled under any agreement,
vote of policyholders or disinterested directors, or
otherwise, both as to action in his or her official
capacity and as to action in another capacity which
holding such office, and shall continue as to a person
who has ceased to be a director, officer, or employee and
shall inure to the benefit of the heirs, executors and
administrators of such a person."
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred
or paid by a director, officer, or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
REPRESENTATIONS PURSUANT TO SECTION 26(E)
General American Life Insurance Company hereby represents that
the fees and charges deducted under the Policies described in
the prospectus are, in the aggregate, reasonable in relation to
the services rendered, the expenses expected, and the risks
assumed by General American Life Insurance Company.
II-2
<PAGE>
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following Papers and
Documents:
The facing sheet.
Variable Universal Life 98 Prospectus, consisting of 220 pages.
The undertaking to file reports required by Section 15(d)
of the 1934 Act.
The undertaking pursuant to Rule 484of the 1933 Act.
Representations pursuant to Section 26(e) of the 1940 Act.
The signatures.
1. The following exhibits (which correspond in number to the numbers
under paragraph A of the instructions for exhibits to Form N-8B-2):
(1) Resolution of the Board of Directors of General American
authorizing establishment of the Separate Account<F1>
(2) Not applicable
(3) (a) Principal Underwriting Agreement<F1>
(b) Proposed form of Selling Agreement<F1>
(c) Commission Schedule<F1>
(4) Not applicable
(5) Form of Variable Universal Life 98 Policy<F2>
(6) (a) Amended Charter and Articles of Incorporation of
General American<F4>
(b) Amended and Restated By-Laws of General American<F4>
(7) Not applicable
(8) (a) Form of Agreement to Purchase Shares of General
American Capital Company<F1>
(b) Participation Agreement with Variable Insurance
Products Fund<F6>
(c) Participation Agreement with Variable Insurance
Products II<F6>
(d) Form of Participation Agreement with J.P. Morgan
Series Trust II<F2>
(e) Form of Participation Agreement with VanEck Worldwide
Insurance Trust<F2>
(f) Form of Shareholder Services Agreement with American
Century Variable Portfolios<F2>
(g) Participation Agreement with SEI Insurance Products
Trust<F6>
(9) Not applicable
(10) (a) Form of Application<F2>
2. Memorandum describing General American's issuance,
transfer, and redemption procedures for the Policies and
General American's procedure for conversion to a fixed
benefit policy.
3. The following exhibits are numbered to correspond to the
numbers in the instructions as to exhibits for Form S-6.
(1) See above
(2) Opinion of Christopher A. Martin, Counsel of General
American<F6>
(3) Not applicable
(5) Not applicable
II-3
<PAGE>
<PAGE>
[FN]
- ----------
<F1> Incorporated by reference to Post-Effective Amendment
No. 16, File No. 33-10146 (VUL 95), April 28, 2000.
<F2> Incorporated by reference to Pre-Effective Amendment No.
1 to the Registration Statement, File No. 333-53477 (VUL
98), July 31, 1998.
<F3> Incorporated by reference to the initial filing of 333-
53477 (VUL 98), May 22, 1998.
<F4> Incorporated by reference to the initial filing of
Registration Statement No. 333-53673 (JSVUL 98), May 27,
1999.
<F5> Incorporated by reference to Post-Effective Amendment
No. 12 to the Registration Statement, File No. 33-48550
(VGSP/Frank Russell), April 28, 2000.
<F6> Filed herewith.
II-4
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
General American Life Insurance Company and General American
Separate Account Eleven represent that this Post-Effective
Amendment meets all the requirements for effectiveness under
Rule 485(b) of that Act and have duly caused this Registration
Statement to be signed on their behalf by the undersigned
thereunto duly authorized, and the seal of General American
Life Insurance Company to be hereunto affixed and attested, all
in the City of St. Louis, State of Missouri, on the 28th day of
April 2000.
GENERAL AMERICAN SEPARATE
ACCOUNT ELEVEN (Registrant)
(Seal) BY: GENERAL AMERICAN LIFE
INSURANCE COMPANY (for
Registrant and as
Depositor)
Attest: /s/ Robert J. Banstetter By: /s/ Kevin C. Eichner
------------------------- --------------------------
Robert J. Banstetter, Sr. Kevin C. Eichner
Secretary President
General American Life
Insurance Company
II-5
<PAGE>
<PAGE>
Pursuant to the requirements of the Securities Act of 1933,
this amended Registration Statement has been signed below by
the following persons in the capacities and on the dates
indicated.
Signature Title Date
- --------- ----- ----
/s/ Richard A. Liddy Chairman, Chief 4/28/00
- ---------------------------- Executive Officer
Richard A. Liddy (Principal Executive
Officer)
/s/ Kevin C. Eichner President 4/28/00
- ----------------------------
Kevin C. Eichner
/s/ Barry C. Cooper Vice President 4/28/00
- ---------------------------- Controller
Barry C. Cooper (Principal Accounting
Officer)
Director
- ----------------------------
August A. Busch, III<F*>
Director
- ----------------------------
William E. Cornelius<F*>
Director
- ----------------------------
John C. Danforth<F*>
Director
- ----------------------------
Bernard A. Edison<F*>
/s/ Richard A. Liddy Director 4/28/00
- ----------------------------
Richard A. Liddy
II-6
<PAGE>
<PAGE>
Signature Title Date
- --------- ----- ----
Director
- ----------------------------
William E. Maritz<F*>
Director
- ----------------------------
Craig D. Schnuck<F*>
Director
- ----------------------------
William P. Stiritz<F*>
Director
- ----------------------------
Andrew C. Taylor<F*>
Director
- ----------------------------
Robert L. Virgil, Jr.<F*>
Director
- ----------------------------
Virginia V. Weldon<F*>
Director
- ----------------------------
Ted C. Wetterau<F*>
By /s/ Christopher A. Martin 4/28/00
-------------------------
Christopher A. Martin
[FN]
<F*> Original powers of attorney authorizing the Registrant's
Secretary and Assistant Secretaries as well as Matthew P.
McCauley, William L. Hutton, and Christopher A. Martin to sign
this Registration Statement and Amendments thereto on behalf of
the Board of Directors of General American Life Insurance
Company are filed herewith.
II-7
<PAGE>
<PAGE>
The Board of Directors
General American Life Insurance Company
Re: Variable Universal Life 98
We consent to the use of our reports included herein and to the
reference to our firm under the heading "Experts" in the
Registration Statement and Prospectus for General American
Separate Account Eleven.
KPMG LLP
St. Louis, Missouri
April 28, 2000
<PAGE>
<PAGE>
LIMITED POWER OF ATTORNEY
WITH RESPECT TO FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION
The undersigned Director of General American Life Insurance
Company (the "Company") hereby constitutes and appoints the
Company's Secretary and Assistant Secretaries as well as
William L. Hutton, Esq. and Christopher A. Martin, Esq., and
each of them singly, the Director's limited attorneys-in-fact,
each with the power of substitution, for him or her in any and
all capacities, to sign any registration statement, amendment
thereto, or other filing, and to file the same, with exhibits
thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or
her substitute or substitutes, may do or cause to be done by
virtue hereof.
/s/ August A. Busch III
- -----------------------------
August A. Busch III
Date: 7/29/99
CAM:dw/GenAm-228
<PAGE>
<PAGE>
LIMITED POWER OF ATTORNEY
WITH RESPECT TO FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION
The undersigned Director of General American Life Insurance
Company (the "Company") hereby constitutes and appoints the
Company's Secretary and Assistant Secretaries as well as
William L. Hutton, Esq. and Christopher A. Martin, Esq., and
each of them singly, the Director's limited attorneys-in-fact,
each with the power of substitution, for him or her in any and
all capacities, to sign any registration statement, amendment
thereto, or other filing, and to file the same, with exhibits
thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or
her substitute or substitutes, may do or cause to be done by
virtue hereof.
/s/ William E. Cornelius
- -----------------------------
William E. Cornelius
Date: 7/22/99
CAM:dw/GenAm-228
<PAGE>
<PAGE>
LIMITED POWER OF ATTORNEY
WITH RESPECT TO FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION
The undersigned Director of General American Life Insurance
Company (the "Company") hereby constitutes and appoints the
Company's Secretary and Assistant Secretaries as well as
William L. Hutton, Esq. and Christopher A. Martin, Esq., and
each of them singly, the Director's limited attorneys-in-fact,
each with the power of substitution, for him or her in any and
all capacities, to sign any registration statement, amendment
thereto, or other filing, and to file the same, with exhibits
thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or
her substitute or substitutes, may do or cause to be done by
virtue hereof.
/s/ John C. Danforth
- -----------------------------
John C. Danforth
Date: 7/29/99
CAM:dw/GenAm-228
<PAGE>
<PAGE>
LIMITED POWER OF ATTORNEY
WITH RESPECT TO FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION
The undersigned Director of General American Life Insurance
Company (the "Company") hereby constitutes and appoints the
Company's Secretary and Assistant Secretaries as well as
William L. Hutton, Esq. and Christopher A. Martin, Esq., and
each of them singly, the Director's limited attorneys-in-fact,
each with the power of substitution, for him or her in any and
all capacities, to sign any registration statement, amendment
thereto, or other filing, and to file the same, with exhibits
thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or
her substitute or substitutes, may do or cause to be done by
virtue hereof.
/s/ Bernard A. Edison
- -----------------------------
Bernard A. Edison
Date: 7/28/99
CAM:dw/GenAm-228
<PAGE>
<PAGE>
LIMITED POWER OF ATTORNEY
WITH RESPECT TO FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION
The undersigned Director of General American Life Insurance
Company (the "Company") hereby constitutes and appoints the
Company's Secretary and Assistant Secretaries as well as
William L. Hutton, Esq. and Christopher A. Martin, Esq., and
each of them singly, the Director's limited attorneys-in-fact,
each with the power of substitution, for him or her in any and
all capacities, to sign any registration statement, amendment
thereto, or other filing, and to file the same, with exhibits
thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or
her substitute or substitutes, may do or cause to be done by
virtue hereof.
/s/ Richard A. Liddy
- -----------------------------
Richard A. Liddy
Date: 7/23/99
CAM:dw/GenAm-228
<PAGE>
<PAGE>
LIMITED POWER OF ATTORNEY
WITH RESPECT TO FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION
The undersigned Director of General American Life Insurance
Company (the "Company") hereby constitutes and appoints the
Company's Secretary and Assistant Secretaries as well as
William L. Hutton, Esq. and Christopher A. Martin, Esq., and
each of them singly, the Director's limited attorneys-in-fact,
each with the power of substitution, for him or her in any and
all capacities, to sign any registration statement, amendment
thereto, or other filing, and to file the same, with exhibits
thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or
her substitute or substitutes, may do or cause to be done by
virtue hereof.
/s/ William E. Maritz
- -----------------------------
William E. Maritz
Date: 7/22/99
CAM:dw/GenAm-228
<PAGE>
<PAGE>
LIMITED POWER OF ATTORNEY
WITH RESPECT TO FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION
The undersigned Director of General American Life Insurance
Company (the "Company") hereby constitutes and appoints the
Company's Secretary and Assistant Secretaries as well as
William L. Hutton, Esq. and Christopher A. Martin, Esq., and
each of them singly, the Director's limited attorneys-in-fact,
each with the power of substitution, for him or her in any and
all capacities, to sign any registration statement, amendment
thereto, or other filing, and to file the same, with exhibits
thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or
her substitute or substitutes, may do or cause to be done by
virtue hereof.
/s/ Craig D. Schnuck
- -----------------------------
Craig D. Schnuck
Date: 7/22/99
CAM:dw/GenAm-228
<PAGE>
<PAGE>
LIMITED POWER OF ATTORNEY
WITH RESPECT TO FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION
The undersigned Director of General American Life Insurance
Company (the "Company") hereby constitutes and appoints the
Company's Secretary and Assistant Secretaries as well as
William L. Hutton, Esq. and Christopher A. Martin, Esq., and
each of them singly, the Director's limited attorneys-in-fact,
each with the power of substitution, for him or her in any and
all capacities, to sign any registration statement, amendment
thereto, or other filing, and to file the same, with exhibits
thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or
her substitute or substitutes, may do or cause to be done by
virtue hereof.
/s/ William P. Stiritz
- -----------------------------
William P. Stiritz
Date: 7/26/99
CAM:dw/GenAm-228
<PAGE>
<PAGE>
LIMITED POWER OF ATTORNEY
WITH RESPECT TO FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION
The undersigned Director of General American Life Insurance
Company (the "Company") hereby constitutes and appoints the
Company's Secretary and Assistant Secretaries as well as
William L. Hutton, Esq. and Christopher A. Martin, Esq., and
each of them singly, the Director's limited attorneys-in-fact,
each with the power of substitution, for him or her in any and
all capacities, to sign any registration statement, amendment
thereto, or other filing, and to file the same, with exhibits
thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or
her substitute or substitutes, may do or cause to be done by
virtue hereof.
/s/ Andrew C. Taylor
- -----------------------------
Andrew C. Taylor
Date: 7/23/99
CAM:dw/GenAm-228
<PAGE>
<PAGE>
LIMITED POWER OF ATTORNEY
WITH RESPECT TO FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION
The undersigned Director of General American Life Insurance
Company (the "Company") hereby constitutes and appoints the
Company's Secretary and Assistant Secretaries as well as
William L. Hutton, Esq. and Christopher A. Martin, Esq., and
each of them singly, the Director's limited attorneys-in-fact,
each with the power of substitution, for him or her in any and
all capacities, to sign any registration statement, amendment
thereto, or other filing, and to file the same, with exhibits
thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or
her substitute or substitutes, may do or cause to be done by
virtue hereof.
/s/ Robert L. Virgil
- -----------------------------
Robert L. Virgil
Date: 7/25/99
CAM:dw/GenAm-228
<PAGE>
<PAGE>
LIMITED POWER OF ATTORNEY
WITH RESPECT TO FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION
The undersigned Director of General American Life Insurance
Company (the "Company") hereby constitutes and appoints the
Company's Secretary and Assistant Secretaries as well as
William L. Hutton, Esq. and Christopher A. Martin, Esq., and
each of them singly, the Director's limited attorneys-in-fact,
each with the power of substitution, for him or her in any and
all capacities, to sign any registration statement, amendment
thereto, or other filing, and to file the same, with exhibits
thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or
her substitute or substitutes, may do or cause to be done by
virtue hereof.
/s/ Virginia V. Weldon
- -----------------------------
Dr. Virginia V. Weldon
Date: 7/23/99
CAM:dw/GenAm-228
<PAGE>
<PAGE>
LIMITED POWER OF ATTORNEY
WITH RESPECT TO FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION
The undersigned Director of General American Life Insurance
Company (the "Company") hereby constitutes and appoints the
Company's Secretary and Assistant Secretaries as well as
William L. Hutton, Esq. and Christopher A. Martin, Esq., and
each of them singly, the Director's limited attorneys-in-fact,
each with the power of substitution, for him or her in any and
all capacities, to sign any registration statement, amendment
thereto, or other filing, and to file the same, with exhibits
thereto and other documents in co
nnection therewith, with the
Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or
her substitute or substitutes, may do or cause to be done by
virtue hereof.
/s/ Theodore C. Wetterau
- -----------------------------
Theodore C. Wetterau
Date: 7/26/99
CAM:dw/GenAm-228
<PAGE>
EXHIBIT 1.(8)(b)
----------------
AMENDED AND RESTATED
--------------------
PARTICIPATION AGREEMENT
-----------------------
Among
VARIABLE INSURANCE PRODUCTS FUND,
---------------------------------
FIDELITY DISTRIBUTORS CORPORATION
---------------------------------
and
GENERAL AMERICAN LIFE INSURANCE COMPANY
---------------------------------------
THIS AGREEMENT is made and entered into as of this 15th
day of February, 1995 by and among GENERAL AMERICAN LIFE
INSURANCE COMPANY, (hereinafter the "Company"), a Missouri
corporation, on its own behalf and on behalf of each segregated
asset account of the Company set forth on Schedule A hereto as
such schedule may be amended from time to time (each such
account hereinafter referred to as the "Account" and
collectively as the "Accounts"), and the VARIABLE INSURANCE
PRODUCTS FUND, an unincorporated business trust organized under
the laws of the Commonwealth of Massachusetts (hereinafter the
"Fund") and FIDELITY DISTRIBUTORS CORPORATION (hereinafter the
"Underwriter"), a Massachusetts corporation. This Agreement
replaces and supersedes that certain Participation Agreement
among the parties dated as of August 3, 1992, as heretofore
amended, which agreement is hereby amended in its entirety.
WHEREAS, the Fund engages in business as an open-end
management investment company and is available to act as the
investment vehicle for separate accounts established for
variable life insurance policies and variable annuity contracts
(collectively, the "Variable Insurance Products") to be offered
by insurance companies which have entered into participation
agreements with the Fund and the Underwriter (hereinafter
"Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided
into several series of shares, each designated a "Portfolio"
and representing the interest in a particular managed portfolio
of securities and other assets; and
WHEREAS, the Fund has obtained an order from the
Securities and Exchange Commission, dated October 15, 1985
(File No.812-6102), granting Participating Insurance Companies
and variable annuity and variable life insurance separate
accounts exemptions from the provisions of sections 9(a),
13(a), 15(a), and 15(b) of the Investment Company Act of 1940,
as
<PAGE>
<PAGE>
amended, (hereinafter the "1940 Act") and Rules 6e-2(b)(15) and
6e-3(T)(b)(15) thereunder, to the extent necessary to permit
shares of the Fund to be sold to and held by variable annuity
and variable life insurance separate accounts of both
affiliated and unaffiliated life insurance companies
(hereinafter the "Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management
investment company under the 1940 Act and its shares are
registered under the Securities Act of 1933, as amended
(hereinafter the "1933 Act"); and
WHEREAS, Fidelity Management & Research Company (the
"Adviser") is duly registered as an investment adviser under
the federal Investment Advisers Act of 1940 and any applicable
state securities law; and
WHEREAS, the Company has registered or will register
certain variable life and variable annuity contracts under the
1933 Act, and offers or will offer for sale certain other group
variable annuity contracts which are or will be exempt from
registration; and
WHEREAS, each Account is a duly organized, validly
existing segregated asset account, established by resolution of
the Board of Directors of the Company, on the date shown for
such Account on Schedule A hereto, to set aside and invest
assets attributable to one or more variable life and annuity
contracts; and
WHEREAS, the Company has registered or will register
certain of the Accounts as a unit investment trust under the
1940 Act and certain of the Accounts are exempt from
registration; and
WHEREAS, the Underwriter is registered as a broker dealer
with the Securities and Exchange Commission ("SEC") under the
Securities Exchange Act of 1934, as amended, (hereinafter the
"1934 Act"), and is a member in good standing of the National
Association of Securities Dealers, Inc. (hereinafter "NASD");
and
WHEREAS, to the extent permitted by applicable insurance
laws and regulations, the Company intends to purchase shares in
the Portfolios on behalf of each Account to fund certain of the
aforesaid variable life and variable annuity contracts and the
Underwriter is authorized to sell such shares to unit
investment trusts such as each Account at net asset value;
NOW, THEREFORE, in consideration of their mutual
promises, the Company, the Fund and the Underwriter agree as
follows:
ARTICLE I. Sale of Fund Shares
-------------------
1.1. The Underwriter agrees to sell to the Company
those shares of the Fund which each Account orders, executing
such orders on a daily basis at the net asset value next
computed after receipt by the Fund or its designee of the order
for the shares of the Fund. For purposes of this Section 1.1,
the Company shall be the designee of the Fund for receipt of
such orders from
2
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<PAGE>
each Account and receipt by such designee shall constitute
receipt by the Fund; provided that the Fund receives notice of
such order by 9:30 a.m. Boston time on the next following
Business Day. "Business Day" shall mean any day on which the
New York Stock Exchange is open for trading and on which the
Fund calculates its net asset value pursuant to the rules of
the Securities and Exchange Commission.
1.2. The Fund agrees to make its shares available
indefinitely for purchase at the applicable net asset value per
share by the Company and its Accounts on those days on which
the Fund calculates its net asset value pursuant to rules of
the Securities and Exchange Commission and the Fund shall use
reasonable efforts to calculate such net asset value on each
day which the New York Stock Exchange is open for trading.
Notwithstanding the foregoing, the Board of Trustees of the
Fund (hereinafter the "Board") may refuse to sell shares of any
Portfolio to any person, or suspend or terminate the offering
of shares of any Portfolio if such action is required by law or
by regulatory authorities having jurisdiction or is, in the
sole discretion of the Board acting in good faith and in light
of their fiduciary duties under federal and any applicable
state laws, necessary in the best interests of the shareholders
of such Portfolio.
1.3. The Fund and the Underwriter agree that shares
of the Fund will be sold only to Participating Insurance
Companies and their separate accounts. No shares of any
Portfolio will be sold to the general public.
1.4. The Fund and the Underwriter will not sell Fund
shares to any insurance company or separate account unless an
agreement containing provisions substantially the same as
Articles I, III, V, VII and Section 2.5 of Article II of this
Agreement is in effect to govern such sales.
1.5. The Fund agrees to redeem for cash, on the
Company's request, any full or fractional shares of the Fund
held by the Company, executing such requests on a daily basis
at the net asset value next computed after receipt by the Fund
or its designee of the request for redemption. For purposes of
this Section 1.5, the Company shall be the designee of the Fund
for receipt of requests for redemption from each Account and
receipt by such designee shall constitute receipt by the Fund;
provided that the Fund receives notice of such request for
redemption on the next following Business Day.
1.6. The Company agrees to purchase and redeem the
shares of selected Portfolios offered by the then-current
prospectus of the Fund and in accordance with the provisions of
such prospectus. The Company agrees that all net amounts
available under the variable life and variable annuity
contracts with the form number(s) which are listed on Schedule
B attached hereto and incorporated herein by this reference, as
such Schedule B may be amended from time to time hereafter by
mutual written agreement of all the parties hereto, (the
"Contracts") shall be invested in the Fund, in such other Funds
advised by the Adviser as may be mutually agreed to in writing
by the parties hereto, or in the Company's general account or
in other separate accounts of the Company managed by the
Company or an affiliate, provided that such amounts may also be
invested in an investment company other than the Fund if (a)
such other investment company, or series thereof, has
investment objectives or policies that are substantially
different from the
3
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<PAGE>
investment objectives and policies of all the Portfolios of the
Fund; or (b) the Company gives the Fund and the Underwriter 45
days written notice of its intention to make such other
investment company available as a funding vehicle for the
Contracts; or (c) such other investment company was available
as a funding vehicle for the Contracts prior to the date of
this Agreement and the Company so informs the Fund and
Underwriter prior to their signing this Agreement; or (d) the
Fund or Underwriter consents to the use of such other
investment company.
1.7. The Company shall pay for Fund shares on the
next Business Day after an order to purchase Fund shares is
made in accordance with the provisions of Section 1.1 hereof.
Payment shall be in federal funds transmitted by wire. For
purpose of Section 2.10 and 2.11, upon receipt by the Fund of
the federal funds so wired, such funds shall cease to be the
responsibility of the Company and shall become the
responsibility of the Fund.
1.8. Issuance and transfer of the Fund's shares will
be by book entry only. Stock certificates will not be issued
to the Company or any Account. Shares ordered from the Fund
will be recorded in an appropriate title for each Account or
the appropriate subaccount of each Account.
1.9. The Fund shall furnish same day notice (by wire
or telephone, followed by written confirmation) to the Company
of any income dividends or capital gain distributions payable
on the Fund's shares. The Company hereby elects to receive all
such income dividends and capital gain distributions as are
payable on the Portfolio shares in additional shares of that
Portfolio. The Company reserves the right to revoke this
election and to receive all such income dividends and capital
gain distributions in cash. The Fund shall notify the Company
of the number of shares so issued as payment of such dividends
and distributions.
1.10. The Fund shall make the net asset value per
share for each Portfolio available to the Company on a daily
basis as soon as reasonably practical after the net asset value
per share is calculated and shall use its best efforts to make
such net asset value per share available by 7 p.m. Boston time.
ARTICLE II. Representations and Warranties
------------------------------
2.1. The Company represents and warrants that the
Contracts are registered under the 1933 Act or are exempt from
registration thereunder; that the Contracts will be issued and
sold in compliance in all material respects with all applicable
Federal and State laws and that the sale of the Contracts shall
comply in all material respects with state insurance
suitability requirements. The Company further represents and
warrants that it is an insurance company duly organized and in
good standing under applicable law and that it has legally and
validly established each Account prior to any issuance or sale
thereof as a segregated asset account under Section 376.309 of
the Insurance Code of the State of Missouri and that each
Account is or will be registered as a unit investment trust in
accordance with the provisions of the 1940 Act to serve as a
segregated investment account for the Contracts or is exempt
from registration thereunder.
4
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<PAGE>
2.2. The Fund represents and warrants that Fund
shares sold pursuant to this Agreement shall be registered
under the 1933 Act, duly authorized for issuance and sold in
compliance with the laws of the State of Missouri and all
applicable federal and state securities laws and that the Fund
is and shall remain registered under the 1940 Act. The Fund
shall amend the Registration Statement for its shares under the
1933 Act and the 1940 Act from time to time as required in
order to effect the continuous offering of its shares. The
Fund shall register and qualify the shares for sale in
accordance with the laws of the various states only if and to
the extent deemed advisable by the Fund or the Underwriter.
2.3. The Fund represents that it is currently
qualified as a Regulated Investment Company under Subchapter M
of the Internal Revenue Code of 1986, as amended, (the "Code")
and that it will make every effort to maintain such
qualification (under Subchapter M or any successor or similar
provision) and that it will notify the Company immediately upon
having a reasonable basis for believing that it has ceased to
so qualify or that it might not so qualify in the future.
2.4. The Company represents that the Contracts are
currently treated as endowment, annuity or life insurance
contracts, under applicable provisions of the Code and that it
will make every effort to maintain such treatment and that it
will notify the Fund and the Underwriter immediately upon
having a reasonable basis for believing that the Contracts have
ceased to be so treated or that they might not be so treated in
the future.
2.5. The Fund currently does not intend to make any
payments to finance distribution expenses pursuant to Rule 12b-
1 under the 1940 Act or otherwise, although it may make such
payments in the future. The Fund has adopted a "no fee" or
"defensive" Rule 12b-l Plan under which it makes no payments
for distribution expenses. To the extent that it decides to
finance distribution expenses pursuant to Rule 12b-l, the Fund
undertakes to have a board of trustees, a majority of whom are
not interested persons of the Fund, formulate and approve any
plan under Rule 12b-1 to finance distribution expenses.
2.6. The Fund makes no representation as to whether
any aspect of its operations (including, but not limited to,
fees and expenses and investment policies) complies with the
insurance laws or regulations of the various states except that
the Fund represents that the Fund's investment policies, fees
and expenses are and shall at all times remain in compliance
with the laws of the State of Missouri and the Fund and the
Underwriter represent that their respective operations are and
shall at all times remain in material compliance with the laws
of the State of Missouri to the extent required to perform this
Agreement.
2.7. The Underwriter represents and warrants that it
is a member in good standing of the NASD and is registered as a
broker-dealer with the SEC. The Underwriter further represents
that it will sell and distribute the Fund shares in accordance
with the laws of the State of Missouri and all applicable state
and federal securities laws, including without limitation the
1933 Act, the 1934 Act, and the 1940 Act.
5
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<PAGE>
2.8. The Fund represents that it is lawfully
organized and validly existing under the laws of the
Commonwealth of Massachusetts and that it does and will comply
in all material respects with the 1940 Act.
2.9. The Underwriter represents and warrants that the
Adviser is and shall remain duly registered in all material
respects under all applicable federal and state securities laws
and that the Adviser shall perform its obligations for the Fund
in compliance in all material respects with the laws of the
State of Missouri and any applicable state and federal
securities laws.
2.10. The Fund and Underwriter represent and warrant
that all of their directors, officers, employees, investment
advisers, and other individuals/entities dealing with the money
or securities of the Fund are and shall continue to be at all
times covered by a blanket fidelity bond or similar coverage
for the benefit of the Fund in an amount not less than the
minimal coverage as required currently by Rule 17g-(1) of the
1940 Act or related provisions as may be promulgated from time
to time. The aforesaid Bond shall include coverage for larceny
and embezzlement and shall be issued by a reputable bonding
company.
2.11. The Company represents and warrants that all of
its directors, officers, employees, investment advisers, and
other entities dealing with the money or securities of the Fund
are and shall continue to be at all times covered by a blanket
fidelity bond or similar coverage for the benefit of the Fund,
in an amount not less than five million dollars ($5 million).
The aforesaid Bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding
company.
ARTICLE III. Prospectuses and Proxy Statements Voting
----------------------------------------
3.1. The Underwriter shall provide the Company with
as many printed copies of the Fund's current prospectus and
Statement of Additional Information as the Company may
reasonably request. If requested by the Company in lieu
thereof, the Fund shall provide camera-ready film or computer
diskettes containing the Fund's prospectus and Statement of
Additional Information, and such other assistance as is
reasonably necessary in order for the Company once each year
(or more frequently if the prospectus and/or Statement of
Additional Information for the Fund is amended during the year)
to have the prospectus for the Contracts and the Fund's
prospectus printed together in one document, and to have the
Statement of Additional Information for the Fund and the
Statement of Additional Information for the Contracts printed
together in one document. Alternatively, the Company may print
the Fund's prospectus and/or its Statement of Additional
Information in combination with other fund companies'
prospectuses and statements of additional information. Except
as provided in the following three sentences, all expenses of
printing and distributing Fund prospectuses and Statements of
Additional Information shall be the expense of the Company.
For prospectuses and Statements of Additional Information
provided by the Company to its existing owners of Contracts in
order to update disclosure as required by the 1933 Act and/or
the 1940 Act, the cost of printing shall be borne by the Fund.
If the Company chooses to receive camera-ready film or computer
diskettes in lieu of receiving printed copies of the Fund's
prospectus, the Fund will reimburse the Company in an amount
equal to the product of A and B where A is the number of such
prospectuses distributed to owners of
6
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<PAGE>
the Contracts, and B is the Fund's per unit cost of typesetting
and printing the Fund's prospectus. The same procedures shall
be followed with respect to the Fund's Statement of Additional
Information.
The Company agrees to provide the Fund or its designee
with such information as may be reasonably requested by the
Fund to assure that the Fund's expenses do not include the cost
of printing any prospectuses or Statements of Additional
Information other than those actually distributed to existing
owners of the Contracts.
3.2. The Fund's prospectus shall state that the
Statement of Additional Information for the Fund is available
from the Underwriter or the Company (or in the Fund's
discretion, the Prospectus shall state that such Statement is
available from the Fund).
3.3. The Fund, at its expense, shall provide the
Company with copies of its proxy statements, reports to
shareholders, and other communications (except for prospectuses
and Statements of Additional Information, which are covered in
Section 3.1) to shareholders in such quantity as the Company
shall reasonably require for distributing to Contract owners.
3.4. If and to the extent required by law the Company
shall:
(i) solicit voting instructions from
Contract owners;
(ii) vote the Fund shares in accordance with
instructions received from Contract
owners; and
(iii) vote Fund shares for which no instructions
have been received in the same proportion as
Fund shares of such portfolio for which
instructions have been received,
so long as and to the extent that the Securities and Exchange
Commission continues to interpret the 1940 Act to require pass-
through voting privileges for variable contract owners. The
Company reserves the right to vote Fund shares held in any
segregated asset account in its own right, to the extent
permitted by law. Participating Insurance Companies shall be
responsible for assuring that each of their separate accounts
participating in the Fund calculates voting privileges in a
manner consistent with the standards set forth on Schedule C
attached hereto and incorporated herein by this reference,
which standards will also be provided to the other
Participating Insurance Companies.
3.5. The Fund will comply with all provisions of the
1940 Act requiring voting by shareholders, and in particular
the Fund will either provide for annual meetings or comply with
Section 16(c) of the 1940 Act (although the Fund is not one of
the trusts described in Section 16(c) of that Act) as well as
with Sections 16(a) and, if and when applicable, 16(b).
Further, the Fund will act in accordance with the Securities
and Exchange Commission's interpretation of the requirements of
Section 16(a) with respect to periodic elections of trustees
and with whatever rules the Commission may promulgate with
respect thereto.
7
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<PAGE>
ARTICLE IV. Sales Material and Information
------------------------------
4.1. The Company shall furnish, or shall cause to be
furnished, to the Fund or its designee, each piece of sales
literature or other promotional material in which the Fund or
its investment adviser or the Underwriter is named, at least
fifteen Business Days prior to its use. No such material shall
be used if the Fund or its designee object to such use within
fifteen Business Days after receipt of such material.
4.2. The Company shall not give any information or
make any representations or statements on behalf of the Fund or
concerning the Fund in connection with the sale of the
Contracts other than the information or representations
contained in the registration statement or prospectus for the
Fund shares, as such registration statement and prospectus may
be amended or supplemented from time to time, or in reports or
proxy statements for the Fund, or in sales literature or other
promotional material approved by the Fund or its designee or by
the Underwriter, except with the permission of the Fund or the
Underwriter or the designee of either.
4.3. The Fund, Underwriter, or its designee shall
furnish, or shall cause to be furnished, to the Company or its
designee, each piece of sales literature or other promotional
material in which the Company or its separate account(s), is
named at least fifteen Business Days prior to its use. No such
material shall be used if the Company or its designee object to
such use within fifteen Business Days after receipt of such
material.
4.4. The Fund and the Underwriter shall not give any
information or make any representations on behalf of the
Company or concerning the Company, each Account, or the
Contracts other than the information or representations
contained in any registration statement, prospectus or offering
materials for the Contracts, as such may be amended or
supplemented from time to time, or in published reports for
each Account which are in the public domain or approved by the
Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the
Company or its designee, except with the permission of the
Company.
4.5. The Fund will provide to the Company at least
one complete copy of all registration statements, prospectuses,
Statements of Additional Information, reports, proxy
statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters,
and all amendments to any of the above, that relate to the Fund
or its shares, contemporaneously with the filing of such
document with the Securities and Exchange Commission or other
regulatory authorities.
4.6. The Company will provide to the Fund at least
one complete copy of any registration statements, prospectuses,
Statements of Additional Information, reports, solicitations
for voting instructions, sales literature and other promotional
materials, applications for exemptions, requests for no action
letters, and all amendments to any of the above, that relate to
the Contracts or each Account, contemporaneously with the
filing of such document with the SEC or other regulatory
authorities. In the case of unregistered Contracts, in lieu of
providing prospectuses and Statements of Additional
Information, the Company shall provide the fund with one
complete copy of the offering materials for the Contracts.
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4.7. For purposes of this Article IV, the phrase
"sales literature or other promotional material" includes, but
is not limited to, advertisements (such as material published,
or designed for use in, a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures, or
other public media), sales literature (i.e., any written
----
communication distributed or made generally available to
customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts,
reprints or excerpts of any other advertisement, sales
literature, or published article), educational or training
materials or other communications distributed or made generally
available to some or all agents or employees, and registration
statements, prospectuses, Statements of Additional Information,
shareholder reports, and proxy materials.
ARTICLE V. Fees and Expenses
-----------------
5.1. The Fund and Underwriter shall pay no fee or
other compensation to the Company under this agreement, except
that if the Fund or any Portfolio adopts and implements a plan
pursuant to Rule 12b-1 to finance distribution expenses, then
the Underwriter may make payments to the Company or to the
underwriter for the Contracts if and in amounts agreed to by
the Underwriter in writing and such payments will be made out
of existing fees otherwise payable to the Underwriter, past
profits of the Underwriter or other resources available to the
Underwriter. No such payments shall be made directly by the
Fund. Currently, no such payments are contemplated.
5.2. All expenses incident to performance by the Fund
under this Agreement shall be paid by the Fund. The Fund shall
see to it that all its shares are registered and authorized for
issuance in accordance with applicable federal law and, if and
to the extent deemed advisable by the Fund, in accordance with
applicable state laws prior to their sale. The Fund shall bear
the expenses for the cost of registration and qualification of
the Fund's shares, preparation and filing of the Fund's
prospectus and registration statement, proxy materials and
reports, setting the prospectus in type, setting in type and
printing the proxy materials and reports to shareholders
(including the costs of printing a prospectus that constitutes
an annual report), the preparation of all statements and
notices required by any federal or state law, and all taxes on
the issuance or transfer of the Fund's shares.
5.3. The Company shall bear the expenses of
distributing the Fund's prospectus, proxy materials and reports
to owners of Contracts issued by the Company.
ARTICLE VI. Diversification
---------------
6.1. The Fund will at all times invest money from the
Contracts in such a manner as to ensure that the Contracts will
be treated as variable contracts under the Code and the
regulations issued thereunder. Without limiting the scope of
the foregoing, the Fund will at all times comply with Section
817(h) of the Code and Treasury Regulation 1.817-5, relating to
the
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diversification requirements for variable annuity, endowment,
or life insurance contracts and any amendments or other
modifications to such Section or Regulations.
ARTICLE VII. Potential Conflicts
-------------------
7.1. The Board will monitor the Fund for the
existence of any material irreconcilable conflict between the
interests of the contract owners of all separate accounts
investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any
state insurance regulatory authority; (b) a change in
applicable federal or state insurance, tax, or securities laws
or regulations, or a public ruling, private letter ruling, no-
action or interpretative letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an
administrative or judicial decision in any relevant proceeding;
(d) the manner in which the investments of any Portfolio are
being managed; (e) a difference in voting instructions given by
variable annuity contract and variable life insurance contract
owners; or (f) a decision by an insurer to disregard the voting
instructions of contract owners. The Board shall promptly
inform the Company if it determines that an irreconcilable
material conflict exists and the implications thereof.
7.2. The Company will report any potential or
existing conflicts of which it is aware to the Board. The
Company will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order, by
providing the Board with all information reasonably necessary
for the Board to consider any issues raised. This includes,
but is not limited to, an obligation by the Company to inform
the Board whenever contract owner voting instructions are
disregarded.
7.3. If it is determined by a majority of the Board,
or a majority of its disinterested trustees, that a material
irreconcilable conflict exists, the Company and other
Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a
majority of the disinterested trustees), take whatever steps
are necessary to remedy or eliminate the irreconcilable
material conflict, up to and including: (1), withdrawing the
assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a
different investment medium, including (but not limited to)
another Portfolio of the Fund, or submitting the question
whether such segregation should be implemented to a vote of all
affected Contract owners and, as appropriate, segregating the
assets of any appropriate group (i.e., annuity contract owners,
----
life insurance contract owners, or variable contract owners of
one or more Participating Insurance Companies) that votes in
favor of such segregation, or offering to the affected contract
owners the option of making such a change; and (2),
establishing a new registered management investment company or
managed separate account.
7.4. If a material irreconcilable conflict arises
because of a decision by the Company to disregard contract
owner voting instructions and that decision represents a
minority position or would preclude a majority vote, the
Company may be required, at the Fund's election, to withdraw
the affected Account's investment in the Fund and terminate
this Agreement with respect to such Account; provided, however
that such withdrawal and termination shall be limited to the
extent required by the foregoing material irreconcilable
conflict as determined by a majority
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of the disinterested members of the Board. Any such withdrawal
and termination must take place within six (6) months after the
Fund gives written notice that this provision is being
implemented, and until the end of that six month period the
Underwriter and Fund shall continue to accept and implement
orders by the Company for the purchase (and redemption) of
shares of the Fund.
7.5. If a material irreconcilable conflict arises
because a particular state insurance regulator's decision
applicable to the Company conflicts with the majority of other
state regulators, then the Company will withdraw the affected
Account's investment in the Fund and terminate this Agreement
with respect to such Account within six months after the Board
informs the Company in writing that it has determined that such
decision has created an irreconcilable material conflict;
provided, however, that such withdrawal and termination shall
be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the
disinterested members of the Board. Until the end of the
foregoing six month period, the Underwriter and Fund shall
continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Fund.
7.6. For purposes of Sections 7.3 through 7.6 of this
Agreement, a majority of the disinterested members of the Board
shall determine whether any proposed action adequately remedies
any irreconcilable material conflict, but in no event will the
Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to
establish a new funding medium for the Contracts if an offer to
do so has been declined by vote of a majority of Contract
owners materially adversely affected by the irreconcilable
material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any
irreconcilable material conflict, then the Company will
withdraw the Account's investment in the Fund and terminate
this Agreement within six (6) months after the Board informs
the Company in writing of the foregoing determination,
provided, however, that such withdrawal and termination shall
be limited to the extent required by any such material
irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-
3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive
relief from any provision of the Act or the rules promulgated
thereunder with respect to mixed or shared funding (as defined
in the Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding
Exemptive Order, then (a) the Fund or the Participating
Insurance Companies, as appropriate, shall take such steps as
may be necessary to comply with Rules 6e-2 and 6e-3(T), as
amended, and Rule 6e-3, as adopted, to the extent such rules
are applicable; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4,
and 7.5 of this Agreement shall continue in effect only to the
extent that terms and conditions substantially identical to
such Sections are contained in such Rule(s) as so amended or
adopted.
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ARTICLE VIII. Indemnification
---------------
8.1. Indemnification By The Company
------------------------------
8.1(a). The Company agrees to indemnify and hold
harmless the Fund and each trustee of the Board and officers
and each person, if any, who controls the Fund within the
meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.1) against
any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the
Company) or litigation (including legal and other expenses), to
which the Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the
sale or acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any
untrue statements or alleged untrue statements of any
material fact contained in any Registration Statement,
prospectus or other offering materials for the Contracts
or contained in the Contracts or sales literature for the
Contracts (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a
material fact required to be stated therein or necessary
to make the statements therein not misleading, provided
that this agreement to indemnify shall not apply as to
any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the
Company by or on behalf of the Fund for use in any
Registration Statement or prospectus for the Contracts or
in the Contracts or sales literature (or any amendment or
supplement) or otherwise for use in connection with the
sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of
statements or representations (other than statements or
representations contained in the Registration Statement,
prospectus or sales literature of the Fund not supplied
by the Company, or persons under its control) or wrongful
conduct of the Company or persons under its control, with
respect to the sale or distribution of the Contracts or
Fund Shares; or
(iii) arise out of any untrue statement or
alleged untrue statement of a material fact contained in
a Registration Statement, prospectus, or sales literature
of the Fund or any amendment thereof or supplement
thereto or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading
if such a statement or omission was made in reliance upon
information furnished to the Fund by or on behalf of the
Company; or
(iv) arise as a result of any failure by
the Company to provide the services and furnish the
materials under the terms of this Agreement; or
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(v) arise out of or result from any
material breach of any representation or warranty made by
the Company in this Agreement or arise out of or result
from any other material breach of this Agreement by the
Company, as limited by and in accordance with the
provisions of Sections 8.1(b) and 8.1(c) hereof.
8.1(b). The Company shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or litigation incurred or assessed against
an Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in
the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations
or duties under this Agreement or to the Fund, whichever is
applicable.
8.1(c). The Company shall not be liable under this
indemnification provision with respect to any claim made
against an Indemnified Party unless such Indemnified Party
shall have notified the Company in writing within a reasonable
time after the summons or other first legal process giving
information of the nature of the claim shall have been served
upon such Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any designated
agent), but failure to notify the Company of any such claim
shall not relieve the Company from any liability which it may
have to the Indemnified Party against whom such action is
brought otherwise than on account of this indemnification
provision. In case any such action is brought against the
Indemnified Parties, the Company shall be entitled to
participate, at its own expense, in the defense of such action.
The Company also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the
action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Company will not be
liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party
independently in connection with the defense thereof other than
reasonable costs of investigation.
8.1(d). The Indemnified Parties will promptly notify the
Company of the commencement of any litigation or proceedings
against them in connection with the issuance or sale of the
Fund Shares or the Contracts or the operation of the Fund.
8.2. Indemnification by the Underwriter
----------------------------------
8.2(a). The Underwriter agrees to indemnify and hold
harmless the Company and each of its directors and officers and
each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.2) against
any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the
Underwriter) or litigation (including legal and other expenses)
to which the Indemnified Parties may become subject under any
statute, at common law
13
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or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of the
Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact
contained in the Registration Statement or prospectus or
sales literature of the Fund (or any amendment or
supplement to any of the foregoing), or arise out of or
are based upon the omission or the alleged omission to
state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with
information furnished to the Underwriter or Fund by or on
behalf of the Company for use in the Registration
Statement or prospectus for the Fund or in sales
literature (or any amendment or supplement) or otherwise
for use in connection with the sale of the Contracts or
Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in any Registration Statement, prospectus,
other offering materials or sales literature for the
Contracts not supplied by the Underwriter or persons
under its control) or wrongful conduct of the Fund,
Adviser or Underwriter or persons under their control,
with respect to the sale or distribution of the Contracts
or Fund shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in any
Registration Statement, prospectus, other offering
materials or sales literature covering the Contracts, or
any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make
the statement or statements therein not misleading, if
such statement or omission was made in reliance upon
information furnished to the Company by or on behalf of
the Fund; or
(iv) arise as a result of any failure by the Fund to
provide the services and furnish the materials under the
terms of this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to comply
with the diversification requirements specified in
Article VI of this Agreement); or
(v) arise out of or result from any material breach
of any representation or warranty made by the Underwriter in
this Agreement or arise out of or result from any other
material breach of this Agreement by the Underwriter; as
limited by and in accordance with the provisions of
Sections 8.2(b) and 8.2(c) hereof.
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8.2(b). The Underwriter shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or litigation to which an Indemnified
Party would otherwise be subject by reason of such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in
the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations
and duties under this Agreement or to each Company or the
Account, whichever is applicable.
8.2(c). The Underwriter shall not be liable under this
indemnification provision with respect to any claim made
against an Indemnified Party unless such Indemnified Party
shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been
served upon such Indemnified Party (or after such Indemnified
Party shall have received notice of such service on any
designated agent), but failure to notify the Underwriter of any
such claim shall not relieve the Underwriter from any liability
which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this
indemnification provision. In case any such action is brought
against the Indemnified Parties, the Underwriter will be
entitled to participate, at its own expense, in the defense
thereof. The Underwriter also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named
in the action. After notice from the Underwriter to such party
of the Underwriter's election to assume the defense thereof,
the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Underwriter will not
be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party
independently in connection with the defense thereof other than
reasonable costs of investigation.
8.2(d). The Company agrees promptly to notify the
Underwriter of the commencement of any litigation or
proceedings against it or any of its officers or directors in
connection with the issuance or sale of the Contracts or the
operation of each Account.
8.3. Indemnification By the Fund
---------------------------
8.3(a). The Fund agrees to indemnify and hold harmless
the Company, and each of its directors and officers and each
person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section 8.3) against any and all
losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Fund) or litigation
(including legal and other expenses) to which the Indemnified
Parties may become subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements
result from the gross negligence, bad faith or willful
misconduct of the Board or any member thereof, are related to
the operations of the Fund and:
(i) arise as a result of any failure by the Fund to
provide the services and furnish the materials
under the terms of this Agreement (including a
failure to comply with the diversification
requirements specified in Article VI of this
Agreement); or
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(ii) arise out of or result from any material breach
of any representation or warranty made by the
Fund in this Agreement or arise out of or result
from any other material breach of this Agreement
by the Fund;
as limited by and in accordance with the provisions of Sections
8.3(b) and 8.3(c) hereof.
8.3(b). The Fund shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or litigation incurred or assessed against
an Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in
the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations
and duties under this Agreement or to the Company, the Fund,
the Underwriter or each Account, whichever is applicable.
8.3(c). The Fund shall not be liable under this
indemnification provision with respect to any claim made
against an Indemnified Party unless such Indemnified Party
shall have notified the Fund in writing within a reasonable
time after the summons or other first legal process giving
information of the nature of the claim shall have been served
upon such Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any designated
agent), but failure to notify the Fund of any such claim shall
not relieve the Fund from any liability which it may have to
the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision.
In case any such action is brought against the Indemnified
Parties, the Fund will be entitled to participate, at its own
expense, in the defense thereof. The Fund also shall be
entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice
from the Fund to such party of the Fund's election to assume
the defense thereof, the Indemnified Party shall bear the fees
and expenses of any additional counsel retained by it, and the
Fund will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than
reasonable costs of investigation.
8.3(d). The Company and the Underwriter agree promptly
to notify the Fund of the commencement of any litigation or
proceedings against it or any of its respective officers or
directors in connection with this Agreement, the issuance or
sale of the Contracts, with respect to the operation of any
Account, or the sale or acquisition of shares of the Fund.
ARTICLE IX. Applicable Law
--------------
9.1. This Agreement shall be construed and the
provisions hereof interpreted under and in accordance with the
laws of the Commonwealth of Massachusetts.
9.2. To the extent they are applicable, this
Agreement shall be subject to the provisions of the 1933, 1934
and 1940 acts, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes,
rules and regulations as the Securities and
16
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Exchange Commission may grant (including, but not limited to,
the Shared Funding Exemptive Order) and the terms hereof shall
be interpreted and construed in accordance therewith.
ARTICLE X. Termination
-----------
10.1. This Agreement shall continue in full force and
effect until the first to occur of:
(a) termination by any party for any reason by sixty (60)
days advance written notice delivered to the
other parties; or
(b) termination by the Company by written notice to the
Fund and the Underwriter with respect to any
Portfolio based upon the Company's determination
that shares of such Portfolio are not reasonably
available to meet the requirements of the
Contracts; or
(c) termination by the Company by written notice to
the Fund and the Underwriter with respect to any
Portfolio in the event any of the Portfolio's
shares are not registered, issued or sold in
accordance with applicable state or federal law
or such law precludes the use of such shares as
the underlying investment media of the Contracts
issued or to be issued by the Company; or
(d) termination by the Company by written notice to
the Fund and the Underwriter with respect to any
Portfolio in the event that such Portfolio
ceases to qualify as a Regulated Investment
Company under Subchapter M of the Code or under
any successor or similar provision, or if the
Company reasonably believes that the Fund may
fail to so qualify; or
(e) termination by the Company by written notice to
the Fund and the Underwriter with respect to any
Portfolio in the event that such Portfolio fails
to meet the diversification requirements
specified in Article VI hereof; or
(f) termination by either the Fund or the Underwriter by
written notice to the Company, if either one or
both of the Fund or the Underwriter respectively,
shall determine, in their sole judgment exercised in
good faith, that the Company or its affiliated companies
has suffered a material adverse change in its business,
operations, financial condition or prospects since the
date of this Agreement or is the subject of material
adverse publicity; or
(g) termination by the Company by written notice to
the Fund and the Underwriter, if the Company shall
determine, in its sole judgment exercised in
good faith, that either the Fund or the
Underwriter has suffered a material adverse
change in its business, operations, financial
condition or prospects since the date of this
Agreement or is the subject of material adverse
publicity; or
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(h) termination by the Fund or the Underwriter by
written notice to the Company, if the Company gives
the Fund and the Underwriter the written notice
specified in Section 1.6(b) hereof and at the
time such notice was given there was no notice
of termination outstanding under any other
provision of this Agreement; provided, however
any termination under this Section 10.1(h) shall
be effective forty five (45) days after the
notice specified in Section 1.6(b) was given.
10.2. Effect of Termination. Notwithstanding any
---------------------
termination of this Agreement, the Fund and the Underwriter
shall at the option of the Company, continue to make available
additional shares of the Fund pursuant to the terms and
conditions of this Agreement, for all Contracts in effect on
the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts").
Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to reallocate investments in the
Fund, redeem investments in the Fund or invest in the Fund upon
the making of additional purchase payments under the Existing
Contracts. The parties agree that this Section 10.2 shall not
apply to any terminations under Article VII and the effect of
such Article VII terminations shall be governed by Article VII
of this Agreement.
10.3 The Company shall not redeem Fund shares
attributable to the Contracts (as opposed to Fund shares
attributable to the Company's assets held in any of the
Accounts) except (i) as necessary to implement Contract Owner
initiated transactions, or (ii) as required by state or federal
laws or regulations or judicial or other legal precedent of
general application (hereinafter referred to as a "Legally
Required Redemption"). Upon request, the Company will promptly
furnish to the Fund and the Underwriter the opinion of counsel
for the Company (which counsel shall be reasonably satisfactory
to the Fund and the Underwriter) to the effect that any
redemption pursuant to clause (ii) above is a Legally Required
Redemption. Furthermore, except in cases where permitted under
the terms of the Contracts, the Company shall not prevent
Contract Owners from allocating payments to a Portfolio that
was otherwise available under the Contracts without first
giving the Fund or the Underwriter 90 days notice of its
intention to do so.
ARTICLE XI. Notices
-------
Any notice shall be sufficiently given when sent by
registered or certified mail to the other party at the address
of such party set forth below or at such other address as such
party may from time to time specify in writing to the other
party.
If to the Fund:
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer
If to the Company:
13045 Tesson Ferry Road
St. Louis, MO 63128
Attn: VUL Administrator
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If to the Underwriter:
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer
ARTICLE XII. Miscellaneous
-------------
12.1 All persons dealing with the Fund must look
solely to the property of the Fund for the enforcement of any
claims against the Fund as neither the Board, officers, agents
or shareholders assume any personal liability for obligations
entered into on behalf of the Fund.
12.2 Subject to the requirements of legal process and
regulatory authority, each party hereto shall treat as
confidential the names and addresses of the owners of the
Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except
as permitted by this Agreement, shall not disclose, disseminate
or utilize such names and addresses and other confidential
information until such time as it may come into the public
domain without the express written consent of the affected
party.
12.3 The captions in this Agreement are included for
convenience of reference only and in no way define or delineate
any of the provisions hereof or otherwise affect their
construction or effect.
12.4 This Agreement may be executed simultaneously in
two or more counterparts, each of which taken together shall
constitute one and the same instrument.
12.5 If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or
otherwise, the remainder of the Agreement shall not be affected
thereby.
12.6 Each party hereto shall cooperate with each
other party and all appropriate governmental authorities
(including without limitation the SEC, the NASD and state
insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with
any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby. Notwithstanding the
generality of the foregoing, each party hereto further agrees
to furnish the California Insurance Commissioner with any
information or reports in connection with services provided
under this Agreement which such Commissioner may request in
order to ascertain whether the variable life insurance
operations of the Company are being conducted in a manner
consistent with the California Variable Life Insurance
Regulations and any other applicable law or regulations.
12.7 The Fund and Underwriter agree that to the
extent any advisory or other fees received by the Fund, the
Underwriter or the Adviser are determined to be unlawful in
legal or administrative proceedings under the 1973 NAIC model
variable life insurance regulation in the states of California,
Colorado, Maryland or Michigan, the Underwriter shall indemnify
and reimburse the Company for any out of pocket expenses and
actual damages the Company has
19
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incurred as a result of any such proceeding; provided however
that the provisions of Section 8.2(1,) and 8.2(c) shall apply
to such indemnification and reimbursement obligation. Such
indemnification and reimbursement obligation shall be in
addition to any other indemnification and reimbursement
obligations of the Fund or the Underwriter under this
Agreement.
12.8. The rights, remedies and obligations contained
in this Agreement are cumulative and are in addition to any and
all rights, remedies and obligations, at law or in equity,
which the parties hereto are entitled to under state and
federal laws.
12.9. This Agreement or any of the rights and
obligations hereunder may not be assigned by any party without
the prior written consent of all parties hereto; provided,
however; that the Underwriter may assign this Agreement or any
rights or obligations hereunder to any affiliate of or company
under common control with the Underwriter, if such assignee is
duly licensed and registered to perform the obligations of the
Underwriter under this Agreement.
12.10. The Company shall furnish, or shall cause to be
furnished, to the Fund or its designee copies of the following
reports:
(a) the Company's annual statement prepared
under statutory accounting principles), as soon
as practical and in any event within 90 days
after the end of each fiscal year;
(b) the Company's quarterly statements (statutory), as
soon as practical and in any event within 45 days
after the end of each quarterly period:
(c) any financial statement, proxy statement,
notice or report of the Company sent to stockholders
or policyholders, as soon as practical after the
delivery thereof;
(d) any registration statement (without exhibits) and
financial reports of the Company filed with
the Securities and Exchange Commission or any state
insurance regulator, as soon as practical after the
filing thereof;
(e) any other report submitted to the Company by
independent accountants in connection with any annual,
interim or special audit made by them of the books of
the Company, as soon as practical after the receipt
thereof.
20
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed in its name and on its behalf by
its duly authorized representative and its seal to be hereunder
affixed hereto as of the date specified below.
GENERAL AMERICAN VARIABLE INSURANCE
LIFE INSURANCE COMPANY PRODUCTS FUND
By: /s/ Leonard M. Rubenstein By: /s/ J. Gary Burkhead
-------------------------------- -------------------------
By: Executive Vice President By: Senior Vice President
-------------------------------- -------------------------
By: February 21, 1995 By: March 14, 1995
-------------------------------- -------------------------
FIDELITY DISTRIBUTORS CORPORATION
By: /s/ Kurt A. Lange
-----------------------------
Title: President
--------------------------
Date: February 28, 1995
---------------------------
21
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Schedule A
----------
Accounts
--------
Name of Account Date of Resolution of Company's Board which
Established the Account
General American January 24, 1985
Separate Account Eleven
General American January 26, 1995
Separate Account Thirty-Six
General American October 22, 1970
Separate Account Two
22
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<PAGE>
Schedule B
----------
Contracts
---------
1. Contract Form Numbers:
VUL-95 10004 (9/86)
PVUL-95 10005 (9/86)
VGSP 10077 (4/92)
VUL-100 10098 (1/95)
IVA (TQ) 10014 (7/87)
IVA (NTQ) 10013 (7/87)
TSA Contract 10015 (7/87)
TSA Certificate 10016 (7/87)
Master Plan 10096 (3/94)
2. Funds currently available to act as investment vehicles for
certain of the above-listed contracts:
Variable Insurance Products Fund II
General American Capital Company
Van Eck Investment Trust
23
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SCHEDULE C
PROXY VOTING PROCEDURE
The following is a list of procedures and corresponding
responsibilities for the handling of proxies relating to the
Fund by the Underwriter, the Fund and the Company. The defined
terms herein shall have the meanings assigned in the
Participation Agreement except that the term ~ shall also
include the department or third party assigned by the Insurance
Company to perform the steps delineated below.
1. The number of proxy proposals is given to the Company by the
Underwriter as early as possible before the date set by
the Fund for the shareholder meeting to facilitate the
establishment of tabulation procedures. At this time the
Underwriter will inform the Company of the Record,
Mailing and Meeting dates. This will be done verbally
approximately two months before meeting.
2. Promptly after the Record Date, the Company will perform
a "tape run", or other activity, which will generate the names,
addresses and number of units which are attributed to
each contractowner/policyholder (the "Customer") as of
the Record Date. Allowance should be made for account
adjustments made after this date that could affect the
status of the Customers' accounts as of the Record Date.
Note: The number of proxy statements is determined by the
activities described in Step #2. The Company will use
its best efforts to call in the number of Customers to
Fidelity, as soon as possible, but no later than two
weeks after the Record Date.
3. The Fund's Annual Report must be sent to each Customer by
the Company either before or together with the Customers'
receipt of a proxy statement. Underwriter will provide
at least one copy of the last Annual Report to the
Company.
4. The text and format for the Voting Instruction Cards
("Cards" or "Card") is provided to the Company by the Fund.
The Company, at its expense, shall produce and personalize
the Voting Instruction Cards. The Legal Department of
the Underwriter or its affiliate ("Fidelity Legal") must
approve the Card before it is printed. Allow approximately
2-4 business days for printing information on the Cards.
Information commonly found on the Cards includes:
a. name (legal name as found on account registration)
b. address
c. Fund or account number
d. coding to state number of units
e. individual Card number for use in tracking and
verification of votes (already on Cards as
printed by the Fund)
(This and related steps may occur later in the chronological
process due to possible uncertainties relating to the
proposals.)
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5. During this time, Fidelity Legal will develop, produce,
and the Fund will pay for the Notice of Proxy and the Proxy
Statement (one document). Printed and folded notices and
statements will be sent to Company for insertion into
envelopes (envelopes and return envelopes are provided
and paid for by the Insurance Company). Contents of
envelope sent to Customers by Company will include:
a. Voting Instruction Card(s)
b. One proxy notice and statement (one
document)
c. return envelope (postage pre-paid by Company)
addressed to the Company or its tabulation
agent
d. "urge buckslip" - optional, but recommended. (This
is a small, single sheet of paper that
requests Customers to vote as quickly as
possible and that their vote is important.
One copy will be supplied by the Fund.)
e. cover letter - optional, supplied by Company and
reviewed and approved in advance by Fidelity Legal.
6. The above contents should be received by the Company
approximately 3-5 business days before mail date. Individual
in charge at Company reviews and approves the contents of the
mailing package to ensure correctness and completeness.
Copy of this approval sent to Fidelity Legal.
7. Package mailed by the Company.
<F*> The Fund must allow at least a 15-day solicitation
----
time to the Company as the shareowner. (A 5-week
period is recommended.) Solicitation time is
calculated as calendar days from (but not
including) the meeting, counting backwards.
8. Collection and tabulation of Cards begins. Tabulation
usually takes place in another department or another vendor
depending on process used. An often used procedure is to
sort Cards on arrival by proposal into vote categories of
all yes, no, or mixed replies, and to begin data entry.
Note: Postmarks are not generally needed. A need for
postmark information would be due to an insurance
company's internal procedure and has not been required by
Fidelity in the past.
9. Signatures on Card checked against legal name on account
registration which was printed on the Card.
Note: For Example, If the account registration is under
"Bertram C. Jones, Trustee," then that is the exact legal
name to be printed on the Card and is the signature
needed on the Card.
25
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<PAGE>
10. If Cards are mutilated, or for any reason are illegible or
are not signed properly, they are sent back to Customer with
an explanatory letter, a new Card and return envelope. The
mutilated or illegible Card is disregarded and considered
to be not received for purposes of vote tabulation. Any
------------
Cards that have "kicked out" (e.g. mutilated, illegible)
of the procedure are "hand verified," i.e., examined as
to why they did not complete the system. Any questions
on those Cards are usually remedied individually.
11. There are various control procedures used to ensure proper
tabulation of votes and accuracy of that tabulation. The
most prevalent is to sort the Cards as they first arrive
into categories depending upon their vote; an estimate of
how the vote is progressing may then be calculated. If
the initial estimates and the actual vote do not
coincide, then an internal audit of that vote should
occur. This may entail a recount.
12. The actual tabulation of votes is done in units which is
then converted to shares. (It is very important that the Fund
receives the tabulations stated in terms of a percentage
and the number of shares.) Fidelity Legal must review and
-------
approve tabulation format.
13. Final tabulation in shares is verbally given by the Company
to Fidelity Legal on the morning of the meeting not later
than 10:00 a.m. Boston time. Fidelity Legal may request
an earlier deadline if required to calculate the vote in
time for the meeting.
14. A Certification of Mailing and Authorization to Vote Shares
will be required from the Company as well as an original copy
of the final vote. Fidelity Legal will provide a
standard form for each Certification.
15. The Company will be required to box and archive the Cards
received from the Customers. In the event that any vote is
challenged or if otherwise necessary for legal, regulatory,
or accounting purposes, Fidelity Legal will be permitted
reasonable access to such Cards.
16. All approvals and "signing-off" may be done orally, but
must always be followed up in writing.
26
<PAGE>
EXHIBIT 1.(8)(c)
----------------
AMENDED AND RESTATED
--------------------
PARTICIPATION AGREEMENT
-----------------------
Among
-----
VARIABLE INSURANCE PRODUCTS FUND II,
------------------------------------
FIDELITY DISTRIBUTORS CORPORATION
---------------------------------
and
---
GENERAL AMERICAN LIFE INSURANCE COMPANY
---------------------------------------
THIS AGREEMENT is made and entered into as of this 15th
day of February, 1995 by and among GENERAL AMERICAN LIFE
INSURANCE COMPANY, (hereinafter the "Company"), a Missouri
corporation, on its own behalf and on behalf of each segregated
asset account of the Company set forth on Schedule A hereto as
such schedule may be amended from time to time (each such
account hereinafter referred to as the "Account" and
collectively as the "Accounts"), and the VARIABLE INSURANCE
PRODUCTS FUND II, an unincorporated business trust organized
under the laws of the Commonwealth of Massachusetts
(hereinafter the "Fund") and FIDELITY DISTRIBUTORS CORPORATION
(hereinafter the "Underwriter"), a Massachusetts corporation.
This Agreement replaces and supersedes that certain
Participation Agreement among the parties dated as of October
28, 1994, as heretofore amended, which agreement is hereby
amended in its entirety.
WHEREAS, the Fund engages in business as an open-end
management investment company and is available to act as the
investment vehicle for separate accounts established for
variable life insurance policies and variable annuity contracts
(collectively, the "Variable Insurance Products") to be offered
by insurance companies which have entered into participation
agreements with the Fund and the Underwriter (hereinafter
"Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided
into several series of shares, each designated a "Portfolio"
and representing the interest in a particular managed portfolio
of securities and other assets; and
WHEREAS, the Fund has obtained an order from the
Securities and Exchange Commission, dated September 17, 1986
(File No.812-6422), granting Participating Insurance Companies
and variable annuity and variable life insurance separate
accounts exemptions from the provisions of sections 9(a),
13(a), 15(a), and 15(b) of the Investment Company Act of 1940,
as
1
<PAGE>
<PAGE>
amended, (hereinafter the "1940 Act") and Rules 6e-2(b)(15) and
6e-3(T)(b)(l5) thereunder, to the extent necessary to permit
shares of the Fund to be sold to and held by variable annuity
and variable life insurance separate accounts of both
affiliated and unaffiliated life insurance companies
(hereinafter the "Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management
investment company under the 1940 Act and its shares are
registered under the Securities Act of 1933, as amended
(hereinafter the "1933 Act"); and
WHEREAS, Fidelity Management & Research Company (the
"Adviser") is duly registered as an investment adviser under
the federal Investment Advisers Act of 1940 and any applicable
state securities law; and
WHEREAS, the Company has registered or will register
certain variable life and variable annuity contracts under the
1933 Act, and offers or will offer for sale certain other group
variable annuity contracts which are or will be exempt from
registration; and
WHEREAS, each Account is a duly organized, validly
existing segregated asset account, established by resolution of
the Board of Directors of the Company, on the date shown for
such Account on Schedule A hereto, to set aside and invest
assets attributable to one or more variable life and annuity
contracts; and
WHEREAS, the Company has registered or will register
certain of the Accounts as a unit investment trust under the
1940 Act and certain of the Accounts are exempt from
registration; and
WHEREAS, the Underwriter is registered as a broker dealer
with the Securities and Exchange Commission ("SEC") under the
Securities Exchange Act of 1934, as amended, (hereinafter the
"1934 Act"), and is a member in good standing of the National
Association of Securities Dealers, Inc. (hereinafter "NASD");
and
WHEREAS, to the extent permitted by applicable insurance
laws and regulations, the Company intends to purchase shares in
the Portfolios on behalf of each Account to fund certain of the
aforesaid variable life and variable annuity contracts and the
Underwriter is authorized to sell such shares to unit
investment trusts such as each Account at net asset value;
NOW, THEREFORE, in consideration of their mutual
promises, the Company, the Fund and the Underwriter agree as
follows:
ARTICLE I. Sale of Fund Shares
-------------------
1.1. The Underwriter agrees to sell to the Company
those shares of the Fund which each Account orders, executing
such orders on a daily basis at the net asset value next
computed after receipt by the Fund or its designee of the order
for the shares of the Fund. For purposes of this Section 1.1,
the Company shall be the designee of the Fund for receipt of
such orders from
2
<PAGE>
<PAGE>
each Account and receipt by such designee shall constitute
receipt by the Fund; provided that the Fund receives notice of
such order by 9:30 a.m. Boston time on the next following
Business Day. "Business Day" shall mean any day on which the
New York Stock Exchange is open for trading and on which the
Fund calculates its net asset value pursuant to the rules of
the Securities and Exchange Commission.
1.2. The Fund agrees to make its shares available
indefinitely for purchase at the applicable net asset value per
share by the Company and its Accounts on those days on which
the Fund calculates its net asset value pursuant to rules of
the Securities and Exchange Commission and the Fund shall use
reasonable efforts to calculate such net asset value on each
day which the New York Stock Exchange is open for trading.
Notwithstanding the foregoing, the Board of Trustees of the
Fund (hereinafter the "Board") may refuse to sell shares of any
Portfolio to any person, or suspend or terminate the offering
of shares of any Portfolio if such action is required by law or
by regulatory authorities having jurisdiction or is, in the
sole discretion of the Board acting in good faith and in light
of their fiduciary duties under federal and any applicable
state laws, necessary in the best interests of the shareholders
of such Portfolio.
1.3. The Fund and the Underwriter agree that shares
of the Fund will be sold only to Participating Insurance
Companies and their separate accounts. No shares of any
Portfolio will be sold to the general public.
1.4. The Fund and the Underwriter will not sell Fund
shares to any insurance company or separate account unless an
agreement containing provisions substantially the same as
Articles I, III, V, VII and Section 2.5 of Article II of this
Agreement is in effect to govern such sales.
1.5. The Fund agrees to redeem for cash, on the
Company's request, any full or fractional shares of the Fund
held by the Company, executing such requests on a daily basis
at the net asset value next computed after receipt by the Fund
or its designee of the request for redemption. For purposes of
this Section 1.5, the Company shall be the designee of the Fund
for receipt of requests for redemption from each Account and
receipt by such designee shall constitute receipt by the Fund;
provided that the Fund receives notice of such request for
redemption on the next following Business Day.
1.6. The Company agrees to purchase and redeem the
shares of selected Portfolios offered by the then-current
prospectus of the Fund and in accordance with the provisions of
such prospectus. The Company agrees that all net amounts
available under the variable life and variable annuity
contracts with the form number(s) which are listed on Schedule
B attached hereto and incorporated herein by this reference, as
such Schedule B may be amended from time to time hereafter by
mutual written agreement of all the parties hereto, (the
"Contracts") shall be invested in the Fund, in such other Funds
advised by the Adviser as may be mutually agreed to in writing
by the parties hereto, or in the Company's general account or
in other separate accounts of the Company managed by the
Company or an affiliate, provided that such amounts may also be
invested in an investment company other than the Fund if (a)
such other investment company, or series thereof, has
investment objectives or policies that are substantially
different from the
3
<PAGE>
<PAGE>
investment objectives and policies of all the Portfolios of the
Fund; or (b) the Company gives the Fund and the Underwriter 45
days written notice of its intention to make such other
investment company available as a funding vehicle for the
Contracts; or (c) such other investment company was available
as a funding vehicle for the Contracts prior to the date of
this Agreement and the Company so informs the Fund and
Underwriter prior to their signing this Agreement; or (d) the
Fund or Underwriter consents to the use of such other
investment company.
1.7. The Company shall pay for Fund shares on the
next Business Day after an order to purchase Fund shares is
made in accordance with the provisions of Section 1.1 hereof.
Payment shall be in federal funds transmitted by wire. For
purpose of Section 2.10 and 2.11, upon receipt by the Fund of
the federal funds so wired, such funds shall cease to be the
responsibility of the Company and shall become the
responsibility of the Fund.
1.8. Issuance and transfer of the Fund's shares will
be by book entry only. Stock certificates will not be issued
to the Company or any Account. Shares ordered from the Fund
will be recorded in an appropriate title for each Account or
the appropriate subaccount of each Account.
1.9. The Fund shall furnish same day notice (by wire
or telephone, followed by written confirmation) to the Company
of any income dividends or capital gain distributions payable
on the Fund's shares. The Company hereby elects to receive all
such income dividends and capital gain distributions as are
payable on the Portfolio shares in additional shares of that
Portfolio. The Company reserves the right to revoke this
election and to receive all such income dividends and capital
gain distributions in cash. The Fund shall notify the Company
of the number of shares so issued as payment of such dividends
and distributions.
1.10. The Fund shall make the net asset value per
share for each Portfolio available to the Company on a daily
basis as soon as reasonably practical after the net asset value
per share is calculated and shall use its best efforts to make
such net asset value per share available by 7 p.m. Boston time.
ARTICLE II. Representations and Warranties
------------------------------
2.1. The Company represents and warrants that the
Contracts are registered under the 1933 Act or are exempt from
registration thereunder; that the Contracts will be issued and
sold in compliance in all material respects with all applicable
Federal and State laws and that the sale of the Contracts shall
comply in all material respects with state insurance
suitability requirements. The Company further represents and
warrants that it is an insurance company duly organized and in
good standing under applicable law and that it has legally and
validly established each Account prior to any issuance or sale
thereof as a segregated asset account under Section 376.309 of
the Insurance Code of the State of Missouri and that each
Account is or will be registered as a unit investment trust in
accordance with the provisions of the 1940 Act to serve as a
segregated investment account for the Contracts or is exempt
from registration thereunder.
4
<PAGE>
<PAGE>
2.2. The Fund represents and warrants that Fund
shares sold pursuant to this Agreement shall be registered
under the 1933 Act, duly authorized for issuance and sold in
compliance with the laws of the State of Missouri and all
applicable federal and state securities laws and that the Fund
is and shall remain registered under the 1940 Act. The Fund
shall amend the Registration Statement for its shares under the
1933 Act and the 1940 Act from time to time as required in
order to effect the continuous offering of its shares. The
Fund shall register and qualify the shares for sale in
accordance with the laws of the various states only if and to
the extent deemed advisable by the Fund or the Underwriter.
2.3. The Fund represents that it is currently
qualified as a Regulated Investment Company under Subchapter M
of the Internal Revenue Code of 1986, as amended, (the "Code")
and that it will make every effort to maintain such
qualification (under Subchapter M or any successor or similar
provision) and that it will notify the Company immediately upon
having a reasonable basis for believing that it has ceased to
so qualify or that it might not so qualify in the future.
2.4. The Company represents that the Contracts are
currently treated as endowment, annuity or life insurance
contracts, under applicable provisions of the Code and that it
will make every effort to maintain such treatment and that it
will notify the Fund and the Underwriter immediately upon
having a reasonable basis for believing that the Contracts have
ceased to be so treated or that they might not be so treated in
the future.
2.5. The Fund currently does not intend to make any
payments to finance distribution expenses pursuant to Rule 12b-
l under the 1940 Act or otherwise, although it may make such
payments in the future. The Fund has adopted a "no fee" or
"defensive" Rule 12b-1 Plan under which it makes no payments
for distribution expenses. To the extent that it decides to
finance distribution expenses pursuant to Rule 12b-l, the Fund
undertakes to have a board of trustees, a majority of whom are
not interested persons of the Fund, formulate and approve any
plan under Rule 12b-l to finance distribution expenses.
2.6. The Fund makes no representation as to whether
any aspect of its operations (including, but not limited to,
fees and expenses and investment policies) complies with the
insurance laws or regulations of the various states except that
the Fund represents that the Fund's investment policies, fees
and expenses are and shall at all times remain in compliance
with the laws of the State of Missouri and the Fund and the
Underwriter represent that their respective operations are and
shall at all times remain in material compliance with the laws
of the State of Missouri to the extent required to perform this
Agreement.
2.7. The Underwriter represents and warrants that it
is a member in good standing of the NASD and is registered as a
broker-dealer with the SEC. The Underwriter further represents
that it will sell and distribute the Fund shares in accordance
with the laws of the State of Missouri and all applicable state
and federal securities laws, including without limitation the
1933 Act, the 1934 Act, and the l940 Act.
5
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<PAGE>
2.8. The Fund represents that it is lawfully
organized and validly existing under the laws of the
Commonwealth of Massachusetts and that it does and will comply
in all material respects with the 1940 Act.
2.9. The Underwriter represents and warrants that the
Adviser is and shall remain duly registered in all material
respects under all applicable federal and state securities laws
and that the Adviser shall perform its obligations for the Fund
in compliance in all material respects with the laws of the
State of Missouri and any applicable state and federal
Securities laws.
2.10. The Fund and Underwriter represent and warrant
that all of their directors, officers, employees, investment
advisers, and other individuals/entities dealing with the money
or securities of the Fund are and shall continue to be at all
times covered by a blanket fidelity bond or similar coverage
for the benefit or the Fund in an amount not less than the
minimal coverage as required currently by Rule 17g-(1) or the
1940 Act or related provisions as may be promulgated from time
to time. The aforesaid Bond shall include coverage for larceny
and embezzlement and shall be issued by a reputable bonding
company.
2.11. The Company represents and warrants that all of
its directors, officers, employees, investment advisers, and
other entities dealing with the money or securities of the Fund
are and shall continue to be at all times covered by a blanket
fidelity bond or similar coverage for the benefit of the Fund,
in an amount not less than five million dollars ($5 million).
The aforesaid Bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding
company.
ARTICLE III. Prospectuses and Proxy Statements: Voting
-----------------------------------------
3.1. The Underwriter shall provide the Company with
as many printed copies of the Fund's current prospectus and
Statement of Additional Information as the Company may
reasonably request. If requested by the Company in lieu
thereof, the Fund shall provide camera-ready film or computer
diskettes containing the Fund's prospectus and Statement of
Additional Information, and such other assistance as is
reasonably necessary in order for the Company once each year
(or more frequently if the prospectus and/or Statement of
Additional Information for the Fund is amended during the year)
to have the prospectus for the Contracts and the Fund's
prospectus printed together in one document, and to have the
Statement of Additional Information for the Fund and the
Statement of Additional Information for the Contracts printed
together in one document. Alternatively, the Company may print
the Fund's prospectus and/or its Statement of Additional
Information in combination with other fund companies'
prospectuses and statements of additional information. Except
as provided in the following three sentences, all expenses of
printing and distributing Fund prospectuses and Statements or
Additional Information shall be the expense of the Company.
For prospectuses and Statements of Additional Information
provided by the Company to its existing owners of Contracts in
order to update disclosure as required by the 1933 Act and/or
the 1940 Act, the cost of printing shall be borne by the Fund.
If the Company chooses to receive camera-ready film or computer
diskettes in lieu of receiving printed copies of the Fund's
prospectus, the Fund will reimburse the Company in an amount
equal to the product of A and B where A is the number of such
prospectuses distributed to owners of
6
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<PAGE>
the Contracts, and B is the Fund's per unit cost of typesetting
and printing the Fund's prospectus. The same procedures shall
be followed with respect to the Fund's Statement of Additional
Information.
The Company agrees to provide the Fund or its designee
with such information as may be reasonably requested by the
Fund to assure that the Fund's expenses do not include the cost
of printing any prospectuses or Statements of Additional
Information other than those actually distributed to existing
owners of the Contracts.
3.2. The Fund's prospectus shall state that the
Statement of Additional Information for the Fund is available
from the Underwriter or the Company (or in the Fund's
discretion, the Prospectus shall state that such Statement is
available from the Fund).
3.3. The Fund, at its expense, shall provide the
Company with copies of its proxy statements, reports to
shareholders, and other communications (except for prospectuses
and Statements of Additional Information, which are covered in
Section 3.1) to shareholders in such quantity as the Company
shall reasonably require for distributing to Contract owners.
3.4. If and to the extent required by law the Company
shall:
(i) solicit voting instructions from Contract
owners;
(ii) vote the Fund shares in accordance with
instructions received from Contract
owners; and
(iii) vote Fund shares for which no instructions
have been received in the same proportion as
Fund shares of such portfolio for which
instructions have been received,
so long as and to the extent that the Securities and Exchange
Commission continues to interpret the 1940 Act to require pass-
through voting privileges for variable contract owners. The
Company reserves the right to vote Fund shares held in any
segregated asset account in its own right, to the extent
permitted by law. Participating Insurance Companies shall be
responsible for assuring that each of their separate accounts
participating in the Fund calculates voting privileges in a
manner consistent with the standards set forth on Schedule C
attached hereto and incorporated herein by this reference,
which standards will also be provided to the other
Participating Insurance Companies.
3.5. The Fund will comply with all provisions of the
1940 Act requiring voting by shareholders, and in particular
the Fund will either provide for annual meetings or comply with
Section 16(c) of the 1940 Act (although the Fund is not one of
the trusts described in Section 16(c) of that Act) as well as
with Sections 16(a) and, if and when applicable, 16(b).
Further, the Fund will act in accordance with the Securities
and Exchange Commission's interpretation of the requirements of
Section 16(a) with respect to periodic elections of trustees
and with whatever rules the Commission may promulgate with
respect thereto.
7
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ARTICLE IV. Sales Material and Information
------------------------------
4.1. The Company shall furnish, or shall cause to be
furnished, to the Fund or its designee, each piece of sales
literature or other promotional material in which the Fund or
its investment adviser or the Underwriter is named, at least
fifteen Business Days prior to its use. No such material shall
be used if the Fund or its designee object to such use within
fifteen Business Days after receipt of such material.
4.2. The Company shall not give any information or
make any representations or statements on behalf of the Fund or
concerning the Fund in connection with the sale of the
Contracts other than the information or representations
contained in the registration statement or prospectus for the
Fund shares, as such registration statement and prospectus may
be amended or supplemented from time to time, or in reports or
proxy statements for the Fund, or in sales literature or other
promotional material approved by the Fund or its designee or by
the Underwriter, except with the permission of the Fund or the
Underwriter or the designee of either.
4.3. The Fund, Underwriter, or its designee shall
furnish, or shall cause to be furnished, to the Company or its
designee, each piece of sales literature or other promotional
material in which the Company or its separate account(s), is
named at least fifteen Business Days prior to its use. No such
material shall be used if the Company or its designee object to
such use within fifteen Business Days after receipt of such
material.
4.4. The Fund and the Underwriter shall not give any
information or make any representations on behalf of the
Company or concerning the Company, each Account, or the
Contracts other than the information or representations
contained in any registration statement, prospectus or offering
materials for the Contracts, as such may be amended or
supplemented from time to time, or in published reports for
each Account which are in the public domain or approved by the
Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the
Company or its designee, except with the permission of the
Company.
4.5. The Fund will provide to the Company at least
one complete copy of all registration statements, prospectuses,
Statements of Additional In formation, reports, proxy
statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters,
and all amendments to any of the above, that relate to the Fund
or its shares, contemporaneously with the filing of such
document with the Securities and Exchange Commission or other
regulatory authorities.
4.6. The Company will provide to the Fund at least
one complete copy of any registration statements, prospectuses,
Statements of Additional Information, reports, solicitations
for voting instructions, sales literature and other promotional
materials, applications for exemptions, requests for no action
letters, and all amendments to any of the above, that relate to
the Contracts or each Account, contemporaneously with the
filing of such document with the SEC or other regulatory
authorities. In the case of unregistered Contracts, in lieu of
providing prospectuses and Statements of Additional
Information, the Company shall provide the fund with one
complete copy of the offering materials for the Contracts.
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4.7. For purposes of this Article IV, the phrase
"sales literature or other promotional material" includes, but
is not limited to, advertisements (such as material published,
or designed for use in, a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures, or
other public media), sales literature (i.e., any written
communication distributed or made generally available to
customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts,
reprints or excerpts of any other advertisement, sales
literature, or published article), educational or training
materials or other communications distributed or made generally
available to some or all agents or employees, and registration
statements, prospectuses, Statements of Additional In
formation, shareholder reports, and proxy materials.
ARTICLE V. Fees and Expenses
-----------------
5.1 The Fund and Underwriter shall pay no fee or
other compensation to the Company under this agreement, except
that if the Fund or any Portfolio adopts and implements a plan
pursuant to Rule 12b-l to finance distribution expenses, then
the Underwriter may make payments to the Company or to the
underwriter for the Contracts if and in amounts agreed to by
the Underwriter in writing and such payments will be made out
of existing fees otherwise payable to the Underwriter, past
profits of the Underwriter or other resources available to the
Underwriter. No such payments shall be made directly by the
Fund. Currently, no such payments are contemplated.
5.2. All expenses incident to performance by the Fund
under this Agreement shall be paid by the Fund. The Fund shall
see to it that all its shares are registered and authorized for
issuance in accordance with applicable federal law and, if and
to the extent deemed advisable by the Fund, in accordance with
applicable state laws prior to their sale. The Fund shall bear
the expenses for the cost of registration and qualification of
the Fund's shares, preparation and filing of the Fund's
prospectus and registration statement, proxy materials and
reports, setting the prospectus in type, setting in type and
printing the proxy materials and reports to shareholders
(including the costs of printing a prospectus that constitutes
an annual report), the preparation of all statements and
notices required by any federal or state law, and all taxes on
the issuance or transfer of the Fund's shares.
5.3. The Company shall bear the expenses of
distributing the Fund's prospectus, proxy materials and reports
to owners of Contracts issued by the Company.
ARTICLE VI. Diversification
---------------
6.1. The Fund will at all times invest money from the
Contracts in such a manner as to ensure that the Contracts will
be treated as variable contracts under the Code and the
regulations issued thereunder. Without limiting the scope of
the foregoing, the Fund will at all times comply with Section
817(h) of the Code and Treasury Regulation 1.817-5, relating to
the
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diversification requirements for variable annuity, endowment,
or life insurance contracts and any amendments or other
modifications to such Section or Regulations.
ARTICLE VII. Potential Conflicts
-------------------
7.1. The Board will monitor the Fund for the
existence of any material irreconcilable conflict between the
interests of the contract owners of all separate accounts
investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any
state insurance regulatory authority; (b) a change in
applicable federal or state insurance, tax, or securities laws
or regulations, or a public ruling, private letter ruling, no-
action or interpretative letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an
administrative or judicial decision in any relevant proceeding;
(d) the manner in which the investments of any Portfolio are
being managed; (e) a difference in voting instructions given by
variable annuity contract and variable life insurance contract
owners; or (f) a decision by an insurer to disregard the voting
instructions of contract owners. The Board shall promptly
inform the Company if it determines that an irreconcilable
material conflict exists and the implications thereof.
7.2. The Company will report any potential or
existing conflicts of which it is aware to the Board. The
Company will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order, by
providing the Board with all information reasonably necessary
for the Board to consider any issues raised. This includes,
but is not limited to, an obligation by the Company to inform
the Board whenever contract owner voting instructions are
disregarded.
7.3. If it is determined by a majority of the Board,
or a majority of its disinterested trustees, that a material
irreconcilable conflict exists, the Company and other
Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a
majority of the disinterested trustees), take whatever steps
are necessary to remedy or eliminate the irreconcilable
material conflict, up to and including: (1), withdrawing the
assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a
different investment medium, including (but not limited to)
another Portfolio of the Fund, or submitting the question
whether such segregation should be implemented to a vote of all
affected Contract owners and, as appropriate, segregating the
assets of any appropriate group (i.e., annuity contract owners,
life insurance contract owners, or variable contract owners of
one or more Participating Insurance Companies) that votes in
favor of such segregation, or offering to the affected contract
owners the option of making such a change; and (2),
establishing a new registered management investment company or
managed separate account.
7.4. If a material irreconcilable conflict arises
because of a decision by the Company to disregard contract
owner voting instructions and that decision represents a
minority position or would preclude a majority vote, the
Company may be required, at the Fund's election, to withdraw
the affected Account's investment in the Fund and terminate
this Agreement with respect to such Account; provided, however
that such withdrawal and termination shall be limited to the
extent required by the foregoing material irreconcilable
conflict as determined by a majority
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of the disinterested members of the Board. Any such withdrawal
and termination must take place within six (6) months after the
Fund gives written notice that this provision is being
implemented, and until the end of that six month period the
Underwriter and Fund shall continue to accept and implement
orders by the Company for the purchase (and redemption) of
shares of the Fund.
7.5. If a material irreconcilable conflict arises
because a particular state insurance regulator's decision
applicable to the Company conflicts with the majority of other
state regulators, then the Company will withdraw the affected
Account's investment in the Fund and terminate this Agreement
with respect to such Account within six months after the Board
informs the Company in writing that it has determined that such
decision has created an irreconcilable material conflict;
provided, however, that such withdrawal and termination shall
be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the
disinterested members of the Board. Until the end of the
foregoing six month period, the Underwriter and Fund shall
continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Fund.
7.6. For purposes of Sections 7.3 through 7.6 of this
Agreement, a majority of the disinterested members of the Board
shall determine whether any proposed action adequately remedies
any irreconcilable material conflict, but in no event will the
Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to
establish a new funding medium for the Contracts if an offer to
do so has been declined by vote of a majority of Contract
owners materially adversely affected by the irreconcilable
material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any
irreconcilable material conflict, then the Company will
withdraw the Account's investment in the Fund and terminate
this Agreement within six (6) months after the Board informs
the Company in writing of the foregoing determination,
provided, however, that such withdrawal and termination shall
be limited to the extent required by any such material
irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-
3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive
relief from any provision of the Act or the rules promulgated
thereunder with respect to mixed or shared funding (as defined
in the Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding
Exemptive Order, then (a) the Fund or the Participating
Insurance Companies, as appropriate, shall take such steps as
may be necessary to comply with Rules 6e-2 and 6e-3(T), as
amended, and Rule 6e-3, as adopted, to the extent such rules
are applicable; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4,
and 7.5 of this Agreement shall continue in effect only to the
extent that terms and conditions substantially identical to
such Sections are contained in such Rule(s) as so amended or
adopted.
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ARTICLE VIII. Indemnification
---------------
8.1. Indemnification By The Company
------------------------------
8.1(a). The Company agrees to indemnify and hold
harmless the Fund and each trustee of the Board and officers
and each person, if any, who controls the Fund within the
meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.1) against
any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the
Company) or litigation (including legal and other expenses), to
which the Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the
sale or acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue
statements or alleged untrue statements of any material
fact contained in any Registration Statement, prospectus
or other offering materials for the Contracts or
contained in the Contracts or sales literature for the
Contracts (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a
material fact required to be stated therein or necessary
to make the statements therein not misleading, provided
that this agreement to indemnify shall not apply as to
any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the
Company by or on behalf of the Fund for use in any
Registration Statement or prospectus for the Contracts or
in the Contracts or sales literature (or any amendment or
supplement) or otherwise for use in connection with the
sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the Registration Statement, prospectus or
sales literature of the Fund not supplied by the Company,
or persons under its control) or wrongful conduct of the
Company or persons under its control, with respect to the
sale or distribution of the Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a Registration
Statement, prospectus, or sales literature of the Fund or
any amendment thereof or supplement thereto or the
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make
the statements therein not misleading if such a statement
or omission was made in reliance upon information
furnished to the Fund by or on behalf of the Company; or
(iv) arise as a result of any failure by the Company
to provide the services and furnish the materials under the
terms of this Agreement; or
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(v) arise out of or result from any material
breach of any representation or warranty made by the Company
in this Agreement or arise out of or result from any other
material breach of this Agreement by the Company, as
limited by and in accordance with the provisions of
Sections 8.1(b) and 8.1(c) hereof.
8.1(b). The Company shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or litigation incurred or assessed against
an Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in
the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations
or duties under this Agreement or to the Fund, whichever is
applicable.
8.1(c). The Company shall not be liable under this
indemnification provision with respect to any claim made
against an Indemnified Party unless such Indemnified Party
shall have notified the Company in writing within a reasonable
time after the summons or other first legal process giving
information of the nature of the claim shall have been served
upon such Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any designated
agent), but failure to notify the Company of any such claim
shall not relieve the Company from any liability which it may
have to the Indemnified Patty against whom such action is
brought otherwise than on account of this indemnification
provision. In case any such action is brought against the
Indemnified Parties, the Company shall be entitled to
participate, at its own expense, in the defense of such action.
The Company also shall be entitled to assume the defense
thereof; with counsel satisfactory to the party named in the
action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Company will not be
liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party
independently in connection with the defense thereof other than
reasonable costs of investigation.
8.1(d). The Indemnified Parties will promptly notify the
Company of the commencement of any litigation or proceedings
against them in connection with the issuance or sale of the
Fund Shares or the Contracts or the operation of the Fund.
8.2. Indemnification by the Underwriter
----------------------------------
8.2(a). The Underwriter agrees to indemnify and hold
harmless the Company and each of its directors and officers and
each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.2) against
any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the
Underwriter) or litigation (including legal and other expenses)
to which the Indemnified Parties may become subject under any
statute, at common law
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or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related
to the sale or acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue
statement or alleged untrue statement of any
material fact contained in the Registration
Statement or prospectus or sales literature of
the Fund (or any amendmentor supplement to any
of the foregoing), or arise out of or are based
upon the omission or the alleged omission to
state therein a material fact required to be stated
therein or necessary to make the statements therein
not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged
statement or omission was made in reliance upon and
in conformity with information furnished to the
Underwriter or Fund by or on behalf of the Company
for use in the Registration Statement or prospectus
for the Fund or in sales literature (or any amendment
or supplement) or otherwise for use in connection
with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in any Registration Statement, prospectus,
other offering materials or sales literature for the
Contracts not supplied by the Underwriter or persons
under its control) or wrongful conduct of the Fund,
Adviser or Underwriter or persons under their control,
with respect to the sale or distribution of the Contracts
or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in any
Registration Statement, prospectus, other offering
materials or sales literature covering the Contracts, or
any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make
the statement or statements therein not misleading, if
such statement or omission was made in reliance upon
information furnished to the Company by or on behalf of
the Fund; or
(iv) arise as a result of any failure by the Fund to
provide the services and furnish the materials under the
terms of this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to comply
with the diversification requirements specified in
Article VI of this Agreement); or
(v) arise out of or result from any material breach of any
representation or warranty made by the Underwriter in
this Agreement or arise out of or result from any other
material breach of this Agreement by the Underwriter; as
limited by and in accordance with the provisions of
Sections 8.2(b) and 8.2(c) hereof.
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8.2(b). The Underwriter shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or litigation to which an Indemnified
Party would otherwise be subject by reason of such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in
the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations
and duties under this Agreement or to each Company or the
Account, whichever is applicable.
8.2(c). The Underwriter shall not be liable under this
indemnification provision with respect to any claim made
against an Indemnified Party unless such Indemnified Party
shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been
served upon such Indemnified Party (or after such Indemnified
Party shall have received notice of such service on any
designated agent), but failure to notify the Underwriter of any
such claim shall not relieve the Underwriter from any liability
which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this
indemnification provision. In case any such action is brought
against the Indemnified Parties, the Underwriter will be
entitled to participate, at its own expense, in the defense
thereof. The Underwriter also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named
in the action. After notice from the Underwriter to such party
of the Underwriter's election to assume the defense thereof,
the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Underwriter will not
be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party
independently in connection with the defense thereof other than
reasonable costs of investigation.
8.2(d). The Company agrees promptly to notify the
Underwriter of the commencement of any litigation or
proceedings against it or any of its officers or directors in
connection with the issuance or sale of the Contracts or the
operation of each Account.
8.3. Indemnification By the Fund
---------------------------
8.3(a). The Fund agrees to indemnify and hold harmless
the Company, and each of its directors and officers and each
person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section 8.3) against any and all
losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Fund) or litigation
(including legal and other expenses) to which the Indemnified
Parties may become subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements
result from the gross negligence, bad faith or willful
misconduct of the Board or any member thereof, are related to
the operations of the Fund and:
(i) arise as a result of any failure by the Fund to
provide the services and furnish the materials
under the terms of this Agreement (including a
failure to comply with the diversification
requirements specified in Article VI of this
Agreement); or
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(ii) arise out of or result from any material breach of
any representation or warranty made by the Fund in
this Agreement or arise out of or result from any
other material breach of this Agreement by the Fund;
as limited by and in accordance with the provisions of Sections
8.3(b) and 8.3(c) hereof.
8.3(b). The Fund shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or litigation incurred or assessed against
an Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in
the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations
and duties under this Agreement or to the Company, the Fund,
the Underwriter or each Account, whichever is applicable.
8.3(c). The Fund shall not be liable under this
indemnification provision with respect to any claim made
against an Indemnified Party unless such Indemnified Party
shall have notified the Fund in writing within a reasonable
time after the summons or other first legal process giving
information of the nature of the claim shall have been served
upon such Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any designated
agent), but failure to notify the Fund of any such claim shall
not relieve the Fund from any liability which it may have to
the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision.
In case any such action is brought against the Indemnified
Parties, the Fund will be entitled to participate, at its own
expense, in the defense thereof. The Fund also shall be
entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice
from the Fund to such party of the Fund's election to assume
the defense thereof, the Indemnified Party shall bear the fees
and expenses of any additional counsel retained by it, and the
Fund will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than
reasonable costs of investigation.
8.3(d). The Company and the Underwriter agree promptly
to notify the Fund of the commencement of any litigation or
proceedings against it or any of its respective officers or
directors in connection with this Agreement, the issuance or
sale of the Contracts, with respect to the operation of any
Account, or the sale or acquisition of shares of the Fund.
ARTICLE IX. Applicable Law
--------------
9.1. This Agreement shall be construed and the
provisions hereof interpreted under and in accordance with the
laws of the Commonwealth of Massachusetts.
9.2. To the extent they are applicable, this
Agreement shall be subject to the provisions of the 1933, 1934
and 1940 acts, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes,
rules and regulations as the Securities and
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Exchange Commission may grant (including, but not limited to,
the Shared Funding Exemptive Order) and the terms hereof shall
be interpreted and construed in accordance therewith.
ARTICLE X. Termination
-----------
10.1. This Agreement shall continue in full force and
effect until the first to occur of:
(a) termination by any party for any reason by sixty (60)
days advance written notice delivered to the
other parties; or
(b) termination by the Company by written notice to the Fund
and the Underwriter with respect to any Portfolio based
upon the Company's determination that shares of such
Portfolio are not reasonably available to meet the
requirements of the Contracts; or
(c) termination by the Company by written notice to
the Fund and the Underwriter with respect to any
Portfolio in the event any of the Portfolio's
shares are not registered, issued or sold in
accordance with applicable state or federal law
or such law precludes the use of such shares as
the underlying investment media of the Contracts
issued or to be issued by the Company; or
(d) termination by the Company by written notice to
the Fund and the Underwriter with respect to any
Portfolio in the event that such Portfolio
ceases to qualify as a Regulated Investment
Company under Subchapter M of the Code or under
any successor or similar provision, or if the
Company reasonably believes that the Fund may
fail to so qualify; or
(e) termination by the Company by written notice to
the Fund and the Underwriter with respect to any
Portfolio in the event that such Portfolio fails
to meet the diversification requirements
specified in Article VI hereof; or
(f) termination by either the Fund or the Underwriter
by written notice to the Company, if either one or
both of the Fund or the Underwriter respectively,
shall determine, in their sole judgment exercised
in good faith, that the Company or its affiliated
companies has suffered a material adverse change
in its business, operations, financial condition
or prospects since the date of this Agreement or
is the subject of material adverse publicity; or
(g) termination by the Company by written notice to
the Fund and the Underwriter, if the Company shall
determine, in its sole judgment exercised in
good faith, that either the Fund or the
Underwriter has suffered a material adverse
change in its business, operations, financial
condition or prospects since the date of this
Agreement or is the subject of material adverse
publicity; or
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(h) termination by the Fund or the Underwriter by
written notice to the Company, if the Company
gives the Fund and the Underwriter the written notice
specified in Section 1.6(b) hereof and at the
time such notice was given there was no notice
of termination outstanding under any other
provision of this Agreement; provided, however
any termination under this Section 10.1(h) shall
be effective forty five (45) days after the
notice specified in Section 1.6(b) was given.
10.2. Effect of Termination. Notwithstanding any
---------------------
termination of this Agreement, the Fund and the Underwriter
shall at the option of the Company, continue to make available
additional shares of the Fund pursuant to the terms and
conditions of this Agreement, for all Contracts in effect on
the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts").
Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to reallocate investments in the
Fund, redeem investments in the Fund or invest in the Fund upon
the making of additional purchase payments under the Existing
Contracts. The parties agree that this Section 10.2 shall not
apply to any terminations under Article VII and the effect of
such Article VII terminations shall be governed by Article VII
of this Agreement.
10.3 The Company shall not redeem Fund shares
attributable to the Contracts (as opposed to Fund shares
attributable to the Company's assets held in any of the
Accounts) except (i) as necessary to implement Contract Owner
initiated transactions, or (ii) as required by state or federal
laws or regulations or judicial or other legal precedent of
general application (hereinafter referred to as a "Legally
Required Redemption"). Upon request, the Company will promptly
furnish to the Fund and the Underwriter the opinion of counsel
for the Company (which counsel shall be reasonably satisfactory
to the Fund and the Underwriter) to the effect that any
redemption pursuant to clause (ii) above is a Legally Required
Redemption. Furthermore, except in cases where permitted under
the terms of the Contracts, the Company shall not prevent
Contract Owners from allocating payments to a Portfolio that
was otherwise available under the Contracts without first
giving the Fund or the Underwriter 90 days notice of its
intention to do so.
ARTICLE XI. Notices
-------
Any notice shall be sufficiently given when sent by
registered or certified mail to the other party at the address
of such party set forth below or at such other address as such
party may from time to time specify in writing to the other
party.
If to the Fund:
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer
If to the Company:
13045 Tesson Ferry Road
St. Louis, MO 63128
Attn: VUL Administrator
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If to the Underwriter:
82 Devonshire Street
Boston, Massachusetts 02109
Attention:Treasurer
ARTICLE XII. Miscellaneous
-------------
12.1 All persons dealing with the Fund must look
solely to the property of the Fund for the enforcement of any
claims against the Fund as neither the Board, officers, agents
or shareholders assume any personal liability for obligations
entered into on behalf of the Fund.
12.2 Subject to the requirements of legal process and
regulatory authority, each party hereto shall treat as
confidential the names and addresses of the owners of the
Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except
as permitted by this Agreement, shall not disclose, disseminate
or utilize such names and addresses and other confidential
information until such time as it may come into the public
domain without the express written consent of the affected
party.
12.3 The captions in this Agreement are included for
convenience of reference only and in no way define or delineate
any of the provisions hereof or otherwise affect their
construction or effect.
12.4 This Agreement may be executed simultaneously in
two or more counterparts, each of which taken together shall
constitute one and the same instrument.
12.5 If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or
otherwise, the remainder of the Agreement shall not be affected
thereby.
12.6 Each party hereto shall cooperate with each
other party and all appropriate governmental authorities
(including without limitation the SEC, the NASD and state
insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with
any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby. Notwithstanding the
generality of the foregoing, each party hereto further agrees
to furnish the California Insurance Commissioner with any
information or reports in connection with services provided
under this Agreement which such Commissioner may request in
order to ascertain whether the variable life insurance
operations of the Company are being conducted in a manner
consistent with the California Variable Life Insurance
Regulations and any other applicable law or regulations.
12.7 The Fund and Underwriter agree that to the
extent any advisory or other fees received by the Fund, the
Underwriter or the Adviser are determined to be unlawful in
legal or administrative proceedings under the 1973 NAIC model
variable life insurance regulation in the states of California,
Colorado, Maryland or Michigan, the Underwriter shall indemnify
and reimburse the Company for any out of pocket expenses and
actual damages the Company has
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incurred as a result of any such proceeding; provided however
that the provisions of Section 8.2(b) and 8.2(c) shall apply to
such indemnification and reimbursement obligation. Such
indemnification and reimbursement obligation shall be in
addition to any other indemnification and reimbursement
obligations of the Fund or the Underwriter under this
Agreement.
12.8. The rights, remedies and obligations contained
in this Agreement are cumulative and are in addition to any and
all rights, remedies and obligations, at law or in equity,
which the parties hereto are entitled to under state and
federal laws.
12.9. This Agreement or any of the rights and
obligations hereunder may not be assigned by any party without
the prior written consent of all parties hereto; provided,
however, that the Underwriter may assign this Agreement or any
rights or obligations hereunder to any affiliate of or company
under common control with the Underwriter, if such assignee is
duly licensed and registered to perform the obligations of the
Underwriter under this Agreement.
12.10. The Company shall furnish, or shall cause to be
furnished, to the Fund or its designee copies of the following
reports:
(a) the Company's annual statement prepared under
statutory accounting principles), as soon as practical
and in any event within 90 days after the end of
each fiscal year;
(b) the Company's quarterly statements (statutory),
as soon as practical and in any event within 45 days
after the end of each quarterly period:
(c) any financial statement, proxy statement, notice or
report of the Company sent to stockholders or
policyholders, as soon as practical after the
delivery thereof;
(d) any registration statement (without exhibits) and
financial reports of the Company filed with the
Securities and Exchange Commission or any state
insurance regulator, as soon as practical after
the filing thereof;
(e) any other report submitted to the Company by
independent accountants in connection with any
annual, interim or special audit made by them of the
books of the Company, as soon as practical after
the receipt thereof.
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IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed in its name and on its behalf by
its duly authorized representative and its seal to be hereunder
affixed hereto as of the date specified below.
GENERAL AMERICAN VARIABLE INSURANCE
LIFE INSURANCE COMPANY PRODUCTS FUND
By: /s/ Leonard M. Rubenstein By: /s/ J. Gary Burkhead
----------------------------- -------------------------
By: Executive Vice President By: Senior Vice President
----------------------------- -------------------------
By: February 21, 1995 By: March 14, 1995
----------------------------- -------------------------
FIDELITY DISTRIBUTORS CORPORATION
By: /s/ Kurt A. Lange
------------------------
Title: President
---------------------
Date: February 28, 1995
----------------------
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Schedule A
----------
Accounts
--------
Name of Account Date of Resolution of Company's Board which
Established the Account
General American January 24, 1985
Separate Account Eleven
General American
Separate Account Thirty-Six January 26, 1995
General American
Separate Account Two October 22, 1970
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Schedule B
----------
Contracts
---------
1. Contract Form Numbers:
VUL-95 10004 (9/86)
PVUL-95 10005 (9/86)
VGSP 10077 (4/92)
VUL-100 10098 (1/95)
IVA (TQ) 10014 (7/87)
IVA (NTQ) 10013 (7/87)
TSA Contract 10015 (7/87)
TSA Certificate 10016 (7/87)
Master Plan 10096 (3/94)
2. Funds currently available to act as investment vehicles
for certain of the above-listed contracts:
Variable Insurance Products Fund
General American Capital Company
Van Eck Investment Trust
23
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SCHEDULE C
PROXY VOTING PROCEDURE
The following is a list of procedures and corresponding
responsibilities for the handling of proxies relating to the
Fund by the Underwriter, the Fund and the Company. The defined
terms herein shall have the meanings assigned in the
Participation Agreement except that the term "Company" shall
also include the department or third party assigned by the
Insurance Company to perform the steps delineated below.
1. The number of proxy proposals is given to the Company by the
Underwriter as early as possible before the date set by
the Fund for the shareholder meeting to facilitate the
establishment of tabulation procedures. At this time the
Underwriter will inform the Company of the Record,
Mailing and Meeting dates. This will be done verbally
approximately two months before meeting.
2. Promptly after the Record Date, the Company will perform
a "tape run", or other activity, which will generate the
names, addresses and number of units which are attributed
to each contractowner/policyholder (the "Customer") as of
the Record Date. Allowance should be made for account
adjustments made after this date that could affect the
status of the Customers' accounts as of the Record Date.
Note: The number of proxy statements is determined by the
activities described in Step #2. The Company will use
its best efforts to call in the number of Customers to
Fidelity, as soon as possible, but no later than two
weeks after the Record Date.
3. The Fund's Annual Report must be sent to each Customer by
the Company either before or together with the Customers'
receipt of a proxy statement. Underwriter will provide
at least one copy of the last Annual Report to the
Company.
4. The text and format for the Voting Instruction Cards ("Cards"
or "Card") is provided to the Company by the Fund. The
Company, at its expense, shall produce and personalize
the Voting Instruction Cards. The Legal Department of
the Underwriter or its affiliate ("Fidelity Legal") must
approve the Card before it is printed. Allow
approximately 2-4 business days for printing information
on the Cards. Information commonly found on the Cards
includes:
a. name (legal name as found on account
registration)
b. address
c. Fund or account number
d. coding to state number of units
e. individual Card number for use in tracking
and verification of votes (already on Cards as
printed by the Fund)
(This and related steps may occur later in the chronological
process due to possible uncertainties relating to the
proposals.)
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5. During this time, Fidelity Legal will develop, produce,
and the Fund will pay for the Notice of Proxy and the Proxy
Statement (one document). Printed and folded notices and
statements will be sent to Company for insertion into
envelopes (envelopes and return envelopes are provided
and paid for by the Insurance Company). Contents of
envelope sent to Customers by Company will include:
a. Voting Instruction Card(s)
b. One proxy notice and statement (one
document)
c. return envelope (postage pre-paid by
Company) addressed to the Company or its
tabulation agent
d. "urge buckslip" - optional, but recommended.
(This is a small, single sheet of paper that
requests Customers to vote as quickly as
possible and that their vote is important.
One copy will be supplied by the Fund.)
e. cover letter - optional, supplied by Company
and reviewed and approved in advance by
Fidelity Legal.
6. The above contents should be received by the Company
approximately 3-5 business days before mail date. Individual
in charge at Company reviews and approves the contents of the
mailing package to ensure correctness and completeness.
Copy of this approval sent to Fidelity Legal.
7. Package mailed by the Company.
<F*> The Fund must allow at least a 15-day solicitation
time to the Company as the shareowner. (A 5-week
period is recommended.) Solicitation time is
calculated as calendar days from (but not
including) the meeting, counting backwards.
8. Collection and tabulation of Cards begins. Tabulation
usually takes place in another department or another vendor
depending on process used. An often used procedure is to
sort Cards on arrival by proposal into vote categories of
all yes, no, or mixed replies, and to begin data entry.
Note: Postmarks are not generally needed. A need for
postmark information would be due to an insurance
company's internal procedure and has not been required by
Fidelity in the past.
9. Signatures on Card checked against legal name on account
registration which was printed on the Card.
Note: For Example, If the account registration is under
"Bertram C. Jones, Trustee," then that is the exact legal
name to be printed on the Card and is the signature
needed on the Card.
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10. If Cards are mutilated, or for any reason are illegible
or are not signed properly, they are sent back to Customer
with an explanatory letter, a new Card and return envelope.
The mutilated or illegible Card is disregarded and considered
to be not received for purposes of vote tabulation. Any
------------
Cards that have "kicked out" (e.g. mutilated, illegible)
of the procedure are "hand verified," i.e., examined as
to why they did not complete the system. Any questions
on those Cards are usually remedied individually.
11. There are various control procedures used to ensure proper
tabulation of votes and accuracy of that tabulation. The
most prevalent is to sort the Cards as they first arrive
into categories depending upon their vote; an estimate of
how the vote is progressing may then be calculated. If
the initial estimates and the actual vote do not
coincide, then an internal audit of that vote should
occur. This may entail a recount.
12. The actual tabulation of votes is done in units which is then
converted to shares. (It is very important that the Fund
receives the tabulations stated in terms of a percentage
and the number of shares.) Fidelity Legal must review and
-------
approve tabulation format.
13. Final tabulation in shares is verbally given by the Company
to Fidelity Legal on the morning of the meeting not later
than 10:00 a.m. Boston time. Fidelity Legal may request
an earlier deadline if required to calculate the vote in
time for the meeting.
14. A Certification of Mailing and Authorization to Vote Shares
will be required from the Company as well as an original copy
of the final vote. Fidelity Legal will provide a
standard form for each Certification.
15. The Company will be required to box and archive the Cards
received from the Customers. In the event that any vote is
challenged or if otherwise necessary for legal,
regulatory, or accounting purposes, Fidelity Legal will
be permitted reasonable access to such Cards.
16. All approvals and "signing-off" may be done orally, but
must always be followed up in writing.
26
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EXHIBIT 1.(8)(g)
PARTICIPATION AGREEMENT
AMONG
GENERAL AMERICAN LIFE INSURANCE COMPANY SEI INSURANCE PRODUCTS
TRUST
AND
SEI INVESTMENTS DISTRIBUTION COMPANY
DATED AS OF APRIL 5, 2000
<PAGE>
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TABLE OF CONTENTS
Page
ARTICLE I. Sale and Redemption of Trust Shares 2
ARTICLE II. Representations and Warranties 4
ARTICLE III. Prospectuses, Reports to Shareholders and Proxy
Statements; Voting 6
ARTICLE IV. Sales Material, Information and Notifications 7
ARTICLE V. Diversification 9
ARTICLE VI. Potential Conflicts 9
ARTICLE VII. Indemnification 11
ARTICLE VIII. Applicable Law and Venue 15
ARTICLE IX. Termination 16
ARTICLE X. Notices 17
ARTICLE XI. Miscellaneous 18
ii
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THIS AGREEMENT, dated as of the 5th day of April, 2000,
by and among GENERAL AMERICAN LIFE INSURANCE COMPANY (the
"Company"), a Missouri life insurance company, on its own
behalf and on behalf of each separate account of the Company
set forth on Schedule A hereto, as may be amended from time to
time (each such account hereinafter referred to as an
"Account"), SEI INSURANCE PRODUCTS TRUST (the "Trust"), a
Massachusetts business trust, and SEI INVESTMENTS DISTRIBUTION
COMPANY (the "Underwriter"), a Delaware corporation.
WHEREAS, the Trust engages in business as an open-end
management investment company and is available to act as (i)
the investment vehicle for separate accounts established by
insurance companies for variable life insurance policies and
variable annuity contracts and (ii) the investment vehicle for
certain qualified pension and retirement plans ("Qualified
Plans"); and
WHEREAS, insurance companies desiring to utilize the
Trust as an investment vehicle under their variable life
insurance policies and/or variable annuity contracts may enter
into participation agreements with the Trust and the
Underwriter (the "Participating Insurance Companies"); and
WHEREAS, shares of the Trust are divided into several
series of shares, each representing an interest in a particular
managed portfolio of securities and other assets, any one or
more of which may be made available under this Agreement (each
such series hereinafter referred to as a "Fund"); and
WHEREAS, the Trust has obtained an order from the
Securities and Exchange Commission, dated November 15, 1999
(File No.812-11722), granting Participating Insurance Companies
and their separate accounts exemptions from the provisions of
Sections 9(a), 13(a), 15(a), and 15(b) of the Investment
Company Act of 1940, as amended (the "1940 Act"), and Rules 6e-
2(b)(15) and 6e-3(T)(b)(l5) thereunder, to the extent necessary
to permit shares of the Trust to be sold to and held by (i)
separate accounts of both affiliated and unaffiliated life
insurance companies offering variable life insurance policies
and variable annuity contracts, (ii) Qualified Plans, and (iii)
SEI Investments Management Corporation ("SIMC"), investment
adviser to the Trust, or any of its affiliates (the "Mixed and
Shared Funding Exemptive Order"); and
WHEREAS, the Trust is registered as an open-end
management investment company under the 1940 Act and its shares
are registered under the Securities Act of 1933, as amended
(the "1933 Act"); and
WHEREAS, the Underwriter is registered as a broker-dealer
under the Securities Exchange Act of 1934, as amended (the
"1934 Act"), is a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD") and serves
as principal underwriter of the shares of the Trust; and
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WHEREAS, each Account is a duly organized, validly
existing separate account, established by resolution or under
authority of the Board of Directors of the Company on the date
shown in Schedule A hereto, to fund variable life insurance
policies or variable annuity contracts; and
WHEREAS, to the extent permitted by applicable insurance
laws and regulations, the Company is authorized to purchase
shares of the Funds on behalf of each Account and the
Underwriter is authorized to sell such shares to the Company
for each such Account;
NOW, THEREFORE, in consideration of their mutual
promises, the Company, the Trust and the Underwriter agree as
follows:
ARTICLE I.
SALE AND REDEMPTION OF TRUST SHARES
1.1. The Trust agrees to sell shares of the Funds
listed in Schedule A (as may be amended from time to time) to
the Company for its Accounts on each Business Day. The Trust
or its designee shall execute purchase orders placed for Fund
shares at the net asset value of such shares next computed
after receipt of such order by the Trust or its designee. For
purposes of this Section 1.1, the Company shall be the designee
of the Trust for receipt of such orders; provided that the
Company receives the order prior to 4:00 p.m. Eastern time and
that the Trust receives notice of such order prior to 10:00 am.
Eastern time on the next following Business Day in accordance
with the procedures set forth in Schedule B, as may be amended
from time to time (the "Procedures"). "Business Day" shall
mean any day on which the Trust calculates its net asset value
pursuant to its then-current prospectus and the rules of the
Securities and Exchange Commission.
1.2. The Trust, so long as this Agreement is in
effect, agrees to make its shares available to the Company
indefinitely for purchase at the applicable net asset value per
share on each Business Day. Notwithstanding the foregoing, the
Board of Trustees of the Trust (the "Board") may refuse to
permit the Trust to sell shares of any Fund to any person, or
suspend or terminate the offering of shares of any Fund, if
such action is required by law or by regulatory authorities
having jurisdiction or if such action is, in the sole
discretion of the Board acting in good faith and in light of
its fiduciary duties under federal and any applicable state
laws, necessary and in the best interests of the shareholders
of such Fund.
1.3. The Trust agrees that shares of the Trust will
be sold only to: (i) Participating Insurance Companies and
their separate accounts, (ii) Qualified Plans, and (iii) such
other persons permitted under the Internal Revenue Code of I
986, as amended. No shares of any Fund will be sold to the
general public.
2
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1.4. The Trust will not make its shares available for
purchase by any insurance company or separate account unless an
agreement containing provisions substantially the same as in
Section 1.3 of Article I, Section 3.5 of Article III, Article V
and Article VI of this Agreement is in effect to govern such
sales.
1.5. The Trust agrees to redeem for cash, on the
Company's request, any full or fractional share of a Fund held
by the Company in an Account, at the net asset value of such
share next computed after receipt by the Trust or its designee
of the request for redemption. Subject to and in accordance
with applicable laws and the prospectus and statement of
additional information of the Trust, and subject to the consent
of the Company, the Trust may redeem shares for assets other
than cash. For purposes of this Section 1.5, the Company shall
be the designee of the Trust for receipt of such requests for
redemptions; provided that the Company receives the request
prior to 4:00 p.m. Eastern time and that the Trust receives
notice of such request prior to 10:00 a.m. Eastern time on the
next following Business Day in accordance with the Procedures.
1.6. The Company agrees that purchases and
redemptions of Fund shares shall be made in accordance with the
provisions of the then-current prospectus of the Trust. The
variable life insurance policies and/or variable annuity
contracts issued by the Company, under which amounts may be
invested in the Trust (the "Contracts"), are listed on Schedule
A attached hereto, as may be amended from time to time.
1.7. The Company shall pay for Trust shares on the
next Business Day after an order to purchase Trust shares is
made in accordance with the provisions of Section 1.1 hereof
and the Procedures. Payment shall be in federal fluids
transmitted by wire. For purposes of Section 2.10 and 2.11,
upon receipt by the Trust of the federal fluids so wired, such
fluids shall cease to be the responsibility of the Company and
shall become the responsibility of the Trust.
1.8. Issuance and transfer of the Trust's shares will
be by book entry only. Stock certificates will not be issued
to the Company or any Account. Shares ordered from the Trust
will be recorded in an appropriate title for each Account or
the appropriate subaccount of each Account.
1.9. The Trust shall furnish same day notice (by
electronic mail, by facsimile transmission or by telephone
followed by written confirmation) to the Company of any income
dividends or capital gain distributions payable on the Trust's
shares. The Company hereby elects to receive all such income
dividends and capital gain distributions as are payable on the
Fund shares in additional shares of that Fund. The Company
reserves the right to revoke this election and to receive all
such income dividends and capital gain distributions in cash.
Any such revocation must be in writing. The Trust shall notify
the Company of the number of shares so issued as payment of
such dividends and distributions.
1.10. The Trust shall make the net asset value per
share for each Fund available to the Company on a daily basis
as soon as reasonably practical after the net asset value
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per share is calculated, and the Trust shall use its best
efforts to make such net asset value per share available no
later than 7:00 p.m. Eastern time in accordance with the
Procedures.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
2.1. The Company represents and warrants that it is
an insurance company duly organized and in good standing under
the insurance laws and regulations of the State of Missouri
(and other laws and regulations of Missouri to the extent
applicable to Missouri insurance companies), that each Account
is legally and validly established as a separate account under
applicable law, that the Company has registered each Account as
a unit investment trust under the 1940 Act (unless exempt
therefrom), and that the Company will maintain such
registration for each Account (unless exempt therefrom) for as
long as any Contract under that Account is outstanding.
2.2. The Company further represents and warrants that
the Contracts will be issued and sold in compliance in all
material respects with all applicable federal and state
insurance and securities laws and regulations. The Company
further represents and warrants that the Contracts are or will
be registered under the 1933 Act or are or will be exempt from
or not subject to registration thereunder. The Company shall
amend the registration statements under the 1933 Act for the
Contracts and the registration statements under the 1940 Act
for the Accounts from time to time as required in order to
effect the continuous offering of the Contracts or as may
otherwise be required by applicable law (unless the Contracts
and Accounts are exempt from or not subject to the registration
requirements of the 1933 Act and the 1940 Act).
2.3. The Company represents and warrants that each
principal underwriter of the Contracts is registered as a
broker-dealer under the 1934 Act and is a member in good
standing of the NASD.
2.4. The Company represents and warrants that the
shares held in each Account or division thereof are the only
securities held in the Account or division thereof and that the
Company, on behalf of the Account or division thereof will (i)
vote such shares in the same proportion as shares of voted by
all other holders of shares (in accordance with Section 3.4)
and (ii) refrain from substituting another security for such
shares unless the Commission has approved such substitution in
the manner provided in Section 26 of the 1940 Act.
2.5. The Trust represents and warrants that Trust
shares sold pursuant to this Agreement shall be registered
under the 1933 Act, and shall be duly authorized for
issuance and sold in compliance with the laws of the
Commonwealth of Massachusetts and all applicable federal and
state securities laws. The Trust represents and warrants that
it is and shall remain registered under the 1940 Act. The
Trust represents and warrants
4
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that it shall amend the registration statement for its shares
under the 1933 Act and the 1940 Act from time to time as
required in order to effect the continuous offering of its
shares and that it shall register and qualify the shares for
sale in accordance with the laws of the various states to the
extent required by applicable state law.
2.6. The Trust represents and warrants that it is
currently qualified as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"), that it will make every effort to maintain such
qualification (under Subchapter M or any successor or similar
provision), and that it will notify the Company immediately
upon having a reasonable basis for believing that it has ceased
to so qualify or that it might not so qualify in the future.
2.7. The Company represents and warrants that the
Contracts are currently treated as life insurance policies or
annuity contracts, under applicable provisions of the Code and
that it will make every effort to maintain such treatment and
that it will notify the Trust and the Underwriter immediately
upon having a reasonable basis for believing that the Contracts
have ceased to be so treated or that they might not be so
treated in the future.
2.8. The Trust represents and warrants that it is
lawfully organized and validly existing under the laws of
Commonwealth of Massachusetts and that it does and will comply
in all material respects with the 1940 Act.
2.9. The Trust represents and warrants that the
Trust's investment policies, fees and expenses are and shall at
all times remain in compliance with the laws of the
Commonwealth of Massachusetts and that its operations are and
shall at all times remain in material compliance with the laws
of the Commonwealth of Massachusetts to the extent required to
perform this Agreement.
2.10. The Trust represents and warrants that its
Trustees, officers, employees, and other individuals and
entities dealing with the money and/or securities of the Trust
are and shall continue to be at all times covered by a blanket
fidelity bond or similar coverage for the benefit of the Trust
in an amount not less than the minimum coverage as required
currently by Rule 17g-I of the 1940 Act or related provisions
as may be promulgated from time to time. The Trust represents
and warrants that the blanket fidelity bond shall include
coverage for larceny and embezzlement and shall be issued by a
reputable bonding company; that the Trust shall make all
reasonable efforts to see that this bond or another bond
containing these provisions is always in effect; and that the
Trust shall notify the Company in the event that such coverage
no longer applies.
2.11. The Company represents and warrants that all of
its Directors, officers, employees, investment advisers, and
other individuals and affiliates dealing with the money and/or
securities of the Trust are covered by a blanket fidelity bond
or similar coverage, in an amount not less than $10 million;
that the bond includes coverage for larceny and embezzlement
and is issued by a reputable bonding company; that the
Company shall make all reasonable efforts to see that this bond
or another bond
5
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containing these provisions is always in effect; and that the
Company shall notify the Trust and the Underwriter in the event
that such coverage no longer applies.
ARTICLE III.
PROSPECTUSES, REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS;
VOTING
3.1. The Trust or its designee shall provide the
Company with a camera ready copy of the Trust's current
prospectus and statement of additional information ("SAI"),
including any prospectus or SAI supplements. If requested by
the Company, in lieu of providing printed camera ready copies,
the Trust shall provide documents in computer form.
3.2. The Trust or its designee, shall provide the
Company with a camera ready copy of its proxy materials,
shareholder reports and other communications to shareholders.
If requested by the Company, in lieu of providing printed
camera ready copies, the Trust shall provide documents in
computer form.
3.3. The Company shall bear the expenses of
distributing to Contract owners and to prospective Contract
owners the documents of the Trust listed in Sections 3.1 and
3.2.
3.4. So long as and to the extent that the Securities
and Exchange Commission continues to interpret the 1940 Act to
require pass-through voting privileges for variable contract
owners, the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote Trust shares in accordance with instructions
received from Contract owners; and
(iii) vote Trust shares for which no instructions
have been received in the same proportion as
Trust shares of such Fund for which
instructions have been received.
The Company reserves the right to vote Trust shares held in any
Account in its own right to the extent permitted by law.
Participating Insurance Companies shall be responsible for
ensuring that each of their Accounts calculates voting
privileges in a manner consistent with the Mixed and Shared
Funding Exemptive Order; provided, however, that the Trust or
its designee shall provide each shareholder, including the
Company and each Account, with the information necessary for
the shareholder meeting, including each Account's respective
ownership in each Fund.
3.5. The Trust will comply with all provisions of the
1940 Act requiring voting by shareholders. Further, the Trust
will act in accordance with the Securities and Exchange Commission's
interpretation of the requirements of Section 16(a) with respect
6
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to periodic elections of Trustees and with whatever rules the
Commission may promulgate with respect thereto.
3.6. The Trust shall use reasonable efforts to
provide Trust documents listed in Section 3.1 and 3.2 to the
Company sufficiently in advance of the Company's mailing dates
to enable the Company to complete, at reasonable cost, the
printing, assembling and distribution of the documents in
accordance with applicable laws and regulations.
ARTICLE IV.
SALES MATERIAL, INFORMATION AND NOTIFICATIONS
4.1. The Company shall furnish, or shall cause to be
furnished, to the Trust or its designee, each piece of sales
literature or other promotional material in which the Trust is
named, at least ten (10) Business Days prior to submission to
the NASD. No such material shall be used if the Trust or its
designee reasonably objects to such use within ten (10)
Business Days after receipt of such material.
4.2. The Company shall not give any information or
make any representations or statements on behalf of the Trust
or concerning the Trust in connection with the sale of the
Contracts other than the information or representations
contained in the registration statement or prospectus for the
Trust shares, as such registration statement and prospectus may
be amended or supplemented from time to time, or in reports or
proxy statements for the Trust, or in sales literature or other
promotional material approved by the Trust or its designee,
except with the permission of the Trust.
4.3. The Trust or its designee shall furnish, or
shall cause to be furnished, to the Company or its designee,
each piece of sales literature or other promotional material in
which the Company or its Account(s) or Contracts are named at
least ten (10) Business Days prior to its use. No such
material shall be used if the Company or its designee
reasonably objects to such use within ten (10) Business Days
after receipt of such material.
4.4. The Trust and the Underwriter shall not give any
information or make any representations on behalf of the
Company or concerning the Company, the Accounts or the
Contracts, other than the information or representations
contained in a registration statement or prospectus for the
Contracts, as such registration statement and prospectus may be
amended or supplemented from time to time, or in published
reports for the Accounts or the Contracts which are in the
public domain or approved by the Company for distribution to
Contract owners, or in sales literature or other promotional
material approved by the Company or its designee, except with
the permission of the Company.
4.5. The Trust will provide to the Company at least
one complete copy of all registration statements, prospectuses,
SAIs, reports, proxy materials, sales literature and other
promotional materials, applications for exemptions, requests
for no-action letters, and all amendments to any of the above,
that relate to the sale of Trust shares to the
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Company and the Accounts, within ten (10) Business Days after
the filing of such document with the Securities and Exchange
Commission or other regulatory authority.
4.6. The Company will provide to the Trust at least
one complete copy of all registration statements, prospectuses,
SAIs, reports, proxy materials, solicitations for voting
instructions, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters,
and all amendments to any of the above, that relate to the
investment in shares of the Trust under the Contracts, within
ten (10) Business Days after the earlier of the use of such
document or the filing of such document with the Securities and
Exchange Commission or other regulatory authority.
4.7. For purposes of this Article IV, the phrase
"sales literature or other promotional material" includes, but
is not limited to, any of the following: advertisements (such
as material published, or designed for use in, a newspaper,
magazine or other periodical, radio, television, telephone or
tape recording, videotape display, signs or billboards, motion
pictures or other public media), sales literature (i.e., any
written communication distributed or made generally available
to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts,
reprints or excerpts of any other advertisement, sales
literature or published article), educational or training
materials or other communications distributed or made generally
available to some or all agents or employees, and registration
statements, prospectuses, SAIs, disclosure statements,
shareholder reports and proxy materials.
4.8. The Company shall furnish, or shall cause to be
furnished, to the Trust or its designee copies of the following
reports:
(a) the Company's annual statement (prepared
under statutory accounting principles) and
annual report (prepared under generally
accepted accounting principles ("GAAP"),
if any), as soon as practical and in any
event within 90 days after the end of each
fiscal year; and
(b) any financial statement, proxy statement, notice
or report of the Company sent to stockholders
and/or policyholders, as soon as practical
after the delivery thereof to
stockholders.
4.9. The Company will furnish to the Trust or the
Underwriter, upon the request of either, a list of all of the
broker-dealers with whom the Company has a distribution
agreement covering the Contracts. The Trust and the
Underwriter will treat as confidential any such information.
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ARTICLE V.
DIVERSIFICATION
5.1. The Trust will at all times invest money from
the Contracts in such a manner as to ensure that the Contracts
will be treated as variable contracts under the Code and the
regulations issued thereunder. Without limiting the scope of
the foregoing, the Trust will at all times comply with Section
817(h) of the Code and Treasury Regulation 1.817-5, relating to
the diversification requirements for variable annuity,
endowment, or life insurance contracts and any amendments or
other modifications to such Section or Regulations.
ARTICLE VI.
POTENTIAL CONFLICTS
6.1. The Board will monitor the Trust for the
existence of any material irreconcilable conflict between the
interests of the owners of Contracts participating in the
Accounts and participants of all Qualified Plans investing in
the Trust, and determine what action, if any, should be taken
in response to such conflicts. A material irreconcilable
conflict may arise for a variety of reasons, including: (i) an
action by any state insurance regulatory authority; (ii) a
change in applicable federal or state insurance, tax or
securities laws or regulations, or a public ruling, private
letter ruling, no-action or interpretative letter, or any
similar action by insurance, tax or securities regulatory
authorities; (iii) an administrative or judicial decision in
any relevant proceeding; (iv) the manner in which the
investments of the Trust are being managed; (v) a difference in
voting instructions given by variable annuity Contract owners,
variable life insurance Contract owners, and trustees of the
Qualified Plans; (vi) a decision by a Participating Insurance
Company to disregard the voting instructions of Contract
owners; or (vii) if applicable, a decision by a Qualified Plan
to disregard the voting instructions of plan participants. The
Trust shall promptly inform the Company if the Board determines
that a material irreconcilable conflict exists and the
implications thereof.
6.2. The Company will report any potential or
existing conflicts of which it is aware to the Board.
The Company will assist the Board in carrying out its
responsibilities under the Mixed and Shared Funding Exemptive
Order by providing the Board with all information reasonably
necessary for the Board to consider any issues raised. This
includes, but is not limited to, an obligation by the Company
to inform the Board whenever Contract owner voting instructions
are disregarded. The responsibility to report such information
and assist the Board will be carried out with a view only to
the interests of Contract owners.
6.3. If it is determined by a majority of the Board,
or a majority of its members who are not "interested persons"
of the Trust under the 1940 Act (the "Independent
Trustees"), that a material irreconcilable conflict exists, the
Company shall, at its expense and to the extent reasonably
practicable (as determined by a majority of the Independent
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Trustees), take whatever steps are necessary to remedy or
eliminate the material irreconcilable conflict, up to and
including: (i) withdrawing the assets allocable to some or all
of the Accounts from the Trust or any Fund and reinvesting such
assets in a different investment medium, including (but not
limited to) another Fund, or submitting the question whether
such segregation should be implemented to a vote of all
affected Contract owners and, as appropriate, segregating the
assets of any appropriate group (i.e., annuity Contract owners,
life insurance Contract owners, or variable Contract owners of
one or more Participating Insurance Companies) that votes in
favor of such segregation, or offering to the affected Contract
owners the option of making such a change; and (ii)
establishing a new registered management investment company or
managed separate account. The responsibility of the Company to
take remedial action will be carried out with a view only to
the interests of Contract owners.
6.4. If a material irreconcilable conflict arises
because of a decision by the Company to disregard Contract
owner voting instructions and that decision represents a
minority position or would preclude a majority vote, the
Company may be required, at the Trust's election, to withdraw
the affected Account's investment in the Trust and terminate
this Agreement with respect to such Account (at the Company's
expense); provided that no charge or penalty will be imposed as
a result of such withdrawal.
6.5. For purposes of this Article VI, a majority of
the Independent Trustees shall determine whether any proposed
action adequately remedies any material irreconcilable
conflict, but in no event will the Trust, the Underwriter, the
Trust's adviser or any affiliate be required to establish a new
funding medium for the Contracts. The Company shall not be
required by the Article VI to establish a new funding medium
for any Contract if an offer to do so has been declined by vote
of a majority of Contract owners materially and adversely
affected by the material irreconcilable conflict.
6.6. If and to the extent that Rule 6e-2 and Rule 6e-
3(T) are amended, or proposed Rule 6e-3 is adopted, to provide
exemptive relief from any provision of the 1940 Act or the
rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Mixed and Shared Funding Exemptive
Order) on terms and conditions materially different from those
contained in the Mixed and Shared Funding Exemptive Order, then
(a) the Trust and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary to
comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3,
as adopted, to the extent such rules are applicable; and (b)
Sections 3.4, 3.5 and Article VI of this Agreement shall
continue in effect only to the extent that terms and conditions
substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.
6.7. The Trust hereby notifies the Company that
account prospectus disclosure regarding potential risks of
mixed and shared funding may be appropriate.
6.8. The Company, at least annually, will submit to
the Board such reports, materials or data as the Board
reasonably may request so that the Board may fully
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carryout the obligations imposed upon it by the mixed and
shared funding exemptive order, and such reports, materials and
data will be submitted more frequently if deemed appropriate by
the Board.
ARTICLE VII.
INDEMNIFICATION
7.1 Indemnification by the Company
------------------------------
7.1(a) The Company agrees to indemnify and hold
harmless the Trust and each member of the Board and each
officer and employee of the Trust, the Underwriter and each
director, officer and employee of the Underwriter, and each
person, if any, who controls the Trust or the Underwriter
within the meaning of Section 15 of the 1933 Act (collectively,
the "Indemnified Parties" and individually, an "Indemnified
Party," for purposes of this Section 7.1) against any and all
losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Company) or expenses
(including legal and other expenses), to which the Indemnified
Parties may become subject under any statute, regulation, at
common law or otherwise, insofar as such losses, claims,
damages, liabilities, or expenses (or actions in respect
thereof) or settlements are alleged to be or are determined to
be related to the sale or acquisition of the Trust's shares or
the Contracts and:
(i) arise out of or are based upon any untrue
statements or alleged untrue statements of any material
fact contained in the disclosure statement for the
Contracts or contained in the Contracts or sales
literature for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or
are based upon the omission or the alleged omission to
state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with
information furnished to the Company by or on behalf of
the Trust for use in any disclosure statement for the
Contracts or in the Contracts or sales literature (or any
amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Trust
shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus,
SAI or sales literature of the Trust not supplied by the
Company, or persons under its control and other than
statements or representations authorized by the Trust or
the Underwriter) or unlawful conduct of the Company or
persons under its control, with respect to the sale or
distribution of the Contracts or Trust shares; or
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(iii) arise out of or result from any untrue
statement or alleged untrue statement of a material fact
contained in a registration statement, prospectus, SAI or
sales literature of the Trust or any amendment thereof or
supplement thereto or the omission or alleged omission to
state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, if such a statement or omission was made in
reliance upon and in conformity with information
furnished to the Trust by or on behalf of the Company; or
(iv) arise as a result of any failure by the Company to
provide the services and furnish the materials under the
terms of this Agreement; or
(v) arise out of or result from any material breach
of any representation or warranty made by the Company in
this Agreement or arise out of or result from any other
material breach of this Agreement by the Company.
7.1(b). The Company shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or expenses incurred or assessed against
an Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in
the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations
or duties under this Agreement.
7.1(c). The Company shall not be liable under this
indemnification provision with respect to any claim made
against an Indemnified Party unless such Indemnified Party
shall have notified the Company in writing within a reasonable
time after the summons or other first legal process giving
information of the nature of the claim shall have been served
upon such Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any designated
agent), but failure to notify the Company of any such claim
shall not relieve the Company from any liability which it may
have to the Indemnified Party against whom such action is
brought otherwise than on account of this indemnification
provision. In case any such action is brought against an
Indemnified Party, the Company shall be entitled to
participate, at its own expense, in the defense of such action.
The Company also shall be entitled to assume the defense
thereof; with counsel satisfactory to the party named in the
action. After notice from the Company to such party of the
Company's election to assume the defense thereof; the
Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Company will not be
liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party
independently in connection with the defense thereof other than
reasonable costs of investigation.
7.1(d). The Trust and/or the Underwriter will promptly
notify the Company of the commencement of any litigation or
proceedings against them or their trustees, directors or
officers in connection with the issuance or sale of the Trust
shares, the Contracts or the operation of the Trust.
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7.2 Indemnification by the Underwriter
----------------------------------
7.2(a). The Underwriter agrees to indemnify and hold
harmless the Company and each of its directors, officers and
employees and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act (collectively,
"Indemnified Parties" and individually, "Indemnified Party,"
for purposes of this Section 7.2) against any and all losses,
claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Underwriter) or
expenses (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute,
regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements alleged to be or are determined to be
related to the sale or acquisition of shares of a Fund or the
Contracts and:
(i) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact
contained in the registration statement, prospectus, SAI
or sales literature of the Trust (or any amendment or
supplement to any of the foregoing), or arise out of or
are based upon the omission or the alleged omission to
state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with
information furnished to the Trust by or on behalf of the
Company for use in the registration statement,
prospectus, statement of additional information for the
Trust or in sales literature (or any amendment or
supplement) or otherwise for use in connection with the
sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus, SAI
or sales literature for the Contracts not supplied by the
Trust or persons under its control and other than
statements or representations authorized by the Company)
or unlawful conduct of the Trust or the Underwriter or
persons under their control, with respect to the sale or
distribution of the Contracts or Fund shares; or
(iii) arise out of or as a result of any untrue
statement or alleged untrue statement of a material fact
contained in a registration statement, prospectus, SAI or
sales literature covering the Contracts, or any amendment
thereof or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statement or
statements therein not misleading, if such statement or
omission was made in reliance upon and in conformity with
information furnished to the Company by or on behalf of
the Trust; or
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(iv) arise out of or result from any material
breach of any representation and/or warranty made by the
Underwriter in this Agreement or arise out of or result
from any other material breach of this Agreement by the
Underwriter.
7.2(b). The Underwriter shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities, or expenses incurred or assessed against
an Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in
the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations
and duties under this Agreement.
7.2(c). The Underwriter shall not be liable under this
indemnification provision with respect to any claim made
against an Indemnified Party unless such Indemnified Party
shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been
served upon such Indemnified Party (or after such Indemnified
Party shall have received notice of such service on any
designated agent), but failure to notify the Underwriter of any
such claim shall not relieve the Underwriter from any liability
which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this
indemnification provision. In case any such action is brought
against any Indemnified Party, the Underwriter will be entitled
to participate, at its own expense, in the defense thereof.
The Underwriter also shall be entitled to assume the defense
thereof; with counsel satisfactory to the party named in the
action. After notice from the Underwriter to such party of the
Underwriter's election to assume the defense thereof; the
Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Underwriter will not
be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party
independently in connection with the defense thereof other than
reasonable costs of investigation.
7.2(d). The Company will promptly notify the Underwriter
of the commencement of any litigation or proceedings against it
or any of its officers or directors in connection with the
issuance or sale of the Contracts, the operation of the
Accounts or the Trust.
7.3 Indemnification by the Trust
----------------------------
7.3(a). The Trust agrees to indemnify and hold harmless
the Company, and each of its directors, officers, and employees
and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act (hereinafter
collectively, the "Indemnified Parties" and individually,
"Indemnified Party," for purposes of this Section 7.3) against
any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the
Trust) or expenses (including legal and other expenses) to
which the Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements alleged to or are
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determined to result from the gross negligence, bad faith or
willful misconduct of the Board or any member thereof; and are
related to the operations of the Trust and:
(i) arise as a result of any failure by the Trust to
provide the services and furnish the materials under the
terms of this Agreement; or
(ii) arise out of or result from any material breach
of any representation and/or warranty made by the Trust in
this Agreement or arise out of or result from any other
material breach of this Agreement by the Trust.
7.3(b). The Trust shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or expenses incurred or assessed against
an Indemnified Party as may arise from such Indemnified Party's
willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of
such Indemnified Party's reckless disregard of obligations and
duties under this Agreement.
7.3(c). The Trust shall not be liable under this
indemnification provision with respect to any claim made
against an Indemnified Party unless such Indemnified Party
shall have notified the Trust in writing within a reasonable
time after the summons or other first legal process giving
information of the nature of the claim shall have been served
upon such Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any designated
agent), but failure to notify the Trust of any such claim shall
not relieve the Trust from any liability which it may have to
the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision.
In case any such action is brought against any Indemnified
Party, the Trust will be entitled to participate, at its own
expense, in the defense thereof. The Trust also shall be
entitled to assume the defense thereof; with counsel
satisfactory to the party named in the action. After notice
from the Trust to such party of the Trust's election to assume
the defense thereof; the Indemnified Party shall bear the fees
and expenses of any additional counsel retained by it, and the
Trust will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than
reasonable costs of Investigation.
7.3(d). The Company will promptly notify the Trust of
the commencement of any litigation or proceedings against it or
any of its officers or directors in connection with the
issuance or sale of the Contracts, the operation of the
Accounts, or the Trust.
ARTICLE VIII. APPLICABLE LAW AND VENUE
8.1. This Agreement shall be construed and the
provisions hereof interpreted under and in accordance with the
substantive laws of the Commonwealth of Massachusetts without
regard to principles of conflict of laws.
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8.2. This Agreement shall be subject to the
provisions of the 1933 Act, the 1934 Act and the 1940 Act, and
the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as
the Securities and Exchange Commission may grant (including,
but not limited to, the Mixed and Shared Funding Exemptive
Order) and the terms hereof shall be interpreted and construed
in accordance therewith.
ARTICLE IX. TERMINATION
9.1. This Agreement shall continue in full force and
effect until the first to occur of:
(a) termination by any party for any reason by sixty (60)
days advance written notice delivered to the
other parties; or
(b) termination by the Company by written notice to the
Trust and the Underwriter with respect to any Fund
in the event any of the Fund's shares are not
registered, issued or sold in accordance with
applicable state and/or federal law or such law
precludes the use of such shares as the
underlying investment media of the Contracts
issued or to be issued by the Company; or
(c) termination by the Company by written notice to
the Trust and the Underwriter with respect to any Fund
in the event that such Fund ceases to qualify as a
regulated investment company under Subchapter M
of the Code or under any successor or similar
provision, or if the Company reasonably believes
that the Trust may fail to so qualify; or
(d) termination by the Company by written notice to the
Trust and the Underwriter with respect to any Fund in
the event that such Fund falls to meet the diversification
requirements specified in Article V hereof; or
(e) termination by the Trust by written notice to
the Company if the Trust shall determine, in its
sole judgment exercised in good faith, that the
Company and/or its affiliated companies has
suffered a material adverse change in its
business, operations, financial condition or
prospects since the date of this Agreement or is
the subject of material adverse publicity; or
(f) termination by the Company by written notice to
the Trust and the Underwriter, if the Company shall
determine, in its sole judgment exercised in good
faith, that either the Trust or the Underwriter has
suffered a material adverse change in its business,
operations, financial
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condition or prospects since the date of this
Agreement or is the subject of material adverse
publicity.
9.2. Notwithstanding any termination of this
Agreement, the Trust shall, at the option of the Company,
continue to make available additional shares of the Trust
pursuant to the terms and conditions of this Agreement, for all
Contracts in effect on the effective date of termination of
this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, the owners of
the Existing Contracts shall be permitted to direct
reallocation of investments in the Trust, redemption of
investments in the Trust and investment in the Trust upon the
making of additional purchase payments under the Existing
Contracts. The parties agree that this Section 9.2 shall not
apply to any terminations under Article VI, and the effect of
such Article VI terminations shall be governed by Article VI of
this Agreement.
9.3. Notwithstanding anything in this Agreement to
the contrary, the parties agree that the Trust may terminate
and liquidate any Fund at any time the Board determines, in its
sole judgment, that it is not in the interest of shareholders
to continue the Fund. The Trust agrees that it shall give the
Company reasonable advance notice of its intention to conduct
any such Fund termination or liquidation and that any such Fund
termination or liquidation shall comply with all applicable
laws and regulations.
ARTICLE X. NOTICES
10.1. Any notice shall be sufficiently given when sent
by registered or certified mail (or through a nationally
recognized overnight courier that provides evidence of receipt)
to the other party at the address of such party set forth below
or at such other address as such party may from time to time
specify in writing to the other party.
If to the Company:
General American Life Insurance Company
700 Market Street
St. Louis, MO 63101
Attn: Christopher A. Martin
If to the Trust:
SEI Insurance Products Trust
One Freedom Valley Drive
Oaks, PA 19456
Attn: Secretary
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If to Underwriter:
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, PA 19456
Attn: Secretary
ARTICLE XI.
MISCELLANEOUS
11.1. The Company and the Underwriter understand and
acknowledge that: (i) the Trust is a registered investment
company organized under Massachusetts law consisting of
separate investment portfolios; (ii) no Fund of the Trust shall
have any liability for the obligations of any other Fund of the
Trust; (iii) under Massachusetts law, shareholders of a
Massachusetts business trust could, under certain
circumstances, be held personally liable for the Trust's
obligations; and (iv) the Trust's declaration of trust,
however, disclaims the shareholder liability set forth in (iii)
above, for the Trust's acts or obligations.
11.2. Subject to the requirements of legal process and
regulatory authority, each party hereto shall treat as
confidential the names and addresses of the owners of the
Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except
as permitted by this Agreement, shall not disclose, disseminate
or utilize such names and addresses and other confidential
information until such time as it may come into the public
domain without the express written consent of the affected
party.
11.3. Each of the parties acknowledges and agrees that
this Agreement and the arrangement described herein are
intended to be non-exclusive and that each of the parties is
free to enter into similar agreements and arrangements with
other entities.
11.4. The captions in this Agreement are included for
convenience of reference only and in no way define or delineate
any of the provisions hereof or otherwise affect their
construction or effect.
11.5. This Agreement may be executed simultaneously in
two or more counterparts, each of which taken together shall
constitute one and the same instrument.
11.6. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or
otherwise, the remainder of the Agreement shall not be affected
thereby.
11.7. Each party hereto shall cooperate with each
other party and all appropriate governmental authorities
(including without limitation the Securities and Exchange
Commission, the NASD and state insurance regulators) and shall
permit such authorities reasonable access to its books and
records in connection with any investigation or inquiry
relating to this Agreement or the transactions contemplated
hereby.
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11.8. The rights, remedies and obligations contained
in this Agreement are cumulative and are in addition to any and
all rights, remedies and obligations at law or in equity, which
the parties hereto are entitled to under state and federal
laws.
11.9. This Agreement or any of the rights and
obligations hereunder may not be assigned by any party without
the prior written consent of all parties hereto; provided,
however, that the Underwriter may assign this Agreement or any
rights or obligations hereunder to any affiliate of or company
under common control with the Underwriter, if such assignee is
duly licensed and registered to perform the obligations of the
Underwriter under this Agreement.
11.10. This Agreement may be amended only by written
agreement of the parties to the Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed in its name and on its behalf by
its duly authorized representative and its seal to be hereunder
affixed hereto as of the date specified above.
GENERAL AMERICAN LIFE INSURANCE COMPANY
By: /s/ Bernard H. Wolzenski
---------------------------------------
Title: Executive Vice President
------------------------------------
Print Name: Bernard H. Wolzenski
-------------------------------
SEI INSURANCE PRODUCTS TRUST
By: /s/ Christine M. McCullough
--------------------------------------
Christine M. McCullough
Vice President and Assistant Secretary
SEI INVESTMENTS DISTRIBUTORS COMPANY
By: /s/ Robert C. Aller
---------------------------------------
Robert C. Aller
Vice President
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SCHEDULE A
----------
PARTICIPATION AGREEMENT
AMONG
GENERAL AMERICAN LIFE INSURANCE COMPANY
SEI INSURANCE PRODUCTS TRUST
AND
SEI INVESTMENTS DISTRIBUTION COMPANY
------------------------------------
Shares of the following Funds are available:
Equity Funds
SEI VP Large Cap Value Fund
SEI VP Large Cap Growth Fund
SEI VP Small Cap Value Fund
SEI VP Small Cap Growth Fund
SEI VP International Equity Fund
SEI VP Emerging Markets Equity Fund Fixed Income Funds
SEI VP Core Fixed Income Fund
SEI VP High Yield Bond Fund
SEI VP International Fixed Income Fund
SEI VP Emerging Markets Debt Fund
Shares of the Funds listed above shall be made available
as investments for the following Accounts and Contracts funded
by the Accounts:
NAME OF ACCOUNT AND DATE ESTABLISHED FORM NUMBER AND NAME OF CONTRACT
BY BOARD OF DIRECTORS: FUNDED BY ACCOUNT:
- ---------------------- ------------------
Separate Account Eleven (Jan. 25, 1985) 100003 Variable Universal Life (VGSP)
100016 Variable Universal Life (VUL98)
100019 Variable Universal Life (VUL98)
Pension Version
100018 Joint & Survivor Variable
Universal Life (JSVUL98)
100020 Joint & Survivor Variable
Universal Life (JSVUL98) Pension
Version
100030 Variable Universal Life \
(Destiny)
Dated as of April 5, 2000.
A-1
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SCHEDULE B
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PARTICIPATION AGREEMENT
AMONG
GENERAL AMERICAN LIFE INSURANCE COMPANY
SEI INSURANCE PRODUCTS TRUST
AND
SEI INVESTMENTS DISTRIBUTION COMPANY
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PROCEDURES
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(a) On each day the Funds calculate their net asset
value pursuant to the requirements of their then current
prospectus and the rules of the Securities and Exchange
Commission (each a "Business Day"), the Company may receive
Instructions from the Contract owners of Contracts specified in
Exhibit A for the purchase or redemption of shares of the Funds
based solely upon each Company's receipt of Instructions from
Contract owners, prior to the Close of Trading on that Business
Day. Instructions in good order received by the Company prior
to 4:00 p.m. Eastern time ("ET") on any given Business Day, or
earlier if the New York Stock Exchange ("Exchange") closes
earlier than 4:00 p.m. ET on any given Business Day (the "Trade
Date") and transmitted to SEI Investments Fund Management or
other SEI entity serving as the Funds' transfer agent (the
"Transfer Agent") by no later than 10:00 a.m. ET on the
Business Day following the Trade Date ("Trade Date plus One" or
"TD+1"), will be executed at the NAV ("Share Price") of each
applicable Fund, determined as of the Close of Trading on the
prior Business Day ("Effective Trade Date").
(b) By no later than 7:00 p.m. ET on each Business
Day ("Price Communication Time"), SEI Investments Fund
Management or other SEI entity serving as fund administrator
(the "Administrator") will use its best efforts to communicate
to the Company via a mutually agreed upon format, the Share
Price of each applicable Fund, as well as dividend and capital
gain information and, in the case of income Funds, the daily
accrual for interest rate factor (mil rate), determined at the
Close of Trading on that Business Day. The Administrator will
notify the Company when and if the Administrator does not
communicate the required Share Price information by 7:00 p.m.
ET on any Business Day. It is understood and agreed that, in
the context of Section 22 of the 1940 Act and the rules and
public interpretations thereunder by the staff of the
Securities and Exchange Commission ("SEC Staff"), receipt by
the Company of any Instructions from the Contract owners in a
timely manner shall be deemed to be receipt by the Funds of
such Instructions solely for pricing purposes and shall cause
purchases and sales for the Contract owners to be deemed to
occur at the Share Price for such Business Day.
(c) As noted in Paragraph (a) above, by 10:00 a.m.
ET on TD+l ("Instruction Cutoff Time") and after the Company
has processed all approved Contract owner activity, the Company
will transmit to the Funds' Transfer Agent, by a method
acceptable to the Company and the Funds' Transfer Agent, a
report (the "Instruction Report") detailing the Instructions
that were received by the Company prior to the Funds' daily
determination of Share Price for each Fund (i.e., the Close of
Trading) on each Business Day. The Company shall transmit a
report on each Business Day, even if there are no Contract
owner instructions to report. If the Transfer Agent does not
receive an Instruction Report on any Business Day, it will
notify the Company.
(i) It is understood by the parties that all
Instructions from the Contract owners
shall be received and processed by the
Company in accordance with its standard
transaction processing procedures that
apply to all investment options offered
B-1
<PAGE>
<PAGE>
under the Contract. The Company shall
maintain records sufficient to identify
the date and time of receipt of all
Contract owner transactions involving the
Funds and shall make such records
available upon reasonable request for
examination by the Funds or its designated
representative or, at the request of the
Funds, by appropriate governmental
authorities. Under no circumstances shall
the Company change, alter or modify any
Instructions received by it in good order.
(ii) The Instruction Report shall state whether the
Instructions received by the Company from
the Contract owners by the Close of
Trading on such Business Day resulted in
the Accounts being a net purchaser or net
seller of shares in each of the Funds and
shall indicate the net dollar value
purchased or net dollar value redeemed by
each Account in each of the Funds and the
date of the transaction. On Business Days
where there are no Instructions in a Fund
for an Account or all the Accounts, the
Instruction Report will so indicate. Each
transmission of Instructions by the
Company of a net purchase or redemption
Instruction relating to a particular Fund
and a Business Day shall constitute a
representation and covenant by the Company
that such net purchase or redemption
Instruction was based on Contract owner
transactions received by the Company prior
to the Close of Trading (and prior to the
time the Share Price for each Fund) was
determined on such Business Day, and that
each net purchase or redemption
Instruction included all such Contract
owner transactions so received by the
Company. All Instructions will be
communicated in U.S. dollars.
(d) As set forth below, upon the timely receipt from
the Company of the Instruction Report, the Funds will execute
the purchase or redemption transactions (as the case may be) at
the Share Price for each Fund computed as of the Close of
Trading on the Effective Trade Date.
(i) Except as otherwise provided herein, all
purchase and redemption transactions will settle
on TD+1. Settlements will be through net
Federal Wire transfers between the Company
and a custodial account designated by the
Funds. In the case of Instructions which
constitute a net purchase order,
settlement shall occur by the Company
initiating a wire transfer to the
custodian for the Funds for receipt by the
Funds' custodian by no later than the
Close of Business at the New York Federal
Reserve Bank on TD+1, causing the
remittance of the requisite Funds to cover
such net purchase order. In the case of
Instructions which constitute a net
redemption order, settlement shall occur
by the Funds' Transfer Agent instructing
the Funds' custodian to initiate a wire
transfer from the Funds' custodial
accounts to the Company's custodial
account for its receipt by no later than
the Close of Business at the New York
Federal Reserve Bank on TD+l, causing the
remittance of the requisite Funds to cover
such net redemption order. On any
Business Day when the Federal Reserve Wire
Transfer System is closed, all
communication and processing rules will be
suspended for the settlement of
Instructions. Instructions will be
settled on the next Business Day on which
the Federal Reserve Wire Transfer System
is open. The original TD+1 Settlement
Date will not apply. Rather, for purposes
of this Paragraph only, the Settlement
Date will be the date on which the
Instruction settles. The Funds reserve
the right to (i) delay settlement of
redemptions for up to five (5) Business
Days after receiving a net redemption
order in accordance with Section 22 of the
1940 Act and Rule 22c-I thereunder, or
(ii) suspend redemptions pursuant to the
1940 Act or as otherwise required by law.
Settlements shall be in U.S. dollars.
<PAGE>
(ii) The Trust will verify, for each Fund, the
NAY, the total dollar amount of transactions,
and the number of shares transacted listed on
the Instruction Report. The
B-2
<PAGE>
<PAGE>
Trust will contact the Company on or
before 1:00 p.m. Eastern time on TD+1 if
any of the information to be verified is
incorrect. The Trust will give the
Company access to its system to verify its
transactions. The Company and the Trust
will cooperate to resolve any
discrepancies as soon as reasonably
practicable. This process will be
reviewed periodically by both parties to
make sure that the needs of both the Trust
and the Company are being met.
(e) In the event of any error or delay with respect
to the Procedures outlined in Schedule B herein: (i) which is
caused by the Funds, the Funds' Transfer Agent or the adviser,
the Funds or its agents (as appropriate) shall make any
adjustments on the Funds' accounting system necessary to
correct such error or delay and the responsible party or
parties shall reimburse the Company for any losses or
reasonable costs incurred directly as a result of the error or
delay but specifically excluding any and all consequential
punitive or other indirect damages; or (ii) which is caused by
the Company or by any Contract owner, the Funds or its agent
shall make any adjustment on the Funds' accounting system
necessary to correct such error or delay and the affected party
or parties shall be reimbursed by the Company for any losses or
reasonable costs incurred directly as a result of the error or
delay (or the Company shall make any adjustments on its
recordkeeping system, if appropriate), but specifically
excluding any and all consequential punitive or other indirect
damages. In the event of any such adjustments on the Funds'
accounting system, the Company shall make the corresponding
adjustments on its internal recordkeeping system. In the event
that errors or delays with respect to the Procedures are
contributed to by more than one party hereto, each party shall
be responsible for that portion of the loss or reasonable cost
which results from its error or delay. The portion of any loss
or cost for which the Funds is responsible may be adjusted
between the Funds and its agents in accordance with the
agreement between the Funds and such agent whereby the agency
is created. All parties agree to provide the other parties
prompt notice of any errors or delays of the type referred to
herein and to use reasonable efforts to take such action as may
be appropriate to avoid or mitigate any such costs or losses.
B-3
<PAGE>
EXHIBIT 3(2)
General American Life Insurance Company
700 Market Street
St. Louis, MO 63101
Dear Sirs:
This opinion is furnished in connection with the offering of
individual, flexible premium variable life insurance policies
("Policies") of General American Life Insurance Company
("General American") under Registration Statement No. 333-53477
filed by General American and General American Life Insurance
Company Separate Account Eleven ("Account") under the
Securities Act of 1933, as amended ("Act").
I have made such examination of the law and examined such
corporate records and such other documents as in my judgment
are necessary and appropriate to enable me to render the
following opinion that:
1. General American has been duly organized under the laws
of the State of Missouri and is a validly existing corporation.
2. The Account has been duly formed by the Board of
Directors of General American as a separate account for assets
designed to support the Policies, pursuant to the provisions of
Section 309 of Chapter 376, of the Revised Statutes of
Missouri. The Account is duly created and validly existing as
a separate account pursuant to the above-cited provisions of
Missouri law.
3. The portion of the assets to be held in the Account equal
to the reserves and other liabilities under the Policies is not
chargeable with liabilities arising out of any other business
General American may conduct.
4. The Policies have been duly authorized by General
American and, when issued as contemplated by the Registration
Statement, as amended, will constitute legal, validly issued,
and binding obligations of General American in accordance with
their terms.
I hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the use of my name under the
caption "Legal Matters" in the Prospectus contained in the
Registration Statement.
Very truly yours,
/s/ Christopher A. Martin
Christopher A. Martin
Counsel
