MMVA.171 12/12/95
<PAGE>
<REDLINE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
DECEMBER 29, 1995
File No. 33-39171
811-5301
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. [ ]
Post - Effective Amendment No. 7 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF
1940
Amendment No. 23 [X]
(Check appropriate box or boxes.)
VARIABLE ACCOUNT I
(Exact Name of Registrant)
AIG Life Insurance Company
(Name of Depositor)
One Alico Plaza, Wilmington, Delaware 19899
(Address of Depositor's Principal Executive Offices)
(Zip Code)
Depositor's Telephone Number, including Area Code (302) 594-
2000
Robert Liguori, Esq.
AIG Life Insurance Company
One Alico Plaza
Wilmington, Delaware 19899
(Name and Address of Agent for Service)
Copies to:
Michael Berenson, Esq. Florence Davis, Esq.
Jorden Burt Berenson & Johnson LLP American International
Suite 400 East Group, Inc.
1025 Thomas Jefferson Street, N.W. 70 Pine Street
Washington, D.C. 20007-0805 New York, New York
10270
Approximate Date of Proposed Public Offering: As soon as
practicable after the effective date of this filing.
</REDLINE>
MMVA.171 12/12/95
<PAGE>
It is proposed that this filing will become effective (check
appropriate box)
__X_ immediately upon filing pursuant to paragraph (b) of
Rule 485 <REDLINE>
___ on ______ pursuant to paragraph (b) of Rule 485
___ 60 days after filing pursuant to paragraph (a)(i) of
Rule 485
___ on ______ pursuant to paragraph (a)(i) of Rule 485
<REDLINE>
If appropriate, check the following box:
___ this post-effective amendment designates a new
effective date for a previously filed post-effective
amendment.
Registrant has declared that it registered an indefinite
number or amount of securities in accordance with Rule 24f-2
under the Investment Company Act of 1940. Registrant filed a
Rule 24f-2 notice for its most recent fiscal year on February
22, 1995.
<REDLINE>
EXPLANATORY NOTE
This Post-Effective Amendment shall not supersede or
effect Post-Effective Amendment No. 6 to this Registration
Statement filed on April 28, 1995. </REDLINE>
MMVA.171 12/12/95
<PAGE>
CROSS REFERENCE SHEET
(required by Rule 495)
<TABLE>
<CAPTION>
Item No. Location
PART A
<S> <C> <C>
Item 1. Cover Page Cover Page
Item 2. Definitions Definitions
Item 3. Synopsis Highlights
Item 4. Condensed Financial Information Condensed Financial
Information
<REDLINE>
Item 5. General Description of Registrant The Variable Account; The
Depositor, and Portfolio Company;
Companies
</REDLINE>
Item 6. Deductions and Expenses Charges and Deductions
Item 7. General Description of Variable Purchasing a Contract;
Rights
Annuity Contracts under the Contracts
Item 8. Annuity Period Annuity Period
Item 9. Death Benefit Death Benefit
Item 10. Purchases and Contract Value Rights under the
Contracts; Purchasing a
Contract
Item 11. Redemptions Withdrawals
Item 12. Taxes Taxes
Item 13. Proceedings Not Applicable
Item 14. Table of Contents of the Table of Contents of the
Statement of Additional Statement of Additonal
Information Information
</TABLE>
MMVA.171 12/12/954
<PAGE>
<TABLE>
<CAPTION>
Item No. Location
PART B
<S> <C> <C>
Item 15. Cover Page Cover Page
Item 16. Table of Contents Table of Contents
Item 17. General Information and History General Information
Item18. Services Services
Item 19. Purchase of Securities Purchasing a Contract;
Being Offered Charges and Deductions
(Part A)
Item 20. Underwriters General Information/
Distributor
Item 21. Calculation of Performance Calculation of
Data Performance Related
Information
Item 22. Annuity Payments Annuity Provisions
Item 23. Financial Statements Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth
under the appropriate item, so numbered, in Part C to this
Registration Statement.
MMVA.171 12/12/955
<PAGE>
PART A
MMVA.171 12/12/956
<PAGE>
AIG LIFE INSURANCE COMPANY
One Alico Plaza
Wilmington, Delaware 19899
INDIVIDUAL SINGLE PURCHASE DEFERRED
VARIABLE ANNUITY CONTRACTS
issued by
VARIABLE ACCOUNT I
and
AIG LIFE INSURANCE COMPANY
The Individual Single Purchase Payment Deferred Variable
Annuity Contracts (the "Contracts") described in this
Prospectus provide for accumulation of Contract Values and
payment of monthly annuity payments. The Contracts may be
used in retirement plans which do not qualify for federal tax
advantages ("Non-Qualified Contracts") or in connection with
retirement plans which may qualify as Individual Retirement
Annuities ("IRA") under Section 408 of the Internal Revenue
Code of 1986, as amended (the "Code") or Section 403(b) of the
Code ("403(b) Plans"). The Contracts will not be available in
connection with retirement plans designed by AIG Life
Insurance Company (the "Company") which qualify for the
federal tax advantages available under Sections 401 and 457 of
the Code. Purchasers intending to use the Contracts in
connection with an IRA or 403(b) Plan should seek competent
tax advice.
<REDLINE>
Purchase payments for the Contracts will be allocated to
a segregated investment account of the Company which account
has been designated Variable Account I (the "Variable
Account"). The assets of each sub-account within the Variable
Account are invested in a corresponding portfolio as selected
by the Owner from the following 14 choices: the Conservative
Investors Portfolio, Growth Investors Portfolio, Growth
Portfolio, or Growth and Income Portfolio of the ALLIANCE
VARIABLE PRODUCTS SERIES FUND, INC. ("Alliance Funds"); the
High Income Portfolio, Growth Portfolio, Money Market
Portfolio, Overseas Portfolio, Asset Manager Portfolio, or
Investment Grade Bond Portfolio of the FIDELITY INVESTMENTS
VARIABLE INSURANCE PRODUCTS FUNDS ("Fidelity Funds"); the Zero
Coupon Portfolio of the DREYFUS VARIABLE INVESTMENT FUND
("Dreyfus Fund"); the Gold and Natural Resources Portfolio or
Worldwide Balanced Portfolio, of the VAN ECK WORLDWIDE
INSURANCE TRUST ("Van Eck Funds"); or the DREYFUS STOCK INDEX
FUND.
MMVA.171 12/12/957
<PAGE>
This Prospectus concisely sets forth the information a
prospective investor ought to know before investing.
Additional information about the Contracts is contained in the
"Statement of Additional Information" which is available at no
charge. The Statement of Additional Information has been
filed with the Securities and Exchange Commission and is
hereby incorporated by reference. The Table of Contents of
the Statement of Additional Information can be found on page
____ of this Prospectus. For the Statement of Additional
Information dated __________ __, 1996, call or write AIG Life
Insurance Company; Attention: Variable Products, One Alico
Plaza, Wilmington, Delaware 19801, 1-800-340-2765. </REDLINE>
INQUIRIES: Purchaser inquiries can be made by calling the
service office at 1-800-340-2765.
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 RETAIN IT
FOR YOUR FUTURE REFERENCE.
THE CONTRACTS OFFERED BY THIS PROSPECTUS ARE NOT
AVAILABLE IN ALL STATES.
<REDLINE> Date of Prospectus: __________ __, 1996</REDLINE>
MMVA.171 12/12/958
<PAGE>
TABLE CONTENTS
PAGE
Definitions
Highlights
Summary of Expenses
Condensed Financial Information
Calculation of Performance Data
The Company
The Variable Account <REDLINE>
The Funds and the Investment Advisors </REDLINE>
Charges and Deductions
Deduction for Premium and Other Taxes
Deduction for Mortality and Expense
Risk Charge
Deduction for Deferred Sales Charge
Deduction for Administrative Charge
Deduction for Income Taxes
Other Expenses
Rights under the Contracts
Annuity Period
Annuity Benefits
Annuity Date
Annuity Options
Annuity Payments
Death Benefit
Death Benefit
Death of the Purchaser
Purchasing a Contract
Application
Purchase Payments
Discount Purchase Programs
Distributor
Contract Value
Withdrawals
Partial Withdrawal
Total Withdrawal
Systematic Withdrawal Program
Payment of Withdrawals
Taxes
Introduction
Company Tax Status
Taxation of Annuities In General
Diversification Standards
Qualified Plans
Individual Retirement Annuities
403(b) Plans
Appendix - General Account Option
Table of Contents of the Statement of Additional Information
MMVA.171 12/12/959
<PAGE>
DEFINITIONS
Accumulation Period - The period prior to the Annuity Date.
Accumulation Unit - Accounting unit of measure used to
calculate the Contract Value prior to the Annuity Date.
Age - Age means age last birthday.
Annuitant - The person upon whose continuation of life any
annuity payment involving life contingencies depends. The
Annuitant named in the application.
Annuity Date - The date at which annuity payments are to
begin.
Annuity Unit - Accounting unit of measure used to calculate
variable annuity payments.
Beneficiary - The person or persons named in the application
who will receive any benefit upon the death of the Owner (or
Annuitant as applicable) prior to the Annuity Date.
Contingent Owner - The Contingent Owner, if any, must be the
spouse of the Purchaser as named in the application, unless
changed.
Contract Anniversary - The same month and date as the Date of
Issue in each subsequent year of the Contract or Certificate.
Contract Value - The value of all amounts accumulated under
the Contract or Certificate.
Contract Year - Any period of twelve (12) months commencing
with the Date of Issue and each Contract or Certificate
Anniversary thereafter.
Contribution Year - any period of 12 months commencing with
the date a Purchase Payment is made and ending on the same
date in each succeeding 12 month period thereafter.
Date of Issue - The date when the initial purchase payment was
invested.
Deferred Sales Charge - The sales charge that may be applied
against amounts withdrawn prior to the Annuity Date if
withdrawal is within six years of a purchase payment.
General Account - All of the Company's assets other than the
assets of the Variable Account and any other separate accounts
of the Company.
MMVA.171 12/12/9510
<PAGE>
<REDLINE>
Office - The Annuity Service Office of the Company: One Alico
Plaza, 600 King Street, P.O. Box 8718, Wilmington, DE 19899.
</REDLINE>
Owner - The person designated as contract owner or
certificate owner in the application, unless changed.
Valuation Date - Each day that the New York Stock Exchange is
open for trading.
Valuation Period - The period commencing as of the close of
the New York Stock Exchange (presently 4 P.M., New York time)
on each Valuation Date and ending as of the close of the New
York Stock Exchange on the next succeeding Valuation Date.
Variable Account - A separate investment account of the
Company, designated Variable Account I, into which purchase
payments will be allocated.
MMVA.171 12/12/9511
<PAGE>
HIGHLIGHTS
Purchase payments for the Contracts will be allocated to a
segregated investment account of the Company which account has
been designated Variable Account I (the "Variable Account").
<REDLINE> The Variable Account invests in shares of the
Portfolios of the available Funds.</REDLINE>
The Contracts provide that in the event that an Owner
withdraws all or a portion of the Contract Value within the
first six contract years there may be assessed a Deferred
Sales Charge. The Deferred Sales Charge is based on a table
of charges, of which the maximum charge is currently 6% of the
Contract Value subject to a maximum of 8.5% of the purchase
payment. (See "Charges and Deductions - Deduction for
Deferred Sales Charge" on page ____.)
Any premium or other taxes levied by any governmental entity
with respect to the Contracts will be charged against the
purchase payments or Contract Value. Premium taxes currently
imposed by certain states on the Contracts range from 0% to
3.5%. The Company will also deduct from any amount payable
under the Contracts any income taxes a governmental authority
requires the Company to withhold with respect to that amount.
(See "Charges and Deductions- Deduction for Premium and Other
Taxes" on page ___.)
The Company deducts from the Contract Value and/or the
Variable Account any Federal income taxes resulting from the
operation of the Variable Account. The Company does not
currently anticipate incurring any income taxes. (See "Charges
and Deductions - Deduction for Income Taxes" on page ___.)
The Company deducts for each Valuation Period a Mortality and
Expense Risk Charge which is equal on an annual basis to 1.25%
of the average daily net asset value of the Variable Account.
(See "Charges and Deductions - Deduction for Mortality and
Expense Risk Charge" on page ___.)
The Company deducts for each Valuation Period an
Administrative Charge which is equal on an annual basis to
0.15% of the average daily net asset value of the Variable
Account. In addition, the Company deducts an annual
Administrative Charge which is currently $30 per year, from
the Contract Value. The Administrative Charges are designed
to reimburse the Company for administrative expenses relating
to maintenance of the Contract and the Variable Account. The
Company may increase the annual Administrative Charge to an
amount not to exceed $100 per year. (See "Charges and
Deductions - Deduction for Administrative Charge" on page
___.)
MMVA.171 12/12/9512
<PAGE>
<REDLINE>
There are deductions and expenses paid out of the assets of
the Funds which are described in the accompanying Prospectuses
for the Funds.</REDLINE>
There is a 10% tax penalty applied to the income portion of
any premature distribution from the Contracts. However, the
penalty is not imposed on certain distributions including but
not limited to amounts received: (a) after the taxpayer
reaches age 59 1/2; (b) after the death of the Annuitant (or
Owner, as applicable); (c) if the taxpayer is totally
disabled; (d) in a series of substantially equal periodic
payments made for the life of the taxpayer or for the joint
lives of the taxpayer and his beneficiary; (e) under an
immediate annuity; (f) which are allocable to purchase
payments made prior to August 14, 1982; (g) under a qualified
funding asset (as defined in Code Section 130(d)); or (h) that
are purchased by an employer upon termination of certain types
of qualified plans and which are held by the employer until
the employee separates from service. Withdrawals are deemed
to be on a last-in-first-out basis. (See "Taxes - Taxation of
Annuities in General" on page ___)
The Contract Owner may return the Contract within ten (10)
days (the "Free Look Period") after it is received by
delivering or mailing it to the Company's Office. If the
Contract is purchased in Kansas or South Carolina and replaces
any existing life insurance policy or annuity, the Contract
Owner will be given a twenty (20) day Free Look Period. The
return of the Contract by mail will be effective when the
postmark is affixed to a properly addressed and postage
prepaid envelope. The Company will refund the Contract Value.
However, if the laws of a state require that the Company
refund, during the Free Look Period, an amount equal to the
purchase payment paid less any withdrawals, the Company will
refund such an amount. purchase payment, less any
withdrawals, or the Contract Value.
MMVA.171 12/12/9513
<PAGE>
SUMMARY OF EXPENSES
Contract Owner Transaction Expenses All Sub-Accounts
Sales Loan Imposed on Purchases . . . . None
Deferred Sales Load (as a percentage
of amount surrendered):
Contract Year 1 . . . . . . . . . . . 6%
Contract Year 2 . . . . . . . . . . . 5%
Contract Year 3 . . . . . . . . . . . 4%
Contract Year 4 . . . . . . . . . . . 3%
Contract Year 5 . . . . . . . . . . . 2%
Contract Year 6 . . . . . . . . . . . 1%
Contract Year 7 and thereafter . . . None
Exchange Fee Currently:
First 12 Per Contract Year . . . . . None
Thereafter . . . . . . . . . . . . . $ 10
<REDLINE>
Annual Contract Fee . . . . . . . . . . . . $ 30
</REDLINE>
Separate Account Expenses
(as a percentage of average account value)
Mortality and Expense Risk Fees . . . . 1.25%
Account Fees and Expenses . . . . . . . .15%
Total Separate Account Annual Expenses 1.40%
Annual Fund Expenses After Expense Reimbursements*
<TABLE>
<CAPTION>
Total
Management Other
Portfolio
Fee Expenses
Expenses
<S> <C> <C> <C>
ALLIANCE
Conservative Investors 0.00 0.95 0.95
Growth Investors 0.00 0.95 0.95
Growth 0.00 0.95 0.95
Growth and Income 0.62 0.28 0.90
Expenses on a hypothetical $1,000 policy, assuming 5% growth:
</TABLE>
MMVA.171 12/12/9514
<PAGE>
<TABLE>
<CAPTION>
<REDLINE>
If you Surrender: 1 Year 3 Years 5 Years 1 0
Years
ALLIANCE
<S> <C> <C> <C> <C>
Conservative Investors 80 114 150 276
Growth Investors 80 114 150 276
Growth 80 114 150 276
Growth and Income 79 113 147 271
If you Annuitize: 1 Year 3 Years 5 Years 1 0
Years
ALLIANCE
Premier Growth 25 75 129 276
Growth & Income 25 75 129 276
Short Term Multi-Market 25 75 129 276
All Others 24 74 127 271
If you do not Surrender 1 Year 3 Years 5 Years 1 0
Years
ALLIANCE
Premier Growth 25 75 129 276
Growth & Income 25 75 129 276
Short Term Multi-Market 25 75 129 276
All Others 24 74 127 271
</TABLE>
Annual Fund Expenses After Expense Reimbursements
<TABLE>
<CAPTION>
Total
Management Other
Portfolio
Fee Expenses
Expenses
<S> <C> <C> <C>
DREYFUS
Zero Coupon 2000 0.00 0.00 0.00
Expenses on a hypothetical $1,000 policy, assuming 5% growth:
</TABLE>
MMVA.171 12/12/9515
<PAGE>
<TABLE>
<CAPTION>
If you Surrender: 1 Year 3 Years
<S> <C> <C>
DREYFUS
Zero Coupon 2000 71 86
If you Annuitize: 1 Year 3 Years
DREYFUS
Zero Coupon 2000 15 46
If you do not Surrender 1 Year 3 Years
DREYFUS
Zero Coupon 2000 15 46
</TABLE
Annual Fund Expenses After Expense Reimbursements
</TABLE>
<TABLE>
<CAPTION>
Total
Management Other
Portfolio
Fee Expenses
Expenses
<S> <C> <C> <C>
DREYFUS STOCK
INDEX FUND 0.30 0.10 0.40
Expenses on a hypothetical $1,000 policy, assuming 5% growth:
</TABLE>
<TABLE>
<CAPTION>
If you Surrender: 1 Years 3 Years
DREYFUS STOCK
<S> <C> <C>
INDEX FUND 75 98
If you Annuitize: 1 Year 3 Years
DREYFUS STOCK
INDEX FUND 19 58
If you do not Surrender 1 Year 3 Years
DREYFUS STOCK
INDEX FUND 19 58
</TABLE>
MMVA.171 12/12/9516
<PAGE>
Annual Fund Expenses After Expense Reimbursements
<TABLE>
<CAPTION>
Total
Management Other
Portfolio
Fee Expenses
Expenses
<S> <C> <C> <C>
FIDELITY
Asset Manager 0.72 0.08 0.80
Growth 0.62 0.03 0.69
High Income 0.61 0.10 0.71
Overseas 0.77 0.15 0.92
Money Market 0.20 0.07 0.27
Investment Grade Bond 0.46 0.21 0.67
Expenses on a hypothetical $1,000 policy, assuming 5% growth:
</TABLE>
<TABLE>
<CAPTION>
If you Surrender: 1 Year 3 Years
<S> <C> <C>
FIDELITY
Asset Manager 78 110
Growth 77 106
High Income 78 107
Overseas 80 113
Money Market 73 94
Investment Grade Bond 77 106
If you Annuitize: 1 Year 3 Years
FIDELITY
Asset Manager 23 71
Growth 22 67
High Income 22 68
Overseas 24 74
Money Market 18 54
Investment Grade Bond 22 67
If you do not Surrender 1 Year 3 Years
FIDELITY
Asset Manager 23 71
Growth 22 67
High Income 22 68
Overseas 24 74
Money Market 18 54
Investment Grade Bond 22 67
Annual Fund Expenses After Expense Reimbursements
</TABLE>
MMVA.171 12/12/9517
<PAGE>
<TABLE>
<CAPTION>
Total
Management Other
Portfolio
Fee Expenses
Expenses
<S> <C> <C> <C>
VAN ECK
Worldwide Balance 0.00 0.00 0.00
Gold and Natural Resources 0.96 0.00 0.96
Expenses on a hypothetical $1,000 policy, assuming 5% growth:
</TABLE>
<TABLE>
<CAPTION>
If you Surrender: 1 Year 3 Years
<S> <C> <C>
VAN ECK
Worldwide Balance 71 86
Gold and Natural Resources 80 114
If you Annuitize: 1 Year 3 Years
VAN ECK
Worldwide Balance 15 46
Gold and Natural Resources 25 75
If you do not Surrender 1 Year 3 Years
VAN ECK
Worldwide Balance 15 46
Gold and Natural Resources 25 75
</TABLE>
</REDLINE>
MMVA.171 12/12/9518
<PAGE>
The purpose of the table set forth above is to assist the
Contract Owner in understanding the various costs and expenses
that a Contract Owner will bear directly or indirectly. The
table reflects expenses of the Variable Account as well as the
Fund. The Annual Administrative Charge for purposes of the
Expense Table, above, was based upon the assessment of a $30
charge on a Contract Value of $5,000. (See "Charges and
Deductions" on page ___ of this Prospectus and "Management of
the Fund" in the Fund Prospectus.)
Any premium or other taxes levied by any governmental
entity with respect to the Contracts will be charged against
the purchase payments or Contract Value based on a percentage
of premiums paid. Premium taxes currently imposed by certain
states on the Contracts range from 0% to 3.5% of premiums
paid. (See "Charges and Deductions - Deduction for Premium
and Other Taxes" on page ___.)
"Other Expenses" are based upon the expenses outlined
under the section entitled "Management of the Fund" in the
Fund Prospectus.
<REDLINE>
*Fund operating expenses for the Growth and Income
Portfolio, before reimbursement by the Fund's investment
adviser, for the period ending December 31, 1995, were 0.91%.
Fund operating expenses for the following Portfolios, before
reimbursement by the relevant Fund's investment adviser, for
the period ending December 31, 1995, were estimated to be:
20.35% for the Conservative Investors; 41.62% for the Growth
Investors; 04.19% for the Growth; 0.71% for the High Income,
0.69% for the Growth; 0.27% for the Money Market; 0.92% for
the Overseas; 0.80% for the Asset Manager; 0.67% for the
Investment Grade Bond; 0.00% for the Zero Coupon; 0.40% for
the Dreyfus Stock Index; 0.96% for the Gold and Natural
Resources; and 78.40% for the Worldwide Balanced Portfolios,
of the average daily net assets. </REDLINE>
In the event that an Owner withdraws all or a portion of
the Contract Value in excess of the Free Withdrawal Amount for
the first withdrawal in a Contract Year, or makes subsequent
withdrawals in a Contract Year, a Deferred Sales Charge may be
imposed. The Free Withdrawal Amount is equal to 10% of the
Contract Value at the time of withdrawal. (See "Charges and
Deductions - Deduction for Deferred Sales Charge" on page
___.)
The Example should not be considered a representation of
past or future expenses and actual expenses may be greater or
less than those shown.
MMVA.171 12/12/9519
<PAGE>
CONDENSED FINANCIAL INFORMATION
ACCUMULATION UNIT VALUES*
1994 1993 1992
<REDLINE>
CONSERVATIVE INVESTORS
Accumulation Unit Value
Beginning of Period 10.00 N/A N/A
End of Period 10.02 N/A N/A
Accum Units o/s @ end of period 62,868.02 N/A N/A
</REDLINE>
GROWTH INVESTORS
Accumulation Unit Value 10.00 N/A N/A
Beginning of Period 9.81 N/A N/A
End of Period 29,492.78 N/A N/A
GROWTH
Accumulation Unit Value
Beginning of Period 10.00 N/A N/A
End of Period 10.48 N/A N/A
Accum Units o/s @ end of period 467,688.06 N/A N/A
GROWTH & INCOME
Accumulation Unit Value
Beginning of Period 11.88 10.78 10.00
End of Period 11.67 11.88 10.78
Accum Units o/s @ end of period 438,680.32 28,041.82 800.00
MMVA.171 12/12/9520
<PAGE>
*Funds were first invested in the Portfolios as listed below:
Conservative Investors Portfolio September 8,1994
Growth Investors Portfolio October 12, 1994
Growth (Alliance) Portfolio August 12, 1994
Growth and Income Portfolio April 17, 1992
<REDLINE>
No financial information has been provided for the Zero
Coupon 2000 Portfolio, Dreyfus Stock Index Portfolio, Money
Market Portfolio, Growth (Fidelity) Portfolio, Overseas
Portfolio, Asset Manager Portfolio, Investment Grade Bond
Portfolio, High Income Portfolio, Worldwide Balance Portfolio,
or Gold and Natural Resources Portfolio, because, as of the
date of this Prospectus, the Variable Account had not
commenced operations with respect to such
Portfolios.</REDLINE>
Calculation of Performance Data
The Company may, from time to time, advertise certain
performance related information concerning one or more of the
Sub-accounts, including information as to total return and
yield. Performance information about a Sub-account is based
on the Sub-account's past performance only and is not intended
as an indication of future performance.
When the Company advertises the average annual total return
of a Sub-account, it will usually be calculated for one, five,
and ten year periods or, where a Sub-account has been in
existence for a period less than one, five or ten years, for
such lesser period. Average annual total return is measured
by comparing the value of the investment in a Sub-account at
the beginning of the relevant period to the value of the
investment at the end of the period (assuming the deduction of
any Deferred Sales Charge which would be payable if the
account were redeemed at the end of the period) and
calculating the average annual compounded rate of return
necessary to produce the value of the investment at the end of
the period. The Company may simultaneously present returns
that do not assume a surrender and, therefore, do not deduct
the Deferred Sales Charge.
When the Company advertises the yield of a Sub-account it
will be calculated based upon a given 30-day period. The yield
is determined by dividing the net investment income earned per
Accumulation Unit during the period by the value of an
Accumulation Unit on the last day of the period.
When the Company advertises the performance of the Money
Market Sub-account it may advertise in addition to the total
return either the yield or the effective yield. The yield of
the Money Market Sub-account refers to the income generated by
MMVA.171 12/12/9521
<PAGE>
an investment in that Sub-account over a seven-day period.
The income is then annualized (i.e., the amount of income
generated by the investment during that week is assumed to be
generated each week over a 52-week period and is shown as a
percentage of the investment). The effective yield is
calculated similarly but when annualized the income earned by
an investment in the Money Market Sub-account is assumed to be
reinvested. The effective yield will be slightly higher than
the yield because of the compounding effect of this assumed
reinvestment during a 52-week period.
Total return at the Variable Account level is reduced by
all contract charges: sales charges, mortality and expense
risk charges, and the administrative charges, and is therefore
lower than the total return at a Fund level, which has no
comparable charges. Likewise, yield and effective yield at
the Variable Account level take into account all recurring
charges (except sales charges), and are therefore lower than
the yield and effective yield at a Fund level, which has no
comparable charges.
Performance information for a Sub-account may be compared
to: (i) the Standard & Poor's 500 Stock Index, Dow Jones
Industrial Average, Donoghue Money Market Institutional
Averages, indices measuring corporate bond and government
security prices as prepared by Shearson Lehman Hutton and
Salomon Brothers or other indices measuring performance of a
pertinent group of securities so that investors may compare a
Sub-account's results with those of a group of securities
widely regarded by investors as representative of the
securities markets in general; (ii) other variable annuity
separate accounts or other investment products tracked by
Lipper Analytical Services, a widely used independent research
firm which ranks mutual funds and other investment companies
by overall performance, investment objectives, and assets, or
tracked by other ratings services, companies, publications, or
persons who rank separate accounts or other investment
products on overall performance or other criteria; (iii) the
Consumer Price Index (measure for inflation) to assess the
real rate of return from an investment in the Contract; and
(iv) indices or averages of alternative financial products
available to prospective investors, including the Bank Rate
Monitor which monitors average returns of various bank
instruments.
Financial Data
Financial Statements of the Company may be found in the
Statement of Additional Information.
MMVA.171 12/12/9522
<PAGE>
THE COMPANY
The Company is a stock life insurance company which is
organized under the laws of the State of Delaware. The
Company provides a full range of life insurance and annuity
plans. The Company is a subsidiary of American International
Group, Inc., which serves as the holding company for a number
of companies engaged in the international insurance business,
both life and general, in over 130 countries and jurisdictions
around the world.
THE VARIABLE ACCOUNT
The Board of Directors of the Company adopted a resolution
to maintain the Variable Account pursuant to Delaware
insurance law. This segregated asset account has been
designated Variable Account I (the "Variable Account"). The
Company has caused the Variable Account to be registered with
the Securities and Exchange Commission as a unit investment
trust pursuant to the provisions of the Investment Company Act
of 1940.
The assets of the Variable Account are the property of the
Company. However, the assets of the Variable Account, equal
to the reserves and other contract liabilities with respect to
the Variable Account, are not chargeable with liabilities
arising out of any other business the Company may conduct.
Income, gains and losses, whether or not realized, are, in
accordance with the Contracts, credited to or charged against
the Variable Account without regard to other income, gains or
losses of the Company. The Company's obligations arising
under the Contracts are general corporate obligations of the
Company. The Variable Account may be subject to liabilities
arising from Sub-accounts whose assets are attributable to
other variable annuity contracts offered by the Variable
Account which are not described in this Prospectus.
<REDLINE>
The Variable Account is divided into Sub-accounts, with the
assets of each Sub-account invested in shares of a
corresponding portfolio of the available Funds. The Company
may, from time to time, add additional Portfolios of a Fund,
and, when appropriate, additional Funds to act as the funding
vehicles for the Contracts.
The Funds and The Investment Advisors
Alliance Funds, Fidelity Funds, Dreyfus Funds, and Van Eck
Funds (collectively, the "Funds") are each registered with the
SEC as a diversified open-end management investment company
under the 1940 Act. Each is made up of different series funds
or Portfolios ("Portfolios"). The Dreyfus Stock Index Fund
(also a "Fund" herein) is an open-end, non-diversified
MMVA.171 12/12/9523
<PAGE>
management investment company, intended to be a funding
vehicle for separate accounts of life insurance companies.
Shares of the Funds are sold to separate accounts of life
insurance companies. The investment objectives of each of the
Portfolios in which Subaccounts invest are set forth below.
There is, of course, no assurance that these objectives will
be met. The Fund prospectuses may include series or
Portfolios which are not available under this Contract.
<REDLINE>
ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.
Conservative Investors Portfolio
This Portfolio seeks the highest total return without undue
risk to principal by investing in a diversified mix of
publicly traded equity and fixed-income securities.
Growth Investors Portfolio
This Portfolio seeks the highest total reaturn available
with reasonable risk by investing in a diversified mix of
publicly traded equity and fixed-income securities.
Growth Portfolio
This Portfolio seeks the long term growth of capital by
investing primarily in comon stocks and other equity
securities.
Growth and Income Portfolio
This Portfolio seeks to balance the objectives of
reasonable current income and opportunities for appreciation
through investments primarily in dividend-paying common stocks
of good quality.
Alliance Variable Products Series Fund, Inc., is managed by
Alliance Capital Management L.P., ("Alliance"). The fund also
includes other portfolios which are not available for use by
the Separate Account. More detailed information regarding
management of the funds, investment objectives, investment
advisory fees and other charges, may be found in the current
Alliance Funds Prospectus which contains a discussion of the
risks involved in investing. The Alliance Funds Prospectus is
included with this Prospectus.
<REDLINE>
DREYFUS VARIABLE INVESTMENT FUND
Zero Coupon 2000 Portfolio
This Portfolio seeks to provide as high an investment
MMVA.171 12/12/9524
<PAGE>
return as is consistent with the preservation of capital.
This portfolio invests primarily in debt obligations of the
U.S. Treasury that have been stripped of their unmatured
interest coupons, interest coupons that have been stripped
from debt obligations issued by the U.S. Treasury, receipts
and certificates for such stripped debt obligations, and
stripped coupons and zero coupon securities issued by domestic
corporations. This portfolio's assets will consist primarily
of portfolio securities which will mature on or about December
31, 2000, at which time the portfolio will be liquidated.
Prior to December 31, 2000, you will be offered the
opportunity to exchange your investment to another Subaccount.
DREYFUS STOCK INDEX FUND
This Fund seeks to provide investment results that
correspond to the price and yield performance of publicly
traded common stocks in the aggregate, as represented by the
Standard & Poor's 500 Composite Stock Price Index. In
anticipation of taking a market position, the fund is
permitted to purchase and sell stock index futures. The Fund
is neither sponsored by nor affiliated with Standard & Poor's
Corporation.
The Dreyfus Corporation serves as the investment advisor
for the Zero Coupon 2000 Portfolio which is the available
portfolio of the Dreyfus Variable Investment Fund. The fund
also includes other portfolios which are not available under
this prospectus as funding vehicles for the Contract. Wells
Fargo Nikko Investment Advisers ("WFNIA") serves as the index
fund manager of the Dreyfus Stock Index Fund. More detailed
information regarding management of the funds, investment
objectives, investment advisory fees and other charges
assessed by the funds, are contained in the prospectuses of
the Dreyfus Variable Investment Fund and of the Dreyfus Stock
Index Fund, each of which is included with this Prospectus.
FIDELITY INVESTMENT VARIABLE INSURANCE PRODUCTS FUNDS
Growth Portfolio
This Portfolio seeks to aggressively achieve capital
appreciation through investments primarily in common stock.
High Income Portfolio
This Portfolio seeks to obtain a high level of current
income by investing primarily in high-yielding, high-risk,
lower-rated, fixed-income securities (commonly referred to as
"junk bonds"), while also considering growth of capital. The
potential for high yield is accompanied by higher risk. For a
MMVA.171 12/12/9525
<PAGE>
more detailed discussion of the investment risks associated
with such securities, please refer to the relevant Fund's
attached prospectus.
Overseas Portfolio
This Portfolio seeks the long-term growth of capital
primarily through investments in securities of companies and
economies outside the United States.
MMVA.171 12/12/9526
<PAGE>
Money Market Portfolio
This Portfolio seeks to obtain as high a level of current
income as is consistent with preserving capital and providing
liquidity. The fund will invest only in high quality U.S.
dollar-denominated money market securities of domestic and
foreign issuers. An investment in Money Market Portfolio is
neither insured nor guaranteed by the U.S. government, and
there can be no assurance that the fund will maintain a stable
$1.00 share price.
Asset Manager Portfolio
This Portfolio seeks to provide a high total return with
reduced risk over the long term by allocating its assets among
stocks, bonds and short-term income instruments.
Investment Grade Bond Portfolio
This Portfolio seeks as high a level of current income as
is consistent with the preservation of capital by investing in
a broad range of investment-grade fixed-income securities.
The Portfolio will maintain a dollar-weighted average
portfolio maturity of ten years or less.
Fidelity Management & Research Company ("FMR") is the
investment advisor for the Variable Insurance Products Funds.
FMR has entered into a sub-advisory agreement with FRM Texas,
Inc., on behalf of the Money Market Portfolio. On behalf of
the Overseas Portfolio, FMR has entered into sub-advisory
agreements with Fidelity Management & Research (U.K.) Inc.,
(FMR U.K.), Fidelity Management & Research (Far East) Inc.
(FMR Far East), and Fidelity International Investment Advisors
(FIIA). FMR U.K. and FMR Far East also are sub-advisors to
the Asset Manager Portfolio. Fidelity Funds include other
portfolios which are not available under this prospectus as
funding vehicles for the Contracts. More detailed information
regarding management of the funds, investment objectives,
investment advisory fees and other charges assesed by the
Fidelity Funds, are contained in the prospectuses of the
funds, included with this Prospectus.
VAN ECK WORLDWIDE INSURANCE TRUST
Worldwide Balanced Fund
This Portfolio seeks long term capital appreciation
together with current income by investing its assets in the
United States and other countries throughout the world, and by
allocating its assets among equity securities, fixed-income
securities and short-term instruments.
MMVA.171 12/12/9527
<PAGE>
Gold and Natural Resources Fund
This Portfolio seeks long-term capital appreciation by
investing in equity and debt securities of companies engaged
in the exploration, development, production and distribution
of gold and other natural resources, such as strategic and
other metals, minerals, forest products, oil, natural gas and
coal. Current income is not an investment objective.
Van Eck Associates Corporation is the investment advisor
and manager of The Van Eck Worldwide Insurance Trust ("Van Eck
Funds"). Van Eck Associates Corporation serves as investment
advisor to the Gold and Natural Resources Fund, and has
entered into sub-advisory agreements to provide investment
advice for certain portfolios. Fiduciary International Inc.
("FII") serves as a sub-advisor to the Worldwide Balanced
Fund. Van Eck Funds include other portfolios which are not
available under this prospectus as funding vehicles for the
Contracts. More detailed information regarding management of
the funds, investment objectives, investment advisory fees and
other charges assessed by the Van Eck Funds, are contained in
the prospectus for the funds included with this Prospectus.
There is no assurance that the investment of the Portfolios
will be met.
The shares of Alliance Funds, Fidelity Funds, Dreyfus Fund,
the Dreyfus Stock Index Fund, and Van Eck Funds are sold not
only to the Variable Account, but may be sold to other
separate accounts of the Company that fund benefits under
variable annuity and variable life policies. The shares of
the Funds are also sold to separate accounts of other
insurance companies. It is conceivable that in the future it
may become disadvantageous for variable life and variable
annuity separate accounts to invest in the same underlying
mutual fund. Although neither we nor Alliance Funds, Fidelity
Funds, Dreyfus Fund, the Dreyfus Stock Index Fund, and Van Eck
Funds currently perceive or anticipate any such disadvantage,
the Funds will monitor events to determine whether any
material conflict exists beteween variable annuity Owners and
variable life Owners.
Material conflicts could result from such occurrences as:
(1) changes in state insurance laws; (2) changes in federal
income tax law; (3) changes in the investment management of
any Fund; or (4) differences between voting instructions given
by variable annuity Owners and those given by variable life
Owners. In the event of a material irreconcilable conflict,
we will take the steps necessary to protect our variable
annuity and variable life Owners. This could include
discontinuance of investment in a Fund.
MMVA.171 12/12/9528
<PAGE>
Each Fund sells and redeems its shares at Net Asset Value
without any sales charge. Any dividends or distributions from
security transactions of a Fund are reinvested at Net Asset
Value in shares of the same Portfolio; however, there are
sales and additional charges associated with the purchase of
the Contracts.
Further information about the Funds and the managers is
contained in the accompanying prospectuses, which You should
read in conjunction with this prospectus. </REDLINE>
Substitution of Securities
If investment in a Subaccount should no longer be possible
or, if in Our judgment, becomes inappropriate to the purposes
of the Contracts, or, if in Our judgment, investment in
another Subaccount or separate account is in the interest of
Owners, We may substitute another Subaccount separate account.
No substitution may take place without notice to Owners and
prior approval of the SEC and insurance regulatory
authorities, to the 1940 Act and applicable law.
Voting Rights
The Funds do not hold regular meetings of shareholders.
The Directors of a Fund may call Special Meetings of
Shareholders for action by shareholder vote as may be required
by the Investment Company Act of 1940 or the Articles of
Incorporation of a Fund. In accordance with its view of
present applicable law, the Company will vote the shares of a
Fund held in the Variable Account at special meetings of the
shareholders of the Fund in accordance with instructions
received from persons having the voting interest in the
Variable Account. The Company will vote shares for which it
has not received instructions from Owners and those shares
which it owns in the same proportion as it votes shares for
which it has received instructions from Owners.
The number of shares which a person has a right to vote
will be determined as of a date to be chosen by the Company
not more than sixty (60) days prior to the meeting of a Fund.
Voting instructions will be solicited by written communication
at least fourteen (14) days prior to such meeting. The person
having such voting rights will be the Owner before the Annuity
Date, and thereafter, the payee entitled to receive payments
under the Contract. During the Annuity Period, voting rights
attributable to a Contract will generally decrease as the
Contract Value attributable to an Annuitant decreases.
The voting rights relate only to amounts invested in the
Variable Account. There are no voting rights with respect to
funds invested in the General Account.
MMVA.171 12/12/9529
<PAGE>
Allocation Of Purchase Payments to Sub-accounts
Purchase payments are allocated to the Sub-account(s)
selected by the Owner in the application except that in those
states which require the Company to deduct premium taxes upon
receipt of a purchase payment the Company will deduct the
premium tax prior to allocating the purchase payment to such
Sub-account(s). The selection must specify a percentage for
each Sub-account that is a whole number, and must be either 0%
or a number equal to or greater than 10%. At the time of the
allocation the purchase payment is divided by the value of the
Accumulation Unit for the particular Sub-account for the
Valuation Period during which such allocation occurs to
determine the number of Accumulation Units attributable to the
purchase payment.
The purchase payment under an IRA plan will be allocated to
the Money Market Sub-account until the expiration of twenty
(15) days from the day the Contract is mailed from the
Company's office. Thereafter, the Contract Value shall be
reallocated in accordance with instructions specified in the
application.
Transfer Of Contract Values
Before the Annuity Date, the Owner may transfer, by written
request or telephone authorization, Contract Values from one
Sub-account to another Sub-account, subject to the following
conditions:
(a) the amount transferred from any Sub-account must be at
least $1,000 (or the entire Sub-account value, if
less);
(b) if less than $1,000 would remain in the Sub-account
after the transfer, the Company will transfer the
entire amount in the Sub-account;
(c) the Company may reject any more than twelve (12)
transfer requests per Contract Year; and
(d) The Company will deduct any transfer charge assessed
on the transaction.
The Company is currently not assessing a transfer fee
for the first twelve (12) transfers per Contract Year.
The Company is assessing a transfer fee of $10 per
transfer thereafter. The Company may increase the
transfer fee to an amount not to exceed $30 per
transfer. The transfer fee will be deducted from
either the Sub-account which is the source of the
transfer or from the amount transferred if the entire
value in the Sub-account is transferred.
MMVA.171 12/12/9530
<PAGE>
Transfer by telephone is authorized by and described in the
application for the Contract. The Company will undertake
reasonable procedures to confirm that instructions
communicated by telephone are genuine. All calls will be
recorded. All transfers performed by telephone authorization
will be confirmed in writing to the Contract Owner. The
Company is not liable for any loss, cost, or expense for
action on telephone instructions which are believed to be
genuine in accordance with these procedures.
Transfer privileges are further explained in the Statement
of Additional Information.
After the Annuity Date, the payee of the annuity payments
may transfer the Contract Value allocated to the Variable
Account from one Sub-account to another Sub-account. However,
the Company reserves the right to refuse any more than one
transfer per month. The transfer fee is the same as before
the Annuity Date. This transfer fee will be deducted from the
next annuity payment after the transfer. If following the
transfer, the units remaining in the Sub-account would
generate a monthly payment of less than $100, then the Company
may transfer the entire amount in the Sub-account.
Once the transfer is effected, the Company will recompute
the number of Annuity Units for each Sub-account. The number
of Annuity Units for each Sub-account will remain the same for
the remainder of the payment period unless the payee requests
another change.
CHARGES AND DEDUCTIONS
Various charges and deductions are made from Contract
Values and the Variable Account. These charges and deductions
are as follows:
Deduction for Premium and Other Taxes
Any premium or other taxes levied by any governmental
entity with respect to the Contracts will be charged against
the purchase payment or Contract Value . Premium taxes
currently imposed by certain states on the Contracts range
from 0% to 3.5% of premiums paid. Some states assess premium
taxes at the time purchase payments are made; others assess
premium taxes at the time of annuitization. The Company
currently intends to advance any premium taxes due at the
time purchase payments are made and then deduct premium taxes
from the Contract Value at the time annuity payments begin or
upon surrender if the Company is unable to obtain refund of or
otherwise obtain a credit for any excess premium taxes paid.
The Company reserves the right to deduct premium taxes when
incurred. Premium taxes are subject to being changed or
MMVA.171 12/12/9531
<PAGE>
amended by state legislatures, administrative interpretations
or judicial acts.
The Company will also deduct from any amount payable under
the Contracts any income taxes a governmental authority
requires the Company to withhold with respect to that amount.
Deduction for Mortality and Expense Risk Charge
The Company deducts for each Valuation Period a Mortality
and Expense Risk Charge which is equal on an annual basis to
1.25% of the average daily net asset value of the Variable
Account (consisting of approximately .90% for mortality risks
and approximately .35% for expense risks). The mortality
risks assumed by the Company arise from its contractual
obligation to make annuity payments after the Annuity Date for
the life of the Annuitant, to waive the Deferred Sales Charge
in the event of the death of the Annuitant and to provide the
death benefit prior to the Annuity Date. The expense risk
assumed by the Company is that the costs of administering the
Contracts and the Variable Account will exceed the amount
received from any Administrative Charge.
If the Mortality and Expense Risk Charge is insufficient to
cover the actual costs, the loss will be borne by the Company.
Conversely, if the amount deducted proves more than
sufficient, the excess will be profit to the Company.
The Mortality and Expense Risk Charge is guaranteed by the
Company and cannot be increased.
The Mortality and Expense Risk Charge is deducted during
the Accumulation Period and after the Annuity Date.
The Company currently offers annuity payment options that
are based on a life contingency. (See "Annuity Period -
Annuity Options" on page ____.) It is possible that in the
future the Company may offer additional payment options which
are not based on a life contingency. If this should occur and
if a Owner should elect a payment option not based on a life
contingency, the Mortality and Expense Risk Charge is still
deducted but the Owner receives no benefit from it.
Deduction for Deferred Sales Charge
In the event that a Contract Owner withdraws all or a
portion of the Contract Value in excess of the Free Withdrawal
Amount for the first withdrawal in a Contract Year other than
by way of the Systematic Withdrawal Program, or makes
subsequent withdrawals in a Contract Year, a Deferred Sales
Charge may be imposed. The Free Withdrawal Amount is equal to
10% of the Contract Value at the time of withdrawal.
MMVA.171 12/12/9532
<PAGE>
The Deferred Sales Charge is deducted based upon a
percentage of the Contract Value which includes the purchase
payment and earnings. Since earnings are included it is
possible that the actual amount of the Deferred Sales Charge
may increase even though the percentage may go down.
The Deferred Sales Charge will vary in amount depending
upon the time which has elapsed since the Date of Issue. The
amount of any withdrawal which exceeds the Free Withdrawal
Amount will be subject to the following charge:
Applicable Deferred
Contract Year Sales Charge Percentage
1 6%
2 5%
3 4%
4 3%
5 2%
6 1%
7 and thereafter 0%
The aggregate Deferred Sales Charges paid with respect to a
Contract shall not exceed 8.5% of the purchase payment for
such Contract.
The Deferred Sales Charge is intended to reimburse the
Company for expenses incurred which are related to Contract
sales. The Company does not expect the proceeds from the
Deferred Sales Charge to cover all distribution costs. To the
extent such charge is insufficient to cover all distribution
costs, the Company may use any of its corporate assets,
including potential profit which may arise from the Mortality
and Expense Risk Charge, to make up any difference.
Certain restrictions on surrenders are imposed on Contracts
issued in connection with retirement plans which qualify under
Code Section 403(b) (a "403(b) Plan"). (See "Taxes - 403(b)
Plans" on page ___.)
Deduction for Administrative Charge
The Company deducts for each Valuation Period a daily
Administrative Charge which is equal on an annual basis to
.15% of the average daily net asset value of the Variable
Account. The Company also deducts an annual Administrative
Charge which is currently $30 per year, from the Contract
Value. The Company may increase the annual Administrative
Charge to an amount not to exceed $100 per year. The
Administrative Charges are designed to reimburse the Company
MMVA.171 12/12/9533
<PAGE>
for the costs it incurs relating to maintenance of the
Contract and the Variable Account. The Company will not
derive a profit from the Administrative Charge.
Prior to the Annuity Date, the annual Administrative Charge
is deducted from the Contract Value on each Contract
Anniversary. If the Annuity Date is a date other than a
Contract Anniversary, the Company will also deduct a pro-rata
portion of the annual Administrative Charge from the Contract
Value for the fraction of the Contract Year preceding the
Annuity Date.
The annual Administrative Charge is also deducted in full
on the date of any total withdrawal. The annual
Administrative Charge will be deducted from each Sub-account
of the Variable Account in the proportion that the value of
each Sub-account attributable to the Contract bears to the
total Contract Value.
After the Annuity Date, the annual Administrative Charge is
deducted on a pro-rata basis from each annuity payment and is
guaranteed to remain at the same amount as at the Annuity
Date.
Deduction for Income Taxes
The Company deducts from the Contract Value and/or the
Variable Account any Federal income taxes resulting from the
operation of the Variable Account. The Company does not
currently anticipate incurring any income taxes.
Other Expenses
There are deductions from and expenses paid out of the
assets of the Fund which are described in the accompanying
Prospectusus for the Funds.
<REDLINE>
ADMINISTRATION OF THE CONTRACTS
While the Company has primary responsibility for all
administration of the Contracts and the Variable Account, it
has retained the services of Delaware Valley Financial
Services, Inc. ("DVFS") pursuant to an administrative
agreement. Such administrative services include issuance of
the Contracts and maintenance of Contract Owners' records.
DVFS serves as the administrator to various insurance
companies offering variable contracts. </REDLINE>
RIGHTS UNDER THE CONTRACTS
The Owner has all rights and may receive all benefits under
the Contract. The Owner is named in the application.
MMVA.171 12/12/9534
<PAGE>
Ownership may be changed prior to the Annuity Date through
the submission of written notification of the change to the
Company on a form acceptable to the Company. On and after
the Annuity Date, the Annuitant and Owner shall be one in the
same person , unless otherwise provided for. In the case of
Contracts issued in connection with an IRA, the Owner must be
the Annuitant.
The Owner's spouse is the only person eligible to be the
Contingent Owner. (See "Death Benefit - Death of the Owner"
on page ___.) Any new choice of Annuitant or Contingent
Owner will automatically revoke any prior choices.
The Owner may, except in the case of a Contract issued in
connection with either an IRA or a 403(b) Plan, assign a
Contract at any time before the Annuity Date and while the
Annuitant is alive. A copy of any assignment must be filed
with the Company. The Company is not responsible for the
validity of any assignment. If the Contract is assigned, the
rights of the Owner and those of any revocable Beneficiary
will be subject to the assignment. An assignment will not
affect any payments the Company may make or action it may take
before it is recorded. Inasmuch as an assignment or change of
ownership may be a taxable event, Owners should consult
competent tax advisers should they wish to assign their
Contracts.
The Contract may be modified only with the consent of the
Owner, except as may be required by applicable law.
ANNUITY PERIOD
Annuity Benefits
If the Annuitant and Owner are alive on the Annuity Date,
the Company will begin making payments to the Annuitant under
the annuity option or options the Owner has chosen.
The Owner may choose or change an annuity payment option by
making a written request at least thirty (30) days prior to
the Annuity Date.
The amount of the payments will be determined by applying
the Contract Value on the Annuity Date. The amount of the
annuity payments will depend on the age of the payee at the
time the settlement contract is issued. At the Annuity Date
the Contract Value in each Sub-account will be applied to the
applicable annuity tables contained in the Contract. The
amount of the Sub-account annuity payments are determined
through a calculation described in the Section captioned
"Annuity Provisions" in the Statement of Additional
MMVA.171 12/12/9535
<PAGE>
Information.
Annuity Date
The Annuity Date for the Annuitant is:
(a) the first day of the calendar month following the
later of the Annuitant's 85th birthday or the 10th
Contract Anniversary; or
(b) such earlier date as may be set by applicable law.
The Owner may designate an earlier date in the application
or may change the Annuity Date by making a written request at
least thirty (30) days prior to the Annuity Date being
changed. However, any Annuity Date must be:
(a) no later than the date defined in (a) above; and
(b) the first day of a calendar month.
Annuity Options
The Owner may choose to receive annuity payments which are
fixed, or which are based on the Variable Account, or a
combination of the two. If the Owner elects annuity payments
which are based on the Variable Account, the amount of the
payments will be variable. The Owner may not transfer
Contract Values between the General Account and the Variable
Account after the Annuity Date, but may, subject to certain
conditions, transfer Contract Values from one Sub-account to
another Sub-account. (See "The Variable Account - Transfer
of Contract Values" on page ___.)
If the Owner has not made any annuity payment option
selection at the Annuity Date, the Contract Value will be
applied to purchase Option 2 fixed basis annuity payments and
Option 2 variable basis annuity payments, in proportion to the
amount of Contract Value in the General Account and the
Variable Account, respectively.
The annuity payment options are:
Option 1: Life Income. The Company will pay an annuity
during the lifetime of the payee.
Option 2: Life Income with 10 Years of Payments
Guaranteed. The Company will pay an annuity during the
lifetime of the payee. If, at the death of the payee,
payments have been made for less than 10 years:
(a) payments will be continued during the remainder of the
MMVA.171 12/12/9536
<PAGE>
period to the successor payee;
(b) the successor payee may elect to receive in a lump sum
the present value of the remaining payments, commuted
at the interest rate used to create the annuity factor
for this Option; or
(c) the guaranteed period will not in the case of
Contracts issued in connection with an IRA exceed the
life expectancy of the Annuitant at the time the first
payment is due.
Option 3: Joint and Last Survivor Income. The Company
will pay an annuity for as long as either the payee or a
designated second person is alive. In the event that the
Contract is issued in connection with an IRA, the payments in
this Option will be made only to the Annuitant and the
Annuitant's spouse.
The annuity payment options are more fully explained in the
Statement of Additional Information. The Company may also
offer additional options at its own discretion.
Annuity Payments
If the Contract Value applied to annuity payment options is
less than $2,000, the Company has the right to pay the amount
in a lump sum in lieu of annuity payments. The Company makes
all other annuity payments monthly. However, if the total
monthly annuity payment would be less than $100 the Company
has the right to make payments semi-annually or annually.
If fixed annuity payments are selected, the amount of each
fixed payment is determined by multiplying the Contract Value
allocated to purchase fixed annuity payments by the factor
shown in the annuity table specified in the Contract for the
option selected, divided by 1,000.
If variable annuity payments are selected, the Annuitant
receives the value of a fixed number of Annuity Units each
month. The actual dollar amount of variable annuity payments
is dependent upon: (i) the Contract Value at the time of
annuitization; (ii) the annuity table specified in the
Contract; (iii) the Annuity Option selected; (iv) the
investment performance of the Sub-account selected; and (v)
the pro-rata portion of the annual Administrative charge.
The annuity tables contained in the Contract are based on a
5% assumed investment rate. If the actual net investment rate
exceeds 5%, payments will increase. Conversely, if the actual
rate is less than 5%, annuity payments will decrease.
MMVA.171 12/12/9537
<PAGE>
DEATH BENEFIT
Death Benefit
If the Annuitant (or Owner, if applicable) dies before the
Annuity Date, the Company will pay a death benefit equal to
the greater of: (a) the purchase payments paid less
withdrawals; (b) the Contract Value; or, (c) the greatest
Contract Value at any sixth contract anniversary increment
(i.e., sixth, twelfth, eighteenth, etc.) less any subsequent
withdrawals. However, in North Carolina the Company will pay
a death benefit equal to the greater of (a) or (b) only.
Before the Company will pay any death benefit, the Company
will require due proof of death. The Company will determine
the value of the death benefit as of the Valuation Period
following receipt of due proof of death at the Company's
Office. The Company will pay the death benefit to the
Beneficiary in accordance with any applicable laws governing
the payment of death proceeds.
Payment of the death benefit may be made in one lump sum or
applied under one of the annuity payment options. (See
"Annuity Period - Annuity Options" on page ___.) The Contract
Owner may by written request elect that any death benefit of
at least $2,000 be received by the Beneficiary under an
annuity payment option. (See "Annuity Period - Annuity
Options" on page .) The Contract Owner may choose or change
a payment option at any time prior to the Annuitant's death.
If at the time the Annuitant dies, the Contract Owner has made
no request for a payment option, the Beneficiary has sixty
(60) days in which to make a written request to elect either a
lump sum payment or any annuity payment option. Any lump sum
payment will be made within seven (7) days after the Company
has received due proof of death and the written election of
the Beneficiary, unless a delay of payments provision is in
effect. (See Statement of Additional Information - "General
Information - Delay of Payments.")
In the event that the Annuitant and the Contract Owner are
the same individual, the death of that individual will be
treated by the Company as the death of the Annuitant.
Death of the Owner
If an Owner dies before the Annuity Date, the entire
Contract Value must be distributed within five (5) years of
the date of death, unless:
(a) it is payable over the lifetime of a designated
Beneficiary with distributions beginning within one
(1) year of the date of death; or
MMVA.171 12/12/9538
<PAGE>
(b) the Contingent Owner, if any, continues the Contract
in his or her own name.
In the case of Contracts issued in connection with an IRA
plan, the Beneficiary or Contingent Owner may elect to
accelerate these payments. Any method of acceleration chosen
must be approved by the Company.
If the Owner dies after the Annuity Date, distribution will
be as provided in the annuity payment option selected.
PURCHASING A CONTRACT
Application
In order to acquire a Contract, an application provided by
the Company must be completed and submitted to the Company for
acceptance. The Company must also receive the purchase
payment. Upon acceptance, the Contract is issued to the Owner
and the purchase payment is then credited to the Variable
Account and converted into Accumulation Units, except in those
states where the applicable premium tax is deducted from the
purchase payment. (See Allocation of Purchase Payment to
Sub-accounts" on page ___ .) If the application for a
Contract is in good order, the Company will apply the purchase
payment to the Variable Account and credit the Contract with
Accumulation Units within two (2) business days of receipt.
In addition to the underwriting requirements of the Company,
good order means that the Company has received federal funds
(monies credited to a bank's account with its regional Federal
Reserve Bank). If the application for a Contract is not in
good order, the Company will attempt to get it in good order
within five (5) business days or the Company will return the
application and the purchase payment, unless the prospective
owner specifically consents to the Company's retaining them
until the application is made complete.
Minimum Purchase Payment
The Contracts are offered on a single purchase payment
basis. The minimum purchase payment the Company will accept
is $5,000.
Distributor
AIG Equity Sales Corp. ("AESC"), formerly known as American
International Fund Distributors, Inc., 80 Pine Street, New
York, New York, acts as the distributor of the Contracts.
AESC is a wholly-owned subsidiary of American International
Group, Inc. and an affiliate of the Company.
Commissions will be paid to registered representatives of
MMVA.171 12/12/9539
<PAGE>
AESC and other entities which sell the Contracts. Additional
payments may be made for other services not directly related
to the sale of the Contracts, including the recruitment and
training of personnel, production of promotional literature,
and similar services.
Under the Glass-Steagall Act and other laws, certain
banking institutions may be prohibited from distributing
variable annuity contracts. If a bank were prohibited from
performing certain agency or administrative services and
receiving fees from AESC, Owners who purchased Contracts
through the bank would be permitted to retain their Contracts
and alternate means for servicing those Owners would be
sought. It is not expected, however, that Owners would suffer
any loss of services or adverse financial consequences as a
result of any of these occurrences.
CONTRACT VALUE
The Contract Value is the sum of the value of all
Sub-account Accumulation Units attributable to the Contract
and amounts contributed to a guarantee period of the General
Account. (See "Appendix-General Account Option"). The value
of an Accumulation Unit will vary from Valuation Period to
Valuation Period. The value of an Accumulation Unit is
determined at the end of the Valuation Period and reflects the
investment earnings, or loss, and the deductions for the
Valuation Period.
WITHDRAWALS
Partial Withdrawal
The Owner may partially withdraw Contract Values from the
Contract prior to the Annuity Date. Any partial withdrawal is
subject to the following conditions:
(a) the Company must receive a written request;
(b) the amount requested must be at least $500;
(c) any applicable Deferred Sales Charge will be deducted;
(d) the amount withdrawn will be the sum of the amount
requested and the amount of any applicable Deferred
Sales Charge; and
(e) the Company will deduct the amount requested plus any
Deferred Sales Charge from each Sub-account of the
Variable Account either as specified or in the
proportion that the Sub-account bears to the total
MMVA.171 12/12/9540
<PAGE>
Contract Value.
Systematic Withdrawal Program
During the Accumulation Period an Owner may at any time
elect in writing to take systematic withdrawals from one or
more of the Sub-accounts for a period of time not to exceed 12
months. In order to initiate this program, the amount to be
systematically withdrawn must be equal to or greater than $200
provided that the Contract Value is equal to or greater than
$24,000 and the amount to be withdrawn does not exceed the
Free Withdrawal Amount. Systematic withdrawals will be made
without the imposition of the Deferred Sales Charge.
Systematic withdrawals may occur monthly or quarterly.
The systematic withdrawal program may be cancelled at any
time by written request or automatically should the Contract
Value fall below $1,000. In the event the systematic
withdrawal program is cancelled, the Owner may not elect to
participate in such program until the next Contract
Anniversary.
An Owner may change once per Contract Year the amount or
frequency subject to be withdrawn on a systematic basis.
The systematic withdrawal program is annually renewable,
although the limitations set forth above shall continue to
apply.
The Free Withdrawal Amount (see "Charges and Deductions -
Deduction for Deferred Sales Charge" on page ) and Dollar
Cost Averaging (See Statement of Additional Information-
"General Information- Transfers") are not available while a
Owner is receiving systematic withdrawals. A Owner will be
entitled to the Free Withdrawal Amount and Dollar Cost
Averaging on and after the Contract Anniversary next following
the termination of the systematic withdrawal program.
Implementation of the systematic withdrawal program may
subject a Owner to adverse tax consequences, including a 10%
tax penalty tax. (See "Taxes - Taxation of Annuities in
General" on page ___ for a discussion of the tax consequences
of withdrawals.)
Total Withdrawal
The Owner may withdraw the entire Contract Value prior to
the Annuity Date. A total withdrawal will cancel the
Contract. The total withdrawal value is equal to the Contract
Value next calculated after receipt of the written withdrawal
request, less any applicable Deferred Sales Charge, less the
annual Administrative Charge and less any applicable premium
MMVA.171 12/12/9541
<PAGE>
taxes, and, less any applicable charges assessed to amounts in
the General Account. (See "Charges and Deductions" on page
.)
Payment of Withdrawals
Any Contract Values withdrawn will be sent to the Owner
within seven (7) days of receipt of the written request,
unless the Delay of Payments provision is in effect. (See
Statement of Additional Information - "General Information -
Delay of Payments.") (See "Taxes - Taxation of Annuities in
General" on page ___ for a discussion of the tax consequences
of withdrawals.)
The Company reserves the right to ensure that a Owner's
check or other form of purchase payment has been cleared for
payment prior to processing any withdrawal or redemption
request occurring shortly after a purchase payment.
Certain restrictions on withdrawals are imposed on
Contracts issued in connection with 403(b) Plans. (See "Taxes
- 403(b) Plans" on page ___.)
TAXES
Introduction
The Contracts are designed to accumulate Contract Values
with retirement plans which, except for IRAs and 403(b) Plans,
are generally not tax-qualified plans ("Qualified Plans").
The ultimate effect of Federal income taxes on the amounts
held under a Contract, on annuity payments, and on the
economic benefits to the Owner, Annuitant or Beneficiary
depend on the Company's tax status and upon the tax and
employment status of the individual concerned. Accordingly,
each potential Owner should consult a competent tax adviser
regarding the tax consequences of purchasing a Contract.
The following discussion is general in nature and is not
intended as tax advice. No attempt is made to consider any
applicable state or other tax laws. Moreover, the discussion
is based upon the Company's understanding of the Federal
income tax laws as they are currently interpreted. No
representation is made regarding the likelihood of
continuation of the Federal income tax laws, the Treasury
Regulations, or the current interpretations by the Internal
Revenue Service (the "Service"). For a discussion of Federal
income taxes as they relate to the Fund, please see the
accompanying Prospectus for the Fund.
Company Tax Status
MMVA.171 12/12/9542
<PAGE>
The Company is taxed as a life insurance company under Part
I of Subchapter L of the Internal Revenue Code of 1986, as
amended (the "Code"). Since the Variable Account is not a
separate entity from the Company and its operations form a
part of the Company, it will not be taxed separately as a
"regulated investment company" under Subchapter M of the Code.
Investment income and realized capital gains on the assets of
the Variable Account are reinvested and taken into account in
determining the Contract Value. Under existing Federal income
tax law, the Variable Account's investment income, including
realized net capital gains, is not taxed to the Company. The
Company reserves the right to make a deduction for taxes from
the assets of the Variable Account should they be imposed with
respect to such items in the future.
Taxation of Annuities in General - Non-Qualified Plans
Code Section 72 governs the taxation of annuities. In
general, a Owner is not taxed on increases in value under a
Contract until some form of withdrawal or distribution is made
under the Contract. However, under certain circumstances, the
increase in value may be subject to tax currently. (See
"Taxes - Contracts Owned by Non-Natural Persons," on page
and "Taxes - Diversification Standards" on page____.)
Withdrawals prior to the Annuity Date
Code Section 72 provides that a total or partial withdrawal
from a Contract prior to the Annuity Date will be treated as
taxable income to the extent the amounts held under the
Contract exceed the "investment in the contract," as that term
is defined under the Code. The "investment in the contract"
can generally be described as the cost of the Contract. It
generally constitutes the sum of all purchase payments made
for the contract less any amounts received under the Contract
that are excluded from gross income. The taxable portion is
taxed as ordinary income. For purposes of this rule, a pledge
or assignment of a Contract is treated as a payment received
on account of a partial withdrawal of a Contract.
Withdrawals on or after the Annuity Date
Upon receipt of a lump sum payment or an annuity payment
under the Contract, the recipient is taxed on the portion of
the payment that exceeds the investment in the Contract.
Ordinarily, the taxable portion of payments under the Contract
will be taxed as ordinary income.
For fixed annuity payments, the taxable portion of each
payment is generally determined by using a formula known as
the "exclusion ratio", which establishes the ratio that the
investment in the Contract bears to the total expected amount
MMVA.171 12/12/9543
<PAGE>
of annuity payments for the term of the Contract. That ratio
is then applied to each payment to determine the nontaxable
portion of the payment. The remaining portion of each payment
is taxed as ordinary income. For variable annuity payments,
the taxable portion is determined by a formula which
establishes a specific dollar amount of each payment that is
not taxed. The dollar amount is determined by dividing the
investment in the Contract by the total number of expected
periodic payments. The remaining portion of each payment is
taxed as ordinary income.
The Company is obligated to withhold Federal income taxes
from certain payments unless the recipient elects otherwise.
Prior to the first payment, the Company will notify the payee
of the right to elect out of withholding and will furnish a
form on which the election may be made. The payee must
properly notify the Company of that election in advance of the
payment in order to avoid withholding.
Penalty Tax on Certain Withdrawals
With respect to amounts withdrawn or distributed before the
taxpayer reaches age 59 1/2, a 10% penalty tax is imposed upon
the portion of such amount which is includable in gross
income. However, the penalty tax will not apply to
withdrawals: (i) made on or after the death of the Owner (or
where the Owner is not an individual, the death of the
"primary annuitant", who is defined as the individual, the
events in the life of whom are of primary importance in
affecting the timing or amount of the payout under the
Contract); (ii) attributable to the taxpayer's becoming
totally disabled within the meaning of Code Section 72(m)(7);
(iii) which are part of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the taxpayer, or the joint
lives (or joint life expectancies) of the taxpayer and his
beneficiary; (iv) allocable to investment in the Contract
before August 14, 1982; (v) under a qualified funding asset
(as defined in Code Section 130(d)); (vi) under an immediate
annuity contract; or (vii) that are purchased by an employer
on termination of certain types of qualified plans and which
are held by the employer until the employee separates from
service.
If the penalty tax does not apply to a withdrawal as a
result of the application of item (iii) above, and the series
of payments are subsequently modified (other than by reason of
death or disability), the tax for the first year in which the
modification occurs will be increased by an amount equal to
the tax that would have been imposed but for item (iii) above
as determined under Treasury Regulations, plus interest for
MMVA.171 12/12/9544
<PAGE>
the deferral period. The foregoing rule applies if the
modification takes place: (a) before the close of the period
which is five years from the date of the first payment and
after the taxpayer attains age 59 1/2; or (b) before the taxpayer
reaches age 59 1/2.
Assignments
Any assignment or pledge of the Contract as collateral for
a loan may result in a taxable event and the excess of the
Contract Value over purchase payments will be taxed to the
assignor as ordinary income. Please consult your tax adviser
prior to making an assignment of the Contract.
Distribution-at-Death Rules
In order to be treated as an annuity contract for Federal
income tax purposes, a Contract must generally provide for the
following two distribution rules: (i) if the Owner dies on or
after the Annuity Date, and before the entire interest in the
Contract has been distributed, the remaining portion of such
interest will be distributed at least as quickly as the method
in effect on the Owner's death; and (ii) if a Owner dies
before the Annuity Date, the entire interest must generally be
distributed within five years after the date of death. To the
extent such interest is payable to a designated Beneficiary,
however, such interest may be annuitized over the life of that
Beneficiary or over a period not extending beyond the life
expectancy of that Beneficiary, so long as distributions
commence within one year after the date of death. If the
Beneficiary is the spouse of the Owner, the Contract may be
continued unchanged in the name of the spouse as Owner.
If the Owner is not an individual, the "primary annuitant"
(as defined under the Code) is considered the Owner. In
addition, when the Owner is not an individual, a change in the
primary annuitant is treated as the death of the Owner.
Gifts of Contracts
Any transfer of a Contract prior to the Annuity Date for
less than full and adequate consideration will generally
trigger tax on the gain in the Contract. The transferee will
receive a step-up in basis for the amount included in the
transferor's income. This provision, however, does not apply
to those transfers between spouses or incident to a divorce
which are governed by Code Section 1041(a).
Contracts Owned by Non-Natural Persons
If the Contract is held by a non-natural person (for
example, a corporation or trust) the Contract is generally not
MMVA.171 12/12/9545
<PAGE>
treated as an annuity contract for Federal income tax
purposes, and the income on the Contract (generally the excess
of the Contract Value over the purchase payments) is
includable in income each year. The rule does not apply where
the non-natural person is only the nominal owner such as a
trust or other entity acting as an agent for a natural person.
The rule also does not apply when the Contract is acquired by
the estate of a decedent, when the Contract is held under
certain qualified plans, when the Contract is a qualified
funding asset for structured settlements, when the Contract is
purchased on behalf of an employee upon termination of a
qualified plan, and in the case of an immediate annuity.
Section 1035 Exchanges
Code Section 1035 provides that no gain or loss shall be
recognized on the exchange of an annuity contract for another
annuity contract. A replacement contract obtained in a
tax-free exchange of contracts succeeds to the status of the
surrendered contract. Special rules and procedures apply to
Code Section 1035 transactions. Prospective owners wishing to
take advantage of Code Section 1035 should consult their tax
advisers.
Multiple Contracts
Annuity contracts that are issued by the same company (or
affiliate) to the same Owner during any calendar year will be
treated as one annuity contract in determining the amount
includable in the taxpayer's gross income. Thus, any amount
received under any such contract prior to the contract's
annuity starting date will be taxable (and possibly subject to
the 10% penalty tax) to the extent of the combined income in
all such contracts. The Treasury has broad regulatory
authority to prevent avoidance of the purposes of this
aggregation rule. It is possible that, under this authority,
Treasury may apply this rule to amounts that are paid as
annuities (on or after the starting date) under annuity
contracts issued by the same company to the same Owner during
any calendar year period. In this case, annuity payments
could be fully taxable (and possibly subject to the 10%
penalty tax) to the extent of the combined income in all such
contracts and regardless of whether any amount would otherwise
have been excluded from income. Owners should consult a tax
adviser before purchasing more than one Contract or other
annuity contracts.
Diversification Standards
To comply with the diversification regulations promulgated
under Code Section 817(h) (the "Diversification Regulations"),
after a start-up period, each Sub-account is required to
MMVA.171 12/12/9546
<PAGE>
diversify its investments. The Diversification Regulations
generally require that on the last day of each quarter of a
calendar year no more than 55% of the value of the assets of a
Sub-account is represented by any one investment, no more than
70% is represented by any two investments, no more than 80% is
represented by any three investments, and no more than 90% is
represented by any four investments. A "look-through" rule
applies so that an investment in the Fund is not treated as
one investment but is treated as an investment in a pro-rata
portion of each underlying asset of the Fund. All securities
of the same issuer are treated as a single investment. In the
case of government securities, each Government agency or
instrumentality is treated as a separate issuer.
In connection with the issuance of the proposed and
temporary version of the Diversification Regulations,
Treasury announced that such regulations do not provide
guidance concerning the extent to which Owners may direct
their investments to particular divisions of a separate
account. It is possible that if and when additional
regulations or IRS pronouncements are issued, the Contract may
need to be modified to comply with such rules. For these
reasons, the Company reserves the right to modify the
Contract, as necessary, to prevent the Owner from being
considered the owner of the assets of the Variable Account.
The Company intends to comply with the Diversification
Regulations to assure that the Contracts continue to be
treated as annuity contracts for Federal income tax purposes.
Qualified Plans
The Contracts may be used to create an IRA. The Contracts
are also available for use in connection with a previously
established 403(b) Plan. No attempt is made herein to provide
more than general information about the use of the Contracts
with IRAs or 403(b) Plans. The information herein is not
intended as tax advice. A prospective Owner considering use
of the Contract to create an IRA or in connection with a
403(b) Plan should first consult a competent tax adviser with
regard to the suitability of the Contract as an investment
vehicle for their qualified plan.
While the Contract will not be available in connection with
retirement plans designed by the Company which qualify for the
federal tax advantages available under Sections 401 and 457 of
the Code, a Contract can be used as the investment medium for
an individual Owner's separately qualified retirement plan.
Under amendments to the Internal Revenue Code which became
effective in 1993, distributions for a qualified plan (other
MMVA.171 12/12/9547
<PAGE>
than non-taxable distributions representing a return of
capital, distributions meeting the minimum distribution
requirement, distributions for the life or life expectancy of
the recipient(s) or distributions that are made over a period
of more than 10 years) are eligible for tax-free rollover
within 60 days of the date of distribution, but are also
subject to federal income tax withholding at a 20% rate unless
paid directly to another qualified plan. If the recipient is
unable to take full advantage of the tax-free rollover
provisions, there may be taxable income, and the imposition of
a 10% penalty if the recipient is under age 59 1/2. A
prospective Owner considering use of the Contract in this
manner should consult a competent tax adviser with regard to
the suitability of the Contract for this purpose and for
information concerning the provisions of the Code applicable
to qualified plans.
Individual Retirement Annuities
Section 408 of the Code permits eligible individuals to
contribute to an IRA. Contracts issued in connection with an
IRA are subject to limitations on eligibility, maximum
contributions, and time of distribution. Distributions from
certain retirement plans qualifying for federal tax advantages
may be rolled over into an IRA. Sales of the Contracts for
use with IRAs are subject to special requirements imposed by
the Service, including the requirement that informational
disclosure be given to each person desiring to establish an
IRA. The IRAs offered by this Prospectus are not available in
all states.
403(b) Plans
Code Section 403(b)(11) imposes certain restrictions on a
Owner's ability to make partial withdrawals from Code Section
403(b) Contracts, if attributable to purchase payments made
under a salary reduction agreement. Specifically, Code
Section 403(b)(11) allows a Owner to make a surrender or
partial withdrawal only (a) when the employee attains age 59
1/2, separates from service, dies, or becomes disabled (as
defined in the Code), or (b) in the case of hardship. In the
case of hardship, only an amount equal to the purchase
payments may be withdrawn. In addition, under Code Section
403(b) the employer must comply with certain
non-discrimination requirements. Owners should consult their
employers to determine whether the employer has complied with
these rules. The 403(b) Plan offered by this Prospectus is
not available in all states.
MMVA.171 12/12/9548
<PAGE>
APPENDIX
GENERAL ACCOUNT OPTION
Under the General Account option, Contract Values are held
in the Company's General Account. Because of exemptive and
exclusionary provisions, interests in the General Account have
not been registered under the Securities Act of 1933 nor is
the General Account registered as an investment company under
the Investment Company Act of 1940. The Company understands
that the staff of the Securities and Exchange Commission has
not reviewed the disclosures in this Prospectus relating to
the General Account portion of the Contract. Disclosures
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. The General Account option
is not available in all states.
Contract Owners may elect to allocate amounts to the
General Account provided that the Contract Owner specifies a
percentage that is a whole number and is equal to 0 or equal
to or greater than 10%. Contract Owners may also transfer
amounts to the General Account. Amounts allocated or
transferred to the General Account are credited with interest
on a daily basis at the then applicable effective guarantee
rate. The effective guarantee rate is that rate declared for
the calendar month in which amounts are allocated or
transferred to the General Account. Therefore, if the
Contract Owner has allocated or transferred amounts at
different times to the General Account, each allocation or
transfer may have a unique effective guarantee rate and
guarantee period associated with that amount. The Company
guarantees that the effective guarantee rate will not be
changed more than once per year and will not be less than 4%
per annum.
The Contract Owner may transfer amounts to the General
Account prior to the Annuity Date by written request or
telephone authorization. However, no more than four transfers
may be made to the General Account per Contract Year and the
amount transferred to the General Account must be at least 25%
of the Contract Value, or the entire amount in the Variable
Account, if less. (See "Alliance Variable Products Series
Fund, Inc. - Transfer of Contract Values" on page .)
The Contract Owner may transfer amounts out of the General
Account only at the end of the guarantee period associated
with that amount. Prior to the end of the guarantee period
the Contract Owner may specify the Sub-accounts of the
Variable Account to which the Contract Owner wants amounts
MMVA.171 12/12/9549
<PAGE>
transferred. If the Contract Owner does not notify the
Company prior to the end of the guarantee period, the Company
will apply that amount to a new guarantee period in the
General Account, which is then subject to the same conditions
as the original guarantee period. The guarantee rate
associated with the new guarantee period may be different from
the effective guarantee rate applicable to the previous
guarantee period. These transfers will be handled at no
charge to the Contract Owner. All other provisions which
apply to transfers among the Sub-accounts (See "Alliance
Variable Products Series Fund, Inc. - Transfer of Contract
Values" on page ___) and which do not conflict with the
provisions set forth above will continue to apply.
Contract Owners may not make a partial withdrawal from the
General Account prior to the Annuity Date unless:
(a) all of the Contract Owner's funds are in the General
Account; or
(b) the Contract Owner does not specify from which funds
the partial withdrawal is to be deducted. In that
event, the Company will deduct the amount from each
Sub-account of the Variable Account and each amount
allocated to each guarantee period of the General
Account in the proportion that each bears to the
Contract Value.
The Deferred Sales Charge (See "Charges and Deductions -
Deduction for Deferred Sales Charge" on page ___) will be
deducted from the Sub-accounts of the Variable Account and
from each amount allocated to each guarantee period of the
General Account in the proportion that the withdrawal was made
from these accounts.
The annual Administrative Charge (See "Charges and
Deductions - Deductions for Administrative Charge" on page
___) and Premium Taxes, if applicable, (See "Charges and
Deductions - Deduction for Premium and Other Taxes" on page
___) will be deducted proportionately from each Sub-account of
the Variable Account and from each amount in each guarantee
period of the General Account.
If the Contract Owner has not made any annuity option
selection at the Annuity Date, the Contract Value will be
applied to purchase Option 2 fixed basis annuity payments and
Option 2 variable basis annuity payments, in proportion to the
amount of Contract Value in the General Account and the
Variable Account, respectively. (See "Annuity Period - Annuity
Options" on page ___.)
MMVA.171 12/12/9550
<PAGE>
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
Page
General Information
The Company
Independent Accountants
Legal Counsel
Distributor
Calculation of Performance Related Information
Delay of Payments
Transfers
Method of Determining Contract Values
Annuity Provisions
Annuity Benefits
Annuity Options
Variable Annuity Payment Values
Annuity Unit
Net Investment Factor
Additional Provisions
Financial Statements
MMVA.171 12/12/9551
<PAGE>
PART B
STATEMENT OF ADDITIONAL INFORMATION
DEFERRED VARIABLE ANNUITY CONTRACTS
issued by
VARIABLE ACCOUNT I
and
AIG LIFE INSURANCE COMPANY
THIS IS NOT A PROSPECTUS. THIS STATEMENT OF ADDITIONAL
INFORMATION SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS
FOR THE DEFERRED VARIABLE ANNUITY CONTRACTS WHICH ARE REFERRED
TO HEREIN.
THE PROSPECTUS CONCISELY SETS FORTH INFORMATION THAT A
PROSPECTIVE INVESTOR OUGHT TO KNOW BEFORE INVESTING. FOR A
COPY OF THE PROSPECTUS DATED ____, CALL OR WRITE: AIG Life
Insurance Company; Attention: Variable Products, One Alico
Plaza, 600 King Street, P.O. Box 8718, Wilmington, Delaware
19899, 1-800-340-2765.
<REDLINE>
DATE OF STATEMENT OF ADDITIONAL INFORMATION: __________ __,
1996. </REDLINE>
MMVA.171 12/12/9552
<PAGE>
TABLE OF CONTENTS
PAGE
General Information
The Company
Independent Accountants
Legal Counsel
Distributor
Calculation of Performance Related Information
Delay of Payments
Transfers
Method of Determining Contract Values
Annuity Provisions
Annuity Benefits
Annuity Options
Variable Annuity Payment Values
Annuity Unit
Net Investment Factor
Additional Provisions
Financial Statements
MMVA.171 12/12/9553
<PAGE>
GENERAL INFORMATION
The Company
A description of AIG Life Insurance Company (the
"Company"), and its ownership is contained in the Prospectus.
The Company will provide for the safekeeping of the assets of
the Variable Account I.
Independent Accountants
The audited financial statements of the Company have been
audited by Coopers and Lybrand, independent certified public
accountants, whose offices are located in Philadelphia,
Pennsylvania.
<REDLINE>
Legal Counsel
Legal matters relating to the Federal securities laws in
connection with the Contracts described herein and in the
Prospectus are being passed upon by the law firm of Jorden
Burt Berenson & Johnson LLP, Washington, D.C.</REDLINE>
Distributor
AIG Equity Sales Corp. ("AESC"), formerly known as American
International Fund Distributors, Inc., a wholly owned
subsidiary of American International Group, Inc. and an
affiliate of the Company, acts as the distributor. The
offering is on a continuous basis. Commissions in the amount
of $2,647,001 were paid during 1994, none of which were
retained by the Distributor.
Calculation Of Performance Related Information
A. Yield and Effective Yield Quotations for the Money
Market Sub-account
The yield quotation for the Money Market Sub-account to be
set forth in the Prospectus will be for a given seven day
period, and will be computed by determining the net change,
exclusive of capital changes, in the value of a hypothetical
pre-existing account having a balance of one Accumulation Unit
in the Money Market Sub-account at the beginning of the
period, subtracting a hypothetical charge reflecting
deductions from Owner accounts, and dividing the difference by
the value of the account at the beginning of the base period
to obtain the base period return, and multiplying the base
period return by (365/7) with the resulting figure carried to
at least the nearest hundredth of one percent.
Any effective yield quotation for the Money Market
Sub-account to be set forth in the Prospectus will be for a
MMVA.171 12/12/9554
<PAGE>
given seven day period, carried at least to the nearest
hundredth of one percent, and will be computed by determining
the net change, exclusive of capital changes, in the value of
a hypothetical pre-existing account having a balance of one
Accumulation Unit in the Money Market Sub-account at the
beginning of the period, subtracting a hypothetical charge
reflecting deductions from Owner accounts, and dividing the
difference by the value of the account at the beginning of the
base period to obtain the base period return, and then
compounding the base period return by adding 1, raising the
sum to a power equal to 365 divided by 7 and subtracting 1
from the result, according to the following formula:
EFFECTIVE YIELD = [(BASE PERIOD RETURN + 1)365/7]-1.
For purposes of the yield and effective yield computations,
the hypothetical charge reflects all deductions that are
charged to all Owner accounts in proportion to the length of
the base period. For any fees that vary with the size of the
account, the account size is assumed to be the Money Market
Sub-account's mean account size. The yield and effective
yield quotations do not reflect the Deferred Sales Charge that
may be assessed at the time of withdrawal in an amount ranging
up to 6% of the purchase payments withdrawn, with the specific
percentage applicable to a particular withdrawal depending on
the length of time the purchase payment was held under the
Contract and whether withdrawals had been previously made
during that Contract Year. (See "Charges and Deductions -
Deduction for Deferred Sales Charge" on page ___ of the
Prospectus) No deductions or sales loads are assessed upon
annuitization under the Contracts. Realized gains and losses
from the sale of securities and unrealized appreciation and
depreciation of the Money Market Sub-account and the Fund are
excluded from the calculation of yield.
<REDLINE>
B. Standardized Total Return Quotations
The standardized total return quotations for all of the
Sub-accounts will be average annual total return quotations
for the one, five, and ten year periods (or, where a
Sub-account has been in existence for a period of less than
one, five or ten years, for such lesser period) ended on a
given date, and for the period from the date monies were first
placed into the Sub-accounts until the aforesaid date. The
quotations are computed by finding the average annual
compounded rates of return over the relevant periods that
would equate the initial amount invested to the ending
redeemable value, according to the following formula:
</REDLINE>
MMVA.171 12/12/9555
<PAGE>
P(1+T)n = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a
hypothetical $1,000 payment made at the
beginning of the particular period at the
end of the particular period.
For the purposes of the total return quotations for all of
the Sub-accounts, the calculations take into effect all fees
that are charged to all Owner accounts. For any fees that
vary with the size of the account, the account size is assumed
to be the respective Sub-account's mean account size. The
calculations also assume a total withdrawal as of the end of
the particular period.
<REDLINE>
No standardized or non-standardized total return quotations
have been provided for the Zero Coupon 2000, Dreyfus Stock
Index, Money Market, Growth, Overseas, Asset Manager,
Investment Grade Bond, High Income, Worldwide Balance or Gold
and Natural Resources Portfolios, because, for the fiscal year
ending December 31, 1994, such Portfolios were not yet in
operation.
</REDLINE>
Annualized total return for certain Sub-accounts as of
December 31, 1994, were as follows:
Inception to Date
Conservative Investors
Growth Investors
Growth
Growth and Income
*Funds were first invested in the Portfolos as listed
below:
Conservative Investors
Growth Investors
Growth
Growth and Income
C. Yield Quotations for each Sub-account other than the
Money Market Sub-account
The yield quotations for each Sub-account other than the
Money Market Sub-account will be based on a thirty-day period.
The computation is made by dividing the net investment income
per Accumulation Unit earned during the period by the Unit
MMVA.171 12/12/9556
<PAGE>
Value on the last day of the period, according to the
following formula:
Yield = 2[(a - b + 1)6 - 1]
cd
Where: a = net investment income earned during the
period by the corresponding Portfolio
attributable to shares owned by the
corresponding Sub-account.
b = expenses accrued for the period (net of
reimbursements).
c = the average daily number of Accumulation
Units outstanding during the period.
d = the maximum Unit Value on the last day of
the period.
For the purposes of the yield quotations for the
Sub-accounts, the calculations take into effect all fees that
are charged to all Owner accounts. For any fees that vary
with the size of the account, the account size is assumed to
be the respective Sub-account's mean account size. The
calculations do not take into account the Deferred Sales
Charge or any transfer charges.
A Deferred Sales Charge may be assessed at the time of
withdrawal in an amount from 6% to 0% of the Purchase Payments
withdrawn, with the specific percentage applicable to a
particular withdrawal depending on the length of time the
purchase payment was held under the Contract, and whether
withdrawals had been previously made during that Contract
Year. (See "Charges and Deductions - Deduction for Deferred
Sales Charge" on page 17 of the Prospectus) There is
currently a transfer charge of $10 per transfer after a
specified number of transfers in each Contract Year. (See
"Transfer of Contract Values" on page 15 of the Prospectus)
D. Non-Standardized Performance Data
<REDLINE>
1. Non-Standardized Total Return Quotations
The non-standardized total return quotations for all
of the Sub-accounts to be set forth in the Prospectus will be
average annual total return quotations for the one, five, and
ten year periods (or, where a Sub-account has been in
existence for a period of less than one, five or ten years,
for such lesser period), ended on a given date for the period
from the date monies were first placed into the Sub-accounts
MMVA.171 12/12/9557
<PAGE>
until the aforesaid date. The quotations are computed by
finding the average annual compounded rates of return over the
relevant periods that would equate the initial amount invested
to the ending redeemable value, according to the following
formula:
</REDLINE>
P(1+T)n = ERV
Where: P = a hypothetical initial payment of
$1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a
hypothetical $1,000 payment made at
the
beginning of the particular period at
the end of the particular period.
For the purposes of the total return quotations, the
calculations take into effect all fees that are charged to all
Owner accounts. For any fees that vary with the size of the
account, the account size is assumed to be the respective
Sub-account's mean account size. The calculations do not,
however, assume a total withdrawal as of the end of the
particular period.
Annualized total return quotations for certain Sub-
accounts as of December 31, 1994, were as follows:
One Year Inception to Date
Conservative Investors
Growth Investors
Growth
Growth and Income
2. The Power of Tax-Deferred Growth
All current taxes on any income or capital gains are
deferred until money is taken out of your account. That way
all of your earnings contribute to the growth of your account.
And, since all your earnings are automatically reinvested to
build your investment base, your account is given yet another
opportunity to grow. It's called the Power of Compounding and
the following charts illustrate just how powerful it can be.
MMVA.171 12/12/9558
<PAGE>
A. The Power of Tax-Deferral $10,000 At 8% Compounded
Annually*
<TABLE>
<CAPTION>
33% TAX APPLIED
AFTER 33% TAX APPLIED UPON SURRENDER TAX DEFERRED
<S> <C> <C> <C>
10 years $ 16,856 $ 15,782 $ 18,630
20 years $ 28,413 $ 26,789 $ 36,059
30 years $ 47,893 $ 47,744 $ 66,336
40 years $ 80,729 $ 87,637 $125,877
50 years $136,078 $163,584 $239,230
</TABLE>
B. The Power of Tax-Deferral $10,000 At 8% Compound
Annually*
<REDLINE>
INSERT: GRAPH OF ILLUSTRATION
</REDLINE>
*These illustrations are not intended to reflect the
return of investments made in your variable annuity contract.
The figures are calculated on a fixed interest rate and assume
no fluctuation in the value of principal or the impact of any
fees or sales charges. Taxes are due on tax-deferred
investments whenever money is withdrawn from that investment.
MMVA.171 12/12/9559
<PAGE>
Delay of Payments
Any payments due under the Contracts will generally be
sent to the Owner within seven (7) days of a completed request
for payment. However, the Company has reserved the right to
postpone any type of payment from the Variable Account for any
period when:
(a) The New York Stock Exchange is closed for other than
customary weekends and holidays;
(b) trading on the Exchange is restricted;
(c) an emergency exists as a result of which it is not
reasonably practicable to dispose of securities held
in the Variable Account or determine their value; or
(d) an order of the Securities and Exchange Commission
permits delay for the protection of security
holders.
The applicable rules of the Securities and Exchange
Commission shall govern as to whether the conditions in (b)
and (c) exists.
Transfers
An Owner may deposit prior to the Annuity Date, all or
part of his Contract Value into the Money Market Sub-account
(the Sending Sub-account"), and then automatically transfer
those assets into one or more of the other Sub-accounts on a
systematic basis. The amount transferred to the Sending Sub-
account must be at least $12,000 in order to initiate this
option. This process is called Automatic Dollar Cost
Averaging.
The Automatic Dollar Cost Averaging option is available
for use with any of the investment options, other than the
General Account.
Automatic Dollar Cost Averaging transfers may occur
monthly or quarterly. The Owner may designate the dollar
amount to be transferred each month or elect to have a
percentage transferred each month, up to a maximum of 60
months.
The Company will make all Automatic Dollar Cost Averaging
transfers on the 15th calendar day of each month, or the next
day the New York Stock Exchange is open for business if the
15th calendar day of the month should fall on a day the New
York Stock Exchange is closed. In order to process an
Automatic Dollar Cost Averaging transfer, the Company must
MMVA.171 12/12/9560
<PAGE>
have received a request in writing by no later than the 6th
calendar day of the month.
The Automatic Dollar Cost Averaging option may be
cancelled at any time by written request or automatically if
the value of the Sending Sub-account subject to the Automatic
Dollar Cost Averaging option is less than $1,000.
An Owner may change his Automatic Dollar Cost Averaging
investment allocation only once during any 12 month period.
Any transfers made under this section are subject to the
conditions of the section entitled "Transfer of Contract
Values" on page __ of the Prospectus, except that the Company
will not deem the election of the Automatic Dollar Cost
Averaging option to count towards a Owner's twelve (12) free
transfers.
METHOD OF DETERMINING CONTRACT VALUES
The Contract Value will fluctuate in accordance with the
investment results of the underlying Portfolio within the
Sub-account. In order to determine how these fluctuations
affect Contract Values, Accumulation Units are utilized. The
value of an Accumulation Unit applicable during any Valuation
Period is determined at the end of that period.
When the first shares of the respective Portfolios were
purchased for the Sub-accounts, the Accumulation Units for the
Sub-accounts were valued at $10. The value of an Accumulation
Unit for a Sub-account on any Valuation Date thereafter is
determined by dividing (a) by (b), where:
(a) is equal to:
(i) the total value of the net assets attributable
to Accumulation Units in the Sub-account, minus
(ii) the daily charge for assuming the risk of
guaranteeing mortality factors and expense
charges which is equal on an annual basis to
1.25% multiplied by the daily net asset value
of the Sub-account; minus
(iii) the daily charge for providing certain
administrative functions which is equal on an
annual basis to 0.15% multiplied by the daily
net asset value of the Sub-account; minus or
plus
MMVA.171 12/12/9561
<PAGE>
(iv) a charge or credit for any tax provision
established for the Sub-account. The Company
is not currently making any provision for
taxes.
(b) is the total number of Accumulation Units applicable
to that Sub-account at the end of the Valuation
Period.
The resulting value of each Sub-account Accumulation Unit
is multiplied by the respective number of Sub-account
Accumulation Units for a Contract. The Contract Value is the
sum of all Sub-account values for the Contract.
An Accumulation Unit may increase or decrease in value from
Valuation Date to Valuation Date.
ANNUITY PROVISIONS
Annuity Benefits
If the Annuitant is alive on the Annuity Date the Company
will begin making payments to the Annuitant under the payment
option or options selected. The amount of the annuity
payments will depend on the age of the payee at the time the
settlement contract is issued.
Annuity Options
The annuity options are as follows:
Option 1: Life Income. The Company will pay an annuity
during the lifetime of the payee.
Option 2: Income with 10 Years of Payments Guaranteed.
The Company will pay an annuity during the lifetime of the
payee. If, at the death of the payee, payments have been
made for less than 10 years:
(a) payments will be continued during the remainder
of the period to the successor payee; or
(b) the successor payee may elect to receive in a
lump sum the present value of the remaining
payments, commuted at the interest rate used to
create the annuity factor for this Option.
Option 3: Joint and Last Survivor Income. The Company
will pay an annuity for as long as either payee or a
designated second person is alive.
MMVA.171 12/12/9562
<PAGE>
Annuity options are available on a fixed and/or a variable
basis. The Owner may allocate Contract Values to purchase
only fixed annuity payments, or to purchase only variable
annuity payments, or to purchase a combination of the two.
Contract Values which purchase fixed annuity payments will be
invested in the General Account. Contract Values which
purchase variable annuity payments will be invested in the
Variable Account. The Owner may make no transfers between the
General Account and the Variable Account after the Annuity
Date. The Company also may offer additional options at its
discretion.
Variable Annuity Payment Values
A Variable Annuity is an annuity with payments which (1)
are not predetermined as to dollar amount and (2) will vary in
amount with the net investment results of the applicable
Sub-account(s) of the Variable Account. At the Annuity Date
the Contract Value in each Sub-account will be applied to the
applicable Annuity Tables contained in the Contract. The
Annuity Table used will depend upon the payment option chosen.
The same Contract Value amount applied to each payment option
may produce a different initial annuity payment. If, as of
the Annuity Date, the then current annuity rates applicable to
this class of contracts will provide a larger income than that
guaranteed for the same form of annuity under the Contracts
described herein, the larger amount will be paid.
The first annuity payment for each Sub-account is
determined by multiplying the amount of the Contract Value
allocated to that Sub-account by the factor shown in the table
for the option selected, divided by 1000.
The dollar amount of Sub-account annuity payments after the
first is determined as follows:
(a) The dollar amount of the first annuity payment is
divided by the value for the Sub-account Annuity Unit
as of the Annuity Date. This establishes the number
of Annuity Units for each monthly payment. The number
of Annuity Units remains fixed during the Annuity
payment period, subject to any transfers.
(b) The fixed number of Annuity Units is multiplied by the
Annuity Unit value for the Valuation Period 14 days
prior to the date of payment.
The total dollar amount of each Variable Annuity payment is
the sum of all Sub-account variable annuity payments less the
pro-rata amount of the annual Administrative Charge.
MMVA.171 12/12/9563
<PAGE>
Annuity Unit
The value of an Annuity Unit for each Sub-account was
arbitrarily set initially at $10. This was done when the
first Portfolio shares were purchased. The Sub-account
Annuity Unit value at the end of any subsequent Valuation
Period is determined by multiplying the Sub-account Annuity
Unit value for the immediately preceding Valuation Period by
the quotient of (a) and (b) where:
(a) is the net investment factor for the Valuation Period
for which the Sub-account Annuity Unit value is being
determined; and
(b) is the assumed investment factor for such Valuation
Period. The assumed investment factor adjusts for the
interest assumed in determining the first variable
annuity payment. Such factor for any Valuation Period
shall be the accumulated value, at the end of such
period, of $1.00 deposited at the beginning of such
period at the assumed investment rate of 5%.
Net Investment Factor
The net investment factor is used to determine how
investment results of the Fund affect Variable Account Values
within the Sub-accounts from one Valuation Period to the next.
The net investment factor for each Sub-account for any
Valuation Period is determined by dividing (a) by (b) and
subtracting (c) from the result, where:
(a) is equal to:
(i) the net asset value per share of the Portfolio
held in the Sub-account determined at the end of that
Valuation Period; plus
(ii) the per share amount of any dividend or capital
gain distribution made to the Portfolio if the
"ex-dividend" date occurs during that same Valuation
Period; plus or minus
(iii) a per share charge or credit, which is
determined by the Company, for changes in tax reserves
resulting from investment operations of the
Sub-account.
(b) is equal to:
(i) the net asset value per share of the Portfolio
held in the Sub-account determined as of the end of
the prior Valuation Period; plus or minus
MMVA.171 12/12/9564
<PAGE>
(ii) the per share charge or credit for any change
in tax reserves for the prior Valuation Period.
(c) is equal to:
(i) the percentage factor representing the Mortality
and Expense Risk Charge, plus
(ii) the percentage factor representing the daily
Administrative Charge.
The net investment factor may be greater or less than the
assumed investment factor; therefore, the Annuity Unit value
may increase or decrease from Valuation Period to Valuation
Additional Provisions
The Company may require proof of the age of the Annuitant
before making any life annuity payment provided for by the
Contract. If the age of the Annuitant has been misstated the
Company will compute the amount payable based on the correct
age. If annuity payments have begun, any underpayments that
may have been made will be paid in full with the next annuity
payment. Any overpayments, unless repaid to the Company in
one sum, will be deducted from future annuity payments until
the Company is repaid in full.
If a Contract provision requires that a person be alive,
the Company may require due proof that the person is alive
before the Company acts under that provision.
The Company will give the payee under an annuity payment
option a settlement contract for the payment option.
MMVA.171 12/12/9565
<PAGE>
FINANCIAL STATEMENTS
The financial statements of the Company and the Variable
Account included herein shall be considered only as bearing
upon the ability of the Company to meet its obligations under
the Contracts.
MMVA.171 12/12/9566
<PAGE>
AIG LIFE INSURANCE COMPANY
(AIG LIFE)
VARIABLE ACCOUNT I
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1994
<TABLE>
<CAPTION>
Assets:
Investments at Market Value:
Alliance Variable Products Series Fund, Inc.: Shares
------
<S> <C>
Money Market Portfolio 4,401,735.300
Premier Growth Portfolio 182,983.633
Growth & Income Portfolio 431,247.683
International Portfolio 371,515.329
Short-Term Multi-Market Portfolio 91,696.989
Global Bond Portfolio 90,017.228
U.S. Government/High Grade
Securities Portfolio 303,951.808
Global Dollar Government Portfolio 68,723.756
North American Government Portfolio 337,750.004
Utility Income Portfolio 110,674.832
Conservative Investors Portfolio 62,623.032
Growth Investors Portfolio 29,368.355
Growth Portfolio 465,730.743
Total Return Portfolio 32,187.140
Worldwide Privitization Portfolio 105,236.863
Total Investments
Dividends Receivable
Recievable from AIG Life
Total Assets
Equity:
Contract Owners Equity
Total Contract Owners Equity
Total Liabilities and Equity
</TABLE>
See Notes to Financial Statements
MMVA.171 12/12/9567
<PAGE>
AIG LIFE INSURANCE COMPANY
(AIG LIFE)
VARIABLE ACCOUNT I
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1994
<TABLE>
<CAPTION>
Assets:
Investments at Market Value:
Alliance Variable Products Series Fund, Inc.: Cost
<S> <C> <C>
----
Money Market Portfolio $4,401,735 $4,401,735
Premier Growth Portfolio $2,280,310 $2,263,495
Growth & Income Portfolio $5,189,194 $5,114,586
International Portfolio $4,850,624 $4,785,117
Short-Term Multi-Market Portfolio $940,806 $908,707
Global Bond Portfolio $927,109 $883,969
U.S. Government/High Grade
Securities Portfolio $3,067,589 $3,021,271
Global Dollar Government Portfolio $692,023 $676,232
North American Government Portfolio $3,395,515 $2,968,823
Utility Income Portfolio $1,125,454 $1,102,311
Conservative Investors Portfolio $627,241 $630,614
Growth Investors Portfolio $292,382 $289,572
Growth Portfolio $4,750,184 $4,904,134
Total Return Portfolio $336,641 $335,068
Worldwide Privitization Portfolio $1,056,109 $1,062,882
Total Investments $33,932,916 $33,348,516
Dividends Receivable $17,161
Recievable from AIG Life $3,919
Total Assets $33,369,596
Equity:
Contract Owners Equity $33,369,596
Total Contract Owners Equity $33,369,596
Total Liabilities and Equity $33,369,596
</TABLE>
See Notes to Financial Statements
MMVA.171 12/12/9568
<PAGE>
AIG LIFE INSURANCE COMPANY
(AIG LIFE)
VARIABLE ACCOUNT I
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1994
<TABLE>
<CAPTION>
Money Premier
Total Market Growth
Portfolio Portfolio
<S> <C> <C> <C>
Investment Income (Loss):
Dividends $195,713 $59,413 $2,236
Expenses:
Mortality & Expense Risk Fees $142,466 $18,917 $11,914
Daily Adminstrative Charges $16,567 $2,173 $1,401
$159,033 $21,090 $13,315
Net Investment Income (Loss) $36,680 $38,323 ($11,079)
Realized and Unrealized Gain (Loss)
on Investments:
Realized Gain (Loss) on Investment
Activity ($19,154) - $4,147
Change in Unrealized Appreciation
(Depreciation) ($595,557) - ($21,343)
Net Gain (Loss) on Investments ($614,711) - ($17,196)
Increase (Decrease) in Net Assets
Resulting From Operations ($578,031) $38,323 ($28,275)
</TABLE>
See Notes to Financial Statements
MMVA.171 12/12/9569
<PAGE>
AIG LIFE INSURANCE COMPANY
(AIG LIFE)
VARIABLE ACCOUNT I
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1994
<TABLE>
<CAPTION>
Growth & Inter- Short-Term
Income national Multi-Market
Portfolio Portfolio Portfolio
<S> <C> <C> <C>
Investment Income (Loss):
Dividends $45,250 $7,283 $11,916
Expenses:
Mortality & Expense Risk Fees $27,377 $19,686 $3,312
Daily Adminstrative Charges $3,235 $2,277 $393
$30,612 $21,963 $3,705
Net Investment Income (Loss) $14,638 ($14,680) $8,211
Realized and Unrealized Gain (Loss)
on Investments:
Realized Gain (Loss) on Investment
Activity $2,879 $4,498 $86
Change in Unrealized Appreciation
(Depreciation) ($79,392) ($68,691) ($32,855)
Net Gain (Loss) on Investments ($76,513) ($64,193) ($32,769)
Increase (Decrease) in Net Assets
Resulting From Operations ($61,875) ($78,873) ($24,558)
</TABLE>
See Notes to Financial Statements
MMVA.171 12/12/9570
<PAGE>
AIG LIFE INSURANCE COMPANY
(AIG LIFE)
VARIABLE ACCOUNT I
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1994 (Continued)
<TABLE>
<CAPTION>
Global U.S. Gov't Global
Bond High Grd Dollar Gov't
Portfolio Portfolio Portfolio
<S> <C> <C> <C>
Investment Income (Loss):
Dividends $34,107 $35,508 -
Expenses:
Mortality & Expense Risk Fees $5,851 $14,151 $3,172
Daily Adminstrative Charges $695 $1,636 $371
$6,546 $15,787 $3,543
Net Investment Income (Loss) $27,561 $19,721 ($3,543)
Realized and Unrealized Gain (Loss)
on Investments:
Realized Gain (Loss) on Investment ($5,329) ($10,894) $47
Change in Unrealized Appreciation
(Depreciation) (45,024) ($42,340) ($15,791)
Net Gain (Loss) on Investments ($50,353) ($53,234) ($15,744)
Increase (Decrease) in Net Assets
Resulting From Operations ($22,792) ($33,513) ($19,287)
</TABLE>
See Notes to Financial Statements
MMVA.171 12/12/9571
<PAGE>
AIG LIFE INSURANCE COMPANY
(AIG LIFE)
VARIABLE ACCOUNT I
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1994 (Continued)
<TABLE>
<CAPTION>
N.Amer. Utility
Gov't Income
Portfolio Portfolio
<S> <C> <C>
Investment Income (Loss):
Dividends - -
Expenses:
Mortality & Expense Risk Fees $17,458 $4,679
Daily Adminstrative Charges $2,090 $547
$19,548 $5,226
Net Investment Income (Loss) ($19,548) ($5,226)
Realized and Unrealized Gain (Loss)
on Investments:
Realized Gain (Loss) on Investment
Activity ($16,961) $1,704
Change in Unrealized Appreciation
(Depreciation) ($426,693) ($23,142)
Net Gain (Loss) on Investments ($443,654) ($21,438)
Increase (Decrease) in Net Assets
Resulting From Operations ($463,202) ($26,664)
</TABLE>
See Notes to Financial Statements
MMVA.171 12/12/9572
<PAGE>
AIG LIFE INSURANCE COMPANY
(AIG LIFE)
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1994 (Continued)
<TABLE>
<CAPTION>
Conservative Growth
Investors Investors
Portfolio Portfolio
<S> <C> <C>
Investment Income (Loss):
Dividends - -
Expenses:
Mortality & Expense Risk Fees $1,431 $699
Daily Adminstrative Charges $163 $81
$1,594 $780
Net Investment Income (Loss) ($1,594) ($780)
Realized and Unrealized Gain (Loss)
on Investments:
Realized Gain (Loss) on Investment Activity ($37) ($375)
Change in Unrealized Appreciation
(Depreciation) $3,373 ($2,809)
Net Gain (Loss) on Investments $3,336 ($3,184)
Increase (Decrease) in Net Assets
Resulting From Operations $1,742 ($3,964)
</TABLE>
See Notes to Financial Statements
MMVA.171 12/12/9573
<PAGE>
AIG LIFE INSURANCE COMPANY
(AIG LIFE)
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1994 (Continued)
<TABLE>
<CAPTION>
Total Worldwide
Growth Return Privatization
Portfolio Portfolio Portfolio
<S> <C> <C> <C>
Investment Income (Loss):
Dividends - - -
Expenses:
Mortality & Expense Risk Fees $11,248 $427 $2,144
Daily Adminstrative Charges $1,248 $43 $214
$12,496 $470 $2,358
Net Investment Income (Loss) ($12,496) ($470) ($2,358)
Realized and Unrealized Gain (Loss)
on Investments:
Realized Gain (Loss) on
Investment Activity $1,108 ($28) $1
Change in Unrealized Appreciation
(Depreciation) $153,950 ($1,573) $6,773
Net Gain (Loss) on Investments $155,058 ($1,601) $6,774
Increase (Decrease) in Net Assets
Resulting From Operations $142,562 ($2,071) $4,416
</TABLE>
See Notes to Financial Statements
MMVA.171 12/12/9574
<PAGE>
AIG LIFE INSURANCE COMPANY
(AIG LIFE)
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended December 31, 1994 and December 31, 1993
<TABLE>
<CAPTION>
1994
Money
Market
Total Portfolio
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net Investment Income (Loss) $36,680 $38,323
Realized Gain (Loss) on Investment
Activity ($19,195) --
Change in Unrealized Appreciation
(Depreciation) of Investments ($595,557) --
----------- ----------
Increase (Decrease) in Net Assets
Resulting from Operations ($578,031) $38,323
----------- ----------
Capital Transactions:
Contract Deposits $34,923,601 $12,769,522
Transfers Between Funds -- ($6,081,820)
Transfers From (To) AIG Life ($2,196,064) ($2,262,382)
Administrative Charges ($1,474) ($23)
Death Benefits ($105,575) ($105,575)
Contract Withdrawals ($267,697) ($17,149)
Deferred Sales Charges ($3,900) --
----------- ----------
Increase (Decrease) in Net Assets
Resulting from Capital
Transactions $32,348,891 $4,302,573
----------- ----------
Total Increase (Decrease) in Net
Assets $31,770,860 $4,340,896
Net Assets, at Beginning of Year $1,598,736 $85,516
----------- ----------
Net Assets, at End of Year $33,369,596 $4,426,412
=========== ==========
</TABLE>
See Notes to Financial Statements
MMVA.171 12/12/9575
<PAGE>
AIG LIFE INSURANCE COMPANY
(AIG LIFE)
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended December 31, 1994 and December 31, 1993
<TABLE>
<CAPTION>
1993
Money
Market
Total Portfolio
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net Investment Income (Loss) $6,824 $330
Realized Gain (Loss) on Investment
Activity $246 --
Change in Unrealized Appreciation
(Depreciation) of Investments $11,768 --
----------- -------
Increase (Decrease) in Net Assets
Resulting from Operations $18,838 $330
----------- -------
Capital Transactions:
Contract Deposits $1,471,184 $335,777
Transfers Between Funds -- ($250,591)
Administrative Charges ($4,569) --
Contract Withdrawals ($90) --
----------- -------
Increase (Decrease) in Net Assets
Resulting from Capital
Transactions $1,466,525 $85,186
----------- -------
Total Increase (Decrease) in
Net Assets $1,485,363 $85,516
Net Assets, at Beginning of Year $113,373 --
----------- -------
Net Assets, at End of Year $1,598,736 $85,516
=========== =======
</TABLE>
See Notes to Financial Statements
MMVA.171 12/12/9576
<PAGE>
AIG LIFE INSURANCE COMPANY
(AIG LIFE)
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended December 31, 1994 and December 31, 1993
<TABLE>
<CAPTION>
1994
Premier Growth &
Growth Income
Portfolio Portfolio
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net Investment Income (Loss) ($11,079) $14,638
Realized Gain (Loss) on Investment
Activity $4,147 $2,879
Change in Unrealized Appreciation
(Depreciation) of Investments ($21,343) ($79,392)
----------- ----------
Increase (Decrease) in Net Assets
Resulting from Operations ($28,275) ($61,875)
----------- ----------
Capital Transactions:
Contract Deposits $1,647,838 $3,463,022
Transfers Between Funds $457,808 $1,436,775
Transfers From (To) AIG Life $15,998 $21,514
Administrative Charges ($168) ($291)
Death Benefits -- --
Contract Withdrawals ($15,667) ($73,276)
Deferred Sales Charges ($380) ($1,208)
----------- ----------
Increase (Decrease) in Net Assets
Resulting from Capital
Transactions $2,105,429 $4,846,536
----------- ----------
Total Increase (Decrease) in Net
Assets $2,077,154 $4,784,661
Net Assets, at Beginning of Year $192,615 $333,025
----------- ----------
Net Assets, at End of Year $2,269,769 $5,117,686
=========== ==========
</TABLE>
See Notes to Financial Statements
MMVA.171 12/12/9577
<PAGE>
AIG LIFE INSURANCE COMPANY
(AIG LIFE)
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended December 31, 1994 and December 31, 1993
<TABLE>
<CAPTION>
1993
Premier Growth &
Growth Income
Portfolio Portfolio
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net Investment Income (Loss) ($515) ($744)
Realized Gain (Loss) on Investment
Activity -- $120
Change in Unrealized Appreciation
(Depreciation) of Investments $4,529 $4,110
-------- --------
Increase (Decrease) in Net Assets
Resulting from Operations $4,014 $3,486
-------- --------
Capital Transactions:
Contract Deposits $161,568 $280,031
Transfers Between Funds $27,033 $41,585
Administrative Charges -- ($694)
Contract Withdrawals -- ($6)
-------- --------
Increase (Decrease) in Net Assets
Resulting from Capital
Transactions $188,601 $320,916
-------- --------
Total Increase (Decrease) in Net
Assets $192,615 $324,402
Net Assets, at Beginning of Year -- $8,623
-------- --------
Net Assets, at End of Year $192,615 $333,025
======== ========
</TABLE>
See Notes to Financial Statements
MMVA.171 12/12/9578
<PAGE>
AIG LIFE INSURANCE COMPANY
(AIG LIFE)
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended December 31, 1994 and December 31, 1993
<TABLE>
<CAPTION>
1994
Inter- Short-Term
national Multi-Market
Portfolio Portfolio
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net Investment Income (Loss) ($14,680) $8,211
Realized Gain (Loss) on Investment
Activity $4,498 86
Change in Unrealized Appreciation
(Depreciation) of Investments ($68,691) ($32,855)
-------- --------
Increase (Decrease) in Net Assets
Resulting from Operations ($78,873) ($24,558)
-------- --------
Capital Transactions:
Contract Deposits $3,606,659 $346,929
Transfers Between Funds $1,074,155 $440,344
Transfers From (To) AIG Life $24,038 --
Administrative Charges ($286) ($77)
Death Benefits -- --
Contract Withdrawals ($56,095) ($3,990)
Deferred Sales Charges ($1,165) --
-------- --------
Increase (Decrease) in Net Assets
Resulting from Capital
Transactions $4,647,306 $783,206
-------- --------
Total Increase (Decrease) in Net
Assets $4,568,433 $758,648
Net Assets, at Beginning of Year $220,959 $149,394
-------- --------
Net Assets, at End of Year $4,789,392 $908,042
======== ========
</TABLE>
See Notes to Financial Statements
MMVA.171 12/12/9579
<PAGE>
AIG LIFE INSURANCE COMPANY
(AIG LIFE)
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended December 31, 1994 and December 31, 1993
<TABLE>
<CAPTION>
1993
Inter- Short-Term
national Multi-Market
Portfolio Portfolio
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net Investment Income (Loss) ($337) $1,713
Realized Gain (Loss) on Investment
Activity -- $30
Change in Unrealized Appreciation
(Depreciation) of Investments $3,185 $1,630
-------- --------
Increase (Decrease) in Net Assets
Resulting from Operations $2,848 $3,373
-------- --------
Capital Transactions:
Contract Deposits $164,265 $90,971
Transfers Between Funds $53,846 $6,147
Administrative Charges -- ($1,586)
Contract Withdrawals -- ($43)
-------- --------
Increase (Decrease) in Net Assets
Resulting from Capital
Transactions $218,111 $95,489
-------- --------
Total Increase (Decrease) in Net
Assets $220,959 $98,862
Net Assets, at Beginning of Year -- $50,532
-------- --------
Net Assets, at End of Year $220,959 $149,394
======== ========
</TABLE>
See Notes to Financial Statements
MMVA.171 12/12/9580
<PAGE>
AIG LIFE INSURANCE COMPANY
(AIG LIFE)
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended December 31, 1994 and December 31, 1993
<TABLE>
<CAPTION>
1994
Global U.S. Gov't Global
Bond High Grade Dollar Gov't
Portfolio Portfolio Portfolio
<S> <C> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net Investment Income (Loss) $27,561 $19,721 ($3,543)
Realized Gain (Loss) on Investment
Activity ($5,329) ($10,894) $47
Change in Unrealized Appreciation
(Depreciation) of Investments ($45,024) ($42,340) ($15,791)
-------- -------
Increase (Decrease) in Net Assets
Resulting from Operations ($22,792) ($33,513) ($19,287)
-------- --------
Capital Transactions:
Contract Deposits $553,883 $2,242,232 $556,089
Transfers Between Funds $165,632 $421,682 $160,981
Transfers From (To) AIG Life -- ($2,455) ($16,815)
Administrative Charges ($130) ($368) --
Death Benefits -- -- --
Contract Withdrawals ($20,050) ($18,733) ($5,486)
Deferred Sales Charges ($772) ($375) --
-------- --------
Increase (Decrease) in Net Assets
Resulting from Capital
Transactions $698,563 $2,641,983 $694,769
-------- --------
Total Increase (Decrease) in Net
Assets $675,771 $2,608,470 $675,482
Net Assets, at Beginning of Year $207,211 $410,016 --
-------- -------- --------
Net Assets, at End of Year $882,982 $3,018,486 $675,482
======== ======== ========
</TABLE>
See Notes to Financial Statements
MMVA.171 12/12/9581
<PAGE>
AIG LIFE INSURANCE COMPANY
(AIG LIFE)
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended December 31, 1994 and December 31, 1993
<TABLE>
<CAPTION>
1993
Global U.S. Gov't Global
Bond High Grade Dollar Gov,t
Portfolio Portfolio Portfolio
<S> <C> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net Investment Income (Loss) $7,236 ($859) --
Realized Gain (Loss) on Investment
Activity $96 -- --
Change in Unrealized Appreciation
(Depreciation) of Investments $2,173 ($3,859) --
-------- --------
Increase (Decrease) in Net Assets
Resulting from Operations $9,505 ($4,718) --
-------- --------
Capital Transactions:
Contract Deposits $118,132 $320,440 --
Transfers Between Funds $27,686 $94,294
Administrative Charges ($2,289) -- --
Contract Withdrawals ($41) -- --
-------- --------
Increase (Decrease) in Net Assets
Resulting from Capital
Transactions $143,488 $414,734 --
-------- --------
Total Increase (Decrease) in Net
Assets $152,993 $410,016 --
Net Assets, at Beginning of Year $54,218 -- --
-------- -------- --------
Net Assets, at End of Year $207,211 $410,016 --
======== ========
</TABLE>
See Notes to Financial Statements
MMVA.171 12/12/9582
<PAGE>
AIG LIFE INSURANCE COMPANY
(AIG LIFE)
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended December 31, 1994 and December 31, 1993
<TABLE>
<CAPTION>
1994
N. Amer. Utility
Gov't Income
Portfolio Portfolio
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net Investment Income (Loss) ($19,548) ($5,226)
Realized Gain (Loss) on Investment
Activity ($16,961) $1,704
Change in Unrealized Appreciation
(Depreciation) of Investments ($426,693) ($23,142)
-------- --------
Increase (Decrease) in Net Assets
Resulting from Operations ($463,262) ($26,664)
-------- --------
Capital Transactions:
Contract Deposits $3,241,845 $1,022,214
Transfers Between Funds $233,697 $109,771
Transfers From (To) AIG Life -- --
Administrative Charges -- --
Death Benefits -- --
Contract Withdrawals ($47,274) ($4,223)
Deferred Sales Charges -- --
-------- --------
Increase (Decrease) in Net Assets
Resulting from Capital
Transactions $3,428,268 $1,127,762
-------- --------
Total Increase (Decrease) in Net
Assets $2,965,066 $1,101,098
Net Assets, at Beginning of Year -- --
-------- --------
Net Assets, at End of Year $2,965,066 $1,101,098
========= =========
</TABLE>
See Notes To Financial Statements
MMVA.171 12/12/9583
<PAGE>
AIG LIFE INSURANCE COMPANY
(AIG LIFE)
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended December 31, 1994 and December 31, 1993
<TABLE>
<CAPTION>
1993
N. Amer. Utility
Gov't Income
Portfolio Portfolio
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net Investment Income (Loss) -- --
Realized Gain (Loss) on Investment
Activity -- --
Change in Unrealized Appreciation
(Depreciation) of Investments -- --
-------- --------
Increase (Decrease) in Net Assets
Resulting from Operations -- --
-------- --------
Capital Transactions:
Contract Deposits -- --
Transfers Between Funds -- --
Administrative Charges -- --
Contract Withdrawals -- --
-------- --------
Increase (Decrease) in Net Assets
Resulting from Capital
Transactions -- --
-------- --------
Total Increase (Decrease) in Net
Assets -- --
Net Assets, at Beginning of Year -- --
-------- --------
Net Assets, at End of Year -- --
======== ========
</TABLE>
See Notes to Financial Statements
MMVA.171 12/12/9584
<PAGE>
AIG LIFE INSURANCE COMPANY
(AIG LIFE)
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended December 31, 1994 and December 31, 1993
<TABLE>
<CAPTION>
1994
Conservative Growth
Investors Investors
Portfolio Portfolio
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net Investment Income (Loss) ($1,594) ($780)
Realized Gain (Loss) on Investment
Activity ($37) ($375)
Change in Unrealized Appreciation
(Depreciation) of Investments $3,373 ($2,809)
-------- --------
Increase (Decrease) in Net Assets
Resulting from Operations $1,742) ($3,964)
-------- --------
Capital Transactions:
Contract Deposits $549,380 $222,714
Transfers Between Funds $79,401 $70,532
Transfers From (To) AIG Life -- --
Administrative Charges -- --
Death Benefits -- --
Contract Withdrawals ($542) --
Deferred Sales Charges -- --
-------- --------
Increase (Decrease) in Net Assets
Resulting from Capital
Transactions $628,239 $293,246
-------- --------
Total Increase (Decrease) in Net
Assets $629,981 $289,282
Net Assets, at Beginning of Year -- --
-------- --------
Net Assets, at End of Year $629,981 $289,282
======== ========
</TABLE>
See Notes to Financial Statements
MMVA.171 12/12/9585
<PAGE>
AIG LIFE INSURANCE COMPANY
(AIG LIFE)
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended December 31, 1994 and December 31, 1993
<TABLE>
<CAPTION>
1993
Conservative Growth
Investors Investors
Portfolio Portfolio
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net Investment Income (Loss) -- --
Realized Gain (Loss) on Investment
Activity -- --
Change in Unrealized Appreciation
(Depreciation) of Investments -- --
-------- --------
Increase (Decrease) in Net Assets
Resulting from Operations -- --
-------- --------
Capital Transactions:
Contract Deposits -- --
Transfers Between Funds -- --
Administrative Charges -- --
Contract Withdrawals -- --
-------- --------
Increase (Decrease) in Net Assets
Resulting from Capital
Transact -- --
-------- --------
Total Increase (Decrease) in Net
Assets -- --
Net Assets, at Beginning of Year -- --
-------- nsurance Company in the Statement of
Additional Information.
2. The inclusion of our report dated February 13, 1995
relating to our audits of the financial statements
of Variable Account I in the Statement of Additional
Information.
3. The incorporation by reference into the Prospectus
of our report dated February 22, 1995 relating to
our audits of the financial statements of AIG Life
Insurance Company and our report dated February 13,
1995 relating to our audits of the financial
statements of Variable Account I.
4. The reference to our firm under the heading "General
Information - Independent Accountants" in the
Statement of Additional Information.
/s/Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
December 22, 1995
2
<PAGE>
</TABLE>
