As Filed With The Securities and Exchange Commission On November 27, 2000
File Nos. 333-49128
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. 1 [X]
Post-Effective Amendment No. [ ]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. [ ]
(Check appropriate box or boxes.)
VARIABLE ACCOUNT I
(Exact Name of Registrant)
AIG Life Insurance Company
(Name of Depositor)
600 King Street, Wilmington, DE 19801
(Address of Depositor's Principal Executive Offices) (Zip Code)
(302) 594-2978
(Depositor's Telephone Number, including Area Code)
Kenneth D. Walma, Esq.
AIG Life Insurance Company
One Alico Plaza
Wilmington, Delaware 19899
(Name and Address of Agent for Service)
<PAGE>
Copies to:
Michael Berenson, Esq. and Ernest T. Patrikis, Esq.
Jorden Burt Boros Cicchetti American International Group, Inc.
Berenson & Johnson LLP 70 Pine Street
1025 Thomas Jefferson Street, N.W. New York, NY 10270
Washington, DC 200007-0805
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this filing.
It is proposed that this filing will become effective (check appropriate box)
___ immediately upon filing pursuant to paragraph (b) of Rule 485
___ on _________ pursuant to paragraph (b) of Rule 485
___ 60 days after filing pursuant to paragraph (a)(i) of Rule 485
___ on ______ pursuant to paragraph (a)(i) of Rule 485
___ on _____ pursuant to paragraph (a)(ii) of Rule 485
If appropriate, check the following box:
Title of Securities Being Registered: Flexible Premium Deferred Variable
Annuity Contract.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Securities and Exchange Commission acting pursuant
to said Section 8(a) may determine.
<PAGE>
PART A
<PAGE>
OVATION ADVISOR VARIABLE ANNUITY PROFILE
This profile is a summary of some of the more important points that you should
know and consider before purchasing a variable annuity. The variable annuity is
more fully described in the accompanying prospectus. The sections in this
summary correspond to sections in the prospectus that discuss the topics in more
detail. All capitalized terms are used as defined in the prospectus. Please read
the prospectus carefully.
________, 2001
================================================================================
1. OVATION ADVISOR VARIABLE ANNUITY
================================================================================
This variable annuity contract is between you and AIG Life Insurance Company. It
is designed to help you invest on a tax-deferred basis and meet long-term
financial goals, such as providing you with retirement income. Tax deferral
means all your money, including the amount you would otherwise pay in current
income taxes, remains in your contract to generate more earnings.
This contract offers a choice of investment options. You may divide your money
among any or all of the 16 variable investment options provided by Alliance
Capital Management L.P. and the fixed investment option. Your investment is not
guaranteed. The value of your contract can fluctuate up or down based on the
performance of the underlying investments you select and you may experience a
loss.
The variable investment portfolios offer professionally managed investment
choices with goals ranging from capital preservation to aggressive growth. Your
choices for the various investment options are listed later in this profile.
Like most deferred annuities, the contract has an accumulation phase and an
income phase. During the accumulation phase, you invest money in your contract.
Your earnings are based on the investment performance of the variable investment
portfolios to which your money is allocated and/or the interest rate earned on
the fixed investment option. You may withdraw money from your contract during
the accumulation phase. However, as with other tax-deferred investments, you
will pay taxes on earnings and untaxed contributions when you withdraw them. A
tax penalty may apply if you make withdrawals before age 59 1/2. The income
phase begins with the Annuity Date that you select. During the income phase,
you, or another person you select as the Annuitant, will receive payments from
your annuity. Your payments may be fixed in dollar amount, vary with investment
performance or a combination of both, depending on where you allocate your
money. Among other factors, the amount of money you are able to accumulate in
your contract during the accumulation phase will determine the amount of your
payments during the income phase.
================================================================================
2. ANNUITY OPTIONS
================================================================================
You can select one of the annuity options listed below:
(1) payments for the Annuitant's lifetime;
(2) payments for the Annuitant's lifetime, but for not less than 10 years;
and
(3) payments for the lifetime of the survivor of two Annuitants.
We may offer other annuity options, subject to our discretion.
You will need to decide if you want your payments to fluctuate with investment
performance, remain constant or to reflect a combination of the two. You will
also select the date on which your payments will begin. Once you begin receiving
payments, you cannot change your annuity option. If your contract is part of a
non-qualified retirement plan (one that is established with after tax dollars),
payments during the income phase are considered partly a return
<PAGE>
of your original investment. The "original investment" part of each payment is
not taxable as income. For contracts that are part of a qualified retirement
plan using before tax dollars, the entire payment is taxable as income.
================================================================================
3. PURCHASING A VARIABLE ANNUITY CONTRACT
================================================================================
You can buy a contract through your financial representative, who can also help
you complete the proper forms. The minimum initial investment is $5,000.
Additional amounts of $1,000 or more may be added to your contract at any time
during the accumulation phase. You can pay additional premium of $100 or more
per month by enrolling in an automatic investment plan.
================================================================================
4. INVESTMENT OPTIONS
================================================================================
You may allocate money to the following variable investment portfolios of
Alliance Variable Products Series Fund, Inc.
Alliance Variable Products Series Fund, Inc.
(managed by Alliance Capital Management L.P.)
Global Bond Portfolio
Global Dollar Government Portfolio
Growth Portfolio
Growth and Income Portfolio
High-Yield Portfolio
International Portfolio
Money Market Portfolio
North American Government Income Portfolio
Premier Growth Portfolio
Quasar Portfolio
Real Estate Investment Portfolio
Technology Portfolio Total Return Portfolio
U.S. Government/High Grade Securities Portfolio
Utility Income Portfolio
Worldwide Privatization Portfolio
The fixed investment option is part of our general account. The interest rate
may differ from time to time but we will never credit less than a 3% annual
effective rate. Once established, the rate will not change during the selected
period. You may also elect to participate in one of two dollar cost averaging
programs. (The 6-month DCA may not yet be available in your state. Please
contact your financial representative for more information.)
================================================================================
5. EXPENSES
================================================================================
Each year we deduct a $30 contract maintenance fee from your Contract Value.
This fee is waived if the value of your contract is at least $50,000. We also
deduct insurance charges on a daily basis equal to 1.40% annually of the average
daily value of your contract allocated to the variable investment options. The
insurance charges include a mortality and expense risk charge of 1.25% and an
administrative charge of 0.15%.
2
<PAGE>
If you select an optional death benefit, we will calculate and deduct a monthly
charge against the assets in the variable account. For the annual ratchet plan
the charge is equal to ____% annually. For the equity assurance plan the charge
is equal to ____% annually for owners whose Attained Age is 0-59 and ____%
annually for owners whose Attained Age is 60 and over. For the enhanced equity
assurance plan the charge is equal to ____% annually for owners whose Attained
Age is 0-59 and ____% annually for owners whose Attained Age is 60 and over. If
you select the accidental death benefit, we will calculate and deduct a monthly
charge against the assets in the variable account equal to an annual charge of
____%.
As with other professionally managed investments, there are also investment
charges imposed on contracts with money allocated to the variable investment
options. These charges include management fees and other operating expenses and
are estimated to range from 0.64% to 1.05%.
Each year you are allowed to make 12 transfers without charge. After your first
12 transfers, a $10 transfer fee will apply to each subsequent transfer.
You may also be assessed a premium tax of up to 3.5% depending upon the state
where you reside.
The following chart is designed to help you understand the charges under your
contract. The column "Total Annual Insurance Charges" reflects insurance charges
in the amount of 1.40% and the $30 contract maintenance fee. We converted the
contract maintenance fee to a percentage using an assumed contract size of
$50,000. The actual impact of this charge on your contract may differ from this
percentage. The column "Total Annual Portfolio Charges" shows portfolio charges
for each portfolio after waivers and/or reimbursements by Alliance Capital
Management L.P. for the year ended December 31, 1999. The third column is the
total of all annual charges. The fourth and fifth columns show two examples of
the charges you would pay under the contract. The examples assume that you
invested $1,000 in a contract that earns 5% annually and that you withdraw your
money (1) at the end of year 1 and (2) at the end of year 10. The premium tax is
assumed to be 0% in both examples.
<TABLE>
<CAPTION>
Total Total Total
Annual Annual Total Expenses Total Expenses
Insurance Portfolio Annual at the end of at the end of
Charges Charges Charges 1 Year 10 Years
<S> <C> <C> <C> <C> <C>
Alliance Variable Products Series Fund Inc.
Global Bond Portfolio 1.46% 0.90% 2.36% $ 78 $270
Global Dollar Government Portfolio 1.46% 0.95% 2.41% $ 78 $275
Growth Portfolio 1.46% 0.84% 2.30% $ 77 $264
Growth & Income Portfolio 1.46% 0.71% 2.17% $ 76 $250
High-Yield Portfolio 1.46% 0.95% 2.41% $ 78 $275
International Portfolio 1.46% 0.95% 2.41% $ 78 $275
Money Market Portfolio 1.46% 0.64% 2.10% $ 75 $243
North American Government Income Portfolio 1.46% 0.95% 2.41% $ 78 $275
Premier Growth Portfolio 1.46% 1.05% 2.51% $ 79 $285
Quasar Portfolio 1.46% 0.95% 2.41% $ 78 $275
Real Estate Investment Portfolio 1.46% 0.95% 2.41% $ 78 $275
Technology Portfolio 1.46% 0.95% 2.41% $ 78 $275
Total Return Portfolio 1.46% 0.86% 2.32% $ 78 $266
U.S. Government/High Grade Securities Portfolio 1.46% 0.86% 2.32% $ 77 $266
Utility Income Portfolio 1.46% 0.95% 2.41% $ 78 $275
Worldwide Privatization Portfolio 1.46% 0.95% 2.41% $ 78 $275
</TABLE>
For more detailed information, see "Fee Tables" in the prospectus.
3
<PAGE>
================================================================================
6. TAXES
================================================================================
Unlike taxable investments where earnings are taxed in the year they are earned,
taxes on amounts earned in a non-qualified contract (one that is established
with after tax dollars) are deferred until they are withdrawn. In a qualified
contract (one that is established with before tax dollars like an IRA), all
amounts are taxable when they are withdrawn.
When you begin taking distributions or withdrawals from your contract, earnings
are considered to be taken out first and will be taxed at your ordinary income
rate. You may be subject to a 10% tax penalty for distributions or withdrawals
before age 59 1/2.
================================================================================
7. ACCESS TO YOUR MONEY
================================================================================
You may withdraw part or all of your Contract Value at anytime. You may have to
pay income tax on any amount withdrawn and a 10% tax penalty may apply if you
are under age 59 1/2.
================================================================================
8. PERFORMANCE
================================================================================
Performance of Variable Account I is not included in this profile because no
contracts have been issued using the subaccounts described in the accompanying
prospectus and, therefore, there is no performance to show at this time.
================================================================================
9. DEATH BENEFIT
================================================================================
If you die during the accumulation phase, the surviving joint owner, if
applicable, will receive the death benefit. If you die during the accumulation
phase and there is no surviving joint owner, your beneficiary will receive the
death benefit. If no named beneficiary is living at the time a death benefit
becomes payable, we will pay the death benefit to the last surviving owner's
estate. Unless you choose an optional death benefit, we will pay the traditional
death benefit. You may select from the death benefit options described below at
the time you purchase your contract. Once we issue your contract, you cannot add
death benefit options. You should discuss with your financial representative
which option is best for you. Additional information is available in the
prospectus.
Traditional Death Benefit
The traditional death benefit is equal to the greater of:
(1) the Contract Value; or
(2) the total of all premium paid, reduced proportionally by any surrenders in
the same proportion that the Contract Value was reduced on the date of a
surrender.
The traditional death benefit will be paid if no other death benefit is
selected.
Optional Death Benefits
There is a charge for each optional death benefit as described under "Expenses"
above.
4
<PAGE>
Annual Ratchet Plan. We will pay a death benefit equal to the greatest of:
(1) the Contract Value;
(2) the total of all premium paid reduced proportionally by any surrenders in
the same proportion that the Contract Value was reduced on the date of a
surrender; or
(3) the greatest Contract Value at any Contract Anniversary reduced
proportionally by any surrenders subsequent to that Contract Anniversary
in the same proportion that the Contract Value was reduced on the date of
a surrender, plus any premium paid subsequent to that Contract
Anniversary.
Equity Assurance Plan. We will pay a death benefit equal to the greater of:
(1) the Contract Value; or
(2) an amount equal to (a) plus (b) where:
(a) is equal to the total of all premium paid on or before the first
Contract Anniversary following your 85th birthday, adjusted for surrenders and
then accumulated at the compound interest rates shown below for the number of
completed years, not to exceed 10, from the date of receipt of each premium to
the earlier of the date of death or the first Contract Anniversary following
your 85th birthday:
o 0% per annum if death occurs during the 1st through 24th month from
the date of premium payment;
o 2% per annum if death occurs during the 25th through 48th month from
the date of premium payment;
o 4% per annum if death occurs during the 49th through 72nd month from
the date of premium payment;
o 6% per annum if death occurs during the 73rd through 96th month from
the date of premium payment;
o 8% per annum if death occurs during the 97th through 120th month
from the date of premium payment;
o 10% per annum (for a maximum of 10 years) if death occurs more than
120 months from the date of premium payment; and
(b) is equal to all premium paid after the first Contract Anniversary
following your 85th birthday, adjusted for surrenders.
Enhanced Equity Assurance Plan. We will pay a death benefit equal to the
greatest of:
(1) the Contract Value;
(2) the greatest Contract Value at any Contract Anniversary reduced
proportionally by any surrenders subsequent to that Contract Anniversary
in the same proportion that the Contract Value was reduced on the date of
a surrender, plus any premium paid subsequent to that Contract
Anniversary.
(3) an amount equal to (a) plus (b) where:
(a) is equal to the total of all premium paid on or before the first
Contract Anniversary following your 85th birthday, adjusted for surrenders and
then accumulated at the compound interest rates shown below for the number
5
<PAGE>
of completed years, not to exceed 10, from the date of receipt of each premium
to the earlier of the date of death or the first Contract Anniversary following
your 85th birthday:
o 0% per annum if death occurs during the 1st through 24th month from
the date of premium payment;
o 2% per annum if death occurs during the 25th through 48th month from
the date of premium payment;
o 4% per annum if death occurs during the 49th through 72nd month from
the date of premium payment;
o 6% per annum if death occurs during the 73rd through 96th month from
the date of premium payment;
o 8% per annum if death occurs during the 97th through 120th month
from the date of premium payment;
o 10% per annum (for a maximum of 10 years) if death occurs more than
120 months from the date of premium payment; and
(b) is equal to all premium paid after the first Contract Anniversary
following your 85th birthday, adjusted for surrenders.
Accidental Death Benefit
If you select the accidental death benefit, it will be paid in addition to the
traditional or optional death benefit in effect at the time of your death. We
will calculate and deduct a monthly daily charge against the assets in the
variable account equal to an annual charge of ____%. The accidental death
benefit is not available if the contract is used as an IRA. If selected, the
accidental death benefit payable under this option will be equal to the lesser
of:
(1) the Contract Value as of the date the death benefit is determined; or
(2) $250,000.
================================================================================
10. OTHER INFORMATION
================================================================================
Right to Examine and Cancel: You may cancel your contract within ten days (or
longer if your state requires a longer period) by mailing it to our
Administrative Office. Your contract will be treated as void on the date we
receive it and we will pay you an amount equal to the value of your contract
(unless otherwise required by state law). Its value may be more or less than the
money you initially invested.
Dollar Cost Averaging: If selected, these programs allow you to invest in the
portfolios gradually over time at a fixed dollar amount or a certain percentage
each month. This type of investing will cover various market cycles. Your
Contract Value must be at least $12,000 to elect this option. The 6-month dollar
cost averaging program may not be available in all states.
Asset Rebalancing: If selected, this program seeks to keep your investment in
line with your goals. We will maintain your specified allocation mix among the
subaccounts that you selected. The Contract Value allocated to each subaccount
will grow or decline in value at different rates during the quarter. Asset
rebalancing automatically reallocates according to the allocation percentages
you selected.
Systematic Withdrawal Program: If selected, this program allows you to receive
either monthly or quarterly withdrawals during the accumulation phase. Of
course, withdrawals may be taxable and a 10% tax penalty may apply if you are
under age 59 1/2. Your Contract Value must be at least $24,000 to elect this
option.
6
<PAGE>
Confirmations and Quarterly Statements: You will receive a confirmation of each
financial transaction within your contract. On a quarterly basis, you will
receive a complete statement of your transactions over the past quarter and a
summary of your Contract Value.
================================================================================
11. INQUIRIES
================================================================================
If you have questions about your contract or need to make changes, call your
financial representative or contact us at:
AIG Life Insurance Company
c/o Delaware Valley Financial Services
P.O. Box 3031
Berwyn, PA 19312-0031
1-800-255-8402
7
<PAGE>
PROSPECTUS
OVATION ADVISOR VARIABLE ANNUITY
issued by
AIG LIFE INSURANCE COMPANY
through its
VARIABLE ACCOUNT I
This prospectus describes a variable annuity contract being offered to
individuals and groups. It is a flexible premium, deferred annuity contract with
a fixed investment option. Please read this prospectus carefully before
investing and keep it for future reference.
The contract has seventeen investment options to which you can allocate your
money -- sixteen variable investment options listed below and one fixed
investment option. The fixed investment option is part of our general account,
which earns a minimum of 3% interest. The variable investment options are
portfolios of the Alliance Variable Products Series Fund, Inc.
Alliance Variable Products Series Fund, Inc.
(managed by Alliance Capital Management L.P.)
Global Bond Portfolio
Global Dollar Government Portfolio
Growth Portfolio
Growth & Income Portfolio
High-Yield Portfolio
International Portfolio
Money Market Portfolio
North American Government Income Portfolio
Premier Growth Portfolio
Quasar Portfolio
Real Estate Investment Portfolio
Technology Portfolio
Total Return Portfolio
U.S. Government/High Grade Securities Portfolio
Utility Income Portfolio
Worldwide Privatization Portfolio
To learn more about the contract, you can obtain a copy of the Statement of
Additional Information ("SAI") dated ________, 2001. The SAI has been filed with
the Securities and Exchange Commission ("SEC") and is incorporated by reference
into this prospectus. The table of contents of the SAI appears on the last page
of this prospectus. For a free copy of the SAI, call us at (800) 255-8402 or
write to us at AIG Life Insurance Company, Attention: Variable Products, One
Alico Plaza, 600 King Street, Wilmington, Delaware 19801.
In addition, the SEC maintains a website at http://www.sec.gov that contains the
prospectus, SAI, materials incorporated by reference and other information that
we have filed electronically with the SEC.
Variable annuities involve risks, including possible loss of principal. They are
not a deposit of any bank or insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.
The SEC has not approved or disapproved of the contract or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
__________, 2001
<PAGE>
================================================================================
TABLE OF CONTENTS
================================================================================
DEFINITIONS................................................................
FEE TABLES.................................................................
CONDENSED FINANCIAL INFORMATION............................................
THE CONTRACT...............................................................
INVESTMENT OPTIONS.........................................................
CHARGES AND DEDUCTIONS.....................................................
ACCESS TO YOUR MONEY.......................................................
ANNUITY PAYMENTS...........................................................
DEATH BENEFIT..............................................................
PERFORMANCE................................................................
TAXES......................................................................
OTHER INFORMATION..........................................................
FINANCIAL STATEMENTS.......................................................
TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION...................
2
<PAGE>
================================================================================
DEFINITIONS
================================================================================
We have capitalized certain terms used in this prospectus. To help you
understand these terms, we have defined them in this glossary.
Accumulation Unit - An accounting unit of measure used to calculate your
Contract Value prior to the Annuity Date.
Administrative Office - The Annuity Service Office, c/o Delaware Valley
Financial Services, Inc., P.O. Box 3031, Berwyn, Pennsylvania 19312-0031.
Annuitant - The person you designate to receive annuity payments and whose life
determines the duration of annuity payments involving life contingencies.
Annuity Date - The date on which annuity payments begin.
Annuity Unit - An accounting unit of measure used to calculate annuity payments
after the Annuity Date.
Contract Anniversary - An anniversary of the date we issued your contract.
Contract Value - The dollar value as of any Valuation Date of all amounts
accumulated under your contract.
Contract Year - Each period of twelve months commencing with the date we issued
your contract.
Premium Year - Any period of twelve months commencing with the date we receive a
premium payment and ending on the same date in each succeeding twelve-month
period thereafter.
Valuation Date - Each day that the New York Stock Exchange is open for trading.
Valuation Period - The period between the close of business on any Valuation
Date and the close of business for the next succeeding Valuation Date.
3
<PAGE>
================================================================================
FEE TABLES
================================================================================
Owner Transaction Expenses
Sales Load............................................................. None
Transfer Fee
First 12 Per Contract Year.......................................... None
Thereafter.......................................................... $10
Contract Maintenance Fee (waived if Contract Value is $50,000
or greater).......................................................... $30/yr
Standard Variable Account Annual Expenses (as a percentage of
average account value)
Mortality and Expense Risk Charge.................................... 1.25%
Administrative Charge................................................ 0.15%
====
Total Standard Variable Account Annual Expenses...................... 1.40%
Optional Variable Account Annual Expenses (as a percentage of
average account value)
Annual Ratchet Plan.................................................. ____%
Equity Assurance Plan................................................ ____%
Enhanced Equity Assurance Plan....................................... ____%
Accidental Death Benefit............................................. ____%
4
<PAGE>
Annual Portfolio Expenses
After Waivers/Reimbursement
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Management Other Total Annual
Fees Expenses(1) Portfolio Expenses(2)
Alliance Variable Products Series Fund, Inc.
<S> <C> <C> <C>
Global Bond Portfolio 0.65% 0.25% 0.90%
Global Dollar Government Portfolio 0.12% 0.83% 0.95%
Growth Portfolio 0.75% 0.09% 0.84%
Growth and Income Portfolio 0.63% 0.08% 0.71%
High-Yield Portfolio 0.60% 0.35% 0.95%
International Portfolio 0.69% 0.26% 0.95%
Money Market Portfolio 0.50% 0.14% 0.64%
North American Government Income Portfolio 0.61% 0.34% 0.95%
Premier Growth Portfolio 1.00% 0.05% 1.05%
Quasar Portfolio 0.81% 0.14% 0.95%
Real Estate Investment Portfolio 0.49% 0.46% 0.95%
Technology Portfolio 0.86% 0.09% 0.95%
Total Return Portfolio 0.63% 0.23% 0.86%
U.S. Government/High Grade Securities Portfolio 0.60% 0.26% 0.86%
Utility Income Portfolio 0.72% 0.23% 0.95%
Worldwide Privatization Portfolio 0.63% 0.32% 0.95%
</TABLE>
(1) Other expenses are based on the expenses outlined in the prospectus for
the Alliance Variable Products Series Funds, Inc.
(2) Total annual expenses for the following portfolios before waivers and
reimbursement by Alliance Capital Management L.P. for the year ended
December 31, 1999, were as follows:
Global Bond Portfolio.........................1.04%
Global Dollar Government Portfolio............2.29%
High-Yield Portfolio..........................1.40%
International Portfolio.......................1.36%
North American Government Income Portfolio....1.20%
Quasar Portfolio..............................1.19%
Real Estate Investment Portfolio..............1.72%
Technology Portfolio..........................1.12%
Utility Income Portfolio......................1.14%
Worldwide Privatization Portfolio.............1.46%
5
<PAGE>
Example
You would pay the following expenses on a $1,000 investment, assuming 5% growth,
whether or not you surrender or annuitize at the end of the applicable period:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Alliance Variable Products Series Fund, Inc.
Global Bond Portfolio $24 $74 $126 $270
Global Dollar Government Portfolio $24 $75 $129 $275
Growth Portfolio $23 $72 $123 $264
Growth & Income Portfolio $22 $68 $116 $250
High-Yield Portfolio $24 $75 $129 $275
International Portfolio $24 $75 $129 $275
Money Market Portfolio $21 $66 $113 $243
North American Government Income Portfolio $24 $75 $129 $275
Premier Growth Portfolio $25 $78 $134 $285
Quasar Portfolio $24 $75 $129 $275
Real Estate Investment Portfolio $24 $75 $129 $275
Technology Portfolio $24 $75 $129 $275
Total Return Portfolio $24 $72 $124 $266
U.S. Government/High Grade Securities Portfolio $24 $72 $124 $266
Utility Income Portfolio $24 $75 $129 $275
Worldwide Privatization Portfolio $24 $75 $129 $275
</TABLE>
The purpose of the tables and the example above is to assist you in
understanding the various costs and expenses that you will bear directly or
indirectly. The example reflects the expenses of the variable account (except
optional benefit charges) and the portfolios, but does not reflect any deduction
for premium taxes, if any. The example should not be considered a representation
of past or future expenses. Actual expenses may be greater or less than those
shown.
================================================================================
CONDENSED FINANCIAL INFORMATION
================================================================================
Historical accumulation unit values are not included because no contracts have
been issued using the subaccounts described in this prospectus.
================================================================================
THE CONTRACT
================================================================================
General Description
An annuity is a contract between you, as the owner, and a life insurance
company. The contract provides tax deferral for your earnings, which means your
earnings accumulate on a tax-deferred basis until you take money out of your
contract. It also provides a death benefit and a guaranteed income in the form
of annuity payments beginning on a date you select. Until you, or another person
you select as the Annuitant, begin to receive annuity payments, your annuity is
in the accumulation phase. The income phase begins once you begin receiving
annuity payments. If you die during the accumulation phase, we guarantee a death
benefit to the surviving joint owner, if applicable, or to your beneficiary.
6
<PAGE>
The contract is called a variable annuity because you can allocate your money
among variable investment options. Each subaccount of our variable account
invests in shares of a corresponding portfolio of a mutual fund. Depending on
market conditions, the various portfolios may make or lose money. If you
allocate money to the portfolios, your Contract Value during the accumulation
phase will depend on their investment performance. In addition, the amount of
the variable annuity payments you may receive will depend on the investment
performance of the portfolios you select for the income phase.
The contract also has a fixed investment option that is part of our general
account. Premium you allocate to the fixed investment option will earn interest
at a fixed rate that we set. We guarantee the interest rate will never be less
than 3%. Your Contract Value in the general account during the accumulation
phase will depend on the total interest we credit. During the income phase, each
annuity payment you receive from the fixed portion of your contract will be for
the same amount.
Purchasing a Contract
Premium is the money you give us as payment to buy the contract, as well as any
additional money you give us to invest in the contract after you own it. The
minimum initial investment for both qualified and non-qualified contracts is
$5,000. You may add premium payments of $1,000 or more to your contract at any
time during the accumulation phase. You can pay scheduled subsequent premium of
$100 or more per month by enrolling in an automatic investment plan.
We may refuse any premium. In general, we will not issue a contract to anyone
who is over age 85.
Allocation of Premium
When you purchase a contract, you will tell us how to allocate your initial
premium among the investment options. We will allocate additional premium in the
same way unless you tell us otherwise.
At the time of application, we must receive your initial premium at our
Administrative Office before the contract will be effective. We will issue your
contract and allocate your initial premium within two business days. If you do
not give us all the necessary information we need to issue the contract, we will
contact you to obtain it. If we are unable to complete this process within five
business days, we will send your money back unless you allow us to keep it until
we get all the necessary information.
Right to Examine Contract
If you change your mind about owning this contract, you can cancel it within ten
days after receiving it (or longer if required by state law) by mailing it back
to our Administrative Office:
Delaware Valley Financial Services, Inc., P.O. Box 3031, Berwyn, PA 19312-0031.
You will receive your Contract Value as of the day we receive your request,
which may be more or less than the money you initially invested.
In certain states or if you purchase your contract as an individual retirement
annuity, we may be required to return your premium. If you cancel your contract
during the right to examine period, we will return to you an amount equal to
your premium payments less any partial surrender.
Accumulation Units
The value of an Accumulation Unit may go up or down from day to day. When you
pay a premium, we credit your contract with Accumulation Units. The number of
Accumulation Units credited is determined by dividing the amount of premium
allocated to a subaccount by the value of the Accumulation Unit for that
subaccount. We calculate the value of an Accumulation Unit as of the close of
business of the New York Stock Exchange ("NYSE")
7
<PAGE>
on each day that the NYSE is open for trading. Except in the case of initial
premium, we credit Accumulation Units to your contract at the value next
calculated after we receive your premium at our Administrative Office.
The Accumulation Unit value for each portfolio will vary from one valuation
period to the next based on the investment experience of the assets in the
portfolio and the deduction of certain charges and expenses. The SAI contains a
detailed explanation of how Accumulation Units are valued.
Your value in any portfolio is determined by multiplying its unit value by the
number of units you own. Your value within the variable investment options is
the sum of your values in all the portfolios. The total value of your contract,
referred to as the Contract Value, equals your value in the variable investment
options plus your value in the fixed investment option.
Transfers During the Accumulation Phase
You can transfer money among the investment options by written request or by
telephone. You can make twelve transfers every Contract Year without charge.
There is a $10 transfer fee for each transfer over twelve in a Contract Year.
Transfers as a result of dollar cost averaging or asset rebalancing are not
counted against your twelve free transfers.
The minimum amount you can transfer is the lesser of $1,000 or your entire value
in the investment option. You cannot make a partial transfer if, after the
transfer, there would be less than $1,000 in the investment option from which
the transfer is being made. Your transfer request must clearly state which
investment options are involved and the amount of the transfer.
We will accept transfers by telephone from you, your representative or anyone
else designated by you. Neither we nor the fund will be liable for following
telephone instructions we reasonably believe to be genuine or for any loss,
damage, cost or expense in acting on such instructions. We have procedures in
place to provide reasonable assurance that telephone instructions are genuine.
We reserve the right to modify, suspend or terminate the transfer provisions at
any time.
Dollar Cost Averaging
The contract has a feature that allows you to dollar cost average your
allocations to the portfolios by authorizing us to make periodic allocations of
Contract Value from either the money market portfolio or the fixed investment
option to one or more of the other portfolios. Dollar cost averaging is a
systematic method of investing in which securities are purchased at regular
intervals in fixed dollar amounts so that the cost of the securities gets
averaged over time and possibly over various market cycles. It will result in
the reallocation of Contract Value to one or more portfolios and these amounts
will be credited at the Accumulation Unit value as of the Valuation Dates on
which the exchanges are effected. The amounts exchanged from a portfolio will
result in a debiting of a greater number of units when the Accumulation Unit
value is low and a lower number of units when the Accumulation Unit value is
high.
To elect dollar cost averaging, your Contract Value must be at least $12,000.
You must send us a completed dollar cost averaging request form, which is
available from the Administrative Office. We will not consider your request
unless your Contract Value is at least the required amount or the premium
submitted is at least $12,000.
Dollar cost averaging does not guarantee profits, nor does it assure that you
will not have losses.
In addition to the dollar cost averaging program described above, we also offer
a six-month dollar cost averaging program that is available only for new premium
payments of at least $12,000. Either initial premium or subsequent
8
<PAGE>
premium payments are eligible for this program. You may not include existing
Contract Value in the six-month dollar cost averaging program.
If you select this program, your premium will be allocated to the DCA account.
The DCA account is a guaranteed account available only for the six month dollar
cost averaging program. Your contract value in the DCA account will earn
interest at a rate guaranteed for six months from the date we receive your new
premium. The interest rate applicable to each account varies. Therefore, each
premium allocation to the program may earn interest at a different rate. The
full amount of the premium you allocate to the DCA account will be transferred
on a monthly basis over a six-month period into portfolios you have selected.
The minimum monthly amount that can be transferred from the DCA account is
one-sixth of the premium allocated to it. You may not change the amount or
frequency of transfers under this program.
The interest rate credited to the DCA account may be different from the interest
rate credited to the guaranteed option. If the six-month dollar cost averaging
program is terminated, we will automatically transfer any Contract Value
remaining in the DCA account to the guaranteed account option.
The six-month dollar cost averaging program may not be available in your state.
Please contact us for more information.
There is no charge for either dollar cost averaging program. In addition, your
periodic transfers under either dollar cost averaging program are not counted
against your twelve free transfers per Contract Year. You may not have dollar
cost averaging and asset rebalancing in effect at the same time. We reserve the
right to modify, suspend or terminate any dollar cost averaging program at any
time.
Asset Rebalancing
Once your premium has been allocated among the investment options, the earnings
may cause the percentage invested in each investment option to differ from your
allocation instructions. You can direct us to automatically rebalance your
contract to return to your allocation percentages by selecting our asset
rebalancing program. Rebalancing will be on a calendar quarter basis and will
occur on the last business day of the quarter. The minimum amount of each
rebalancing is $1,000.
There is no charge for asset rebalancing. In addition, a rebalancing is not
counted against your twelve free transfers each Contract Year. You may not
select dollar cost averaging and asset rebalancing at the same time. We reserve
the right to modify, suspend or terminate this program at anytime. We also
reserve the right to waive the $1,000 minimum amount for asset rebalancing.
================================================================================
INVESTMENT OPTIONS
================================================================================
Variable Investment Options
Variable Account I
Our board of directors authorized the organization of the variable account in
1986. The variable account is maintained pursuant to Delaware insurance law and
is registered with the SEC as a unit investment trust under the Investment
Company Act of 1940, as amended (the "1940 Act"). However, the SEC does not
supervise the management or the investment practices of the variable account.
We own the assets in the variable account and use them to support the variable
portion of your contract and other variable annuity contracts described in other
prospectuses. The variable account's assets are separate from our other
9
<PAGE>
assets and are not chargeable with liabilities arising out of any other business
we conduct. Income, gains or losses, whether or not realized, are credited to or
charged against the subaccounts of the variable account without regard to
income, gains or losses arising out of any of our other business. As a result,
the investment performance of each subaccount of the variable account is
entirely independent of the investment performance of our general account and of
any of our other variable accounts.
The variable account is divided into subaccounts, each of which invests in
shares of a different portfolio of a mutual fund. The variable account maintains
subaccounts that are not available under the contract. We may, from time to
time, add or remove subaccounts and the corresponding portfolios. No
substitution of shares of one portfolio for another will be made until you have
been notified and the SEC has approved the change. If deemed to be in the best
interest of persons having voting rights under the contract, the variable
account may be operated as a management company under the 1940 Act, may be
deregistered under that Act in the event such registration is no longer
required, or may be combined with one or more other variable accounts.
The Fund and Its Portfolios
The Alliance Variable Products Series Fund, Inc. is a mutual fund registered
with the SEC. It has additional portfolios that are not available under the
contract.
You should carefully read the fund's prospectus before investing. The fund
prospectus is attached to this prospectus and contains detailed information
regarding management of the portfolios, investment objectives, investment
advisory fees and other charges. The prospectus also discusses the risks
involved in investing in the portfolios. Below is a summary of the investment
objectives of the portfolios available under the contract. There is no assurance
that any of these portfolios will achieve its stated objectives.
Global Bond Portfolio seeks a high level of return from a combination of current
income and capital appreciation by investing in a globally diversified portfolio
of high quality debt securities denominated in the U.S. dollar and a range of
foreign currencies. The sub-adviser for this portfolio is AIGAM International
Limited, an affiliate of American International Group, Inc.
Global Dollar Government Portfolio seeks a high level of current income through
investing substantially all of its assets in U.S. and non-U.S. fixed income
securities denominated only in U.S. dollars. As a secondary objective, the
portfolio seeks capital appreciation. Substantially all of the portfolio's
assets will be invested in high yield, high risk securities that are low-rated
(i.e., below investment grade), or of comparable quality and unrated, and that
are considered to be predominately speculative as regards the issuer's capacity
to pay interest and repay principal.
Growth Portfolio seeks long-term growth of capital by investing primarily in
common stocks and other equity securities.
Growth and Income Portfolio seeks to balance the objectives of reasonable
current income and reasonable opportunities for appreciation through investments
primarily in dividend-paying common stocks of good quality.
High-Yield Portfolio seeks the highest level of current income available without
assuming undue risk by investing principally in high-yielding fixed income
securities. As a secondary objective, this portfolio seeks capital appreciation
where consistent with its primary objective. Many of the high-yielding
securities in which the High-Yield Portfolio invests are rated in the lower
rating categories (i.e., below investment grade) by the nationally recognized
rating services. These securities, which are often referred to as "junk bonds,"
are subject to greater risk of loss of principal and interest than higher rated
securities and are considered to be predominately speculative with respect to
the issuer's capacity to pay interest and repay principal.
International Portfolio seeks to obtain a total return on its assets from
long-term growth of capital and from income principally through a broad
portfolio of marketable securities of established non-U.S. companies (or U.S.
companies
10
<PAGE>
having their principal activities and interests outside the United States),
companies participating in foreign economies with prospects for growth, and
foreign government securities.
Money Market Portfolio seeks safety of principal, maintenance of liquidity and
maximum current income by investing in a broadly diversified portfolio of money
market securities. An investment in the Money Market Portfolio is neither
insured nor guaranteed by the U.S. Government. There can be no assurance that
the portfolio will be able to maintain a stable net asset value of $1.00 per
share, although it expects to do so.
North American Government Income Portfolio seeks the highest level of current
income, consistent with what the adviser considers to be prudent investment
risk, that is available from a portfolio of debt securities issued or guaranteed
by the governments of the United States, Canada and Mexico, their political
subdivisions (including Canadian Provinces but excluding the states of the
United States), agencies, instrumentalities or authorities. The portfolio seeks
high current yields by investing in government securities denominated in local
currency and U.S. dollars. Normally, the portfolio expects to maintain at least
25% of its assets in securities denominated in the U.S. dollar.
Premier Growth Portfolio seeks growth of capital rather than current income. In
pursuing its investment objective, the Premier Growth Portfolio will employ
aggressive investment policies. Since investments will be made based on their
potential for capital appreciation, current income will be incidental to the
objective of capital growth. The portfolio is not intended for investors whose
principal objective is assured income or preservation of capital.
Quasar Portfolio seeks growth of capital by pursuing aggressive investment
policies. The portfolio invests principally in a diversified portfolio of equity
securities of any company and industry and in any type of security that is
believed to offer possibilities for capital appreciation.
Real Estate Investment Portfolio seeks total return on its assets from long-term
growth of capital and from income principally through investing in a portfolio
of equity securities of issuers that are primarily engaged in or related to the
real estate industry.
Technology Portfolio seeks growth of capital through investment in companies
expected to benefit from advances in technology. The portfolio invests
principally in a diversified portfolio of securities of companies that use
technology extensively in the development of new or improved products or
processes.
Total Return Portfolio seeks to achieve a high return through a combination of
current income and capital appreciation by investing in a diversified portfolio
of common and preferred stocks, senior corporate debt securities, and U.S.
government and agency obligations, bonds and senior debt securities.
U.S. Government/High Grade Securities Portfolio seeks a high level of current
income consistent with preservation of capital by investing principally in a
portfolio of U.S. government securities and other high grade debt securities.
Utility Income Portfolio seeks current income and capital appreciation by
investing primarily in the equity and fixed-income securities of companies in
the "utilities industry." The portfolio's investment objective and policies are
designed to take advantage of the characteristics and historical performance of
securities of utilities companies. The utilities industry consists of companies
engaged in the manufacture, production, generation, provision, transmission,
sale and distribution of gas, electric energy, and communications equipment and
services, and in the provision of other utility or utility-related goods and
services.
Worldwide Privatization Portfolio seeks long-term capital appreciation by
investing principally in equity securities issued by enterprises that are
undergoing, or have undergone, privatization. The balance of the portfolio's
investment portfolio will include equity securities of companies that are
believed by the adviser to be beneficiaries of the privatization process.
11
<PAGE>
Alliance Capital Management L.P. may compensate us for providing administrative
services in connection with the portfolios that are offered under the contract.
Such compensation is paid from its assets.
Fixed Investment Option
Premium you allocate to the fixed investment option is guaranteed and goes into
our general account. The general account is not registered with the SEC. The
general account is invested in assets permitted by state insurance law. It is
made up of all of our assets other than assets attributable to our variable
accounts. Unlike our variable account assets, assets in the general account are
subject to claims of owners like you, as well as claims made by our other
creditors.
We credit money allocated to the fixed investment option with interest on a
daily basis at the guaranteed rate then in effect. The rate of interest to be
credited to the general account is determined wholly within our discretion.
However, the rate will not be changed more than once per year. The interest rate
will never be less than 3%.
If you allocate premium to the fixed investment option, the fixed portion of
your Contract Value during the accumulation phase will depend on the total
interest we credit to your contract. During the income phase, each annuity
payment you receive from the fixed portion of your contract will be for the same
amount.
We reserve the right to delay any payment from the general account for up to six
months from the date we receive the request at our Administrative Office, as
permitted by law.
================================================================================
CHARGES AND DEDUCTIONS
================================================================================
Insurance Charges
Each day, we deduct insurance charges from your Contract Value. This is done as
part of our calculation of the value of Accumulation Units during the
accumulation phase and of Annuity Units during the income phase. The insurance
charges are the mortality and expense risk charge, the administrative charge,
and the charges for the optional death benefits described under "Death Benefit."
Mortality and Expense Risk Charge
The mortality and expense risk charge is equal, on an annual basis, to 1.25% of
the daily value of the variable portion of your contract. We will not increase
this charge. It compensates us for assuming the risks associated with our
obligations to make annuity payments and to provide the death benefit and for
assuming the risk that current charges will be insufficient in the future to
cover the cost of administering the contract. If the charges under the contract
are not sufficient, we will bear the loss. If the charges are sufficient, we
will keep the balance of this charge as profit.
Administrative Charge
The administrative charge is equal, on an annual basis, to 0.15% of the daily
value of the variable portion of your contract. It compensates us for our
administrative expenses, which include preparing the contract, confirmations and
statements, and maintaining contract records. If this charge is not enough to
cover the costs of administering the contract, we will bear the loss.
12
<PAGE>
Optional Death Benefit Charges
If you elect an optional death benefit, we will calculate and deduct a monthly
charge against the assets in the variable account equal to an annual charge as
shown below.
Annual Ratchet Plan ____%
Equity Assurance Plan
Owner's Attained Age Annual Charge
-------------------- -------------
0-59 ____%
60+ ____%
Enhanced Equity Assurance Plan
Owner's Attained Age Annual Charge
-------------------- -------------
0-59 ____%
60+ ____%
Accidental Death Benefit ____%
Contract Maintenance Fee
During the accumulation phase, we will deduct a contract maintenance fee of $30
from your contract on each Contract Anniversary. We will not increase this fee.
It compensates us for the expenses incurred to establish and maintain your
contract. If you surrender the entire value of your contract, the contract
maintenance fee will be deducted prior to the surrender. During the income
phase, we will pro rate the contract maintenance fee and deduct it from the
monthly annuity payments.
We do not deduct the contract maintenance fee if your Contract Value is $50,000
or more when the deduction is to be made.
Premium Taxes
We will deduct from your Contract Value any premium tax imposed by the state or
locality where you reside. Premium taxes currently imposed on the contract by
various states range from 0% to 3.5% of premiums paid. These taxes are due
either when premium is paid or when annuity payments begin. It is our current
practice to charge you for these taxes when annuity payments begin or if you
surrender the contract in full. In the future, we may discontinue this practice
and assess the tax when it is due or upon the payment of the death benefit.
Income Taxes
Although we do not currently deduct any charges for income taxes attributable to
your contract, we reserve the right to do so in the future.
Fund Expenses
There are deductions from and expenses paid out of the assets of the various
portfolios. These charges are described in the prospectus for the Alliance
Variable Products Series Fund, Inc. and are summarized in the fee table.
13
<PAGE>
Reduction or Elimination of Certain Charges and Additional Amounts Credited
We may reduce or eliminate the administrative charge or change the minimum
premium requirement when the contract is sold to groups of individuals under
circumstances which reduce our sales expenses. We will determine the eligibility
of such groups by considering factors such as:
(1) the size of the group;
(2) the total amount of premium we expect to receive from the group;
(3) the nature of the purchase and the persistency we expect in that
group;
(4) the purpose of the purchase and whether that purpose makes it likely
that expenses will be reduced; and
(5) any other circumstances that we believe are relevant in determining
whether reduced sales expenses may be expected.
We may also waive or reduce the contract maintenance fee in connection with
contracts sold to employees, employees of affiliates, registered
representatives, employees of broker-dealers which have a current selling
agreement with us, and immediate family members of those persons. Any reduction
or waiver may be withdrawn or modified by us.
================================================================================
ACCESS TO YOUR MONEY
================================================================================
Generally
Contract Value is available in the following ways:
o by surrendering all or part of your Contract Value during the
accumulation phase;
o by receiving annuity payments during the income phase;
o when a death benefit is paid.
Generally, surrenders are subject to a contract maintenance fee and, if it is a
full surrender, premium taxes. Surrenders may also be subject to income tax and
a penalty tax.
To make a surrender you must send a complete and detailed written request to our
Administrative Office. We will calculate your surrender as of the close of
business of the NYSE at the value next determined after we receive your request.
To surrender your entire Contract Value, you must also send us your contract.
Under most circumstances, partial surrenders must be for a minimum of $500. We
require that your Contract Value be at least $2,000 after the surrender. If the
Contract Value would be less than $2,000 as a result of a surrender, we may
cancel the contract. Unless you provide us with different instructions, partial
surrenders will be made pro rata from each investment option in which your
contract is invested.
We may be required to suspend or postpone the payment of a surrender for an
undetermined period of time when:
o the NYSE is closed (other than a customary weekend and holiday
closings);
14
<PAGE>
o trading on the NYSE is restricted;
o an emergency exists such that disposal of or determination of the
value of shares of the portfolios is not reasonably practicable;
o the SEC, by order, so permits for the protection of owners.
Systematic Withdrawal Program
The systematic withdrawal program allows you to make regularly scheduled
withdrawals from your Contract Value of at least $200 each on a monthly or
quarterly basis. You may change the amount or frequency of withdrawals under the
program once per Contract Year. In order to initiate the program, your Contract
Value must be at least $24,000. A maximum of 10% of your Contract Value may be
withdrawn in a Contract Year.
Charges are not imposed on withdrawals under this program, nor is there any
charge for participating in this program. You may not elect this program if you
have made a partial surrender earlier in the same Contract Year.
Systematic withdrawals will begin on the first scheduled withdrawal date
selected by you following the date we process your request. In the event that
your value in a specified portfolio or the fixed investment option is not
sufficient to make a withdrawal or if your request for systematic withdrawal
does not specify the investment options from which to deduct withdrawals,
withdrawals will be deducted pro rata from your Contract Value in each portfolio
and the fixed investment option.
The systematic withdrawal program may be canceled at any time by written request
or automatically by us if your Contract Value falls below $1,000. In the event
the systematic withdrawal program is canceled, you may not elect to participate
in the program again until the next Contract Anniversary.
If your contract is issued in connection with an individual retirement annuity
or 403(b) Plan, you are cautioned that your rights to implement a systematic
withdrawal program may be subject to the terms and conditions of your plan,
regardless of the terms and conditions of your contract. Moreover,
implementation of the systematic withdrawal program may subject you to adverse
tax consequences, including a 10% tax penalty if you are under age 59 1/2. See
"Taxes" for a discussion of the various tax consequences.
For information, including the necessary enrollment form, please check with our
Administrative Office. We reserve the right to modify, suspend or terminate this
program at any time.
================================================================================
ANNUITY PAYMENTS
================================================================================
Generally
Beginning on the Annuity Date, the Annuitant will receive regular annuity
payments. You may choose annuity payments that are fixed, variable or a
combination of fixed and variable.
You select the Annuity Date, which must be the first day of a month and must be
at least one year after we issue your contract. You may change the Annuity Date
at least 30 days before payments are to begin. However, annuity payments must
begin by the first day of the month following the Annuitant's 90th birthday.
Certain states may require that annuity payments begin prior to such date and we
must comply with those requirements.
15
<PAGE>
You may change the Annuitant at any time prior to the Annuity Date. If you are
not the Annuitant and the Annuitant dies before the Annuity Date, you must
notify us and designate a new Annuitant.
Annuity Options
The contract offers three annuity options as described below. Other annuity
options may be made available, including other guarantee periods and options
without life contingencies, subject to our discretion. If you do not choose an
annuity option, we will make annuity payments in accordance with option 2.
However, if the annuity payments are for joint lives, we will make payments in
accordance with option 3. Where permitted by state law, we may pay the annuity
in one lump sum if your Contract Value is less than $2,000. In addition, if your
annuity payments would be less than $100 a month, we have the right to change
the frequency of your payment to be on a semiannual or annual basis so that the
payments are at least $100. We will make annuity payments to you unless you
designate another person to receive them. In that case, you must notify us in
writing at least thirty days before the Annuity Date. You will remain fully
responsible for any taxes related to the annuity payments.
Option 1 - Life Income
Under this option, we will make monthly annuity payments as long as the
Annuitant is alive. Annuity payments stop when the Annuitant dies.
Option 2 - Life Annuity with 10 Years Guaranteed
This option is similar to option 1 above with the additional guarantee that
monthly payments will be made for a period you select of at least 10 years.
Under this option, if the Annuitant dies before all guaranteed payments have
been made, the rest will be paid to the beneficiary for the remainder of the
period.
Option 3 - Joint and Last Survivor Income
Under this option, we will make monthly annuity payments as long as either the
Annuitant or a contingent Annuitant is alive. If your contract is issued as an
individual retirement annuity, payments under this option will be made only to
you as Annuitant or to your spouse. Upon the death of either of you, we will
continue to make annuity payments so long as the survivor is alive.
Variable Annuity Payments
If you choose to have any portion of your annuity payments based on the variable
investment options, the amount of your payments will depend upon:
o your Contract Value in the portfolios on the Annuity Date;
o the 5% assumed investment rate used in the annuity table for the
contract;
o the performance of the portfolios you selected;
o the annuity option you selected.
If the actual performance exceeds the 5% assumed rate, the annuity payments will
increase. Similarly, if the actual rate is less than 5%, the annuity payments
will decrease. The SAI contains more information.
16
<PAGE>
Transfers During Income Phase
Transfers during the income phase are subject to the same limitations as
transfers during the accumulation phase. See "The Contract - Transfers During
Accumulation Phase." However, you may only make one transfer each month and you
may only transfer money among the variable investment options. You may not
transfer money from the fixed investment option to the variable investment
options or from the variable investment options to the fixed investment option.
Deferment of Payments
We may defer making fixed annuity payments for up to six months subject to state
law. We will credit interest to you during the deferral period.
================================================================================
DEATH BENEFIT
================================================================================
Death of Owner Before the Annuity Date
If you die before the Annuity Date and there is a joint owner of the contract,
the death benefit is payable to the surviving joint owner. If you die before the
Annuity Date and there is no surviving joint owner, the death benefit is payable
to the beneficiary. The value of the death benefit will be determined as of the
date we receive proof of death in a form acceptable to us. If ownership was
changed from one natural person to another natural person, the death benefit
will equal the Contract Value. If the surviving joint owner, if applicable, or
designated beneficiary is your spouse, he or she can elect to continue the
contract and become the owner. The amount of the death benefit to be paid is
determined by the death benefit option selected at the time of application, if
any, and is calculated in accordance with the terms of that option as described
below. The amount of the death benefit will never be less than the traditional
death benefit. If you select more than one optional death benefit, the death
benefit will be the greatest of the traditional death benefit and the optional
death benefits you select. The accidental death benefit, if applicable, will be
paid in addition to any other benefit. All death benefit options may not be
available in all states.
Traditional Death Benefit
Under the traditional death benefit, we will pay the amount equal to the greater
of:
(1) the Contract Value; or
(2) the total of all premium paid reduced proportionally by any
surrenders in the same proportion that the Contract Value was
reduced on the date of a surrender;
The traditional death benefit will be paid unless you select an optional death
benefit.
Optional Death Benefits
Annual Ratchet Plan. We will pay a death benefit equal to the greatest of:
(1) the Contract Value;
(2) the total of all premium paid reduced proportionally by any
surrenders in the same proportion that the Contract Value was
reduced on the date of a surrender; or
17
<PAGE>
(3) the greatest Contract Value at any Contract Anniversary reduced
proportionally by any surrenders subsequent to that Contract
Anniversary in the same proportion that the Contract Value was
reduced on the date of a surrender, plus any premiums paid
subsequent to that Contract Anniversary.
The annual ratchet plan will be in effect if:
(1) you select it on the application; and
(2) the charge for the annual ratchet plan is shown in your contract.
The annual ratchet plan will cease to be in effect upon our receipt of your
written request to discontinue it.
Equity Assurance Plan. We will pay a death benefit equal to the greater of:
(1) the Contract Value; or
(2) an amount equal to (a) plus (b) where:
(a) is equal to the total of all premium paid on or before the first
Contract Anniversary following your 85th birthday, adjusted for surrenders
as described below, and then accumulated at the compound interest rates
shown below for the number of completed years, not to exceed 10, from the
date of receipt of each premium to the earlier of the date of death or the
first Contract Anniversary following your 85th birthday:
o 0% per annum if death occurs during the 1st through 24th
month from the date of premium payment;
o 2% per annum if death occurs during the 25th through
48th month from the date of premium payment;
o 4% per annum if death occurs during the 49th through
72nd month from the date of premium payment;
o 6% per annum if death occurs during the 73rd through
96th month from the date of premium payment;
o 8% per annum if death occurs during the 97th through
120th month from the date of premium payment;
o 10% per annum (for a maximum of 10 years) if death
occurs more than 120 months from the date of premium
payment; and
(b) is equal to all premium paid after the first Contract
Anniversary following your 85th birthday, adjusted for surrenders as
described below.
In determining the death benefit, for each surrender a proportionate reduction
will be made to each premium paid prior to the surrender. The proportion is
determined by dividing the amount of the Contract Value surrendered by the
Contract Value immediately prior to the surrender.
The Equity Assurance Plan will be in effect if:
18
<PAGE>
(1) you select it on the application;
(2) the charge for the equity assurance plan is shown in your contract.
The equity assurance plan will cease when we receive your written request to
discontinue it or upon the allocation of Contract Value to either the money
market portfolio or fixed investment option unless such allocation is made as
part of dollar cost averaging.
Enhanced Equity Assurance Plan. We will pay a death benefit equal to the
greatest of:
(1) the Contract Value;
(2) the greatest Contract Value at any Contract Anniversary reduced
proportionally by any surrenders subsequent to that Contract
Anniversary in the same proportion that the Contract Value was
reduced on the date of a surrender, plus any premiums paid
subsequent to that Contract Anniversary; or
(3) an amount equal to (a) plus (b) where:
(a) is equal to the total of all premium paid on or before the first
Contract Anniversary following your 85th birthday, adjusted for surrenders
as described below, and then accumulated at the compound interest rates
shown below for the number of completed years, not to exceed 10, from the
date of receipt of each premium to the earlier of the date of death or the
first Contract Anniversary following your 85th birthday:
o 0% per annum if death occurs during the 1st through 24th
month from the date of premium payment;
o 2% per annum if death occurs during the 25th through
48th month from the date of premium payment;
o 4% per annum if death occurs during the 49th through
72nd month from the date of premium payment;
o 6% per annum if death occurs during the 73rd through
96th month from the date of premium payment;
o 8% per annum if death occurs during the 97th through
120th month from the date of premium payment;
o 10% per annum (for a maximum of 10 years) if death
occurs more than 120 months from the date of premium
payment; and
(b) is equal to all premium paid after the first Contract
Anniversary following your 85th birthday, adjusted for surrenders as
described below.
In determining the death benefit, for each surrender a proportionate reduction
will be made to each premium paid prior to the surrender. The proportion is
determined by dividing the amount of the Contract Value surrendered by the
Contract Value immediately prior to the surrender.
The Enhanced Equity Assurance Plan will be in effect if:
19
<PAGE>
(1) you select it on the application;
(2) the charge for the enhanced equity assurance plan is shown in your
contract.
The enhanced equity assurance plan will cease when we receive your written
request to discontinue it or upon the allocation of Contract Value to either the
money market portfolio or fixed investment option unless such allocation is made
as part of dollar cost averaging.
Accidental Death Benefit
If you select the accidental death benefit at the time of application, it will
be paid in addition to the traditional or optional death benefit in effect at
the time of your death. The accidental death benefit is not available if the
contract is used in connection with an individual retirement annuity. If
selected at the time of application, the accidental death benefit payable under
this option will be equal to the lesser of:
(1) the Contract Value as of the date the death benefit is determined;
or
(2) $250,000.
The accidental death benefit is payable if you die as a result of injury prior
to the Contract Anniversary following your 75th birthday. The death must also
occur before the Annuity Date and within 365 days of the date of the accident
that caused the injury. The accidental death benefit does not apply to the death
of a surviving joint owner.
The accidental death benefit will not be paid for any death caused by or
resulting (in whole or in part) from the following:
o suicide or attempted suicide, while sane or insane, or intentionally
self-inflicted injuries;
o sickness, disease or bacterial infection of any kind, except
pyogenic infections which occur as a result of an injury or
bacterial infections which result from the accidental ingestion of
contaminated substances;
o hernia;
o injury sustained as a consequence of riding in, including boarding
or alighting from, any vehicle or device used for aerial navigation
except if you are a passenger on any aircraft licensed for the
transportation of passengers;
o declared or undeclared war or any act thereof; or
o service in the military, naval or air service of any country.
The accidental death benefit will be in effect if:
(1) you select it on the Application; and
(2) the charge for the accidental death benefit is shown in your
contract.
The accidental death benefit will cease to be in effect upon the Contract
Anniversary following your 75th birthday or upon our receipt of your written
request to discontinue.
20
<PAGE>
Payment to Surviving Joint Owner or Beneficiary
Upon your death if prior to the Annuity Date, the surviving joint owner or the
beneficiary, as applicable, may elect the death benefit to be paid as follows:
(1) payment of the entire death benefit within five years of the date of
your death; or
(2) payment over the recipient's lifetime with distribution beginning
within one year of your date of death.
If no payment option is elected within sixty days of our receipt of proof of
your death, a single sum settlement will be made at the end of the sixty-day
period following such receipt. Upon payment of a death benefit, the contract
will end.
Death of Owner After the Annuity Date
If you are not the Annuitant, and if your death occurs on or after the Annuity
Date, no death benefit will be payable under the contract. Any guaranteed
payments remaining unpaid will continue to be paid to the Annuitant pursuant to
the annuity option in force at the date of your death. If the contract is not
owned by an individual, the Annuitant will be treated as the owner and any
change of the named Annuitant will be treated as if the owner died.
Death of Annuitant
Before the Annuity Date
If you are not the Annuitant, and if the Annuitant dies before the Annuity Date,
you may name a new Annuitant. If you do not name a new Annuitant within sixty
days after we are notified of the Annuitant's death, we will deem you to be the
new Annuitant.
After the Annuity Date
If an Annuitant dies after the Annuity Date, the remaining payments, if any,
will be as specified in the annuity option in effect when the Annuitant died. We
will require proof of the Annuitant's death. The remaining benefit, if any, will
be paid to the beneficiary at least as rapidly as under the method of
distribution in effect at the Annuitant's death. If you were not the Annuitant
and no beneficiary survives the Annuitant, we will pay any remaining benefit to
you.
================================================================================
PERFORMANCE
================================================================================
Occasionally, we may advertise certain performance related information
concerning one or more of the portfolios, including total return and yield
information. A portfolio's performance information is based on the portfolio's
past performance only and is not intended as an indication of future
performance.
When we advertise the average annual total return of a portfolio, it will
usually be calculated for one, five, and ten year periods or, where a portfolio
has been in existence for a period of 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 portfolio at the beginning of the relevant period
to the value of the investment at the end of the period. Then the average annual
compounded rate of return is calculated to produce the value of the investment
at the end of the period.
21
<PAGE>
When we advertise the yield of a portfolio we will calculate it based upon a
given thirty 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 we advertise the performance of the money market portfolio we may advertise
the yield or the effective yield in addition to the total return. The yield of
the money market portfolio refers to the income generated by an investment in
that portfolio 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 portfolio 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 lower than at the portfolio level
since it is reduced by all contract charges (mortality and expense risk charge,
administrative charge, and contract maintenance fee). Likewise, yield and
effective yield at the variable account level are lower than at the portfolio
level since the variable account level total return reflects all recurring
charges.
Performance information for a portfolio may be compared to:
(1) 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 Lehman
Brothers, Inc. and Salomon Brothers, or other indices measuring
performance of a pertinent group of securities so that investors may
compare a portfolio's results with those of a group of securities
widely regarded by investors as representative of the securities
markets in general;
(2) 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;
(3) the Consumer Price Index (measure for inflation) to assess the real
rate of return from an investment in the contract; and
(4) indices or averages of alternative financial products available to
prospective investors, including the Bank Rate Monitor which
monitors average returns of various bank instruments.
================================================================================
TAXES
================================================================================
Introduction
The following discussion of federal income tax treatment is general in nature
and is not intended as tax advice. This discussion is based on current law and
interpretations, which may change. For a discussion of federal income taxes as
they relate to the fund, please see the accompanying fund prospectus. No attempt
is made to consider any applicable state or other tax laws. We do not guarantee
the tax status of your contract.
22
<PAGE>
Annuity Contracts in General
The Internal Revenue Code (the "Code") provides special rules regarding the tax
treatment of annuity contracts. Generally, you will not be taxed on the earnings
in an annuity contract until you take the money out. Different rules apply
depending on how you take the money out and whether your contract is qualified
or non-qualified, as explained below.
If you do not purchase your contract under a retirement arrangement entitled to
favorable federal income tax treatment, your contract is referred to as a
non-qualified contract. If you purchase your contract under a retirement
arrangement entitled to favorable federal income tax treatment, your contract is
referred to as a qualified contract.
Tax Treatment of Distributions -- Non-Qualified Contracts
If you make a withdrawal from a non-qualified contract or surrender it before
annuity payments begin, the amount you receive will be taxed as ordinary income,
rather than as a return of premium, until all gain has been withdrawn. For
annuity payments, any portion of each payment that is considered a return of
your premium will not be taxed. There is a 10% tax penalty on any taxable amount
you receive unless the amount received is paid:
(1) after you reach age 59 1/2;
(2) to your beneficiary after you die;
(3) after you become disabled;
(4) in a series of substantially equal installments made not less
frequently than annually under a lifetime annuity; or
(5) under an immediate annuity.
Assignments
If you assign all or part of the contract as collateral for a loan, the part
assigned will be treated as a withdrawal and the excess of the Contract Value
over total premium will be taxed as ordinary income. Please consult your tax
adviser prior to making an assignment of the contract.
Gifts of Contracts
If you transfer a contract for less than full consideration, such as by gift,
you will generally trigger tax on the gain in the contract. This rule does not
apply to those transfers between spouses or incident to divorce.
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 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 premium) 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, and in other
limited circumstances.
Distribution at Death Rules
Upon the death of the owner of a contract, certain distributions must be made:
23
<PAGE>
o If the owner dies on or after the Annuity Date, and before the entire
interest in the contract has been distributed, the remaining portion will
be distributed at least as quickly as the method in effect on the owner's
death;
o If the owner dies before the Annuity Date, the entire interest must
generally be distributed within five years after the date of death.
o If the beneficiary is a natural person, the interest may be annuitized
over the life of that individual or over a period not extending beyond the
life expectancy of that individual, so long as distributions commence
within one year after the date of death.
o If the beneficiary is the spouse of the owner, the contract may be
continued in the name of the spouse as owner.
o If the owner is not an individual, the death of the "primary annuitant"
(as defined under the Code) is treated as the death of 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.
Section 1035 Exchanges
Code Section 1035 generally provides that no gain or loss shall be recognized on
the exchange of an annuity contract for another annuity contract unless money or
other property is distributed as part of the exchange. 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 Section 1035
transactions. Prospective owners wishing to take advantage of Section 1035 of
the Code should consult their tax advisers.
Tax Treatment of Distributions --Qualified Contracts
If you purchase your contract under a tax-favored retirement plan or account,
your contract is referred to as a qualified contract. Examples of qualified
plans or accounts are:
o Individual Retirement Annuities ("IRAs");
o Roth IRAs;
o Tax Deferred Annuities (governed by Code Section 403(b) and referred to as
"403(b) Plans");
o Keogh Plans; and
o Employer-sponsored pension and profit sharing arrangements such as 401(k)
plans.
Withdrawals in General
Generally, with the exception of a Roth IRA, you have not paid any taxes on the
premium used to buy a qualified contract or on any earnings. Therefore, any
amount you take out as a withdrawal or as annuity payments will be taxable
income. In addition, a 10% tax penalty may apply to the taxable part of a
withdrawal received before age 59 1/2. Limited exceptions are provided, such as
where amounts are paid in the form of a qualified life annuity, upon death or
disability of the employee, to pay certain medical expenses, or, in some cases,
upon separation from service on or after age 55.
24
<PAGE>
Individual Retirement Annuities
Code Section 408 permits eligible individuals to contribute to an IRA. By
attachment of an endorsement that reflects the limits of Code Section 408(b),
the Contracts may be issued as 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. In addition,
distributions from an IRA may be rolled over to another IRA, provided certain
conditions are met. Most IRAs cannot accept contributions after the owner
reaches 70 1/2, and must also begin required distributions at that age. Sales of
the contract for use with IRAs are subject to special requirements, including
the requirement that informational disclosure be given to each person desiring
to establish an IRA. That person must be given the opportunity to affirm or
reverse a decision to purchase the contract. Contracts offered by this
prospectus in connection with an IRA are not available in all states. The
accidental death benefit is not available under a contract issued in connection
with an IRA.
Roth IRAs
Code Section 408A provides special rules for "Roth IRAs." The basic distinction
between a Roth IRA and a traditional IRA is that contributions to a Roth IRA are
not deductible and "qualified distributions" from a Roth IRA are not includable
in gross income for federal income tax purposes. Other differences include the
ability to make contributions to a Roth IRA after age 70 1/2 and to defer
distributions beyond age 70 1/2. Taxpayers whose adjusted gross incomes exceed
certain levels are not eligible for Roth IRAs.
403(b) Plans
The contracts are also available for use in connection with a previously
established 403(b) plan. Code Section 403(b) imposes certain restrictions on
your ability to make partial surrenders from a contract used in connection with
a 403(b) Plan, if attributable to premium paid under a salary reduction
agreement. Specifically, an owner may make a surrender or partial withdrawal
only (a) when the employee attains age 59 1/2, separates from service, dies, or
becomes disabled, or (b) in the case of hardship. In the case of hardship, only
an amount equal to the premium paid may be withdrawn. 403(b) Plans are subject
to additional requirements, including eligibility, limits on contributions,
minimum distributions, and nondiscrimination requirements applicable to the
employer. In particular, distributions generally must commence by April 1 of the
calendar year following the later of the year in which the employee (a) attains
age 70 1/2, or (b) retires. Owners and their employers are responsible for
compliance with these rules. Contracts offered by this prospectus in connection
with a 403(b) Plan are not available in all states.
Rollovers
Distributions from a 401(a) qualified plan or 403(b) plan (other 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, 403(b) plan or IRA. 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 tax law provisions applicable to
qualified plans, 403(b) plans, and IRAs.
Diversification and Investor Control
The Code imposes certain diversification requirements on the underlying
investments for a variable annuity to be treated as a variable annuity for tax
purposes. We believe that the portfolios are being managed so as to comply with
these requirements.
25
<PAGE>
The tax regulations do not provide guidance as to the circumstances under which
you, because of the degree of control you exercise over the underlying
investments, would be considered the owner of the shares of the portfolios. If
any guidance on this point is provided which is considered a new position, then
the guidance would generally be applied prospectively. However, if such guidance
is considered not to be a new position, it may be applied retroactively. This
would mean you, as the owner of the contract, could be treated as the owner of
assets in the portfolios. We reserve the right to make changes to the contract
we think necessary to see that it qualifies as a variable annuity contract for
tax purposes.
Withholding
We are required to withhold federal income taxes on withdrawals, lump sum
distributions, and annuity payments that include taxable income unless the payee
elects to not have any withholding or in certain other circumstances. If you do
not provide a social security number or other taxpayer identification number,
you will not be permitted to elect out of withholding. Special withholding rules
apply to payments made to non-resident aliens.
For lump-sum distributions or withdrawals, we are required to withhold 10% of
the taxable portion of any withdrawal or lump sum distribution unless you elect
out of withholding. For annuity payments, the company will withhold on the
taxable portion of annuity payments based on a withholding certificate you file
with us. If you do not file a certificate, you will be treated, for purposes of
determining your withholding rates, as a married person with three exemptions.
You are liable for payment of federal income taxes on the taxable portion of any
withdrawal, distribution, or annuity payment. You may be subject to penalties
under the estimated tax rules if your withholding and estimated tax payments are
not sufficient.
================================================================================
OTHER INFORMATION
================================================================================
AIG Life Insurance Company
We are a stock life insurance company initially organized under the laws of
Pennsylvania and reorganized under the laws of Delaware. We were incorporated in
1962. Our principal business address is One Alico Plaza, 600 King Street,
Wilmington, Delaware 19801. We provide a full range of life insurance and
annuity plans. We are a subsidiary of American International Group, Inc.
("AIG"), which serves as the holding company for a number of companies engaged
in the international insurance business in approximately 130 countries and
jurisdictions around the world.
We may occasionally publish in advertisements, sales literature and reports the
ratings and other information assigned to AIG by one or more independent rating
organizations such as A.M. Best Company, Moody's and Standard & Poor's. The
purpose of the ratings is to reflect the rating organization's opinion of our
financial strength and should not be considered as bearing on the investment
performance of assets held in the variable account.
The ratings are not recommendations to purchase our life insurance or annuity
products or to hold or sell these products and the ratings do not comment on the
suitability of such products for a particular investor. There can be no
assurance that any rating will remain in effect for any given period of time or
that any rating will not be lowered or withdrawn entirely by a rating
organization if, in such organization's judgment, future circumstances so
warrant. The ratings do not reflect the investment performance of the variable
account or the degree of risk associated with an investment in the variable
account.
26
<PAGE>
Ownership
This prospectus describes both individual flexible premium deferred variable
annuity contracts and group flexible premium deferred variable annuity
contracts. The individual and group contracts described in this prospectus are
identical except that the individual contract is issued directly to the
individual owner. A group contract is issued to a contract holder for the
benefit of the participants in the group. If you are a participant in the group
you will receive a certificate evidencing your ownership. You, either as the
owner of an individual contract or as the owner of a certificate, are entitled
to all the rights and privileges of ownership. As used in this prospectus, the
term contract is equally applicable to an individual contract or to a
certificate.
Voting Rights
To the extent required by law, we will vote the portfolio shares held in the
variable account at shareholder meetings in accordance with instructions
received from persons having a voting interest in the portfolio. However, if
legal requirements or our interpretation of present law changes to permit us to
vote the portfolio shares in our own right, we may elect to do so.
Prior to the Annuity Date, you hold a voting interest in each portfolio in whose
corresponding subaccount you have Contract Value. We determine the number of
portfolio shares that are attributable to you by dividing the corresponding
value in a particular portfolio by the net asset value of one portfolio share.
After the Annuity Date, we determine the number of portfolio shares that are
attributable to you by dividing the reserve maintained in a particular portfolio
to meet the obligations under the contract by the net asset value of one
portfolio share. The number of votes that you will have a right to cast will be
determined as of the record date established by each portfolio.
We will solicit voting instructions by mail prior to the shareholder meeting.
Each person having a voting interest in a portfolio will receive proxy material,
reports and other materials relating to the appropriate portfolios. We will vote
shares in accordance with instructions received from the person having a voting
interest. We will vote shares for which we receive no timely instructions and
any shares not attributable to owners in proportion to the voting instructions
we have received.
The voting rights relate only to amounts invested in the variable account. There
are no voting rights with respect to funds allocated to the fixed investment
option.
Administration of the Contract
While we have primary responsibility for all administration of the contract and
the variable account, we have retained the services of Delaware Valley Financial
Services, Inc. ("DVFS") pursuant to an administrative agreement. These
administrative services include issuance of the contract and maintenance of
owner records. DVFS serves as the administrator to various insurance companies
offering variable annuity contracts and variable life insurance policies.
Legal Proceedings
There are no pending legal proceedings that, in our judgment, are material with
respect to the variable account.
27
<PAGE>
================================================================================
FINANCIAL STATEMENTS
================================================================================
Financial statements of AIG Life Insurance Company are included in the SAI,
which may be obtained without charge by calling (800) 255-8402 or writing to AIG
Life Insurance Company, Attention: Variable Products, One Alico Plaza, 600 King
Street, Wilmington, Delaware 19801. The financial statement have also been filed
electronically with the SEC and can be obtained through its website at
http://www.sec.gov. Financial statements of the variable account are not
included because no contracts have been issued using the subaccounts described
in this prospectus.
28
<PAGE>
================================================================================
TABLE OF CONTENTS OF
THE STATEMENT OF ADDITIONAL INFORMATION
================================================================================
GENERAL INFORMATION..........................................................
AIG Life Insurance Company.............................................
Independent Accountants................................................
Legal Counsel..........................................................
Distributor............................................................
Potential Conflicts....................................................
CALCULATION OF PERFORMANCE DATA..............................................
Yield and Effective Yield Quotations for the Money Market Subaccount...
Yield Quotations for Other Subaccounts.................................
Total Return Quotations................................................
Tax Deferred Accumulation..............................................
ANNUITY PROVISIONS...........................................................
Variable Annuity Payments..............................................
Annuity Unit Value.....................................................
Net Investment Factor..................................................
Additional Provisions..................................................
FINANCIAL STATEMENTS.........................................................
29
<PAGE>
PART B
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
_______, 2000
OVATION ADVISOR VARIABLE ANNUITY
issued by
AIG LIFE INSURANCE COMPANY
through its
VARIABLE ACCOUNT I
This statement of additional information is not a prospectus. It should be read
in conjunction with the prospectus describing the flexible premium deferred
annuity contract. The prospectus concisely sets forth information that a
prospective investor should know before investing. For a copy of the prospectus
dated ________, 2000, call us at (800) 255-8402 or write to us at AIG Life
Insurance Company, Attention: Variable Products, One Alico Plaza, 600 King
Street, Wilmington, Delaware 19801.
<PAGE>
================================================================================
TABLE OF CONTENTS
================================================================================
GENERAL INFORMATION............................................................3
AIG Life Insurance Company..................................................3
Independent Accountants.....................................................3
Legal Counsel...............................................................3
Distributor.................................................................3
Potential Conflicts.........................................................3
CALCULATION OF PERFORMANCE DATA................................................4
Yield and Effective Yield Quotations for the Money Market Subaccount........4
Yield Quotations for Other Subaccounts......................................5
Total Return Quotations.....................................................5
Tax Deferred Accumulation...................................................6
ANNUITY PROVISIONS.............................................................7
Variable Annuity Payments...................................................7
Annuity Unit Value..........................................................7
Net Investment Factor.......................................................8
Additional Provisions.......................................................9
FINANCIAL STATEMENTS...........................................................9
2
<PAGE>
================================================================================
GENERAL INFORMATION
================================================================================
AIG Life Insurance Company
A description of AIG Life Insurance Company and its ownership is contained in
the prospectus. We will provide for the safekeeping of the assets of Variable
Account I.
Independent Accountants
Our financial statements have been audited by PricewaterhouseCoopers LLP,
independent certified public accountants, whose offices are located in
Washington, D.C.
Legal Counsel
Legal matters relating to the federal securities laws in connection with the
contract described herein and in the prospectus are being passed upon by Jorden
Burt Boros Cicchetti Berenson & Johnson LLP, Washington, D.C.
Distributor
Our affiliate, AIG Equity Sales Corp. ("AIGESC"), 70 Pine Street, New York, New
York, acts as the distributor of the contract. AIGESC is a wholly owned
subsidiary of American International Group, Inc. Commissions not to exceed 7% of
premiums will be paid to entities that sell the contract. Additional payments
may be made for other services not directly related to the sale of the contract,
including the recruitment and training of personnel, production of promotional
literature and similar services. Commissions are paid by Variable Account I
directly to selling dealers and representatives on behalf of AIGESC. Aggregate
commissions were $46,881,581 in 1999, $33,398,137 in 1998, and $27,225,980 in
1997. Commissions retained by AIGESC were $0 in 1999, $0 in 1998, and $193,263
in 1997.
Potential Conflicts
Shares of the funds may be sold only to separate accounts of life insurance
companies. They may be sold to our other separate accounts, as well as to
separate accounts of other affiliated or unaffiliated life insurance companies,
to fund variable annuity contracts and variable life insurance policies. It is
conceivable that, in the future, it may be disadvantageous for variable life
insurance separate accounts and variable annuity separate accounts to invest in
a fund simultaneously. Although neither we nor the funds currently foresee any
such disadvantages, either to variable life insurance policy owners or to
variable annuity owners, each fund's board of directors will monitor events in
order to identify any material irreconcilable conflicts which may possibly arise
and to determine what action, if any, should be taken. If a material
irreconcilable
3
<PAGE>
conflict were to occur, we will take whatever steps are deemed necessary, at our
expense, to remedy or eliminate the irreconcilable material conflict. As a
result, one or more insurance company separate accounts might withdraw their
investments in the fund. This might force the fund to sell securities at
disadvantageous prices.
================================================================================
CALCULATION OF PERFORMANCE DATA
================================================================================
Yield and Effective Yield Quotations for the Money Market Subaccount
The yield quotation for the money market subaccount will be for the seven days
ended on the date of the most recent balance sheet of Variable Account I
included in the registration statement. It 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 subaccount at the beginning of the period, subtracting a hypothetical
charge reflecting deductions from owner accounts, 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 subaccount will be for the
seven days ended on the date of the most recent balance sheet of Variable
Account I included in the registration statement and will be carried at least to
the nearest hundredth of one percent. It 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 subaccount at the beginning of the period, subtracting a hypothetical
charge reflecting deductions from owner accounts, 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 quotations, 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
subaccount's mean account size. No deductions are assessed upon annuitization
under the contract. Realized gains and losses from the sale of securities and
unrealized appreciation and depreciation of the money market subaccount and the
corresponding portfolio are excluded from the calculation of yield.
4
<PAGE>
Yield Quotations for Other Subaccounts
Yield quotations will be based on the thirty-day period ended on the date of the
most recent balance sheet of Variable Account I included in the registration
statement, and are computed by dividing the net investment income per
Accumulation Unit earned during the period by the maximum offering price per
unit 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 portfolio
attributable to shares owned by the Subaccount.
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of Accumulation Units outstanding
during the period.
d = the maximum offering price per Accumulation Unit on the last day
of the period
Yield quotations for a subaccount reflect all recurring contract charges. For
any charge that varies with the size of the account, the account size is assumed
to be the respective subaccount's mean account size.
Total Return Quotations
The total return quotations for all of the subaccounts will be average annual
total return quotations for the one, five, and ten year periods (or, where a
subaccount has been in existence for a period of less than one, five or ten
years, for such lesser period) ended on the date of the most recent balance
sheet of Variable Account I and for the period from the date monies were first
placed into the subaccounts 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:
P(1+T)^n = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
5
<PAGE>
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
The total return quotations reflect all recurring contract charges and assume a
total surrender at the end of the particular period. For any charge that varies
with the size of the account, the account size is assumed to be the respective
subaccount's mean account size.
Tax Deferred Accumulation
In reports or other communications to you or in advertising or sales materials,
we may also describe the effects of tax deferred compounding on Variable Account
I's investment returns or upon returns in general. These effects may be
illustrated in charts or graphs and may include comparisons at various points in
time of returns under the contract or in general on a tax-deferred basis with
the returns on a taxable basis. Different tax rates may be assumed.
In general, individuals who own annuity contracts are not taxed on increases in
the value under the annuity contract until some form of distribution is made
from the contract. Thus, the annuity contract will benefit from tax deferral
during the accumulation phase, which generally will have the effect of
permitting an investment in an annuity contract to grow more rapidly than a
comparable investment under which increases in value are taxed on a current
basis. The chart shows accumulations on an initial investment or premium of a
given amount, assuming hypothetical gross annual returns compounded annually,
and a stated assumed rate. The values shown for the taxable investment do not
include any deduction for management fees or other expenses but assume that
taxes are deducted annually from investment returns. The values shown for the
variable annuity in a chart reflect the deduction of contractual expenses such
as the 1.25% mortality and expense risk charge, the 0.15% administrative charge,
and the $30 contract maintenance fee, but not the expenses of an underlying
investment vehicle. The chart assumes a full surrender at the end of the period
shown and the payment of taxes at the 31% rate on the amount in excess of the
premium.
In developing tax-deferral charts, we will follow these general principles:
(1) the assumed rate of earnings will be realistic;
(2) the chart will depict accurately the effect of all fees and charges
or provide a narrative that prominently discloses all fees and
charges;
(3) comparative charts for accumulation values for tax-deferred and
non-tax-deferred investments will depict the implications of any
surrender; and
(4) a narrative accompanying the chart will disclose prominently that
there may be a 10% tax penalty on a surrender by an owner who has
not reached age 59 1/2.
6
<PAGE>
The rates of return illustrated are hypothetical and are not an estimate or
guaranty of performance. Actual tax rates may vary for different taxpayers.
================================================================================
ANNUITY PROVISIONS
================================================================================
Variable Annuity Payments
A variable annuity is an annuity with payments which are not predetermined as to
dollar amount and will vary in amount with the net investment results of the
applicable subaccounts. At the Annuity Date, the Contract Value in each
subaccount 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 contract will provide a larger income than that
guaranteed for the same form of annuity under the contract, the larger amount
will be paid.
The first annuity payment for each subaccount is determined by multiplying the
amount of the Contract Value allocated to that subaccount by the factor shown in
the table for the option selected, divided by 1000. The dollar amount of
subsequent annuity payments is determined as follows:
(a) The dollar amount of the first annuity payment is divided by the
Annuity Unit value 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 fourteen days prior to the date of
payment.
The total dollar amount of each variable annuity payment is the sum of all
subaccount variable annuity payments less the pro-rata amount of the
administrative charge.
Annuity Unit Value
The value of an Annuity Unit for each subaccount was arbitrarily set initially
at $10. This was done when the first portfolio shares were purchased. The
Annuity Unit value at the end of any subsequent Valuation Period is determined
by multiplying the subaccount's Annuity Unit value for the immediately preceding
Valuation Period by the quotient of (a) and (b) where:
o (a) is the net investment factor for the Valuation Period for which
the Annuity Unit value is being determined; and
7
<PAGE>
o (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 a
portfolio affect the Annuity Unit value of the subaccount from one Valuation
Period to the next. The net investment factor for each subaccount for any
Valuation Period is determined by dividing (a) by (b) and subtracting (c) from
the result, where:
o (a) is equal to:
(i) the net asset value per share of the portfolio held in the
subaccount determined at the end of that Valuation Period,
plus
(ii) the per share amount of any dividend or capital gain
distribution made by the portfolio held in the subaccount if
the "ex-dividend" date occurs during that same Valuation
Period, plus or minus
(iii) a per share charge or credit, which we determine, for changes
in tax reserves resulting from investment operations of the
subaccount.
o (b) is equal to:
(i) the net asset value per share of the portfolio held in the
subaccount determined as of the end of the prior Valuation
Period, plus or minus
(ii) the per share charge or credit for any change in tax reserves
for the prior Valuation Period.
o (c) is equal to:
(i) the percentage factor representing the mortality and expense
risk charge, plus
(ii) the percentage factor representing the 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 Period.
8
<PAGE>
Additional Provisions
We will require proof of age and sex of the Annuitant before making any life
annuity payment provided for by the contract. If the age or sex of the Annuitant
has been misstated, we will compute the amount payable based on the correct age
and sex. If annuity payments have begun, any underpayment that may have been
made will be paid in full with the next annuity payment, including interest at
the minimum annual rate of 3%. Any overpayments, including interest at the
minimum annual rate of 3%, unless repaid to us in one sum, will be deducted from
future annuity payments until we are repaid in full.
If a contract provision requires that a person be alive, we may require due
proof that the person is alive before we act under that provision.
We will give the payee under an annuity payment option a settlement contract for
the payment option.
You may assign the contract prior to the Annuity Date. You must send a dated and
signed written request to our Administrative Office accompanied by a duly
executed copy of any assignment. We are not responsible for the validity of any
assignment.
================================================================================
FINANCIAL STATEMENTS
================================================================================
Our financial statements are included herein. The financial statements have also
been filed electronically with the SEC and can be obtained through its website
at http://www.sec.gov. Our financial statements shall be considered only as
bearing upon our ability to meet our obligations under the contract. Financial
statements of Variable Account I are not included because no contracts have been
issued as of the date of this statement of additional information.
9
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements
To be filed by amendment
(b) Exhibits
(1) Certificate of Resolution for AIG Life Insurance Company dated June
5, 1986, authorizing the issuance and sale of variable and fixed
annuity contracts*
(2) N/A
(3)(a) Principal Underwriter's Agreement between AIG Life Insurance
Company and American International Fund Distributors dated August
1, 1988*
(b) Broker/Dealer Agreement between AIG Life Insurance Company and
American International Fund Distributors dated August 1, 1988*
(c) Selling Agreement between AIG Life Insurance Company, American
International Life Assurance Company of New York, and AIG Equity
Sales Corporation dated October 1998*
(d) Distribution Agreement between AIG Life Insurance Company, American
International Life Assurance Company of New York, and Alliance Fund
Distributors dated June 11, 1991*
(e) Buy Sell Agreement between AIG Life Insurance Company and Alliance
Variable Products Series Fund and Alliance Capital Management, L.P.
dated June 11, 1991*
(4)(a) Form of Individual Variable Annuity Single Purchase Payment Policy
(45648 - 4/87)*
(b) Form of Individual Variable Annuity Policy (11VAN0896)*
(c) Form of Group Variable Annuity Policy (11VAN0896GP)*
(d) Form of Variable Annuity Certificate of Coverage (16VAN0896)*
(e) Form of Group Variable Annuity Policy (11GVAN999) and Certificate
(16GVAN999)*****
(f) Form of Individual Variable Annuity Policy
(11NLVAN100) *****
(g) Form of Group Immediate Variable Annuity Contract ###.
(h) Form of Individual Variable Annuity Policy (11NSVAN800P) (filed
electronically herewith)
(i) Form of Group Variable Annuity Policy (16GNSVAN800P) and
Certificate (16GNSVAN800) (filed electronically herewith)
(5)(a) Form of variable annuity application (14VAN897)*
(b) Form of Flexible Variable Annuity application (56778 11/96)*
(c) Form of Single Variable Annuity application (52970 11/96)*
(d) Form of Group Variable Annuity application (56451 11/96)*
<PAGE>
(6)(a) By-Laws of AIG Life Insurance Company as amended through December
31, 1991*
(b) Certificate of Incorporation of AIG Life Insurance Company dated
December 31, 1991*
(c) Restated Certificate of Incorporation of AIG Life Insurance
Company dated December 31, 1991*
(d) Restated By-Laws of AIG Life Insurance Company dated March 2000.##
(7) N/A
(8) Delaware Valley Financial Services, Inc. Administrative Agreement,
appointing Delaware Valley Financial Services, Inc. by AIG Life
Insurance Company and American International Life Assurance
Company of New York, dated October 1, 1986*
(9) Opinion and Consent of Counsel [to be filed by amendment].
(10)(a) Consent of Jorden Burt Boros Cicchetti Berenson & Johnson LLP [to
be filed by amendment].
(b) Consent of Independent Accountants [to be filed by amendment].
(11) N/A
(12) N/A
(13) Performance Data #
(14)(a) Powers of Attorney **
(b) Power of Attorney ***
(c) Power of Attorney ****
(d) Power of Attorney *****
* Incorporated by reference to Registrant's Post-Effective Amendment No. 12
to the Registration Statement on Form N-4 (File No. 33-39171) filed on
October 27, 1998.
** Incorporated by reference to Registrant's Post-Effective Amendment No. 2
to the Registration Statement on Form S-6 (File No. 33-90684) filed on May
1, 1997.
*** Incorporated by reference to Registrant's Pre-Effective Amendment No. 1 to
the Registration Statement on Form S-6 (File No. 333-85573) filed on
October 15, 1999.
**** Incorporated by reference to Registrant's Registration Statement on Form
N-4 (File No. 333-93709) filed on December 28, 1999.
<PAGE>
***** Incorporated by reference to Registrant's Initial filing on Form N-4 (File
No. 333-31972) filed on March 8, 2000
# Incorporated by reference to Registrant's Post-Effective Amendment No. 3
to Form N-4 (File No. 33-39171) filed on May 1, 1993.
## Incorporated by reference to Registrant's Post-Effective Amendment No. 15
to Form N-4 (File No. 33-39171) filed on April 28, 2000.
### Incorporated by reference to Registrant's Pre-Effective Amendment No. 1 to
Form N-4 (File No. 333-36260) filed on November 8, 2000.
Item 25. Directors and Officers of the Depositor.
The following are the Principal Officers and Directors of the Company:
<TABLE>
<CAPTION>
Name and Principal Position and Offices
Business Address with the Company
<S> <C>
Michele L. Abruzzo(2) Director, Sr. Executive Vice President
James A. Bambrick(2) Senior Vice President
Paul S. Bell(3) Director, Sr. Vice President, Chief Actuary
Maurice R. Greenberg(1) Director
Jeffrey M. Kestenbaum(2) Executive Vice President
Edward E. Matthews(1) Director, Senior Vice President - Finance
Jerome T. Muldowney(4) Director, Sr. Vice President - Domestic Investments
Robinson Kendall Nottingham(3) Director, Chairman of the Board
John Oehmke(3) Chief Financial Officer, Vice President
Nicholas A. O'Kulich(1) Director, Vice Chairman, Treasurer
Howard Ian Smith(1) Director
Edmund Sze-Wing Tse(1) Director
Elizabeth M. Tuck(1) Secretary - Corporate
Kenneth D. Walma(3) Vice Presdient, General Counsel
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Gerald W. Wyndorf(2) Director, Chief Executive Officer, President
</TABLE>
(1) Business address is: 70 Pine Street, New York, New York 10270
(2) Business address is: 80 Pine Street, New York, New York 10005
(3) Business address is: One Alico Plaza, 600 King Street Wilmington, DE 19801
(4) Business address is: 175 Water Street, New York, New York 10038
Item 26. Persons Controlled by or Under Common Control with the Depositor or
Registrant
Incorporated by reference to the Form 10-K, Exhibit 21 filed by American
International Group (parent of registrant) for the year ended December 31, 1999.
Item 27. Number of Contractowners
Not applicable.
Item 28. Indemnification
Incorporated by reference to Principal Underwriter's Agreement between AIG Life
Insurance Company and American International Fund Distributors, dated August 1,
1988, and filed electronically on October 27, 1998 as an exhibit to
post-effective amendment no. 12 to the registration statement on Form N-4 (File
No. 33-39171).
Item 29. Principal Underwriter
(a) AIG Equity Sales Corp., the principal underwriter for Variable Account I,
also acts as the principal underwriter for other separate accounts of the
Depositor, and for the separate accounts of American International Life
Assurance Company of New York, an affiliated company.
(b) The following information is provided for each director and officer of the
principal underwriter:
<TABLE>
<CAPTION>
Name and Principal Business Address* Positions and Offices with Underwriter
<S> <C>
Michele L. Abruzzo Director
Kevin Clowe Director
Ernest T. Patrikis Director
Walter R. Josiah Director and President
Ronald Alan Latz Director, Vice President and Financial Operations Principal
Jerome Thomas Muldowney Director
Helen Stefanis Director
Martinnette J. Witrick Vice President and Compliance Officer
Kenneth F. Judkowitz Vice President
Elizabeth M. Tuck Secretary
</TABLE>
*Business address is 70 Pine Street, New York, New York 10270.
<PAGE>
<TABLE>
<CAPTION>
(c) Net
Name of Underwriting Compensation
Principal Discounts and on Brokerage
Underwriter Commission Redemption Commissions Compensation
----------- ------------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
AIG Equity $0 $0 $0 $0
Sales Corp.
</TABLE>
Item 30. Location of Accounts and Records.
Kenneth F. Judkowitz, Vice President of AIG Life Insurance Company, whose
address is 70 Pine Street, New York, New York 10270, maintains physical
possession of the accounts, books, or documents of Variable Account I required
to be maintained by Section 31(a) of the Investment Company Act of 1940 and the
rules promulgated thereunder.
Item 31. Management Services.
Not applicable.
Item 32. Undertakings
(a) Registrant hereby undertakes to file a post-effective amendment to this
registration statement as frequently as is necessary to ensure that the
audited financial statements in the registration statement are never more
than 16 months old for so long as payments under the variable annuity
contracts may be accepted.
(b) Registrant hereby undertakes to include either (1) as part of any
application to purchase a contract offered by the prospectus, a space that
an applicant can check to request a Statement of Additional Information,
or (2) a postcard or similar written communication affixed to or included
in the prospectus that the applicant can remove to send for a Statement of
Additional Information.
(c) Registrant hereby undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available
under this Form promptly upon written or oral request.
(d) Registrant represents that in connection with 403(b) Plans, it is relying
on the November 28, 1988 no-action letter issued by the SEC to the
American Council of Life Insurance.
(e) Registrant and Depositor represent that the fees and charges deducted
under the contracts offered by this registration statement, in the
aggregate, are reasonable in relation to the services rendered, the
expenses expected to be incurred, and the risks assumed by the company.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant has caused this Registration Statement to be signed on its
behalf, in the City of Wilmington, and State of Delaware on this 27th day of
November, 2000.
Variable Account I
By: AIG Life Insurance Company
By: /s/ Kenneth D. Walma
-----------------------------------
Kenneth D. Walma,
Vice President and General Counsel
AIG Life Insurance Company
By: /s/ Kenneth D. Walma
-----------------------------------
Kenneth D. Walma,
Vice President and General Counsel
As required by the Securities Act of 1933, this Registration Statement has
been signed by the following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Michele L. Abruzzo* Senior Executive Vice November 27, 2000
------------------- President, Director
Michele L. Abruzzo
Paul S. Bell* Chief Actuary, Senior November 27, 2000
------------- Vice President, Director
Paul S. Bell
M.R. Greenberg* Director November 27, 2000
---------------
M.R. Greenberg
Edward. E. Matthews* Senior Vice President, November 27, 2000
-------------------- Director
Edward E. Matthews
Jerome T. Muldowney* Senior Vice President, November 27, 2000
------------------- Director
Jerome T. Muldowney
Robinson Kendall Nottingham* Chairman of the Board November 27, 2000
---------------------------- of Directors, Director
Robinson Kendall Nottingham
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
John Oehmke* Vice President, Chief Financial November 27, 2000
------------ Officer
John Oehmke
Nicholas A. O'Kulich* Vice Chairman, Treasurer, November 27, 2000
--------------------- Director
Nicholas A. O'Kulich
Howard I. Smith* Director November 27, 2000
----------------
Howard I. Smith
Edmund Sze-Wing Tse* Director November 27, 2000
--------------------
Edmund Sze-Wing Tse
Elizabeth M. Tuck* Secretary November 27, 2000
------------------
Elizabeth M. Tuck
Gerald W. Wyndorf* Director November 27, 2000
------------------
Gerald W. Wyndorf
</TABLE>
*By: /s/ Kenneth D. Walma
----------------------
Kenneth D. Walma,
Attorney in Fact
<PAGE>
INDEX TO EXHIBITS
4(h) Form of Individual Variable Annuity Policy (11NSVAN800)
11NSVAN800
11NSVAN800P
11GNSVAN800
4(i) Form of Group Variable Annuity Policy
(16GNSVAN800)
(16GNSVAN800P)
