As filed with the Securities and Exchange Commission on January 29, 1999
Registration No. 33-76334
Registration No. 811-5343
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
Registration Statement Under the Securities Act of 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 15
For Registration Under the Investment Company Act of 1940
Amendment No. 37
GE Life & Annuity Separate Account 4
(Exact Name of Registrant)
GE Life and Annuity Assurance Company
(Name of Depositor)
6610 W. Broad Street
Richmond, Virginia 23230
(Address of Depositor's Principal Executive Office)
Depositor's Telephone Number: (804) 281-6000
Patricia L. Dysart
Associate General Counsel and Assistant Vice President
GE Life and Annuity Assurance Company
6610 W. Broad Street
Richmond, Virginia 23230
(Name and address of Agent for Service)
Copy to:
Stephen E. Roth, Esquire
Sutherland Asbill & Brennan LLP
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2415
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b) of Rule 485
__ on May 1, 1998 pursuant to paragraph (b) of Rule 485
X_ 60 days after filing pursuant to paragraph (a) of Rule 485
_on ___________ pursuant to paragraph (a) of Rule 485
Title of Securities Being Registered: Interests in a Separate Account
under Individual Flexible Premium Variable Deferred Annuity Policie
<PAGE>
GE Life & Annuity Separate Account 4
Prospectus For The
Flexible Premium Variable Deferred Annuity Policy
Form P1150 10/98
Form P1143 4/94
issued by:
GE Life and Annuity Assurance Company
6610 West Broad Street
Richmond, Virginia 23230
Telephone: (804) 281-6000
This Prospectus describes a flexible premium variable deferred annuity policy
(the "Policy") for individuals and some qualified and nonqualified retirement
plans. GE Life and Annuity Assurance Company (the "Company," "we," "us," or
"our") issues the Policy.
The Policy offers you the accumulation of Account Value and the payment of
periodic annuity benefits. We may pay these benefits on a variable or fixed
basis or a combination of both.
You may allocate your premium payments to Account 4, the Guarantee Account, or
both. Each Investment Subdivision of Account 4 invests in shares of the Funds.
We list the Funds, and their currently available portfolios, below.
Janus Aspen Series:
Growth Portfolio, Aggressive Growth Portfolio, International Growth
Portfolio, Worldwide Growth Portfolio, Balanced Portfolio, Flexible
Income Portfolio, Capital Appreciation Portfolio
Variable Insurance Products Fund:
VIP Equity-Income Portfolio, VIP Overseas Portfolio, VIP Growth
Portfolio Variable Insurance Products Fund II:
VIP II Asset Manager Portfolio, VIP II Contrafund Portfolio Variable
Insurance Products Fund III:
VIP III Growth & Income Portfolio, VIP III Growth Opportunities
Portfolio GE Investments Funds, Inc.:
S&P 500 Index Fund, Money Market Fund, Total Return Fund,
International Equity Fund, Real Estate Securities Fund, Global
Income Fund, Value Equity Fund, Income Fund, U.S. Equity Fund
Oppenheimer Variable Account Funds:
Oppenheimer Bond Fund, Oppenheimer Aggressive Growth Fund, Oppenheimer
Growth Fund, Oppenheimer High Income Fund, Oppenheimer Multiple
Strategies Fund
Federated Insurance Series:
Federated American Leaders Fund II, Federated Utility Fund II,
Federated High Income Bond Fund II The Alger American Fund:
Alger American Growth Portfolio, Alger American Small Capitalization
Portfolio
PBHG Insurance Series Fund, Inc.
PBHG Growth II Portfolio, PBHG Large Cap Growth Portfolio
Goldman Sachs Variable Insurance Trust:
Goldman Sachs Growth and Income Fund, Goldman Sachs Mid Cap Equity
Fund
Salomon Brothers Variable Series Fund:*
Salomon Investors Fund, Salomon Total Return Fund, Salomon Strategic
Bond Fund
*The Salomon Investors Fund, Salomon Total Return Fund and Salomon
Strategic Bond Fund for Salomon Brothers Variable Series Fund are not
available at this time in connection with policies issued to California
policyowners. Further, these funds may not be available in all markets.
Except for amounts in the Guarantee Account, both the value of a Policy before
the Maturity Date and the amount of monthly income afterward will depend upon
the investment performance of the portfolio(s) you select. You bear the
investment risk of investing in the portfolios.
The Securities and Exchange Commission has not approved these securities or
determined if this Prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
Your investment in the Policy is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any government
agency.
This Prospectus gives details about Account 4 and our Guarantee Account that you
should know before investing. Please read this prospectus carefully before
investing and keep it for future reference.
A statement of additional information ("SAI"), dated ____ __, 1999, concerning
Account 4 has been filed with the Securities and Exchange Commission ("SEC") and
is incorporated by reference into this Prospectus. If you would like a free
copy, call us at 1-800-352-9910. The SAI also is available on the SEC's website
at http://www.sec.gov. A table of contents for the SAI appears on the last page
of this Prospectus.
The date of this Prospectus is ____ __, 1999
<PAGE>
(ii)
TABLE OF CONTENTS
Page
Definitions...................................................
Expense tables................................................
Synopsis......................................................
Condensed Financial Information...............................
Investment Results............................................
Financial Statements..........................................
GE Life and Annuity Assurance Company.........................
Account 4.....................................................
Guarantee Account.............................................
Charges and Other Deductions..................................
The Policy....................................................
Transfers.....................................................
Withdrawals...................................................
Death Benefit.................................................
Income Payments...............................................
Federal Tax Matters...........................................
Voting Rights.................................................
Requesting Payments...........................................
Distribution of the Policies..................................
<PAGE>
Additional Information .......................................
Table of Contents Statement of Additional Information.........
This prospectus does not constitute an offering in any jurisdiction in which
such offering may not lawfully be made.
<PAGE>
DEFINITIONS
We have tried to make this Prospectus as understandable as possible. However, in
explaining how the Policy works, we have had to use certain terms that have
special meanings. We define these terms below.
Account Value -- The value of the Policy equal to the amount allocated to the
Investment Subdivisions of Account 4 and the Guarantee Account.
Account 4 -- GE Life & Annuity Separate Account 4, a separate investment account
we established to receive and invest the premiums you pay under the Policies,
and other variable annuity policies we issue.
Accumulation Unit -- An accounting unit of measure we use in calculating the
Account Value in Account 4 before the Maturity Date.
Annuitant -- The Annuitant is the person named in the Policy upon whose age and,
where appropriate, sex, we determine monthly income benefits.
Annuity Unit -- An accounting unit of measure we use in the calculation of the
amount of the second and each subsequent variable income payment.
Death Benefit -- The benefit provided under a Policy upon the death of an
Annuitant before the Maturity Date.
Designated Beneficiary(ies) -- The person(s) designated in the Policy who is
alive (or in existence for non-natural entities) on the date of an Owner's,
Joint Owner's or Annuitant's death and who we will treat as the sole owner of
the Policy following such a death.
Fund -- Any open-end management investment company or investment portfolio
thereof or any unit investment trust, in which an Investment Subdivision
invests.
General Account -- Our assets that are not segregated in any of our separate
investment accounts.
Guarantee Account -- Part of our General Account that provides a guaranteed
interest rate for a specified guarantee period. This account is not part of and
does not depend on the investment performance of Account 4.
<PAGE>
Investment Subdivision -- A subdivision of Account 4, each of which invests
exclusively in shares of a designated portfolio of one of the Funds. All
Investment Subdivisions may not be available in all states or in all markets.
Maturity Date -- The date stated in the Policy on which your income payments
will commence, if the Annuitant is living on that date.
Owner -- The person or persons (in the case of Joint Owners) entitled to receive
income payments after the Maturity Date. During the lifetime of the Annuitant,
the Owner also is entitled to the ownership rights stated in the Policy and in
any application. "You" or "your" refers to the Owner or Joint Owners.
Policy Date -- The date we issue your Policy and your Policy becomes effective.
Your Policy Date is shown in your Policy and we use it to determine Policy years
and anniversaries.
Surrender Value -- The Account Value less any applicable surrender charge,
premium tax, and optional benefit charges.
Valuation Day -- For each Investment Subdivision, each day on which the New York
Stock Exchange is open for business except for days that the Fund does not value
its shares.
Valuation Period -- The period between the close of business on a Valuation Day
and the close of business on the next succeeding Valuation Day.
<PAGE>
EXPENSE TABLE
This table describes the various costs and expenses that you will pay (either
directly or indirectly) if you purchase the Policy. The table reflects expenses
both of Investment Subdivisions of Account 4 and of the portfolios. For more
complete descriptions of the various costs and expenses involved, see Charges
and Other Deductions in this Prospectus, and the Fund prospectuses. Premium tax
charges also may apply, although they do not appear in the table. In addition,
we reserve the right to impose a transfer charge, although we do not currently
do so.
Owner transaction expenses:
The maximum surrender charge (as a percentage of each premium
payment surrendered/withdrawn): 6%
We reduce the surrender charge percentage over time. In general, the later you
surrender or withdraw a premium payment, the lower the surrender charge will be
on that premium payment.
(Note: During each Policy Year, up to 10% of premium payments plus any gain may
be withdrawn without the imposition of the surrender charge. We may waive the
surrender charge in certain cases. See Surrender Charge.)
Transfer Charge: None
Annual Expenses (as a percentage of Account Value):
Mortality and Expense Risk Charge 1.25%
Administrative Expense Charge .15%
Total Annual Expenses 1.40%
Other Annual Expenses:
Annual Policy Maintenance Charge $25*
Maximum Guaranteed Minimum Death
Benefit Charge ("GMBD") (as a percentage
of average benefit amount) .35%**
Maximum Optional Death Benefit
Charge ("ODB") (as a percentage of
Account Value) .25%***
<PAGE>
* We do not assess this charge if your Account Value at the time the
charge is due is more than $75,000.
** If the Elective Guaranteed Minimum Death Benefit applies. This may be
referred to as the "Six Percent EstateProtector" in our marketing
materials.
*** If the Elective Optional Death Benefit applies. This may be referred to
as the "Annual EstateProtector" in our marketing materials.
Fund Annual Expenses
Annual expenses of the portfolios of the Funds for the year ended December 31,
1998: (as a percentage of each portfolio's average net assets):.
The expenses numbers will be added by a subsequent post effective amendment.
<TABLE>
<CAPTION>
Total Annual
Fund Management Fees Other Expenses Expenses
<S> <C>
Balanced
Janus Aspen Balanced Portfolio
VIP II Asset Manager Portfolio
Salomon Brothers Total Return Fund
GE Total Return Fund
Oppenheimer Multiple Strategies Fund
Aggressive Growth
Janus Aspen Aggressive Growth Portfolio
Oppenheimer Aggressive Growth Fund
Alger American Small Capitalization Portfolio
Growth
Janus Aspen Growth Portfolio Janus Aspen Capital Appreciation Portfolio
Alger American Growth Portfolio VIP II Contrafund Portfolio VIP Growth
Portfolio Oppenheimer Growth Fund VIP III Growth Opportunities Portfolio
Goldman Sachs Mid Cap Equity Fund GE Value Equity Fund PBHG Growth II
Portfolio PBHG Large Cap Growth Portfolio
Growth & Income
Federated American Leaders Fund II GE US Equity Fund Goldman Sachs Growth
& Income Fund Salomon Brothers Investors Fund VIP Equity-Income Portfolio
VIP III Growth & Income Portfolio GE S&P 500 Index Fund
International Stock
Janus Aspen International Growth Portfolio
VIP Overseas Portfolio
GE International Equity Fund
Corporate Bond
Oppenheimer Bond Fund
Salomon Brothers Strategic Bond Fund
GE Income Fund
High Yield Bond
<PAGE>
Oppenheimer High Income Fund
Federated High Income Bond Fund
Specialty
Federated Utility Fund II
GE Real Estate Securities Fund
Diversified Bond
Janus Aspen Flexible Income Portfolio
Global Stock
Janus Aspen Worldwide Growth Portfolio
International Bond
GE Global Income Fund
Money Market
GE Money Market Fund
</TABLE>
<PAGE>
Examples The information for the charts shown below will be added by a
subsequent post-effective amendment.
These examples show what your costs would be under certain hypothetical
situations. The examples do not represent past or future expenses. Your actual
expenses may be more less than those shown.
* * *
1. If you surrender your Policy at the end of the applicable time period, you
would pay the following expenses on a $1,000 investment, assuming a 5%
annual return:*
<TABLE>
<CAPTION>
With GMDB and ODB charges
<S> <C>
Fund: 1 Year 3 Years 5 Years 10 Years
Balanced
Janus Aspen Balanced Portfolio
VIP II Asset Manager Portfolio
Salomon Brothers Total Return Fund
GE Investments Total Return Fund
Oppenheimer Multiple Strategies Fund
Aggressive Growth
Janus Aspen Aggressive Growth Portfolio
Oppenheimer Aggressive Growth Fund
Alger American Small Capitalization Portfolio
Growth
Janus Aspen Growth Portfolio
Janus Aspen Capital Appreciation Portfolio
Alger American Growth Portfolio VIP II
Contrafund Portfolio
VIP Growth Portfolio
Oppenheimer Growth Fund
VIP III Growth Opportunities Portfolio
Goldman Sachs Mid Cap Equity Fund
GE Investments Value Equity Fund
PBHG Growth II Portfolio
PBHG Large Cap Growth Portfolio
Growth & Income
Federated American Leaders Fund II
GE Investments US Equity Fund
Goldman Sachs Growth & Income Fund
Salomon Brothers Investors Fund
VIP Equity-Income Portfolio
VIP III Growth & Income Portfolio
GE Investments S&P 500 Index Fund
International Stock
Janus Aspen International Growth Portfolio
VIP Overseas Portfolio
GE Investments International Equity Fund
Corporate Bond
Oppenheimer Bond Fund
Salomon Brothers Strategic Bond Fund
GE Investments Income Fund
High Yield Bond
Oppenheimer High Income Fund
Federated High Income Bond Fund II
Specialty
Federated Utility Fund II
GE Investments Real Estate Securities Fund
Diversified Bond
Janus Aspen Flexible Income Portfolio
Global Stock
Janus Aspen Worldwide Growth Portfolio
International Bond
GE Global Income Fund
Money Market
GE Investments Money Market Fund
* surrender includes annuitization over a period of less than 5 years.
</TABLE>
<PAGE>
2. If you do not surrender your policy, you would pay the following expenses on
a $1,000 investments, assuming a 5% annual return
<TABLE>
<CAPTION>
With GMDB and ODB charges
Fund: 1 Year 3 Years 5 Years 10 Years
<S> <C>
Balanced
Janus Aspen Balanced Portfolio
VIP II Asset Manager Portfolio
Salomon Brothers Total Return Fund
GE Investments Total Return Fund
Oppenheimer Multiple Strategies Fund
Aggressive Growth
Janus Aspen Aggressive Growth Portfolio
Oppenheimer Aggressive Growth Fund
Alger American Small Capitalization Portfolio
Growth
Janus Aspen Growth Portfolio
Janus Aspen Capital Appreciation Portfolio
Alger American Growth Portfolio VIP II
Contrafund Portfolio VIP Growth Portfolio
Oppenheimer Growth Fund
VIP III Growth Opportunities Portfolio
Goldman Sachs Mid Cap Equity Fund
GE Investments Value Equity Fund
PBHG Growth II Portfolio
PBHG Large Cap Growth Portfolio
Growth & Income
Federated American Leaders Fund II
GE Investments US Equity Fund
Goldman Sachs Growth & Income Fund
Salomon Brothers Investors Fund
VIP Equity-Income Portfolio
VIP III Growth & Income Portfolio
GE Investments S&P 500 Index Fund
International Stock
Janus Aspen International Growth Portfolio
VIP Overseas Portfolio
GE Investments International Equity Fund
Corporate Bond
Oppenheimer Bond Fund
Salomon Brothers Strategic Bond Fund
GE Investments Income Fund
High Yield Bond
Oppenheimer High Income Fund
Federated High Income Bond Fund II
Specialty
Federated Utility Fund II
GE Investments Real Estate Securities Fund
Diversified Bond
Janus Aspen Flexible Income Portfolio
Global Stock
Janus Aspen Worldwide Growth Portfolio
International Bond
GE Global Income Fund
Money Market
GE Investments Money Market Fund
</TABLE>
* surrender includes annuitization over a period of less than 5 years.
<PAGE>
1. If you surrender your Policy at the end of the applicable time period, you
would pay the following expenses on a $1,000 investment, assuming a 5%
annual return:*
<TABLE>
<CAPTION>
Without GMDB and ODB charges
Fund: 1 Year 3 Years 5 Years 10 Years
<S> <C>
Balanced
Janus Aspen Balanced Portfolio
VIP II Asset Manager Portfolio
Salomon Brothers Total Return Fund
GE Investments Total Return Fund
Oppenheimer Multiple Strategies Fund
Aggressive Growth
Janus Aspen Aggressive Growth Portfolio
Oppenheimer Aggressive Growth Fund
Alger American Small Capitalization Portfolio
Growth
Janus Aspen Growth Portfolio
Janus Aspen Capital Appreciation Portfolio
Alger American Growth Portfolio
VIP II Contrafund Portfolio
VIP Growth Portfolio
Oppenheimer Growth Fund
VIP III Growth Opportunities Portfolio
Goldman Sachs Mid Cap Equity Fund
GE Investments Value Equity Fund
PBHG Growth II Portfolio
PBHG Large Cap Growth Portfolio
Growth & Income
Federated American Leaders Fund II
GE Investments US Equity Fund
Goldman Sachs Growth & Income Fund
Salomon Brothers Investors Fund
VIP Equity-Income Portfolio
VIP III Growth & Income Portfolio
GE Investments S&P 500 Index Fund
International Stock
Janus Aspen International Growth Portfolio
VIP Overseas Portfolio
GE Investments International Equity Fund
Corporate Bond
Oppenheimer Bond Fund
Salomon Brothers Strategic Bond Fund
GE Investments Income Fund
High Yield Bond
Oppenheimer High Income Fund
Federated High Income Bond Fund II
Specialty
Federated Utility Fund II
GE Investments Real Estate Securities Fund
Diversified Bond
Janus Aspen Flexible Income Portfolio
Global Stock
Janus Aspen Worldwide Growth Portfolio
International Bond
GE Global Income Fund
Money Market
GE Investments Money Market Fund
</TABLE>
* surrender includes annuitization over a period of less than 5 years.
<PAGE>
2.If you do not surrender your Policy, you would pay the following expenses on a
$1,000 investment, assuming a 5% annual return:*
<TABLE>
<CAPTION>
Without GMDB and ODB charges
Fund: 1 Year 3 Years 5 Years 10 Years
<S> <C>
Balanced
Janus Aspen Balanced Portfolio
VIP II Asset Manager Portfolio
Salomon Brothers Total Return Fund
GE Investments Total Return Fund
Oppenheimer Multiple Strategies Fund
Aggressive Growth
Janus Aspen Aggressive Growth Portfolio
Oppenheimer Aggressive Growth Fund
Alger American Small Capitalization Portfolio
Growth
Janus Aspen Growth Portfolio
Janus Aspen Capital Appreciation Portfolio
Alger American Growth Portfolio
VIP II Contrafund Portfolio
VIP Growth Portfolio
Oppenheimer Growth Fund
VIP III Growth Opportunities Portfolio
Goldman Sachs Mid Cap Equity Fund
GE Investments Value Equity Fund
PBHG Growth II Portfolio
PBHG Large Cap Growth Portfolio
Growth & Income
Federated American Leaders Fund II
GE Investments US Equity Fund
Goldman Sachs Growth & Income Fund
Salomon Brothers Investors Fund
VIP Equity-Income
Portfolio VIP III Growth & Income Portfolio
GE Investments S&P 500 Index Fund
International Stock
Janus Aspen International Growth Portfolio
VIP Overseas Portfolio
GE Investments International Equity Fund
Corporate Bond
Oppenheimer Bond Fund
Salomon Brothers Strategic Bond Fund
GE Investments Income Fund
High Yield Bond
Oppenheimer High Income Fund
Federated High Income Bond Fund II
Specialty
Federated Utility Fund II
GE Investments Real Estate Securities Fund
Diversified Bond
Janus Aspen Flexible Income Portfolio
Global Stock
Janus Aspen Worldwide Growth Portfolio
International Bond
GE Global Income Fund
Money Market
GE Investments Money Market Fund
</TABLE>
* surrender includes annuitization over a period of less than 5 years.
<PAGE>
The Funds supplied all of the figures provided under the subheading Fund Annual
Expenses and part of the data used to produce the figures in the examples. We
have not independently verified this information.
Other Policies
We offer other variable annuity policies which also may invest in the same Funds
offered under the Policy. These policies have different charges that could
affect their investment subdivisions' performance, and they offer different
benefits.
SYNOPSIS
<PAGE>
What type of Policy am I buying? The Policy is an individual flexible premium
variable deferred annuity policy. We may issue it as a policy qualified
("Qualified Policy") under the Internal Revenue Code of 1986, as amended (the
"Code"), or as a policy that is not qualified under the Code ("Non-Qualified
Policy"). This Prospectus only provides disclosure about the Policy. Certain
features described in this prospectus may vary from yourP Policy. If your Policy
Form is P1143 4/94, please see the Appendix. See The Policy.
How does the Policy work? Once we approve your application, we will issue a
policy. During the accumulation period, while you are paying in, you can use
your premium payments to buy Accumulation Units under Account 4 or interests in
the Guarantee Account. Should you decide to annuitize (that is, change your
Policy to a payout mode rather than an accumulation mode), we will convert your
Accumulation Units and Guarantee Account interests to Annuity Units. You can
choose a fixed or variable income payment. If you choose a variable income
payment, we will base your periodic income payment upon the number of Annuity
Units to which you became entitled at the time you decided to annuitize and on
the value of each unit on the date the payment is determined. See The Policy.
What are my variable investment choices? Through its 40 Investment Subdivisions,
Account 4 uses your premium payments to purchase shares, at your direction, in
one or more portfolios of the 11 Funds. In turn, each portfolio holds securities
consistent with its own particular investment policy. Amounts you allocate to
Account 4 will reflect the investment performance of the portfolios you select.
You bear the risk of investment gain or loss. See Account 4 - Investment
Subdivisions.
What is the Guarantee Account? We offer fixed investment choices through our
Guarantee Account. The Guarantee Account is part of our General Account and pays
interest at declared rates we guarantee for selected periods of time. We also
guarantee the principal, after deductions. Since the Guarantee Account is part
of the General Account, we assume the risk of investment gain or loss on this
amount. You may transfer value between the Guarantee Account and Account 4
subject to certain restrictions. See Transfers Before the Maturity Date. The
Guarantee Account may not be available in all states or all markets.
What charges are associated with this Policy? Should you withdraw Account Value
before your premium payments have been in your Policy for six years, we will
assess a surrender charge of anywhere from 0% to 6%, depending upon how many
full years those payments have been in the Policy. (Note: We waive this charge
under certain conditions). See Surrender Charge.
<PAGE>
We assess annual charges in the aggregate at an effective annual rate of 1.40%
against the daily net asset value of Account 4, including that portion of the
account attributable to your premium payments. These charges consist of .15% an
administrative expense charge and 1.25% as a mortality and expense risk charge.
Additionally, we may impose an annual Policy Maintenance Charge. We also charge
for the GMDB and the ODB. For a complete discussion of all charges associated
with the Policy, see Charges and Other Deductions.
If your state assesses a premium tax with respect to your Policy, then at the
time your Policy incurs the tax (or at such other time as we may choose), we
will deduct those amounts from Premium Payments or Account Value, as applicable.
See Charges and Other Deductions and Deductions for Premium Taxes.
The Funds also have certain expenses. These include management fees and other
expenses associated with the daily operation of each portfolio. See Account 4 -
Investment Subdivisions. These Fund expenses are more fully described in each
Fund's prospectus.
How much must I pay, and how often? Subject to certain minimum and maximum
payments, the amount and frequency of your Premium Payments are completely
flexible. See The Policy--Premium Payments.
How will my income payments be calculated? We will pay you a monthly income
beginning on the Maturity Date if the Annuitant is still living. You may also
decide to annuitize under one of the optional payment plans. We will base your
initial payment on maturity value and other factors. See Income Payments.
What happens if I die before the Maturity Date? Before the Maturity Date, if an
Owner, Joint Owner, or Annuitant dies while the Policy is in force, we will
treat the Designated Beneficiary as the sole Owner of the Policy, subject to
certain distribution rules. We may pay a Death Benefit to the Designated
Beneficiary. See Death of the Owner or Joint Owner Before the Maturity Date.
May I transfer Account Value among portfolios? Yes, but there may be limits on
how often you may do so. The minimum transfer amount is the entire balance in
the Investment Subdivision if the transfer will leave a balance of less than
$100. See The Policy--Transfers Before the Maturity Date, and Income
Payments--Transfers After the Maturity Date.
May I surrender the Policy or make a partial surrender? Yes, subject to Policy
requirements and to restrictions imposed under certain retirement plans.
If you surrender the Policy or make a partial surrender, we may assess a
surrender charge as discussed above. In addition, you may be subject to income
tax and, if you are younger than age 591/2 at the time of the surrender, a 10%
premature withdrawal penalty tax. A surrender or a partial surrender may also be
subject to withholding. See Federal Tax Matters. A partial surrender will reduce
the Death Benefit by the proportion that the partial surrender (including any
applicable surrender charge) reduces Account Value.
Do I get a free look at this Policy? Yes. You have the right to return the
Policy to us at our Home Office, and have us cancel the Policy within a certain
number of days (usually 10 days from the date you receive the Policy, but some
states require different periods).
<PAGE>
If you exercise this right, we will cancel the Policy as of the day we receive
your request and send you a refund equal to your Account Value plus any charges
we have deducted on or before the date we received the returned Contract, or if
greater, and required by the law of your state, your Premium Payments (less any
withdrawals previously taken). See Return Privilege.
When are my allocations effective? In states that require us to return your
premium payments upon exercise of your free look right, we will allocate any
amounts you allocated to Account 4 to the Money Market Investment Subdivision
until we deem the free look period to have expired. See Allocation of Premium
Payments.
INVESTMENT RESULTS
At times, Account 4 may compare its investment results to various unmanaged
indices or other variable annuities in reports to shareholders, sales
literature, and advertisements. We will calculate the results on a total return
basis for various periods, with or without surrender charges. Results calculated
without surrender charges will be higher. Total returns include the reinvestment
of all distributions of the portfolios. See the SAI for further information.
FINANCIAL STATEMENTS
The financial statements for The Life Insurance Company of Virginia, now known
as GE Life and Annuity Assurance Company, and Life of Virginia Account 4, now
known as GE Life & Annuity Separate Account 4, are located in the SAI. If you
would like a free copy of the SAI, call 1-800-352-9910. Otherwise, the SAI is
available on the SEC's website at http://www.sec.gov.
GE LIFE AND ANNUITY ASSURANCE COMPANY
We are a stock life insurance company operating under a charter granted by the
Commonwealth of Virginia on March 21, 1871. We principally offer life insurance
and annuity policies. We may do business in 49 states and the District of
Columbia. Our principal offices are at 6610 West Broad Street, Richmond,
Virginia 23230. Before January 1, 1999, our company name was The Life Insurance
Company of Virginia.
<PAGE>
General Electric Capital Assurance Company ("GE Capital Assurance") owns eighty
percent of our capital stock. GE Capital Assurance is an indirect wholly owned
subsidiary of GE Capital ("GE Capital"). GE Financial Assurance Holdings Inc., a
direct wholly owned subsidiary of GE Capital, owns the remaining 20%. GE
Capital, a New York corporation, is a diversified financial services company
whose subsidiaries consist of specialty insurance, equipment management, and
commercial and consumer financing businesses. GE Capital's indirect parent,
General Electric Company, founded more than one hundred years ago by Thomas
Edison, is the world's largest manufacturer of jet engines, engineering
plastics, medical diagnostic equipment and large electric power generation
equipment.
GNA Corporation, a direct wholly owned subsidiary of GE Financial Assurance
Holdings, Inc., directly owns the stock of Capital Brokerage Corporation (the
principal underwriter for the Policies and a broker/dealer registered with the
U.S. Securities and Exchange Commission).
We are a member of the Insurance Marketplace Standards Association ("IMSA"). We
may use the IMSA membership logo and language in our advertisements, as outlined
in IMSA's Marketing and Graphics Guidelines. Companies that belong to IMSA
subscribe to a set of ethical standards covering the various aspects of sales
and service for individually sold life insurance and annuities.
ACCOUNT 4
We established Account 4 as a separate investment account on August 19, 1987.
Account 4 may invest in mutual funds, unit investment trusts, managed separate
accounts, and other portfolios. We use Account 4 to support the Policy as well
as for other purposes permitted by law.
Account 4 currently has 40 Investment Subdivisions available under the Policy,
but that number may change in the future. Each Investment Subdivision invests
exclusively in shares representing an interest in a separate corresponding
portfolio of the Funds described below. We allocate net premium payments in
accordance with your instructions among up to ten of the 40 Investment
Subdivisions available under the Policy.
The assets of Account 4 belong to us. Nonetheless, we do not charge the assets
in Account 4 attributable to the Policies with liabilities arising out of any
other business which we may conduct. The assets of Account 4 shall, however, be
available to cover the liabilities of our General Account to the extent that the
assets of Account 4 exceed its liabilities arising under the Policies supported
by it. Income and both realized and unrealized gains or losses from the assets
of Account 4 are credited to or charged against Account 4 without regard to the
income, gains, or losses arising out of any other business we may conduct.
We registered Account 4 with the SEC as a unit investment trust under the
Investment Company Act of 1940 ("1940 Act"). Account 4 meets the definition of a
separate account under the federal securities laws. Registration with the SEC
does not involve supervision of the management or investment practices or
policies of Account 4 by the SEC. You assume the full investment risk for all
amounts you allocate to Account 4.
<PAGE>
The Funds
There is a separate Investment Subdivision which corresponds to each portfolio
of a Fund offered in this Policy. You decide the Investment Subdivisions to
which you allocate net premium payments. You may change your allocation without
penalty or charges.
Each Fund is registered with the Securities and Exchange Commission as an
open-end management investment company under the 1940 Act. The assets of each
portfolio are separate from other portfolios of a Fund and each portfolio has
separate investment objectives and policies. As a result, each portfolio
operates as a separate portfolio and the investment performance of one portfolio
has no effect on the investment performance of any other portfolio.
Before choosing an Investment Subdivision to allocate your net premium payments
and Account Value, carefully read the prospectus for each Fund, along with this
Prospectus. We summarize the investment objectives of each portfolio below.
There is no assurance that any of the portfolios will meet these objectives. We
do not guarantee any minimum value for the amounts you allocate to Account 4.
You bear the investment risk of investing in the portfolios.
The investment objectives and policies of certain portfolios are similar to the
investment objectives and policies of other portfolios that may be managed by
the same investment adviser or manager. The investment results of the
portfolios, however, may be higher or lower than the results of such other
portfolios. There can be no assurance, and no representation is made, that the
investment results of any of the portfolios will be comparable to the investment
results of any other portfolio, even if the other portfolio has the same
investment adviser or manager, or if the other portfolio has a similar name.
Investment Subdivisions
We offer you a choice from among 40 Investment Subdivisions, each of which
invests in an underlying portfolio of one of the Funds. You may allocate
premiums to up to ten Investment Subdivisions at any one time.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment Subdivision Investment Objective Adviser (and Sub-
Adviser, as applicable)
- --------------------------------------- ---------------------------------------------------------------- -------------------------
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Balanced Funds
- --------------------------------------- ---------------------------------------------------------------- --------------------------
<S> <C>
Janus Aspen Series Long term growth of capital, consistent with the preservation Janus Capital
Balanced Portfolio of capital and balanced by current income. Normally invests Corporation
40-60% of its assets in securities selected primarily for
their growth potential and 40-60% of its assets in securities
selected primarily for their income potential.
- -------------------------------------- ---------------------------------------------------------------- --------------------------
Fidelity Variable Insurance High total return with reduced risk over the long-term by Fidelity Management &
Products Fund II allocating assets among domestic and foreign stocks, bonds and Research Company
VIP II Asset Manager Portfolio short-term fixed income instruments.
- --------------------------------------- ---------------------------------------------------------------- --------------------------
Salomon Brothers Variable Primarily invests in a broad variety of securities, Salomon Brothers
Series Funds including stocks, taxed-income securities and short-term Asset Management
Total Return Fund obligations. Inc
(currently not available in
California and may not be available
in all markets)
- --------------------------------------- ---------------------------------------------------------------- -------------------------
GE Investments Funds Objective of providing highest total return, composed of GE GE Investment
Total Return Fund current income and capital appreciation, as is Management, Incorporated
consistent with Management prudent investment risk by
investing in common stock, bonds Incorporated and
money market instruments, the proportion of each being
continuously determined by the investment adviser.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Oppenheimer Variable Total investment return (which includes current income and OppenheimnerFunds, Inc,
Account Funds capital appreciation in the values of itsshares) from
Multiple Strategies Fund investments in common stocks and other equity securities,
bonds and other debt securities, and "money market" securities.
- ----------------------------------------------------------------------------------------------------------------------------------
Aggressive Growth Funds
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Janus Aspen Series Non-diversified portfolio achieving long-term growth of Janus Capital Corporation
Aggressive Growth Portfolio capital by normally investing at least 50% of its equity
assets in securities issued by medium-sized companies.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Oppenheimer Variable Account Funds Achieves capital appreciation by investing in "growth-type" Oppenheimer Funds, Inc.
Aggressive Growth Fund companies. Before May 1, 1998 this fund was known as Capital
Appreciation Fund.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
The Alger American Fund Long-term capital appreciation. Except during temporary Fred Alger Management, Inc.
Alger American Small defensive periods, the portfolio invests at least 65% of its
Capitalization Portfolio total assets in equity securities of companies that, at the
time of purchase of the securities, have total market
capitalization within the range of companies included in the
Russell 2000 Growth Index or the S&P Small Cap 600 Index,
updated quarterly. Both indexes are broad indexes of small
capitalization stocks. The portfolio may invest up to 35% of
its total assets in equity securities of companies that, at
the time of purchase, have total market capitalization outside
this combined range and in excess of that amount (up to
100% of its assets) during temporary defensive periods.
- ---------------------------------------------------------------------------------------------------------------------------------
Growth Funds
- ---------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Long-term capital growth consistent with the preservation of Janus Capital Corporation
Growth Portfolio capital and pursues its objective by investing in common
stocks of companies of any size. Emphasizes larger, more
established issuers.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Janus Aspen Series Long-term growth of capital by investing primarily in common Janus Capital Corporation
Capital Appreciation Portfolio stocks of companies of any size.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
The Alger American Fund Long-term capital appreciation. Except during temporary Fred Alger Management. Inc.
Alger American Growth Portfolio defensive periods, this portfolio invests at least 65% of its
total assets in equity securities of companies that, at the
time of purchase have a total market capitalization of $1
billion or greater.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Fidelity Variable Insurance Capital appreciation by investing mainly in equity securities Fidelity
Products Fund II of companies believed to be undervalued or out-of-favor. Management &
VIP II Contrafund Portfolio Research Company
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Fidelity Variable Insurance Capital appreciation by normally purchasing common stocks, Fidelity
Products Fund although its investments are not restricted to any one type of Management &
VIP Growth Portfolio security. Capital appreciation may also be found in other Research Company
types of securities. Including bonds and preferred stocks.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Oppenheimer Variable Capital appreciation normally through purchases in common Oppenheimer Funds, Inc.
Account Funds stocks, although its investments are not restricted to any one
Growth Portfolio type of security. Capital appreciation may also be found in
other types of securities including bonds and preferred stocks.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Fidelity Variable Insurance Capital growth by investing primarily in common stock and Fidelity
Products Fund III securities convertible to common stock. Management &
VIP III Growth Opportunities Research Company
Portfolio
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Goldman Sachs Variable Long-term capital appreciation, primarily through equity Golden Sachs Asset
Insurance Trust securities of companies with public stock market Management
Mid Cap Equity Fund capitalization between $500 million and $10 billion at the
time of investment.
- --------------------------------------- ---------------------------------------------------------------- --------------------------
GE Investment Funds Provides long term growth of capital appreciation by Ge Investment Management
Value Equity Fund investing primarily in common stock and other Incorporated
equity securities of companies undervalued by the market and (Subadvised by NWQ
offer above-average Incorporated growth potential. Investment Management
Company)
- --------------------------------------- ---------------------------------------------------------------- --------------------------
PBHG Insurance Series Fund, Inc. Capital Appreciation by investing at east 65% Pilgrim Baxter &
PBHG Growth II Portfolio of total assets in the equity securities of small and medium Associates, Ltd.
sized growth companies (market capitalization of up to $4
billion) that, in the adviser's opinion, have an outlook
for strong earnings growth and the potential for significant
capital appreciation..
- --------------------------------------- ---------------------------------------------------------------- -------------------------
PBHG Insurance Series Fund, Inc. Long-term growth of capital by investing primarily in the Pilgrim Baxter &
PBHG Large Cap Growth Portfolio equity securities of large capitalization companies (market Associates, Ltd.
capitalization of greater than $1 billion) that, in the
adviser's opinion, have an outlook for
strong growth in earnings and potential
for capital appreciation.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Growth and IncomeFunds
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Federated Insurance Series Long-term growth of capital and a secondary objective of Federated Advisors
American Leaders Fund II providing income. Seeks to achieve its objective by
investing, under normal circumstances, at least 65% of its
total assets in common stock of "blue chip" companies.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
GE Investment Funds Long-term growth of capital through investments primarily in GE Investment Management
U.S. Equity Fund equity securities of U.S. companies. Incorporated
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Goldman Sachs Variable Long-term capital growth and growth of income, primarily Goldman Sachs Asset
Insuranced Trust through equity securities that, in the management team's Management
Growth and Income Fund view, offer favorable capital appreciation and/or Fund
dividend-paying ability.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Salomon Brothers Variable Series Long-term growth of capital with current income Salomon Brothers
Investors Fund as a secondary Salomon Brothers Funds objective, primarily Asset Management Inc.
(currently not available in through investments in common stocks of well-known
California and many not be
available in all markets)
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Fidelity Variable Insurance Reasonable income by investing primarily in income-producing Fidelity
Products Fund equity securities. In choosing these securities, the portfolio Management &
VIP Equity-Income Portfolio will also consider the potential for capital appreciation. The Research Company
portfolio's goal is to achieve a yield, which exceeds the
composite yield on the securities comprising the
Standard & Poor's Composite Index of 500 Stocks.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
Fidelity Variable Insurance High total return through a combination of current income and Fidelity
Products Fund III capital appreciation by investing mainly in equity securities. Management &
VIP III Growth & Income Research Company
Portfolio
- --------------------------------------- ---------------------------------------------------------------- -------------------------
GE Investments Funds Provides capital appreciation and accumulation of income GE Investment Management
S&P 500 (1) Index Fund that corresponds to the investment return of the Standard & Incorporated
Poor's Incorporated (Subadvised by 500 Composite Stock Price (Subadvised by State
Index through investment in common State Street Global Street Global Advisors)
stocks traded on the New York Stock Exchange and the
American Advisors) Stock Exchange, to a limited extent, in
the over-the-counter markets.
- --------------------------------------- ---------------------------------------------------------------- -------------------------
- --------
1"Standard & Poor's," "S&P," and "S&P 500" are trademarks of
The Mc-Graw Hill Companies, Inc. and have been licensed for use by GE
Investment Management Incorporated. The S&P 500 Index Fund is not
sponsored, endorsed, sold or promoted by Standard & Poor's, and
Standard & Poor's makes no representation or warranty, express or
implied, regarding the advisability of investing in this Fund or the
Policy.
- ----------------------------------------------------------------------------------------------------------------------------------
International Stock Funds
- --------------------------------------- ---------------------------------------------------------------- --------------------------
Janus Aspen Series Long-term growth of capital primarily through investments in Janus Capital Corporation
International Growth Portfolio common stocks of issuers located outside the united States.
The portfolio normally invests at least 65% of its total
assets in securities of issuers from at least five different
countries, excluding the United States.
- ------------------------------------- ------------------------------------------------------------ ---------------------------
Fidelity Variable Insurance Long-term growth of capital through investments in Fidelity Management &
Products Fund foreign securities and provides a means for investors to Research Company
VIP Overseas Portfolio diversify their own portfolios by participating in companies
economies outside of the United States.
- ----------------------------------------------------------------------------------------------------------------------------------
GE Investments Funds Long-term capital appreciation by investing primarily in GE Investment Management
International Equity Fund equity and equity-related securities of companies that are Incorporated
organized outside of the U.S. or whose securities are
principally traded outside the U.S.
- ----------------------------------------------------------------------------------------------------------------------------------
Corporate Bond Funds
- ----------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds High level of current income and capital, growth when Oppenheimer Funds Inc.
Bond Fund consistent with its primary objective. Under normal
conditions this fund will invest at least 65% of its
total assets in investment grade debt securities.
- ------------------------------------- ------------------------------------------------------------ --------------------------------
Salomon Brothers Variable Series High level of current income with capital Salomon Brothers
Funds appreciation as a secondary objective, through a Asset Management, Inc.
Strategic Bond Fund globally diverse portfolio of fixed-income investments,
(currently not available in including lower-rated fixed income securities commonly
California and may not be known as junk bonds.
available in all markets)
- ----------------------------------------------------------------------------------------------------------------------------------
GE Investments Funds Maximum income consistent with prudent investment GE Investment
Income Fund management and preservation of capital by investing Management Incorporated.
Incorporated primarily in income-bearing debt securities
and other income bearing instruments.
- ---------------------------------------------------------------------------------------------------------------------------------
High Yield Bond Funds
- --------------------------------------------------------------------------------------------------------------------------------
Opppenheimer Variable High current income from investments in high yield fixed Oppenheimer Funds, Inc.
Account Funds income securities, including unrated securities or high
High Income Fund risk securities in lower rating categories. These
securities may be considered speculative. This Fund may
have substantial holdings of lower-rated debt securities
or "junk" bonds. The risks of investing in junk
bonds are described in the prospectus for the
Oppenheimer Variable Account Funds, which should be
read carefully before investing.
- ----------------------------------------------------------------------------------------------------------------------------------
Federated Insurance Series High current income by investing primarily in a Federated Advisers
High Income Bond Fund II diversified portfolio of professionally managed
fixed-income securities. The fixed income securities
in which the Fund intends to invest are lower-rated
corporate debt obligations, commonly referred to as "junk
bonds." The risks of these securities are described in
the prospectus for the Federated Insurance Series,
which should be read careful before investing.
- ----------------------------------------------------------------------------------------------------------------------------------
Specialty Funds
- ---------------------------------------------------------------------------------------------------------------------------------
Federated Insurance High current income and moderate capital appreciation by Federated Advisers
Utility Fund II investing primarily in equity and debt securities of
utility companies.
- ---------------------------------------------------------------------------------------------------------------------------------
GE Investments Funds Maximum total return through current income and capital GE Investment Management
Real Estate Securities Fund appreciation by investing primarily in securities of U.S. Incorporated
issuers that are principally engaged in or related to the
real estate industry including those that own significant
real estate assets. The portfolio will not invest directly
in real estate
- ---------------------------------------------------------------------------------------------------------------------------------
Diversified Bond Funds
- ---------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Maximum total return consistent with preservation of Janus Capital
Flexible Income Portfolio capital. Total return is expected to result from a Corporation
combination of income and capital appreciation.
The portfolio pursues its objective primarily by
investing in any type of income-producing securities.
This portfolio may have substantial holdings of
lower-rated debt securities or "junk" bonds. The
risks of investing in junk bonds are described in the
prospectus for Janus Aspen Series, which should be read
carefully before investing.
- ----------------------------------------------------------------------------------------------------------------------------------
Global Stock Funds
- ----------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Long-term capital growth in a manner consistent with the Janus Capital
Worldwide Growth Portfolio preservation of capital by investing in a diversified Corporation
portfolio of common stocks of foreign and domestic issuers
of all sizes. Normally invests in at least five different
companies including the United States.
- ----------------------------------------------------------------------------------------------------------------------------------
International Bond Funds
---------------------------------------------------------------------------------------------------------------------------------
Innvestments Funds High total return, emphasizing current income and, to a GE Investment
Global Income Fund lesser extent, capital appreciation. Seeks to achieve Management
objectives by investing primarily in income-bearing debt Incorporated
securities and other income-bearing instruments of U.S.
and foreign issuers
- ----------------------------------------------------------------------------------------------------------------------------------
Money Market Funds
- ----------------------------------------------------------------------------------------------------------------------------------
GE Investments Funds Highest level of current income as is consistent with high GE Investment
GE Investment Money Market Fund liquidity and safety of principal by investing Management, Incorporated
in high quality quality money market securities.
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
We will purchase shares of the portfolios at net asset value and direct them to
the appropriate Investment Subdivisions of Account 4. We will redeem sufficient
shares of the appropriate portfolios at net asset value to pay Death Benefits
and surrender/partial surrender proceeds, to make income payments, or for other
purposes described in the Policy. We automatically reinvest all dividend and
capital gain distributions of the portfolios in shares of the distributing
portfolios at their net asset value on the date of distribution. In other words,
we do not pay portfolio dividends or portfolio distributions out to Owners as
additional units, but instead reflect them in unit values.
Shares of the Funds are not sold directly to the general public. They are sold
to the Company, and may be sold to other insurance companies, for investment of
the assets of the investment subdivisions established by those insurance
companies to fund variable annuity and variable life insurance policies or to
retirement plans.
<PAGE>
When a Fund sells shares in any of its portfolios both to variable annuity and
to variable life insurance separate accounts, it engages in mixed funding. When
a Fund sells shares in any of its portfolios to separate accounts of
unaffiliated life insurance companies, it engages in shared funding.
Each Fund may engage in mixed and shared funding. Therefore, due to differences
in redemption rates or tax treatment, or other considerations, the interests of
various shareholders participating in a Fund could conflict. A Fund's Board of
Directors will monitor for the existence of any material conflicts, and
determine what action, if any, should be taken. See the Prospectuses for the
Funds.
We have entered into agreements with either the investment adviser or
distributor of each of the Funds under which the adviser or distributor pays us
a fee ordinarily based upon a percentage of the average aggregate amount we have
invested on behalf of Account 4 and other separate accounts. These percentages
differ, and some investment advisers or distributors pay us a greater percentage
than other advisors or distributors. These agreements reflect administrative
services we provide.
Changes to Account 4 and the Investment Subdivisions
We reserve the right, within the law, to make additions, deletions and
substitutions for the Funds and/or any portfolios within the Funds in which
Account 4 participates. We may substitute shares of other portfolios for shares
already purchased, or to be purchased in the future, under the Policy. This
substitution might occur if shares of a portfolio should no longer be available,
or if investment in any portfolio's shares should become inappropriate, in the
judgment of our management, for the purposes of the Policy. No substitution of
the shares attributable to your Policy may take place without notice to you and
before approval of the SEC, in accordance with the 1940 Act.
We also reserve the right to establish additional Investment Subdivisions, each
of which would invest in a separate portfolio of a Fund, or in shares of another
investment company, with a specified investment objective. We may also eliminate
one or more Investment Subdivisions if, in our sole discretion, marketing, tax,
or investment conditions warrant.
If permitted by law, we may deregister Account 4 under the 1940 Act in the event
such registration is no longer required; manage Account 4 under the direction of
a committee; or combine Account 4 with other separate accounts of the Company.
Further, to the extent permitted by applicable law, we may transfer the assets
of Account 4 to another separate account.
THE GUARANTEE ACCOUNT
<PAGE>
Due to certain exemptive and exclusionary provisions of the federal securities
laws, we have not registered interests in the Guarantee Account under the
Securities Act of 1933 (the "1933 Act"), and we have not registered either the
Guarantee Account or our General Account as an investment company under the 1940
Act. Accordingly, neither the interests in the Guarantee Account, nor our
General Account are generally subject to regulation under the 1933 Act and the
1940 Act. Disclosures relating to the interests in the Guarantee Account, and
the General Account, however, may be subject to certain generally applicable
provisions of the federal securities laws relating to the accuracy of statements
made in a registration statement.
You may allocate some or all of your net premium payments and transfer some or
all of your Account Value to the Guarantee Account. We credit the portion of the
Account Value allocated to the Guarantee Account with interest (as described
below). Account Value in the Guarantee Account is subject to some, but not all,
of the charges we assess in connection with the Policy. See Charges and Other
Deductions.
Each time you allocate net premium payments or transfer Account Value to the
Guarantee Account, we establish an interest rate guarantee period. For each
interest rate guarantee period, we guarantee an interest rate for a specified
period of time. At the end of an interest rate guarantee period, a new interest
rate will become effective, and a new interest rate guarantee period will
commence for the remaining portion of that particular allocation.
We determine the interest rates in our sole discretion. The determination made
will be influenced by, but not necessarily correspond to, interest rates
available on fixed income investments which we may acquire with the amounts we
receive as premium payments or transfers of Account Value under the Policies.
You will have no direct or indirect interest in these investments. We also will
consider other factors in determining interest rates for a guarantee period
including, but not limited to, regulatory and tax requirements, sales
commissions, and administrative expenses borne by us, general economic trends,
and competitive factors. Amounts you allocate to the Guarantee Account will not
share in the investment performance of our General Account, or any portion
thereof. We cannot predict or guarantee the level of interest rates in future
guarantee periods. However, the interest rates for any interest guarantee period
will be at least the guaranteed interest rate shown in your Policy.
We will notify Owners in writing at least 10 days prior to the exipiration date
of any guarantee period about the then currently available guarantee peiords and
the guarantee interest rates applicable to such guarantee periods. A new one
year guarantee period will commence automatically uness we receive written
notice prior to the end of the 30 day period following the expiration of the
guarantee period ("30 day window") of your election of a different guarantee
period from among those being offered by us at that time, or instructions to
transfer all of a portion of the remaining amount to one or more Investment
Subdivisions subject to certain restrictions. (See Transfers Before the Maturity
Date.) During the 30 day window, the allocation will accrue interest at the new
guarantee period's interest rate
We reserve the right to credit bonus interest on premium payments allocated to a
Guarantee Account participating in the Dollar-Cost Averaging Program. (This may
not be available to all classes of policies.)
CHARGES AND OTHER DEDUCTIONS
All of the charges described in this section apply to Account Value allocated to
Account 4. Account Value in the Guarantee Account is subject to all of the
charges described in this section except for the mortality and expense risk
charge and the administrative expense charge.
We will deduct the charges described below to cover our costs and expenses,
services provided, and risks assumed under the Policies. We incur certain costs
and expenses for the distribution and administration of the Policies and for
providing the benefits payable thereunder. Our administrative services include:
o processing applications for and issuing the Policies;
o processing purchases and redemptions of portfolio shares as required;
<PAGE>
o maintaining records;
o administering annuity payouts;
o furnishing accounting and valuation services (including the
calculation and monitoring of daily Investment Subdivision
values);
o reconciling and depositing cash receipts;
o providing Policy confirmations and periodic statements;
o providing toll-free inquiry services; and
o furnishing telephone fund transfer services.
The risks we assume include:
o the risk that the Death Benefits will be greater than the Surrender
Value;
o the risk that the actual life-span of persons receiving income
payments under the Policy will exceed the assumptions reflected in
our guaranteed rates (these rates are incorporated in the Policy
and cannot be changed);
o the risk that more Owners than expected will qualify for waivers of
the surrender charges; and
o the risk that our costs in providing the services will exceed our
revenues from Policy charges (which cannot be changed by us).
The amount of a charge may not necessarily correspond to the costs associated
with providing the services or benefits indicated by the designation of the
charge. For example, the surrender charge we collect may not fully cover all of
the sales and distribution expenseswe actually incur. We also may realize a
profit on one or more of the charges. We may use any such profits for any
corporate purpose, including the payment of sales expenses.
Transaction Expenses
Surrender Charge
We assess a surrender charge (except as described below) on partial and full
surrenders of premium payments. You pay this charge to compensate us for the
losses we experience on Policy distribution costs when Owners surrender or
partially surrender. If your policy form is P1143 4/94, your surrender charge
provisions may vary from those discussed below. Please see the Appendix.
<PAGE>
We calculate the surrender charge separately for each premium payment. For
purposes of calculating this charge, we assume that you withdraw premium
payments on a first-in first-out basis. We deduct the surrender charge
proportionately from the Investment Subdivisions. However, if there is no
Account Value in Account 4, we will deduct the charge from the Guarantee
Account. The surrender charge is as follows:
Surrender charge as a percentage of the surrendered
or partially surrendered premium payment
- ------------------------------------------- ---------------------------------
Number of full and
partially completed
years since we
received the premium
payment
Year
Percentage
1 6%
2 6%
3 6%
4 6%
5 4%
6 2%
7 or more 0%
We do not assess the surrender charge on surrenders:
o of amounts representing gain (as defined below);
o of free withdrawal amounts (as defined below);
o if taken under the surrender under Optional Payment Plan 1, Optional
Payment Plan 2 (for a period of 5 or more years), or
Optional Payment Plan 5;
o if a waiver of surrender charge provision applies; or
o if taken upon the death of the Annuitant.
You may withdraw any gain in your Policy free of any surrender charge. We
calculate gain in the Policy as: (a) plus (b) minus (c) minus (d), but not less
than zero where:
(a) is the Account Value on the date we receive your surrender
request;
(b) is the total of any partial surrenders previously taken;
<PAGE>
(c) is the total of premium payments made; and
(d) is the total of any gain previously surrendered.
In addition to any gain, you may withdraw an amount equal to 10% of your total
premium payments each Policy year without a surrender charge (the "free
withdrawal amount"). The free withdrawal amount is not cumulative from Policy
year to Policy year.
Further, we will waive the surrender charge if you annuitize under Optional
Payment Plan 1 (Life Income with Period Certain), Optional Payment Plan 2
(Income for a Fixed Period) provided that you select a fixed period of 5 years
or more, or Optional Payment Plan 5 (Joint Life and Survivor Income). See
Optional Payment Plans.
We also will waive surrender charges arising from a surrender occurring before
income payments begin if, at the time we receive the surrender request, we have
received due proof that the Annuitant has a qualifying terminal illness, or has
a qualifying confinement to a state licensed or legally operated hospital or
inpatient nursing facility for a minimum period as set forth in the Policy
(provided the confinement began, or the illness was diagnosed, at least one year
after the Policy Date). If you surrender the Policy under the terminal illness
waiver, please remember that we will pay your Account Value, which could be less
than the Death Benefit otherwise available. The terms and conditions of the
waivers are set forth in your Policy.
Deductions from Account 4
We deduct from Account 4 an amount, computed daily, at an annual rate of 1.40%
of the daily net asset value. The charge consists of an administrative expense
charge at an effective annual rate of .15% and a mortality and expense risk
charge at an effective annual rate of 1.25%.
Other Charges
Annual Death Benefit Charge
We charge you for expenses related to the Guaranteed Minimum Death Benefit
("GMDB") and/or Optional Death Benefit ("ODB"). We deduct these charges against
the Account Value in Account 4 at each anniversary and at full surrender to
compensate us for the increased risks and expenses associated with providing the
enhanced Death Benefit(s). We will allocate the annual GMDB and/or ODB charge
among the Investment Subdivisions in the same proportion that the Policy's
Account Value in each Investment Subdivision bears to the totasl Account Value
in all Investment Subdivisions at the time we make the charge. If the Guarantee
Account is available under the Policy and the Account Value in Account 4 is not
sufficient to cover the charge for the GMDB and/or the ODB, we will deduct the
charge first from the Account Value in Account 4, if any, and then from the
Guarantee Account. At full surrender, we will charge you a pro-rata portion of
the annual charge. (We do not have exemptive relief to deduct the ODB charge at
full surrender, so we do not currently deduct the ODB charge at full surrender.
We are, however, in the process of applying for exemptive relief. If we receive
this exemptive relief, we will begin to deduct the ODB cahrge at full
surrender.)
For the elective Guaranteed Minimum Death Benefit, we guarantee that this charge
will never exceed an annual rate of 0.35% of the prior year's average Guaranteed
Minimum Death Benefit. For the elective Optional Death Benefit, we guarantee
that this charge will never exceed an annual rate of 0.25% of your Account
Value.
<PAGE>
Policy Maintenance Charge
We will deduct an annual charge of $25 annually from the Account Value of each
Policy to compensate us for certain administrative expenses incurred in
connection with the Policies. We will deduct the charge at each Policy
anniversary and at full surrender. We will waive this charge if your Account
Value at the time of deduction is more than $75,000.
We will allocate the annual Policy Maintenance Charge among the Investment
Subdivisions in the same proportion that the Policy's Account Value in each
Investment Subdivision bears to the total Account Value in all Investment
Subdivisions at the time we make the charge. If there is insufficient Account
Value allocated to Account 4, we will deduct any remaining portion of the charge
from the Guarantee Account from the amounts that have been in the Guarantee
Account for the longest period of time. Other allocation methods may be
available upon request.
Deductions for Premium Taxes
We will deduct charges for any premium tax or other tax levied by any
governmental entity from Account Value when incurred or at another time of our
choosing.
The applicable premium tax rates that states and other governmental entities
impose on the purchase of an annuity are subject to change by legislation, by
administrative interpretation or by judicial action. These premium taxes
generally depend upon the law of your state of residence. The tax generally
ranges from 0.0% to 3.5%.
Other Charges and Deductions
Each Fund incurs certain fees and expenses. To pay for these charges, the Fund
makes deductions from its assets. The deductions are described more fully in
each Fund's prospectus.
Additional Information
We may reduce or eliminate the administrative expense and surrender charges
described previously for any particular Policy. However, we will reduce these
charges only to the extent that we anticipate lower distribution and/or
administrative expenses, or that we perform fewer sales or administrative
services than those originally contemplated in establishing the level of those
charges. Lower distribution and administrative expenses may be the result of
economies associated with (1) the use of mass enrollment procedures, (2) the
performance of administrative or sales functions by the employer, (3) the use by
an employer of automated techniques in submitting deposits or information
related to deposits on behalf of its employees, or (4) any other circumstances
which reduce distribution or administrative expenses. We will state the exact
amount of administrative expense and surrender charges applicable to a
particular Policy in that Policy. We will include any such differences in your
Policy.
<PAGE>
THE POLICY
The Policy is an individual flexible deferred variable annuity Policy. We
describe your rights and benefits below and in the Policy. There may be
differences in your Policy because of requirements of the state where we issued
your Policy. We will include any such differences in your Policy.
The discussion above about the Policy in this prospectus relates to Policies
that use policy form P1150 10/98. If your policy form is P1143 4/94, your death
benefit and surrender charge may vary from the descriptions found in this
prospectus. Please see the Appendix for a description of these features in your
Policy.
Purchase of the Policy
If you wish to purchase a Policy, you must apply for it through an authorized
sales representative. The sales representative will send your completed
application to us, and we will decide whether to accept or reject it. If we
accept your application, our legally authorized officers prepare and execute a
Policy. We then send the Policy to you through your sales representative. See
Distribution of the Policies.
If we receive a completed application and all other information necessary for
processing a purchase order, we will apply your initial premium payment no later
than two business days after we receive the order. While attempting to finish an
incomplete application, we may hold your initial premium payment for no more
than five business days. If the incomplete application cannot be completed
within those five days, we will inform you of the reasons, and will return your
premium payment immediately (unless you specifically authorize us to keep it
until the application is complete). Once you complete your application, we must
apply the initial premium payment within two business days.
To apply for a Policy, you must be of legal age in a state where we may lawfully
sell the Policies and also be eligible to participate in any of the qualified or
non-qualified plans for which we designed the Policies. The Annuitant cannot be
older than age 85, unless we approve a different age.
Ownership
As Owner, you have all rights under the Policy, subject to the rights of any
irrevocable beneficiary. According to Virginia law, the assets of Account 4 are
held for the exclusive benefit of all Owners and their Designated Beneficiaries.
Qualified Policies may not be assigned or transferred except as permitted by the
Employee Retirement Income Security Act (ERISA) of 1974 and upon written
notification to us. We assume no responsibility for the validity or effect of
any assignment. Consult your tax advisor about the tax consequences of an
assignment.
If you name a Joint Owner in the application, we will treat the Joint Owners as
having equal undivided interests in the Policy. All Owners must together
exercise any ownership rights in this Policy.
Premium Payments
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You may make premium payments at a frequency and in the amount you select. You
must obtain our approval before you make total premium payments for an Annuitant
age 79 or younger that exceed $2,000,000. If the Annuitant is age 80 or older at
the time of payment, the total amount not subject to prior approval is
$1,000,000. Payments may be made or, if stopped, resumed at any time until the
Maturity Date, the surrender of the Policy, or the death of the Owner (or Joint
Owner, if applicable), whichever comes first. We reserve the right to refuse to
accept a premium payment for any lawful reason.
The minimum initial premium payment is $5,000 (or $2,000 if your Policy is an
IRA Policy). We may accept a lower initial premium payment in the case of
certain group sales. Each additional premium payment must be at least $500 for
Non-Qualified Policies, $50 for IRA policies and $100 for other Qualified
Policies.
Valuation Day
We will value Accumulation and Annuity Units once daily as of the close of
trading (currently 4:00 p.m., New York time) for each day the New York Stock
Exchange is open except for days on which a Fund does not value its shares
(Valuation Day). If a Valuation Period contains more than one day, the unit
values will be same for each day in the Valuation Period.
Allocation of Premium Payments
We place net premium payments into Account 4's Investment Subdivisions, each of
which invests in shares of a corresponding portfolio of the Funds, and/or the
Guarantee Account, according to your instructions. However, in those states
which require that premium payments be returned during the free look period (see
Return Privilege), we will place the premium payments you allocated to Account 4
in the Investment Subdivision investing in the Money Market Fund of GE
Investments Funds (the "Money Market Investment Subdivision"). You may not make
transfers during this period. At the deemed end of the free look period, if we
allocated any portion of your initial premium payment to the Money Market
Investment Subdivision, we will transfer the value in the Money Market
Investment Subdivision to the Investment Subdivisions you specified in your
application. Solely for the purpose of processing transfers from the Money
Market Investment Subdivision, we will deem the free look period to end 15 days
after the Policy Date. This transfer from the Money Market Investment
Subdivision to the other Investment Subdivisions upon the expiration of the free
look period does not count as a transfer for any other purposes under the
Policy.
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The percentage of any premium payment which you can put into any one Investment
Subdivision or Guarantee Period must be a whole percentage and not less than
$100. Upon allocation to the appropriate Investment Subdivision we convert net
premium payments into Accumulation Units. We determine the number of
Accumulation Units credited by dividing the amount allocated to each Investment
Subdivision by the value of an Accumulation Unit for that Investment Subdivision
on the Valuation Day on which we receive the premium payment at our Home Office
if received before 4:00 p.m., New York time. If we receive the premium payment
at or after 4:00 p.m, New York time, we will use the Accumulation Unit value
computed on the next Valuation Day. The number of Accumulation Units determined
in this way is not changed by any subsequent change in the value of an
Accumulation Unit. However, the dollar value of an Accumulation Unit will vary
depending not only upon how well the portfolio's investments perform, but also
upon the charges of Account 4 and the fees and expenses of the portfolios.
You may change the allocation of subsequent premium payments at any time,
without charge, by sending us acceptable notice in writing or over the phone.
The new allocation will apply to any premium payments made after we receive
notice of the change
Valuation of Accumulation Units
We value Accumulation Units for each Investment Subdivision separately.
Initially, we arbitrarily set the value of each Accumulation Unit at $10.00.
Thereafter, the value of an Accumulation Unit in any Investment Subdivision for
a Valuation Period equals the value of an Accumulation Unit in that Investment
Subdivision as of the preceding Valuation Period multiplied by the net
investment factor of that Investment Subdivisions for the current Valuation
Period.
The net investment factor is an index used to measure the investment performance
of an Investment Subdivision from one Valuation Period to the next. The net
investment factor for any Investment Subdivision for any Valuation Period
reflects the change in the net asset value per share of the portfolio held in
the Investment Subdivision from one Valuation Period to the next, adjusted for
the daily deduction of the administrative expense and mortality and expense risk
charges from assets in the Investment Subdivision. If any "ex-dividend" date
occurs during the Valuation Period, we take into account the per share amount of
any dividend or capital gain distribution so that the unit value is not
impacted. Also, if we need to reserve money for taxes, we take into account a
per share charge or credit for any taxes reserved for which we determine to have
resulted from the operations of the Investment Subdivision.
TRANSFERS
Transfers Before the Maturity Date
Before the earliest of the surrender of the Policy, payment of any Death
Benefit, or the Maturity Date, you may transfer all or a portion of your
investment between and among the Investment Subdivisions of Account 4 and the
Guarantee Account, subject to certain conditions. We process transfers among the
Investment Subdivisions of Account 4 and between the Investment Subdivision and
any Guarantee Account as of the end of the Valuation Period that we receive the
transfer request at our Home Office. We may postpone transfers to, from, or
among the Investment Subdivisions of Account 4, under certain circumstances. See
Requesting Payments.
We restrict transfers from any particular allocation of a Guarantee Account to
an Investment Subdivision. You may make such transfers only during the 30 day
period beginning with the end of the preceding interest rate guarantee period
applicable to that particular allocation. We also may limit the amount which you
may transfer to the Investment Subdivisions. However, for any particular
allocation to the Guarantee Account, the limited amount will not be less than
any accrued interest on that allocation plus 25% of the original amount of that
allocation.
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Further, we may restrict certain transfers from the Investment Subdivisions. We
reserve the right to prohibit or limit transfers from an Investment Subdivision
to a Guarantee Account during the six month period following the transfer of any
amount from the Guarantee Account to any Investment Subdivision.
Currently, there is no other limit on the number of transfers between and among
Investment Subdivisions of Account 4 and the Guarantee Account; however, we
reserve the right to limit the number of transfers each calendar year to twelve,
or if it is necessary for the Policy to continue to be treated as an annuity
policy by the Internal Revenue Service, a lower number. Currently, all transfers
under the Policy are free. However, we reserve the right to assess a fee of $10
per transfer. The minimum transfer amount is the entire balance in the
Investment Subdivision or guarantee period if the transfer will leave a balance
of less than $100.
Sometimes, we may not honor your transfer request. We may not honor your
transfer request:
(i) if any Investment Subdivision that would be affected by the
transfer is unable to purchase or redeem shares of the Fund in which
the Investment Subdivision invests;
(ii) if the transfer is a result of more than one trade involving the
same Investment Subdivision within a 30 day period; or
(iii) if the transfer would adversely affect accumulation unit values;
and
(iv) if the transfer would adversely affect any Fund affected by the
transfer.
We also may not honor transfers made by third parties holding multiple powers
of attorney. (See Powers of Attorney.)
When thinking about a transfer of Account Value, you should consider the
inherent risk involved. Frequent transfers based on short-term expectations may
increase the risk that you will make a transfer at an inopportune time.
Telephone Transfers
We permit telephone transfers. We may be liable for losses resulting from
unauthorized or fraudulent telephone transfers if we fail to employ reasonable
procedures to confirm that the telephone instructions that we receive are
genuine. Therefore, we will employ means to prevent unauthorized or fraudulent
telephone requests, such as sending written confirmation, recording telephone
requests, and/or requesting other identifying information. In addition, we will
require written authorization before allowing you to make telephone transfers.
We reserve the right to limit telephone transfers.
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To request a telephone transfer, you should call our Annuity Customer Service
Line. We will record all telephone transfer requests. We will execute transfer
requests received before the close of the New York Stock Exchange that Valuation
Day at that day's prices. We will execute requests received after that time on
the next Valuation Day at that day's prices.
Powers of Attorney
As a general rule and as a convenience to you, we allow the use of powers of
attorney whereby you give third parties the right to effect transfers on your
behalf. However, when the same third party possesses powers of attorney executed
by many Owners, the result can be simultaneous transfers involving large amounts
of Account Value. Such transfers can disrupt the orderly management of the Funds
underlying the Policy, can result in higher costs to Owners, and are generally
not compatible with the long-range goals of Owners. We believe that such
simultaneous transfers effected by such third parties are not in the best
interests of all shareholders of the Funds underlying the Policies, and the
management of the Funds share this position. Therefore, we may limit transfers
made by a third party holding multiple powers of attorney.
Dollar-Cost Averaging
The dollar-cost averaging program permits you to systematically transfer on a
monthly or quarterly basis a set dollar amount from the Money Market Investment
Subdivision and/or the Guarantee Account to any combination of other Investment
Subdivisions (as long as the total number of Investment Subdivisions used does
not exceed the maximum number allowed under the Policy). The dollar-cost
averaging method of investment is designed to reduce the risk of making
purchases only when the price of units is high, but you should carefully
consider your financial ability to continue the program over a long enough
period of time to purchase Accumulation Units when their value is low as well as
when it is high. Dollar-cost averaging does not assure a profit or protect
against a loss.
You may participate in the dollar-cost averaging program by selecting the
program on the application, completing a dollar-cost averaging agreement, or
calling our Home Office. To use the dollar-cost averaging program, you must
transfer at least $100 from an Investment Subdivision or a guarantee period with
each transfer. Once elected, dollar-cost averaging remains in effect from the
date we receive your request until the value of the Investment Subdivision or
the guarantee period from which transfers are being made is depleted, or until
you cancel the program by written request or by telephone if we have your
telephone authorization on file.
With regard to dollar-cost averaging from the Guarantee Account, we reserve the
right to determine the amount of each automatic transfer. We reserve the right
to transfer any remaining portion of an allocation used for dollar-cost
averaging to a Guarantee Account with a new guarantee period upon termination of
the dollar-cost averaging program for that allocation.
There is no additional charge for dollar-cost averaging. We reserve the right to
discontinue offering the dollar-cost averaging program. We will provide you 30
days written notice should we do this.
Asset Allocation
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You may select from five asset allocation model portfolios, or you may use a
model as a guide to help you develop your own asset allocation program. The
models are as follows:
Model Investment and Risk Profile
1 Income
2 Enhanced Income
3 Growth & Income
4 Growth
5 Aggressive Growth
If you elect to participate in the asset allocation program, we will
automatically allocate all premium payments among the Investment Subdivisions
indicated by the model and the Funds within the model you select. The models do
not include allocation to the Guarantee Account. Although you may use only one
model at a time, you may elect to change your selection as your tolerance for
risk, needs, and/or objectives change. You may use a questionnaire to determine
the model that best meets your risk tolerance and time horizons.
Asset allocation does not guarantee a profit or protect against a loss.
Because each Investment Subdivision performs differently over time, your
portfolio mix may vary from its initial allocations. You may elect to have the
portfolios automatically rebalanced under our portfolio rebalancing program,
described below.
From time to time, the allocation percentages among the Investment Subdivisions
or even some of the Investment Subdivisions within a particular model, may need
to be changed. We will send you notice that such a change has been made. Unless
you elect to participate in the new allocation model you will remain in your
current designated allocation model. This change will not be made automatically.
There is no additional charge for the asset allocation program. We reserve the
right to discontinue offering this program at any time and for any reason.
Portfolio Rebalancing Program
Once you have allocated your money among the Investment Subdivisions, the
performance of each Investment Subdivision may cause your allocation to shift.
You may instruct us to automatically rebalance (on a quarterly, semi-annual or
annual basis) your Account Value among the Investment Subdivisions to return to
the percentages specified in your allocation instructions. The program does not
include allocations to the Guarantee Account. You may elect to participate in
the portfolio rebalancing program at any time by completing the portfolio
rebalancing agreement. Your percentage allocations must be in whole percentages.
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Subsequent changes to your percentage allocations may be made at any time by
written or telephone instructions to the Home Office. Once elected, portfolio
rebalancing remains in effect from the date we receive your written request
until you instruct us to discontinue portfolio rebalancing. There is no
additional charge for using portfolio rebalancing, and we do not consider a
portfolio rebalancing transfer a transfer for purposes of assessing a transfer
processing fee or calculating the maximum number of transfers permitted in a
calendar year. We reserve the right to discontinue offering the portfolio
rebalancing program at any time and for any reason. Portfolio rebalancing does
not guarantee a profit or protect against a loss. We reserve the right to
discontinue offering portfolio rebalancing upon 30 days written notice to you.
SURRENDERS
Surrenders and Partial Surrenders
Subject to the rules discussed below, we will allow the surrender of the Policy
or a withdrawal of a portion of the Account Value at any time before the
Maturity Date upon your written request. Surrender or partial surrender rights
after the Maturity Date depend upon the income payment option you select.
We will not permit a partial surrender that is less than $500 or that reduces
Account Value to less than $5,000. If your partial surrender request would
reduce Account Value to less than $5,000, we will surrender only that amount of
Account Value that would reduce the remaining Account Value to $5,000 and deduct
any surrender charge from the amount you surrendered.
The amount payable on full surrender of the Policy is the Surrender Value at the
end of the Valuation Period during which we receive the request. The Surrender
Value equals the Account Value on the date we receive a request for surrender
less any applicable surrender charge, GMDB charge and/or ODB charge, and less
any applicable premium tax. We may pay the Surrender Value in a lump sum or
under one of the optional payment plans specified in the Policy, based on your
instructions.
You may indicate, in writing or by calling the Annuity Customer Service Line,
from which Investment Subdivisions or guarantee periods we are to take your
partial surrender. If you do not so specify, we will deduct the amount of the
partial surrender first from the Investment Subdivisions of Account 4 on a
pro-rata basis, in proportion to the Account Value in Account 4. We then will
deduct any remaining amount from the Guarantee Account. We will take deductions
from the Guarantee Account from the amounts (including any interest credited to
such amounts) which have been in the Guarantee Account for the longest period of
time.
Please remember that a partial surrender will reduce the Death Benefit by the
proportion that the partial surrender (including any applicable surrender
charge) reduced Account Value.
Restrictions on Distributions from Certain Policies
Section 830.105 of the Texas Government Code permits participants in the Texas
Optional Retirement Program ("ORP") to withdraw their interest in a variable
annuity contract issued under the ORP only upon (i) termination of employment in
the Texas public institutions of higher education, (ii) retirement, (iii) death,
or (iv) the participant's attainment of age 70 1/2. Accordingly, before we
distribute any amounts from these Policies, you must furnish us proof that one
of these four events has occurred.
<PAGE>
Systematic Withdrawals
You may elect in writing on our form to take systematic withdrawals of a
specified dollar amount (in equal installments of at least $100) on a monthly,
quarterly, semi-annual or annual basis. Payments can begin at any time after 30
days from the Policy Date. Your systematic withdrawals in a Policy year may not
exceed the amount which is not subject to a surrender charge. You may provide
specific instructions as to how we are to take the systematic withdrawals. If
you have not provided specific instructions, or if your specific instructions
cannot be carried out, we will process the withdrawals by first taking on a
pro-rata basis Accumulation Units from all of the Investment Subdivisions in
which you have an interest. To the extenet that your Account Value in Account 4
is not sufficient to accomplish the withdrawal, we will take any Account Value
you have in the Guarantee Account to accomplish the withdrawal.
After your systematic withdrawals begin, you may change the frequency and/or
amount of your payments, subject to the following:
o you may request only one such change in a calendar quarter; and
o if you did not elect the maximum amount you could withdraw under
this program at the time you elected the current series of
systematic withdrawals, then you may increase the remaining
payments.
A systematic withdrawal program will terminate automatically when a systematic
withdrawal would cause the remaining Account Value to be less than $5,000. If a
systematic withdrawal would cause the Account Value to be less than $5,000, then
we will not process that systematic withdrawal transaction. If any of your
systematic withdrawals would be or becomes less than $100, we reserve the right
to reduce the frequency of payments to an interval that would result in each
payment being at least $100. You may discontinue systematic withdrawals at any
time by notifying us in writing at our Home Office or by telephone.
When you consider systematic withdrawals, please remember that each systematic
withdrawal is subject to federal income taxes on any portion considered gain for
tax purposes. In addition, you may be assessed a 10% federal penalty tax on
systematic withdrawals if you are under age 591/2 at the time of the withdrawal.
Both partial surrenders at your specific request and withdrawals under a
systematic withdrawal program will count toward the limit of the amount that you
may withdraw in any Policy year free under the free withdrawal privilege.
We reserve the right to prohibit simultaneous systematic withdrawals and
dollar-cost averaging. We also reserve the right to discontinue systematic
withdrawals upon 30 days written notice to Owners.
<PAGE>
THE DEATH BENEFIT
Beneficiaries
You may select one or more primary and contingent Beneficiaries during your
lifetime upon application and by filing a written request with our Home Office.
Each change of Beneficiary revokes any previous designation.
Death Benefit at Death of Annuitant Before Maturity Date
If the Annuitant dies before income payments begin, regardless of whether the
Annuitant is also an Owner or Joint Owner of the Policy, the amount of proceeds
available is the Death Benefit. Upon receipt of due proof of the Annuitant's
death (generally, due proof is a certified copy of the death certificate or a
certified copy of the decree of a court of competent jurisdiction as to the
finding of death), we will treat the Death Benefit in accordance with your
instructions, subject to distribution rules and termination of contract
provisions described elsewhere. If your policy form is P1143 4/94, please see
the Appendix for a description of certain provisions of your Death Benefit.
The Death Benefit equals the sum of (a) and (b) where (a) is the Account Value
as of the date we receive a request for distribution of proceeds, and (b) is the
excess, if any, of the unadjusted death benefit (as defined below) as of the
date of the Annuitant's death over the Account Value as of the date of the
Annuitant's death, with interest credited on that excess from the date of the
Annuitant's death to the date of distribution. The rate credited may depend on
applicable law or regulation. Otherwise, we will set it.
The unadjusted Death Benefit varies based on the Annuitant's age at the time we
issued the Policy and on the number of Policy years elapsed since you purchased
the Policy.
For a Policy issued with an Annuitant who was age 80 or younger on the Policy
Date:
1. If the Annuitant dies during the first six Policy years, the unadjusted
Death Benefit is the greater of:
(i) Account Value determined as of the date of the Annuitant's
death; or
(ii) the total of premium payments made adjusted by the
proportion that any partial surrender (including applicable
surrender charge) reduced Account Value and less any applicable
premium tax.
2. If the Annuitant dies after the first six Policy years, the unadjusted
Death Benefit is the greater of:
(i) Account Value determined as of the date of the Annuitant's
death;
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(ii) the total of premium payments made adjusted by the
proportion that any partial surrender (including applicable
surrender charge) reduced Account Value and less any applicable
premium tax; or
(iii) the greatest unadjusted Death Benefit on the last day of any
previous 6-year Death Benefit period, plus any premium payments
made since then, reduced by any applicable premium tax and
adjusted by the proportion that any partial surrender
(including any applicable surrender charge) reduced Account
Value.
For a Policy issued with an Annuitant who was age 81 or older on the Policy
Date:
The unadjusted Death Benefit is the Account Value determined as of the date
of the Annuitant's death.
Example: Assuming an Owner: (i) purchases a Policy for $100,000; (ii) makes no
partial surrenders and no additional premium payments, (iii) is not subject to
premium taxes, and (iv) the Annuitant's age is 80 or younger on the Policy date,
then:
Unadjusted
Issue Year Account Value Death Benefit
Issue $100,000 $100,000
1 $110,000 $110,000
2 $ 90,000 $100,000
3 $ 80,000 $100,000
4 $120,000 $120,000
5 $130,000 $130,000
6 $150,000 $150,000
7 $160,000 $160,000
8 $130,000 $150,000
9 $ 90,000 $150,000
10 $170,000 $170,000
11 $140,000 $150,000
12 $135,000 $150,000
13 $120,000 $150,000
Please note that we do not intend to depict investment performance of the Policy
in the Example shown above.
Death of an Owner or Joint Owner Before the Maturity Date
General: In certain circumstances, federal tax law requires that distributions
be made under this Policy upon the first death of:
o an Owner or Joint Owner, or
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o the Annuitant if any Owner is a non-natural entity (such as a trust or
corporation).
The discussion below describes the methods available for distributing the value
of the Policy upon death.
Designated Beneficiary: At the death of any Owner (or Annuitant, if any Owner is
a non-natural entity), the person or entity first listed below who is alive or
in existence on the date of that death will become the Designated Beneficiary:
(1)Owner or Joint Owners.
(2)Primary beneficiary.
(3)Contingent beneficiary.
(4)Owner's estate.
We then will treat the Designated Beneficiary as the sole Owner of the Policy.
If there is more than one Designated Beneficiary, we will treat each one
separately in applying the tax law's rules described below.
Distribution rules: The distributions required by federal tax law differ
depending on whether the Designated Beneficiary is the spouse of the deceased
Owner (or of the Annuitant, if the Policy is owned by a non-natural entity).
o Spouses -- If the Designated Beneficiary is the surviving
spouse of the deceased person, we will continue the Policy in
force with the surviving spouse as the new Owner. If the
deceased person was the Annuitant and there was no surviving
Contingent Annuitant, the surviving spouse will automatically
become the new Annuitant. At the death of the surviving
spouse, this provision may not be used again, even if the
surviving spouse remarries. In that case, the rules for
non-spouses will apply.
o Non-Spouses -- If the Designated Beneficiary is not the
surviving spouse of the deceased person, this Policy cannot be
continued in force indefinitely. Instead, upon the death of
any Owner (or Annuitant, if any Owner is a non-natural
entity), payments must be made to (or for the benefit of) the
Designated Beneficiary under one of the following payment
choices:
(1) Receive the Surrender Value in one lump sum
payment upon receipt of due proof of death.
(2) Receive the Surrender Value at any time
during the five year period following the
date of death. At the end of the five year
period, we will pay in a lump sum payment
any Surrender Value still remaining.
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(3) Apply the Surrender Value to provide a
monthly income benefit under Optional
Payment Plan 1 or 2. The first monthly
income benefit payment must be made no later
than one year after the date of death. Also,
the monthly income benefit payment period
must be either the lifetime of the
Designated Beneficiary or a period not
exceeding the Designated Beneficiary's life
expectancy.
If no choice is made by the Designated Beneficiary within 30 days following
receipt of due proof of death, we will use payment choice 2 (payment of the
entire value of the Policy within 5 years of the date of death). Due proof of
death must be provided within 90 days of the date of death. We will not accept
any premium payments after the non-spouse's death. If the Designated Beneficiary
dies before we distributed the entire Surrender Value, we will pay in a lump sum
payment of any Surrender Value still remaining to the person named by the
Designated Beneficiary. If no person is so named, we will pay the Designated
Beneficiary's estate.
Under payment choices 1 or 2, the Policy will terminate upon payment of the
entire Surrender Value. Under payment choice 3, this Policy will terminate when
we apply the Surrender Value to provide a Monthly Income Benefit.
Amount of the proceeds: If an Owner or Joint Owner dies and that person is
someone other than the Annuitant, the amount of the proceeds available is the
Surrender Value. If the Annuitant dies (whether or not he or she is an Owner or
Joint Owner), the amount of the proceeds available is the Death Benefit. Upon
receipt of due proof of the Annuitant's death, the Death Benefit will constitute
the new Surrender Value. The Owner will instruct us how to treat the Surrender
Value, subject to the distribution rules described above.
Guaranteed Minimum Death Benefit Rider
If an Annuitant dies before the Maturity Date while the Guaranteed Minimum Death
Benefit Rider (the "GMDB Rider") is in effect, the Designated Beneficiary may
elect the Death Benefit, described below, in lieu of the Surrender Value. (The
Death Benefit under the GMDB Rider may be referred to in our marketing materials
as the "Six Percent EstateProtector".) The Guaranteed Minimum Death Benefit
Rider may not be available in all states or markets. If your policy form is
P1143 4/94, please see the Appendix for a description of the GMDB which may
apply under your Policy.
If the GMDB Rider applies, the Death Benefit will be the greater of: ( i ) the
Death Benefit described above under "Death Benefit at Death of Annuitant Before
Maturity Date," and (ii) the Guaranteed Minimum Death Benefit on the date we
receive due proof of the Annuitant's death, or, if later, the date of the
request. The Guaranteed Minimum Death Benefit is, on the Policy Date, equal to
the initial premium payment. At the end of each Valuation Period after such
date, the Guaranteed Minimum Death Benefit is the lesser of:
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(A) the total of all premium payments received, multiplied by
two, adjusted by the proportion by which any partial
Surrenders (including applicable surrender charges) made
before or during that Valuation Period reduced Account
Value;
(B) the Guaranteed Minimum Death Benefit at the end of the
preceding Valuation Period, increased as specified below,
plus any additional premium payments made during the current
Valuation Period adjusted by the proportion by any
partial surrender including any applicable surrender charge
reduced Account Value during the current Valuation Period.
We will calculate the amount of the increase for the Valuation Period by
applying a factor to the Guaranteed Minimum Death Benefit at the end of the
preceding Valuation Period. Until the anniversary on which the Annuitant attains
age 80, we determine the factor for each Valuation Period at an effective annual
rate of 6%, except that with respect to amounts invested in certain Investment
Subdivisions shown in the Policy, the increase factor will be calculated as the
lesser of: (1) the net investment factor (an index applied to measure the
investment performance of an Investment Subdivision from one Valuation Period to
the next) for the Valuation Period, minus one, and (2) a factor for the
Valuation Period equivalent to an effective annual rate of 6%. Currently, these
subdivisions include only the Money Market Investment Subdivision. With respect
to amounts allocated to the Guarantee Account, we replace Item (1) above with a
factor for the Valuation Period equivalent to the credited rate(s) applicable to
such amounts.
You may only purchase the GMDB Rider at the time of application. The Rider is
effective on the Policy Date and will remain in effect while the Policy is in
force and before income payments begin, or until the Policy anniversary
following the date of receipt of the Owner's request to terminate the rider. We
will charge you each year for expenses related to the Death Benefit available
under the terms of the Guaranteed Minimum Death Benefit Rider. This charge will
not exceed .35% of the prior year's average Guaranteed Minimum Death Benefit.
See Annual Death Benefit Charge.
Optional Death Benefit
The Optional Death Benefit Rider (which may be referred to as the "Annual
EstateProtector" in our marketing materials) provides for an annual step-up in
death benefit, as described below. The Designated Beneficiary may elect the
Optional Death Benefit at any time after the Annuitant's death. If we pay this
Death Benefit, the Policy will terminate, and we will have no further obligation
under the Policy. The Optional Death Benefit Rider May Not Be Available in All
States or Markets. If your policy form is P1143 4/94, please see the Appendix
for a description of the Optional Death Benefit that may apply to your Policy.
The Death Benefit under the Optional Death Benefit Rider is the greater of: (1)
the Death Benefit described above under "Death Benefit at Death of Annuitant
Before Maturity Date," and (2) the minimum Death Benefit described below.
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During the first Policy year, the minimum Death Benefit under the Optional Death
Benefit Rider is the total of premium payments made, adjusted for any partial
surrenders. After the first Policy year and until the Policy anniversary
immediately preceding the Annuitant's 81st birthday, the minimum Death Benefit
is the Policy's greatest Death Benefit on any previous Policy anniversary, plus
the total premium payments made since that date, adjusted for any partial
surrenders taken since that date. Beginning on the Policy anniversary
immediately preceding the Annuitant's 81st birthday, the minimum Death Benefit
is the Policy's minimum Death Benefit on that date, plus the total premium
payments made since that date, less adjustments or any partial surrenders taken
since that date.
Your election of the Optional Death Benefit Rider is effective on the Policy
Date (unless another effective date is shown on the Policy data pages). It will
remain in effect while the Policy is in force and before income payments begin,
or until the Policy Anniversary following the date of receipt of the Owner's
request to terminate the rider. We will charge you each year for expenses
related to the Death Benefit available under the terms of the Optional Death
Benefit Rider. This charge will not exceed .25% of Account Value. See "Annual
Death Benefit Charge." Amounts payable under the Optional Death Benefit Rider
are subject to the distribution rules described above.
INCOME PAYMENTS
When you apply for a Policy, you may select any Maturity Date permitted by law;
however, this date can not be any later than the Policy anniversary following
the Annuitant's 90th birthday, unless we approve otherwise. (Please note the
following exception: Policies issued under Qualified Retirement Plans provide
for income payments to start at the date and under the option specified in the
plan.)
We will pay a monthly income benefit to the Owner beginning on the Maturity Date
if the Annuitant is still living. We will pay the monthly income benefit in the
form of variable income payments similar to those described in Optional Payment
Plan 1, Life Income with 10 Years Certain (automatic payment plan), using the
sex and settlement age of the Annuitant instead of the payee, unless you make
another election. You may also choose to receive the maturity value (that is,
the Surrender Value of your Policy on the date immediately preceding the
Maturity Date) in one lump sum (in which case we will cancel the Policy).
Under the Life Income with 10 Years Certain plan, if the Annuitant lives longer
than ten years, payments will continue for his or her life. If the Annuitant
dies before the end of ten years, we will discount the remaining payments for
the ten year period at the same rate used to calculate the monthly income
payment. If the remaining payments are variable income payments, we will assume
the amount of each payment that we discount equals the payment amount on the
date we receive due proof of death. We will pay this discounted amount in one
sum.
The Policy also provides optional forms of annuity payments, each of which is
payable on a fixed basis. Optional Payment Plans 1 and 5 also are available on a
variable basis. The Policy provides that all or part of the Account Value may be
used to purchase an annuity.
If you elect fixed income payments, the guaranteed amount payable will earn
interest at 3% compounded yearly. We may increase the interest rate which will
increase the amount we pay to you or the payee.
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If you elect variable income payments, your income payments, after the first
payment, will reflect the investment experience of the Investment Subdivisions
to which you allocated Account Value.
We will make annuity payments monthly unless you elect quarterly, semi-annual or
annual installments. Under the monthly income benefit and all of the optional
payment plans, if any payment made more frequently than annually would be or
becomes less than $100, we reserve the right to reduce the frequency of payments
to an interval that would result in each payment being at least $100. If the
annual payment payable at maturity is less than $20, we will pay the maturity
value in a lump sum. Upon making such a payment, we will have no future
obligation under the Policy. Following are explanations of the optional payment
plans available.
Optional Payment Plans
Plan 1--Life Income with Period Certain. This option guarantees periodic
payments during a designated period. If the payee lives longer than the minimum
period, payments will continue for his or her life. The minimum period can be
10, 15, or 20 years. The payee selects the designated period. If the payee dies
during the minimum period, we will discount the amount of the remaining
guaranteed payments at the same rate used in calculating income payments. We
will pay the discounted amount in one sum to the payee's estate unless otherwise
provided.
Plan 2--Income for a Fixed Period. This option provides for periodic payments to
be made for a fixed period not longer than 30 years. Payments can be annual,
semi-annual, quarterly, or monthly. If the payee dies, we will discount the
amount of the remaining guaranteed payments to the date of the payee's death at
the same rate used in calculating income payments. We will pay the discounted
amount in one sum to the payee's estate unless otherwise provided.
Plan 3--Income of a Definite Account. This option provides periodic payments of
a definite amount to be paid. Payments can be annual, semi-annual, quarterly, or
monthly. The amount paid each year must be at least $120 for each $1,000 of
proceeds. Payments will continue until the proceeds are exhausted. The last
payment will equal the amount of any unpaid proceeds. If the payee dies, we will
pay the amount of the remaining proceeds with earned interest in one sum to the
payee's estate unless otherwise provided.
Plan 4--Interest Income. This option provides for periodic payments of interest
earned from the proceeds left with us. Payments can be annual, semi-annual,
quarterly, or monthly. If the payee dies, we will pay the amount of remaining
proceeds and any earned but unpaid interest in one sum to the payee's estate
unless otherwise provided. This plan is not available under Qualified Policies.
Plan 5--Joint Life and Survivor Income. This option provides for us to make
monthly payments to two payees for a guaranteed minimum of 10 years. Each payee
must be at least 35 years old when payments begin. Payments will continue as
long as either payee is living. If both payees die before the end of the minimum
period, we will discount the amount of the remaining payments for the 10-year
period at the same rate used in calculating income payments. We will pay the
discounted amount in one sum to the survivor's estate unless otherwise provided.
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If the payee is not a natural person, our consent must be obtained before
selecting an Optional Payment Plan.
Before the Maturity Date, you may change:
o your Maturity Date to any date at least ten years after your last
premium payment;
o your optional payment plan;
o the allocation of your investment among the Investment Subdivisions;
and
o the Owner, Joint Owner, primary Beneficiary, contingent
Beneficiary, and contingent Annuitant upon written notice to
the Home Office if you reserved this right and the Annuitant
is living.
We must receive your request for a change in a form satisfactory to us. The
change will take effect as of the date you sign the request. The change will be
subject to any payment made before we recorded the change.
Fixed Income Payments will begin on the date we receive due proof of the
Annuitant's death, on surrender, or on the Policy's Maturity Date. Variable
income payments will begin within seven days after the date payments would begin
under the corresponding fixed option. Payments under Optional Payment Plan 4
(Interest Income) will begin at the end of the first interest period after the
date proceeds are otherwise payable.
Variable Income Payments
We will determine your variable income payments using:
1. The maturity value;
2. The annuity tables contained in the Policy;
3. The optional payment plan selected; and
4. The investment performance of the Investment Subdivisions
selected.
To determine the amount of payment, we make this calculation:
1. First, we determine the dollar amount of the first income
payment; then
2. we allocate that amount to the Investment Subdivisions
according to your instructions; then
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3. we determine the number of Annuity Units for each Investment
Subdivision by dividing the amount allocated by the Annuity
Unit Value on the Valuation Day; and finally
4. we calculate the value of the Annuity Units for each
Investment Subdivision on the Valuation Day for each income
payment thereafter.
To calculate your variable income payments, we need to make an assumption
regarding the investment performance of the Investment Subdivisions you select.
We call this your assumed investment rate. This rate is simply the total return,
after expenses, you need to earn to keep your variable income payments level. We
assume an effective annual rate of 3%. This means that if the annualized
investment performance, after expenses, of your Investment Subdivisions is less
than 3%, then the dollar amount of your variable income payment will decrease.
Conversely, if the annualized investment performance, after expenses, of your
Investment Subdivisions is greater than 3%, then the dollar amount of your
income payments will increase.
Transfers After the Maturity Date
If we are making variable income payments, the payee may change the Investment
Subdivisions from which are making the payments once each calendar year. The
transfer will be effective as of the end of the Valuation Period during which we
receive written request at our Home Office. However, we reserve the right to
limit the number of transfers if necessary for the Policy to continue to be
treated as an Annuity Under the Code. We also reserve the right to refuse to
execute any transfer if any of the Investment Subdivisions that would be
affected by the transfer is unable to purchase or redeem shares of the Fund in
which the Investment Subdivision invests or if the transfer would adversely
affect Account Value. If the number of annuity units remaining in an Investment
Subdivision after a transfer is less than 1, we will transfer the remaining
balance in addition to the amount requested for the transfer.
We do not permit transfers between the Investment Subdivisions and the Guarantee
Account after the Maturity Date.
FEDERAL TAX MATTERS
Introduction
This part of the Prospectus discusses the Federal income tax treatment of the
Policy. The Federal income tax treatment of the Policy is complex and sometimes
uncertain. The Federal income tax rules may vary with your particular
circumstances. This discussion does not address all of the Federal income tax
rules that may affect you and your Policy. This discussion also does not address
other Federal tax consequences, or state or local tax consequences, associated
with a Policy. As a result, you should always consult a tax adviser about the
application of tax rules to your individual situation.
Taxation of Non-Qualified Policies
<PAGE>
This part of the discussion describes some of the Federal income tax rules
applicable to Non-Qualified Policies. A Non-Qualified Policy is a Policy not
issued in connection with a qualified retirement plan receiving special tax
treatment under the Code, such as an individual retirement annuity or a section
401(k) plan.
Tax Deferral on Earnings. The Federal income tax law does not tax any increase
in an Owner's Account Value until there is a distribution from the Policy.
However, certain requirements must be satisfied in order for this general rule
to apply, including:
o An individual must own the Policy (or the tax law must treat the
Policy as owned by an individual);
o The investments of Account 4 must be "adequately diversified" in
accordance with Internal Revenue Service ("IRS")
regulations;
o The Owner's right to choose particular investments for a Policy must
be limited; and
o The Policy's Maturity Date must not occur near the end of the Annuitant's life
expectancy.
This part of the Prospectus discusses each of these requirements.
Policies not owned by an individual--no tax deferral and loss of interest
deduction: As a general rule, the Code does not treat a Policy that is owned by
an entity (rather than an individual) as an annuity contract for Federal income
tax purposes. The entity owning the Policy pays tax currently on the excess of
the Account Value over the premiums paid for the Policy. Policies issued to a
corporation or a trust are examples of Policies where the Owner pays current tax
on the Policy's earnings.
There are several exceptions to this rule. For example, the Code treats a Policy
as owned by an individual if the nominal owner is a trust or other entity that
holds the Policy as an agent for an individual. However, this exception does not
apply in the case of any employer that owns a Policy to provide deferred
compensation for its employees.
In the case of a Policy issued after June 8, 1997 to a taxpayer that is not an
individual, or a Policy held for the benefit of an entity, the entity will lose
its deduction for a portion of its otherwise deductible interest expenses. This
disallowance does not apply if the Owner pays tax on the annual increase in the
Account Value. Entities that are considering purchasing the Policy, or entities
that will benefit from someone else's ownership of a Policy, should consult a
tax advisor.
<PAGE>
Investments in Account 4 must be diversified: For a Policy to be treated as an
annuity contract for Federal income tax purposes, the investments of a separate
account such as Account 4 must be "adequately diversified." The IRS has issued
regulations that prescribe standards for determining whether the investments of
Account 4 are adequately diversified. If Account 4 fails to comply with these
diversification standards, the Owner could be required to pay tax currently on
the excess of the Account Value over the premiums paid for the Policy.
Although we do not control the investments of all of the Funds (we only
indirectly control those of GE Investments Funds, Inc., through an affiliated
company), we expect that the Funds will comply with the IRS regulations so that
Account 4 will be considered "adequately diversified."
Restrictions on the extent to which an Owner can direct the investment of
Account Values: Federal income tax law limits the Owner's right to choose
particular investments for the Policy. The U.S. Treasury Department stated in
1986 that it expected to issue guidance clarifying those limits, but it has not
yet done so. Thus, the nature of the limits is currently uncertain. As a result,
an Owner's right to allocate Account Values among the portfolios may exceed
those limits. If so, the Owner would be treated as the owner of the assets of
Account 4 and thus subject to current taxation on the income and gains from
those assets.
We do not know what limits the Treasury Department may set forth in any guidance
that the Treasury Department may issue or whether any such limits will apply to
existing Policies. We therefore reserve the right to modify the Policy without
the Owners' consent to attempt to prevent the tax law from considering the
Owners as the owners of the assets of Account 4.
Age at which annuity payouts must begin: Federal income tax rules do not
expressly identify a particular age by which annuity payouts must begin.
However, those rules do require that an annuity contract provide for
amortization, through annuity payouts, of the contract's premiums paid and
earnings. If annuity payouts under the Policy begin or are scheduled to begin on
a date past the Annuitant's 85th birthday, it is possible that the tax law will
not treat the Policy as an annuity contract for Federal income tax purposes. In
that event, the Owner would be currently taxable on the excess of the Account
Value over the premiums paid for the Policy.
No Guarantees Regarding Tax Treatment: We make no guarantees regarding the tax
treatment of any Policy or of any transaction involving a Policy. However, the
remainder of this discussion assumes that your Policy will be treated as an
annuity contract for Federal income tax purposes and that the tax law will not
impose tax on any increase in your Account Value until there is a distribution
from your Policy.
Withdrawals and Surrenders. A withdrawal occurs when you receive less than the
total amount of the Policy's Surrender Value. In the case of a withdrawal, you
will pay tax on the amount you receive to the extent your Account Value before
the withdrawal exceeds your "investment in the contract." (This term is
explained below.) This income (and all other income from your Policy) is
ordinary income.
The Code imposes a higher rate of tax on ordinary income than it does on capital
gains.
A surrender occurs when you receive the total amount of the Policy's Surrender
Value. In the case of a surrender, you will pay tax on the amount you receive to
the extent it exceeds your "investment in the contract."
<PAGE>
Your "investment in the contract" generally equals the total of your Premium
Payments under the Policy, reduced by any amounts you previously received from
the Policy that you did not include in your income.
Your Policy imposes mortality charges relating to the Death Benefit, including
any GMDB Rider and ODB Rider. It is possible that all or a portion of these
charges could be treated as withdrawals from the Policy.
Loans and Assignments. With the exception of certain Qualified Policies, the
Code treats any amount received as a loan under a Policy, and any assignment or
pledge (or agreement to assign or pledge) any portion of your Account Value, as
a withdrawal of such amount or portion.
Gifting a Policy. If you transfer ownership of your Policy--without receiving a
payment equal to your Policy's value-- to a person other than your spouse (or to
your former spouse incident to divorce), you will pay tax on your Account Value
to the extent it exceeds your "investment in the contract." In such a case, the
new owner's "investment in the contract" will be increased to reflect the amount
included in your income.
Systematic Withdrawals. In the case of systematic withdrawals, the amount of
each withdrawal should be considered a distribution and taxed in the same manner
as a withdrawal from the Policy. However, there is some uncertainty regarding
the tax treatment of systematic withdrawals, and it is possible that additional
amounts could be included in income.
Taxation of Annuity Payouts. The Code imposes tax on a portion of each annuity
payout (at ordinary income tax rates) and treats a portion as a nontaxable
return of your "investment in the contract." The Company will notify you
annually of the taxable amount of your annuity payout.
Pursuant to IRS regulations, you will pay tax on the full amount of your annuity
payouts once you have recovered the total amount of the "investment in the
contract." If annuity payouts cease because of the death of the Annuitant and
before the total amount of the investment in the contract has been recovered,
the unrecovered amount generally will be deductible.
If proceeds are left with the us (Optional Payment Plan 4), they are taxed in
the same manner as a surrender. The Owner must pay tax currently on the interest
credited on these proceeds. This treatment could also apply to Plan 3 if the
payee is at an advanced age, such as age 80 or older.
Taxation of Death Benefits. We may distribute amounts from your Policy because
of the death of an Owner, a Joint Owner, or an Annuitant. The tax treatment of
these amounts depends on whether the Owner, Joint Owner, or Annuitant dies
before or after the Policy's Maturity Date.
Prior to the Policy's Maturity Date:
o If received under an annuity payout option, death benefits are taxed in the
same manner as annuity payouts.
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o If not received under an annuity payout option, death benefits are taxed in
the same manner as a withdrawal.
After the Policy's Maturity Date:
o If received in accordance with the existing annuity payout option,
death benefits are excludible from income to the extent that they
do not exceed the unrecovered "investment in the contract." All
annuity payouts in excess of the unrecovered "investment in the
contract" are includible in income.
o If received in a lump sum, the tax law imposes tax on death
benefits to the extent that they exceed the unrecovered
"investment in the contract" at that time.
Penalty Taxes Payable on Withdrawals, Surrenders, or Annuity Payouts. The Code
may impose a penalty tax equal to 10% of the amount of any payment from your
Policy that is included in your gross income. The Code does not impose the 10%
penalty tax if one of several exceptions applies. These exceptions include
withdrawals, surrenders, or annuity payouts that:
o you receive on or after you reach age 59 1/2,
o you receive because you became disabled (as defined in the tax law),
o a beneficiary receives on or after the death of the Owner, or
o you receive as a series of substantially equal periodic payments for the life
(or life expectancy) of the Owner.
It is uncertain whether systematic withdrawals will qualify for this last
exception. If they did, any modification of the systematic withdrawals could
result in certain adverse tax consequences. In addition, a transfer between
Investment Subdivisions may result in payments not qualifying for this
exception.
Special Rules If You Own More Than One Policy. In certain circumstances, you
must combine some or all of the Non-Qualified Policies you own in order to
determine the amount of an annuity payout, a surrender, or a withdrawal that you
must include in income. For example:
o If you purchase a Policy offered by this Prospectus and also
purchase at approximately the same time an immediate annuity, the
IRS may treat the two contracts as one contract.
o If you purchase two or more deferred annuity contracts from the
same life insurance company (or its affiliates) during any
calendar year, the Code treats all such contracts as one contract.
o The effects of such aggregation are not clear. However, it could
affect:
<PAGE>
o the amount of a surrender, a withdrawal or an annuity payout that
you must include in income, and
o the amount that might be subject to the penalty tax described
above.
Qualified Retirement Plans
We also designed the Policies for use in connection with certain types of
retirement plans that receive favorable treatment under the Code. Policies
issued to or in connection with a qualified retirement plan are called
"Qualified Policies." We do not currently offer all of the types of Qualified
Policies described, and may not offer them in the future. Prospective purchasers
should contact our Home Office to learn the availability of Qualified
Policies at any given time.
The Federal income tax rules applicable to qualified plans are complex and
varied. As a result, this Prospectus makes no attempt to provide more than
general information about use of the Policy with the various types of qualified
plans. Persons intending to use the Policy in connection with a qualified plan
should obtain advice from a competent advisor.
Types of Qualified Policies. Some of the different types of Qualified Policies
include:
o Individual Retirement Accounts and Annuities ("Traditional IRAs")
o Roth IRAs
o Simplified Employee Pensions ("SEP's")
o Savings Incentive Matched Plan for Employees ("SIMPLE plans")
o Public school system and tax-exempt organization annuity plans
("403(b) plans")
o Qualified corporate employee pension and profit-sharing plans
("401(a) plans") and qualified annuity plans ("403(a) plans")
o Self-employed individual plans ("H.R. 10 plans" or "Keogh Plans")
o Deferred compensation plans of state and local governments and
tax-exempt organizations ("457 plans")
<PAGE>
Terms of Qualified Plans and Qualified Policies. The terms of a qualified plan
may affect your rights under a Qualified Policy. When issued in connection with
a qualified plan, we will amend a Policy as generally necessary to conform to
the requirements of the type of plan. However, the rights of any person to any
benefits under qualified plans may be subject to the terms and conditions of the
plans themselves, regardless of the terms and conditions of the Policy. In
addition, we are not bound by the terms and conditions of qualified plans to the
extent such terms and conditions contradict the Policy, unless we consent.
The Death Benefit and Qualified Policies. Pursuant to IRS regulations, IRAs may
not invest in life insurance contracts. We do not believe that these regulations
prohibit the Death Benefit, including that provided by the GMDB Rider or the ODB
Rider, from being provided under the Policies when we issue the Policies as
Traditional IRAs or Roth IRAs. However, the law is unclear and it is possible
that the presence of the Death Benefit under a Policy issued as a Traditional or
Roth IRA could result in increased taxes to the Owner.
It is also possible that the Death Benefit could be characterized as an
incidental death benefit. If the Death Benefit were so characterized, this could
result in currently taxable income to purchasers. In addition, there are
limitations on the amount of incidental death benefits that may be provided
under qualified plans, such as in connection with a 403(b) plan. Even if the
Death Benefit under the Policy were characterized as an incidental death
benefit, it is unlikely to violate those limits unless the purchaser also
purchases a life insurance contract in connection with such plan.
Treatment of Qualified Policies Compared with Non-Qualified Policies. Although
some of the Federal income tax rules are the same for both Qualified and
Non-Qualified Policies, many of the rules are different. For example:
o The Code generally does not impose tax on the earnings under either Qualified
or Non-Qualified Policies until received.
o The Code does not limit the amount of premium payments and the
time at which premium payments can be made under Non-Qualified
Policies. However, the Code does limit both the amount and
frequency of premium payments made to Qualified Policies.
o The Code does not allow a deduction for premium payments made for
Non-Qualified Policies, but sometimes allows a deduction or
exclusion from income for premium payments made to a Qualified
Policy.
The Federal income tax rules applicable to qualified plans and Qualified
Policies vary with the type of plan and Policy. For example:
o Federal tax rules limit the amount of premium payments that can be
made, and the tax deduction or exclusion that may be allowed for
the premium payments. These limits vary depending on the type of
qualified plan and the circumstances of the plan participant,
e.g., the participant's compensation.
o Under most qualified plans, e g., 403(b) plans and Traditional
IRAs, the Owner must begin receiving payments from the Policy in
certain minimum amounts by a certain age, typically age 70 1/2.
However, these "minimum distribution rules" do not apply to a Roth
IRA.
o
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o Loans are allowed in connection with certain types of qualified
plans, but Federal income tax rules prohibit loans under other
types of qualified plans. For example, Federal income tax rules
permit loans under some section 403(b) plans, but prohibit loans
under Traditional and Roth IRAs. If allowed, loans are subject to
a variety of limitations, including restrictions as to the amount
of the loan, the duration of the loan, and the manner in which the
loan must be repaid.
Amounts Received Under Qualified Policies. Amounts are generally subject to
income tax: Federal income tax rules generally include distributions from a
Qualified Policy in your income as ordinary income. Premium payments that are
deductible or excludible from income do not create "investment in the contract."
Thus, under many Qualified Policies there will be no "investment in the
contract" and you include the total amount you receive in your income. There are
exceptions. For example, you do not include amounts received from a Roth IRA if
certain conditions are satisfied.
Additional Federal taxes may be payable in connection with a Qualified Policy:
For example, failure to comply with the minimum distribution rules applicable to
certain qualified plans, such as Traditional IRAs, will result in the imposition
of an excise tax. This excise tax generally equals 50% of the amount by which a
minimum required distribution exceeds the actual distribution from the qualified
plan.
Federal penalty taxes payable on distributions: The Code may impose a penalty
tax equal to 10% of the amount of any payment from your Qualified Policy that is
includible in your income. The Code does not impose the penalty tax if one of
several exceptions apply. The exceptions vary depending on the type of Qualified
Policy you purchase. For example, in the case of an IRA, exceptions provide that
the penalty tax does not apply to a withdrawal, surrender, or annuity payout:
o received on or after the Owner reaches age 591/2,
o received on or after the Owner's death or because of the Owner's
disability (as defined in the tax law),
o received as a series of substantially equal periodic payments for the
life (or life expectancy) of the Owner, or
o received as reimbursement for certain amounts paid for medical care.
These exceptions, as well as certain others not described here, generally apply
to taxable distributions from other qualified plans. However, the specific
requirements of the exception may vary.
<PAGE>
Moving Money from One Qualified Policy or Qualified Plan to Another. Rollovers
and Transfers: In many circumstances you may move money between Qualified
Policies and qualified plans by means of a rollover or a transfer. Special rules
apply to such rollovers and transfers. If you do not follow the applicable
rules, you may suffer adverse federal income tax consequences, including paying
taxes which you might not otherwise have had to pay. You should always consult a
qualified advisor before you move or attempt to move funds between any Qualified
Policy or plan and another Qualified Policy or plan.
Direct rollovers: The direct rollover rules apply to certain payments (called
"eligible rollover distributions") from section 401(a) plans, section 403(a) or
(b) plans, HR 10 plans, and Policies used in connection with these types of
plans. (The direct rollover rules do not apply to distributions from IRAs or
section 457 plans). The direct rollover rules require federal income tax equal
to 20% of the eligible rollover distribution to be withheld from the amount of
the distribution, unless the Owner elects to have the amount directly
transferred to certain Qualified Policies or plans.
Prior to receiving an eligible rollover distribution from the Company, we will
provide you with a notice explaining these requirements and how you can avoid
20% withholding by electing a direct rollover.
Federal Income Tax Withholding
We will withhold and remit to the IRS a part of the taxable portion of each
distribution made under a Policy unless the distributee notifies us at or before
the time of the distribution that he or she elects not to have any amounts
withheld. In certain circumstances, federal income tax rules may require us to
withhold tax. At the time you request a withdrawal, surrender, or annuity
payout, we will send you forms that explain the withholding requirements.
Tax Status of the Company
Under existing federal income tax laws, we do not pay tax on investment income
and realized capital gains of Account 4. We do not anticipate that we will incur
any federal income tax liability on the income and gains earned by Account 4.
The Company, therefore, does not impose a charge for federal income taxes. If
federal income tax law changes and we must pay tax on some or all of the income
and gains earned by Account 4, we may impose a charge against Account 4 to pay
the taxes.
Changes in the Law
This discussion is based on the Code, IRS regulations, and interpretations
existing on the date of this Prospectus. Congress, the IRS, and the courts may
modify these authorities, however, sometimes retroactively.
VOTING RIGHTS
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As required by law, we will vote the portfolio shares held in Account 4 at
meetings of the shareholders of the Funds. The voting will be done according to
the instructions of Owners who have interests in any Investment Subdivisions
which invest in the portfolios of the Funds. If the 1940 Act or any regulation
under it should be amended, and if as a result we determine that we are
permitted to vote the portfolios' shares in our own right, we may elect to do
so.
We will determine the number of votes which you have the right to cast by
applying your percentage interest in an Investment Subdivision to the total
number of votes attributable to the Investment Subdivision. In determining the
number of votes, we will recognize fractional shares.
We will vote portfolio shares of a class held in an Investment Subdivision for
which we received no timely instructions in proportion to the voting
instructions which we received for all Policies participating in that Investment
Subdivision. We will apply voting instructions to abstain on any item to be
voted on a pro-rata basis to reduce the number of votes eligible to be cast.
Whenever a Fund calls a shareholders meeting, each person having a voting
interest in an Investment Subdivision will receive proxy voting material,
reports and other materials relating to the portfolio. Since each portfolio may
engage in shared funding, other persons or entities besides the Company may vote
portfolio shares. See Account 4 - Investment Subdivisions.
REQUESTING PAYMENTS
To request a payment, you must provide us with notice in a form satisfactory to
us. We will ordinarily pay any Death Benefit, partial surrenders, or surrender
proceeds within seven days after receipt at our Home Office of all the
requirements for such a payment. We will determine the amount as of the date our
Home Office receives all such requirements.
We may delay making a payment, applying Account Value to a payment plan, or
processing a transfer request if: (1) the disposal or valuation of Account 4's
assets is not reasonably practicable because the New York Stock Exchange is
closed for other than a regular holiday or weekend, trading is restricted by the
SEC, or the SEC declares that an emergency exists; or (2) the SEC, by order,
permits postponement of payment to protect our Owners. We also may defer making
payments attributable to a check that has not cleared (which may take up to 15
days), and we may defer payment of proceeds from the Guarantee Account for a
withdrawal, surrender, or transfer request for up to six months from the date we
receive the request. The amount deferred will earn interest at a rate and for a
time period not less than the minimum required in the jurisdiction in which we
issued the Policy.
<PAGE>
DISTRIBUTION OF THE POLICIES
Distributor
Capital Brokerage Corporation (doing business in Indiana, Minnesota, New Mexico,
and Texas as GE Capital Brokerage Corporation) ("Capital Brokerage") is the
distributor and principal underwriter of the Policies. Capital Brokerage, a
Washington corporation and an affiliate of ours, is located at 6630 W. Broad
St., Richmond, Virginia 23230. Properly licensed registered representatives of
independent broker-dealers will sell the Policies. These broker-dealers have
selling agreements with Capital Brokerage and have been licensed by state
insurance departments to represent us. Properly licensed registered
representatives of Capital Brokerage will also sell the Policies. Capital
Brokerage is registered with the SEC under the Securities Exchange Act of 1934
as a broker-dealer and is a member of the National Association of Securities
Dealers, Inc. ("NASD"). We will offer the Policies in all states where we are
licensed to do business.
Commissions
Our writing agents will receive commissions based on a commission schedule and
rules. The agents will receive a maximum commission of 3% of the initial premium
payment and any additional premium payment.
Agents may also be eligible to receive certain bonuses and allowances, as well
as retirement plan credits, based on commissions earned. Our field management
receives compensation which we may base in part on the level of agent
commissions in their management units. Broker-dealers and their registered
agents will receive first-year and subsequent year commissions equivalent to the
total commissions and benefits received by our field management and writing
agents. We do not deduct these commissions from premium payments or Account
Value; we pay these commissions.
ADDITIONAL INFORMATION
Owner Questions
The obligations to Owners under the Policies are ours. Please direct your
questions and concerns to us at our Home Office.
Return Privilege
<PAGE>
Within the free-look period after you receive the Policy, you may cancel it for
any reason by delivering or mailing it postage prepaid, to our Home Office,
Variable Products Department, 6610 W. Broad Street, Richmond, Virginia 23230. If
you cancel your Policy, it will be void. Unless state law requires that we
return your premium payments, the amount of the refund you receive will equal
the Account Value less any adjustments required by applicable law or regulation
on the date we receive the Policy, but without reduction for any surrender
charge. If state law requires that we return your premium payments, the amount
of the refund will equal the greater of (1) the Account Value without any
surrender charges, plus any amount deducted from your premium payments before we
allocated them to Account 4, and (2) the premium payments made less any
withdrawals you previously made. In certain states, you may have more than 10
days to return the Policy for a refund.
State Regulation
As a life insurance company organized and operated under the laws of the
Commonwealth of Virginia, we are subject to provisions governing life insurers
and to regulation by the Virginia Commissioner of Insurance.
Our books and accounts are subject to review and examination by the State
Corporation Commission of the Commonwealth of Virginia at all times. That
Commission conducts a full examination of our operations at least every five
years.
Records and Reports
As presently required by the 1940 Act and applicable regulations, we are
responsible for maintaining all records and accounts relating to Account 4. At
least once each year, we will send you a report showing information about your
Policy for the period covered by the report. The report will show the Account
Value in each Investment Subdivision. The report also will show premium payments
and charges made during the statement period. We also will send you an annual
and a semi-annual report for each portfolio underlying an Investment Subdivision
to which you have allocated Account Value, as required by the 1940 Act. In
addition, when you make premium payments, transfers, or partial surrenders, you
will receive a written confirmation of these transactions.
Other Information
A Registration Statement has been filed with the SEC, under the Securities Act
of 1933 as amended, for the Policies being offered here. This Prospectus does
not contain all the information in the Registration Statement, its amendments
and exhibits. Please refer to the Registration Statement for further information
about Account 4, the Company, and the Policies offered. Statements in this
Prospectus about the content of Policies and other legal instruments are
summaries. For the complete text of those Policies and instruments, please refer
to those documents as filed with the SEC and available on the SEC's website at
http://www.sec gov.
Year 2000 Readiness Disclosure
<PAGE>
Like all financial services providers, we utilize computer systems that may be
affected by Year 2000 date data processing issues and we also rely on service
providers, including banks, custodians, administrators, and investment managers
that also may be affected. We are engaged in a process to evaluate and develop
plans to have our computer systems and critical applications ready to process
Year 2000 date data. We also are confirming that our service providers are also
so engaged. The resources that are being devoted to this effort are substantial.
Further, we anticipate that we will spend approximately $2 million to $5 million
dollars on this conversion. Remedial actions include inventorying our computer
systems, applications and interfaces, assessing the impact of Year 2000 date
data on them, developing a range of solutions specific to particular situations
and implementing appropriate solutions. Some systems, applications and
interfaces will be replaced or upgraded to new software or new releases or
existing software which are Year 2000 ready. It is difficult to predict with
precision whether the amount of resources ultimately devoted, or the outcome of
these efforts, will have any negative impact on us and Account 4. However, as of
the date of this Prospectus, we do not anticipate that Owners will experience
negative effects on their investment, or on the services provided in connection
therewith, as a result of Year 2000 transition implementation. Our target dates
for completion of these activities depend upon the particular situation. Our
goal is to be substantially Year 2000 ready for critical applications on or
about mid-1999, but there can be no assurance that we will be successful, or
that interaction with other service providers will not impair our services at
that time.
If we are not successful in our Year 2000 transition or implementation, or if
interaction with other service providers is impaired, it is possible that we
could encounter difficulty and/or delays in calculating unit values, redeeming
shares, delivering account statements and providing other information,
communication and servicing to our policyowners. In light of our current efforts
to address this issue we do not consider the likelihood of such occurrences to
be very high.
Legal Matters
The Company, like other life insurance companies, is involved in lawsuits,
including class action lawsuits. In some class action and other lawsuits
involving insurance companies, substantial damages have been sought and/or
material settlement payments have been made. Although the Company cannot predict
the outcome of any litigation with certainty, the Company believes that at the
present time there are no pending or threatened lawsuits that are reasonably
likely to have a material adverse impact on it or Account 4.
CONDENSED FINANCIAL INFORMATION
The Accumulation Unit Values and the number of accumulation units outstanding
for each Investment Subdivision for the periods shown are as follows:
This information will be filed iin a subsequent post-effective amendment.
<TABLE>
<CAPTION>
Accumulation Accumulation No. of Accumulation Accumulation No. of
Unit Values Unit Values Units Unit Values Unit Values Units
as of as of as of as of as of as of
Funds
----- ------- - -------- -------- ------- ------- --------
<S> <C>
Variable Insurance Products Fund
Equity-Income.....................
Growth ...........................
Overseas..........................
Variable Insurance Products Fund II
Asset Manager.....................
Contrafund .......................
Variable Insurance Products Fund III
Growth and Income + ..............
Growth Opportunities + ...........
GE Investments Funds, Inc.
Money Market .....................
Government Securities + ..........
S&P 500 Index ....................
Total Return .....................
International Equity .............
Real Estate Securities ...........
Global Income + ..................
Value Equity + ...................
Income + .........................
U.S. Equity + ....................
Oppenheimer Variable Account Funds
High Income ......................
Bond .............................
Aggressive Growth ................
Growth ...........................
Multiple Strategies ..............
Janus Aspen Series
Growth............................
Aggressive Growth ................
Worldwide Growth .................
International Growth+ ............
Balanced .........................
Flexible Income ..................
Capital Appreciation+ ............
Federated Insurance Series
Federated Utility II .............
Federated High Income Bond II ....
Federated American Leaders II+ ...
The Alger American Fund
Alger American Growth.............
Alger American Small Capitalization
PBHG Insurance Series Fund, Inc.
Growth II+ .......................
Large Cap Growth+ ................
Goldman Sachs Variable Insurance Trust
Growth and Income+ ...............
Mid Cap Equity+ ..................
Salomon Brothers Variable Series Fund
Investors Fund+ ..................
Total Return Fund+ ...............
Strategic Bond Fund+ .............
</TABLE>
<PAGE>
- ------
<TABLE>
<CAPTION>
Accumulation Accumulation No. of Accumulation Accumulation No. of
Unit Values Unit Values Units Unit Values Unit Values Units
as of as of as of as of as of as of
Funds
----- ------- - -------- -------- ------- -------- --------
<S> <C>
Variable Insurance Products Fund
Equity-Income.....................
Growth ...........................
Overseas..........................
Variable Insurance Products Fund II
Asset Manager.....................
Contrafund .......................
Variable Insurance Products Fund III
Growth and Income + ..............
Growth Opportunities + ...........
GE Investments Funds, Inc.
Money Market .....................
Government Securities + ..........
S&P 500 Index ....................
Total Return .....................
International Equity .............
Real Estate Securities ...........
Global Income + ..................
Value Equity + ...................
Income + .........................
U.S. Equity + ....................
Oppenheimer Variable Account Funds
High Income ......................
Bond .............................
Aggressive Growth ................
Growth ...........................
Multiple Strategies ..............
Janus Aspen Series
Growth............................
Aggressive Growth ................
Worldwide Growth .................
International Growth+ ............
Balanced .........................
Flexible Income ..................
Capital Appreciation+ ............
Federated Insurance Series
Federated Utility II .............
Federated High Income Bond II ....
Federated American Leaders II+ ...
The Alger American Fund
Alger American Growth.............
Alger American Small Capitalization
PBHG Insurance Series Fund, Inc.
Growth II+ .......................
Large Cap Growth+ ................
Goldman Sachs Variable Insurance Trust
Growth and Income+ ...............
Mid Cap Equity+ ..................
Salomon Brothers Variable Series Fund
Investors Fund+ ..................
Total Return Fund+ ...............
Strategic Bond Fund+ .............
</TABLE>
- --------------
+ We do not show unit values for the Investment Subdivisions investing in these
portfolios, as they were not available to Account 4 Owners during the periods
shown.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
Page
The Policies......................................................
Transfer of Annuity Units.........................................
Net Investment Factor.............................................
Termination of Participation Agreements...........................
Calculation of Performance Data...................................
Money Market Investment Subdivisions..............................
Other Investment Subdivisions.....................................
Federal Tax Matters...............................................
Taxation of The Company...........................................
IRS Required Distributions........................................
General Provisions................................................
Using the Policies as Collateral..................................
Non-Participating.................................................
Misstatement of Age or Sex........................................
Incontestability..................................................
Statement of Values...............................................
Written Notice....................................................
Legal Developments Regarding Employment-Related Benefit Plans.....
Legal Matters.....................................................
Experts...........................................................
Change in Auditors................................................
Financial Statements..............................................
Dated ______ __, 1999
GE Life and Annuity Company
6610 West Broad Street
Richmond, Virginia 23230
A Statement of Additional Information containing more detailed
information about the Policy and Account 4 is available free by writing us at
the address above or by calling (800) 352-9910.
<PAGE>
APPENDIX
Policy Form P1143 4/94
The purpose of this Appendix is to show certain benefits for Policies
issued on Policy Form P1143 4/94.
Death Benefit at Death of Annuitant
For Policies issued before May 1, 1997 (unless applicable state
regulation requires a later date), if the Annuitant was age 80 or younger on the
Policy Date, and dies prior to the Maturity Date while the Policy is in force,
the Designated Beneficiary may elect a Death Benefit within 90 days of the date
of such death.
During the first six Policy years, the Death Benefit will be the
greater of: (1) the total premium payments made, reduced by any applicable
premium tax and any partial surrenders plus their applicable surrender charge,
and (2) the Account Value on the date we receive due proof of death.
During subsequent six year periods, the Death Benefit will be the
greater of: (1) the Death Benefit on the last day of the previous six year
period, plus any premium payments made since then, reduced by any applicable
premium tax and any partial surrenders plus their applicable surrender charges
since then, and (2) the Account Value on the date we receive due proof of death.
If the request for payment of the Death Benefit occurs more than 90
days after the date of the Annuitant's death, and/or if the deceased Annuitant
was age 81 or older on the Policy Date, we will pay the Surrender Value instead
of the Death Benefit.
For Policies issued on or after May 1, 1997 (unless applicable state regulation
requires a later date), if the Annuitant dies before income payments begin, the
Designated Beneficiary may elect to surrender the Policy for a Death Benefit by
notifying us of such election within 90 days of the date of the Annuitant's
death. (This election may not be available in all states.) If notification
occurs more than 90 days after the date of the Annuitant's death, we will pay
the Surrender Value instead of the Death Benefit.
The Death Benefit will be the greater of (1) the minimum Death Benefit
(described below); or (2) the Account Value on the date we receive due proof of
death of the annuitant. During the first six Policy Years, or if the Annuitant
was age 81 or older on the Policy Date, the minimum death benefit is the total
of premiums paid, less adjustments for any partial surrenders. During any
subsequent six year period if the Annuitant was age 80 or younger on the Policy
Date, the minimum death benefit will be the Death Benefit on the last day of the
previous six year period, plus any premiums paid since that day, less
adjustments for any partial surrenders since that day.
Surrender charges will apply if the Designated Beneficiary surrenders
the Policy more than 90 days after death of the Annuitant, without regard to
whether or not the Account Value was increased.
<PAGE>
Guaranteed Minimum Death Benefit
If an Annuitant dies before the Maturity Date while the Guaranteed
Minimum Death Benefit is in effect, the Designated Beneficiary may elect the
Death Benefit described below within 90 days of the date of such death. If we
pay this Death Benefit, the Policy will terminate, and we will have no further
obligation under the Policy. The Guaranteed Minimum Death Benefit may not be
available in all states or markets.
The Death Benefit under the Guaranteed Minimum Death Benefit Rider will
be the greater of: (1) the Death Benefit described immediately above under
"Death Benefit at Death of Annuitant" (above), and (2) the greater of (A) the
Guaranteed Minimum Death Benefit, and (B) the Account Value of the Policy on the
date we received proof of the Annuitant's death, or, if later, the date of the
request. The Guaranteed Minimum Death Benefit is, on the Policy Date, equal to
the premium payments made. At the end of each Valuation Period after such date,
the Guaranteed Minimum Death Benefit is the lesser of: (1) the total of all
premiums received, multiplied by two, less the amount of any partial surrenders
made prior to or during that Valuation Period; or (2) the Guaranteed Minimum
Death Benefit at the end of the preceding Valuation Period, increased as
specified below, plus any additional premium payments during the current
Valuation Period and less any partial surrenders plus their applicable surrender
charges during the current Valuation Period.
We will calculate the amount of the increase for the Valuation Period
by applying a factor to the Guaranteed Minimum Death Benefit at the end of the
preceding Valuation Period. Until the anniversary on which the Annuitant attains
age 80, we determine the factor for each Valuation Period at an effective annual
rate of 6%, except that with respect to amounts invested in certain Investment
Subdivisions shown in the Policy, the increase factor will be calculated as the
lesser of: (1) the net investment factor for the Valuation Period, minus one,
and (2) a factor for the Valuation Period equivalent to an effective annual rate
of 6%. Currently, these Investment Subdivisions include only the Money Market
Investment Subdivision. With respect to amounts allocated to the Guarantee
Account, we replace Item (1) above with a factor for the Valuation Period
equivalent to the credited rate(s) applicable to such amounts.
If you elect the Guaranteed Minimum Death Benefit Rider, the rider is
effective on the Policy Date and will remain in effect while the Policy is in
force and before income payments begin, or until the Policy Anniversary
following the date of receipt of your request to terminate the rider. There will
be a charge made each year for expenses related to the Death Benefit available
under the terms of the Guaranteed Minimum Death Rider. See Annual Death Benefit
Charge. Amounts payable under the Guaranteed Minimum Death Benefit Rider are
subject to the distribution rules.
Optional Death Benefit Rider
The optional death benefit rider provides for an annual step-up in the
Death Benefit. If an Annuitant dies before the Maturity Date while the Optional
Death Benefit Rider is in effect, the Designated Beneficiary may elect the Death
Benefit described below with 90 days of the date of such death. If we pay this
Death Benefit, the Policy will terminate, and we will have no further obligation
under the Policy. The optional death benefit rider may not be available in all
states or markets.
<PAGE>
The Death Benefit under the Optional Death Benefit Rider is the greater
of: (1) the Death Benefit described above under "Death Benefit at Death of
Annuitant" (above), and (2) the minimum Death Benefit described below.
During the first Policy year, the minimum Death Benefit under the
Optional Death Benefit Rider is the total of premiums paid, adjusted for any
partial surrenders. After the first Policy year and until the Policy anniversary
immediately preceding the Annuitant's 81st birthday, the minimum Death Benefit
is the Policy's greatest Death Benefit on any previous Policy anniversary, plus
the total premium payments made since that date, less adjustments for any
partial surrenders taken since that date. Beginning on the Policy anniversary
immediately preceding the Annuitant's 81st birthday, the minimum Death Benefit
is the Policy's minimum Death Benefits on that date, plus the total premium
payments made since that date, less adjustments for any partial surrenders taken
since that date.
If you elect the Optional Death Benefit Rider, the rider is effective
on the Policy Date (unless another effective date is shown on the Policy data
pages). It will remain in effect while the Policy is in force and before income
payments begin, or under the Policy Anniversary following the date of receipt of
the Owner's request to terminate the rider. There will be a charge made each
year for expenses related to the Death Benefit available under the terms of the
Optional Death Benefit Rider. See "Annual Death Benefit Charge." Amounts payable
under the Optional Death Benefit Rider are subject to the distribution rules.
Surrender Charge
For Policies issued before May 1, 1998, or until the necessary
endorsement is approved, if later, we deduct surrender charges from the amount
surrendered. All or part of the amount surrendered may be subject to charge. We
consider any amount subject to charge a surrender of premium payments. We
determine surrender charges using the assumption that premium payments are
surrendered on a first-in first-out basis, up to the amount surrendered. For
each such premium payment, the charge is a percentage of the premium payment (or
portion thereof) surrendered.
Reduced Charges on Certain Surrenders
For Policies issued before May 1, 1998, or until the necessary endorsement is
approved, if later, no surrender charge applies to the first surrender of the
policy year, if the amount surrendered is not more than 10% of the Account Value
at the end of the Valuation Period during which the surrender request is
received. If the first surrender of the policy year is a full surrender, or a
partial surrender of more than 10% of the Account Value, no surrender charge
will apply to a portion of the amount surrendered equal to 10% of the Account
Value. Any remaining portion of the amount surrendered may be subject to
surrender charges, as described above. If the first surrender of the Policy year
is less than an amount equal to 10% of the Account Value, you may elect to
receive additional partial surrenders without surrender charges until the total
amount withdrawn during that Policy year reaches that amount. For instance, if
your Account Value is $10,000 and you withdraw $500, you may withdraw an
additional $500 during that year without surrender charge.The amount subject to
charge will not exceed the amount surrendered.
<PAGE>
Waiver of Surrender Charges in the Event of Hospital or
Nursing Facility Confinement.
We will waive surrender charges arising from a full surrender or one or
more partial surrenders occurring before income payments begin if:
o An Annuitant is, or has been confined to a state licensed or
legally operated hospital or inpatient nursing facility for at
least 30 consecutive days;
o Such confinement begins at least one year after the Policy Date;
o An Annuitant was age 80 or younger on the Policy Date; and
o We receive the request for the full or partial surrender, together
with proof of such confinement, in our Home Office while the
Annuitant is confined or within 90 days after discharge from the
facility.
For purposes of this provision, Annuitant means either the Annuitant,
or Joint Annuitant, whichever is applicable.
The waiver of surrender charges in the event of hospital or nursing
facility confinement may not be available in all states or all markets.
<PAGE>
PART B
GE Life & Annuity Separate Account 4
Statement of Additional Information
For the
Flexible Premium Variable Deferred Annuity Policy
Form P1150 10/98
Form P1143 4/94
Offered by
GE Life and Annuity Assurance Company
(A Virginia Stock Corporation)
6610 W. Broad Street
Richmond, Virginia 23230
This Statement of Additional Information expands upon subjects discussed in the
current Prospectus for the above-named Flexible Premium Variable Deferred
Annuity Policy ("Policy") offered by GE Life and Annuity Assurance Company. You
may obtain a copy of the Prospectus dated _________ by calling (800) 352-9910,
or by writing to GE Life and Annuity Assurance Company, 6610 W. Broad Street,
Richmond, Virginia 23230. Terms used in the current Prospectus for the Policy
are incorporated in this Statement.
This Statement of Additional Information is
not a Prospectus and should be read only in conjunction
with the Prospectuses for the Policy and the Funds.
Dated ___________
<PAGE>
Statement of Additional Information
Table of Contents
Page
The Policies
Transfer of Annuity Units.
Net Investment Factor.
Termination of Participation Agreements.
Calculation of Performance Data.
Money Market Investment Subdivisions
Other Investment Subdivisions.
Federal Tax Matters.
Taxation of GE Life & Annuity
IRS Required Distributions
General Provisions
Using the Policies as Collateral
Non-Participating.
Misstatement of Age or Sex
Incontestability
Statement of Values.
Written Notice
Distribution of the Policies
Legal Developments Regarding Employment-Related Benefit Plans.
Legal Matters.
Experts.
Change in Auditors
Financial Statements
<PAGE>
The Policies
Transfer of Annuity Units
At your request, Annuity Units may be transferred once per calendar year from
the Investment Subdivisions in which they are currently held. However, where
permitted by state law, we reserve the right to refuse to execute any transfer
if any of the Investment Subdivisions that would be affected by the transfer are
unable to purchase or redeem shares of the mutual funds in which the Investment
Subdivisions invest. The number of Annuity Units to be transferred is (a) times
(b) divided by (c) where: (a) is the number of Annuity Units in the current
Investment Subdivision desired to be transferred; (b) is the Annuity Unit Value
for the Investment Subdivision in which the Annuity Units are currently held;
and (c) is the Annuity Unit Value for the Investment Subdivision to which the
transfer is made.
If the number of Annuity Units remaining in an Investment Subdivision after the
transfer is less than 1, we will transfer the amount remaining in addition to
the amount requested. We will not transfer into any Investment Subdivision
unless the number of Annuity Units of that Investment Subdivision after the
transfer is at least 1. The amount of the Income Payment as of the date of the
transfer will not be affected by the transfer (however, subsequent variable
income payments will reflect the investment experience of the selected
Investment Subdivisions).
Net Investment Factor
The net investment factor measures investment performance of the Investment
Subdivisions of Account 4 during a Valuation Period. Each Investment Subdivision
has its own net investment factor for a Valuation Period. The net investment
factor of an Investment Subdivision available under the Policies for a Valuation
Period is (a) divided by (b) minus (c) where:
(a) is (1) the value of the net assets of that Investment Subdivision at the
end of the preceding Valuation Period, plus (2) the investment income and
capital gains, realized or unrealized, credited to the net assets of that
Investment Subdivision during the Valuation Period for which the net
investment factor is being determined, minus (3) the capital losses, realized
or unrealized, charged against those assets during the Valuation Period,
minus (4) any amount charged against that Investment Subdivision for taxes,
or any amount we set aside during the Valuation as a provision for taxes
attributable to the operation or maintenance of that Investment Subdivision;
and
(b) is the value of the net assets of that Investment Subdivision at the end
of the preceding Valuation Period; and
(c) is a charge no greater than .004271% for each day in the Valuation
Period. This corresponds to 1.30% and 0.25% per year of the net assets of
that Investment Subdivision for mortality and expense risks, and for
administrative expenses, respectively.
The values of the assets in Account 4 will be taken at their fair market
value in accordance with generally accepted accounting practices and
applicable laws and regulations.
Termination of Participation Agreements
The participation agreements pursuant to which the Funds sell their shares to
Account 4 contain varying provisions regarding termination. The following
summarizes those provisions:
Janus Aspen Series. This agreement may be terminated by the parties on
six month advance written notice.
Variable Insurance Products Fund, Variable Insurance Products Fund II and
Variable Insurance Products Fund III. ("the Fund") These agreements provide
for termination (1) on one year's advance notice by either party, (2) at
the Company's option if shares of the Fund are not reasonably available to
meet requirements of the policies, (3) at the option of either party if
certain enforcement proceedings are instituted against the other, (4) upon
vote of the policyowners to substitute shares of another mutual fund, (5)
at the Company's option if shares of the Fund are not registered, issued,
or sold in accordance with applicable laws or if the Fund ceases to qualify
as a regulated investment company under the Code, (6) at the option of the
Fund or its principal underwriter if it determines that the Company has
suffered material adverse changes in its business or financial condition or
is the subject of material adverse publicity, (7) at the option of the
Company if the Fund has suffered material adverse changes in its business
or financial condition or is the subject of material adverse publicity, or
(8) at the option of the Fund or its principal underwriter if the Company
decides to make another mutual fund available as a funding vehicle for its
policies.
GE Investments Funds, Inc. This agreement may be terminated at the option
of any party upon six months' written notice to the other parties, unless a
shorter time is agreed to by the parties.
Oppenheimer Variable Account Funds. This agreement may be terminated by
the parties on six months' advance written notice.
Federated Insurance Series. This agreement may be terminated by any
of the parties on 180 days written notice to the other parties.
The Alger American Fund. This agreement may be terminated at the option of
any party upon six months' written notice to the other parties, unless a
shorter time is agreed to by the parties.
PBHG Insurance Series Fund, Inc. This agreement may be terminated at the
option of any party upon six months' written notice to the other parties,
unless a shorter time is agreed to by the parties.
Goldman Sachs Variable Insurance Trust. This agreement may be terminated at
the option of any party upon six months' written notice to the other
parties, unless a shorter time is agreed to by the parties.
Salomon Brothers Variable Series Funds Inc.. This agreement may be
terminated at the option of any party upon six months' advance written
notice to the other parties, unless a shorter time is agreed to by the
parties.
Calculation of Performance Data
From time to time, we may disclose total return, yield, and other performance
data for the Investment Subdivisions pertaining to the Policies. Such
performance data will be computed, or accompanied by performance data computed,
in accordance with the standards defined by the Securities and Exchange
Commission.
The calculations of yield, total return, and other performance data do not
reflect the effect of any premium tax that may be applicable to a particular
Policy. Premium taxes currently range generally from 0% to 3.5% of premium
payments and are generally based on the rules of the state in which you reside.
"Money Market" Investment Subdivisions
From time to time, advertisements and sales literature may quote the yield of
one or more of the "money market" Investment Subdivisions for a seven-day
period, in a manner which does not take into consideration any realized or
unrealized gains or losses on shares of the corresponding money market
investment portfolio or on its portfolio securities. This current annualized
yield is computed by determining the net change (exclusive of realized gains and
losses on the sale of securities and unrealized appreciation and depreciation
and income other than investment income) at the end of the seven-day period in
the value of a hypothetical account under a Policy having a balance of one unit
in that "money market" Investment Subdivision at the beginning of the period,
dividing such net change in account value by the value of the account at the
beginning of the period to determine the base period return, and annualizing the
result on a 365-day basis. The net change in account value reflects: 1) net
income from the investment portfolio attributable to the hypothetical account;
and 2) charges and deductions imposed under the Policy which are attributable to
the hypothetical account. The charges and deductions include the per unit
charges for the policy maintenance charge, administrative expense charge, and
the mortality and expense risk charge. For purposes of calculating current
yields for a Policy, an average per unit policy maintenance charge is used.
Current Yield will be calculated according to the following formula:
Current Yield = ((NCP - ES)/UV) X (365/7)
where:
NCP = the net change in the value of the investment portfolio (exclusive of
realized gains or losses on the sale of securities and unrealized
appreciation and depreciation and income other than investment income) for
the seven-day period attributable to a hypothetical account having a balance
of one Investment Subdivision unit.
ES = per unit expenses of the hypothetical account for the seven-day period.
UV = the unit value on the first day of the seven-day period.
The effective yield of a "money market" Investment Subdivision determined on
a compounded basis for the same seven-day period may also be quoted. The
effective yield is calculated by compounding the base period return according
to the following formula:
Effective Yield = (1 + ((NCP - ES)/UV))365/7 - 1
where:
NCP = the net change in the value of the investment portfolio (exclusive of
realized gains or losses on the sale of securities and unrealized
appreciation and depreciation and income other than investment income) for
the seven-day period attributable to a hypothetical account having a balance
of one Investment Subdivision unit.
ES = per unit expenses of the hypothetical account for the seven-day period.
UV = the unit value for the first day of the seven-day period.
The yield on amounts held in a "money market" Investment Subdivision normally
will fluctuate on a daily basis. Therefore, the disclosed yield for any given
past period is not an indication or representation of future yields or rates of
return. A "money market" Investment Subdivision's actual yield is affected by
changes in interest rates on money market securities, average portfolio maturity
of the Investment Subdivision's corresponding money market investment portfolio,
the types and quality of portfolio securities held by that investment portfolio,
and that investment portfolio's operating expenses. Because of the charges and
deductions imposed under the Policy, the yield for a "money market" Investment
Subdivision will be lower than the yield for its corresponding "money market"
investment portfolio.
Yield calculations do not take into account the surrender charge under the
Policy, a maximum of 8% of each Premium Payment made during the 8 years prior to
a full or partial surrender, or charges for the GMDB rider.
Other Investment Subdivisions
Total Return. Sales literature or advertisements may quote total return,
including average annual total return for one or more of the Investment
Subdivisions for various periods of time including 1 year, 5 years and 10 years,
or from inception if any of those periods are not available.
Average annual total return for a period represents the average annual
compounded rate of return that would equate an initial investment of $1,000
under a Policy to the redemption value of that investment as of the last day of
the period. The ending date for each period for which total return quotations
are provided will be for the most recent practicable, considering the type and
media of the communication, and will be stated in the communication.
For periods that begin before the Policy was available, performance data will be
based on the performance of the underlying portfolios, with the level of Account
4 and policy charges currently in effect. Average annual total return will be
calculated using Investment Subdivision unit values and deductions for the
policy maintenance charge, annual death benefit charge and the surrender charge
as described below:
1. We calculate unit value for each Valuation Period based on the performance
of the Investment Subdivision's underlying investment portfolio (after
deductions for Fund expenses, the administrative expense charge, and the
mortality and expense risk charge).
2. The policy maintenance charge is $25 per year, deducted at the beginning
of each Policy Year after the first. For purposes of calculating average
annual total return, an average policy maintenance charge (currently 0.1% of
account value attributable to the hypothetical investment) is used. This
charge will be waived if the Account Value is at least $10,000 at the time
the charge is due.
3. The surrender charge will be determined by assuming a surrender of the
Policy at the end of the period. Average annual total return for periods of
eight years or less will therefore reflect the deduction of a surrender
charge.
4. Total return does not consider the GMDB charges.
5. Total return will then be calculated according to the following
formula:
TR = (ERV/P)1/N - 1
where:
TR = the average annual total return for the period.
ERV = the ending redeemable value (reflecting deductions as described above)
of the hypothetical investment at the end of the period.
P = a hypothetical single investment of $1,000.
N = the duration of the period (in years).
The available Investment Subdivisions have not yet commenced operations;
therefore, standard performance data for the available Investment Subdivisions
is not available at this time. However, non-standard adjusted historical
performance data (reflects all fees and charges including surrender charges) for
the Funds underlying the available Investment Subdivisions is as follows:
Total Return for the available Investment Subdivisions is as follows:
<TABLE>
<CAPTION>
From the
For the For the For the For the Date of Date of
1-year period 3-year period 5-year 10-year Subaccount Subaccount
ended 12/31/97 ended 12/31/97 period ended period ended Inception Inception
12/31/97 12/31/97 to
12/31/97
<S> <C>
Subdivision
Balanced
Janus Aspen Balanced Portfolio 09/13/93
VIP II Asset Manager Portfolio 09/06/89
Salomon Brothers Total Return Fund N/A
GE Investments Total Return Fund 07/01/85
Oppenheimer Multiple Strategies Fund 02/09/87
Growth
Janus Aspen Growth Portfolio 09/13/93
Janus Aspen Capital Appreciation 05/01/97
Portfolio
Alger American Growth Portfolio 01/09/89
VIP II Contrafund Portfolio 01/03/95
VIP Growth Portfolio 10/09/86
Oppenheimer Growth Fund 04/03/85
VIP III Growth Opportunities Portfolio 01/03/95
Goldman Sachs Mid Cap Equity Fund N/A
GE Investments Value Equity Fund 05/01/97
PBHG Growth II Portfolio 05/01/97
PBHG Large Cap Growth Portfolio 05/01/97
International Stock
Janus Aspen International Growth 05/02/94
Portfolio
VIP Overseas Portfolio 01/28/87
GE Investments International Equity Fund 05/01/95
High Yield Bond
Oppenheimer High Income Fund 04/30/86
Federated High Income Bond Fund II 03/01/94
Diversified Bond
Janus Aspen Flexible Income Portfolio 09/13/93
Aggressive Growth
Janus Aspen Aggressive Growth Portfolio 09/13/93
Oppenheimer Aggressive Growth Fund 08/15/86
Alger American Small Capitalization 09/21/88
Portfolio
Growth & Income
Federated American Leaders Fund II 02/10/94
GE Investments US Equity Fund 01/02/95
Goldman Sachs Growth & Income Fund N/A
Salomon Brothers Investors Fund N/A
VIP Equity-Income Portfolio 10/09/86
VIP III Growth & Income Portfolio 12/31/96
GE Investments S&P 500 Index Fund 04/14/85
Corporate Bond
Oppenheimer Bond Fund 04/03/85
Salomon Brothers Strategic Bond Fund N/A
GE Investments Income Fund 01/02/95
Specialty
Federated Utility Fund II 02/10/94
GE Investments Real Estate Securities 05/01/95
Fund
Global Stock
Janus Aspen Worldwide Growth Portfolio 09/13/93
International Bond
GE Global Income Fund 05/01/97
Money Market
GE Investments Money Market Fund 06/30/85
</TABLE>
++ Returns for periods of less than one year are not annualized.
Past performance is not a guarantee of future results.
The Funds have provided the price information used to calculate the total return
of the Investment Subdivisions for periods prior to the inception of the
Investment Subdivisions. While we have no reason to doubt the accuracy of the
figures provided by the Funds, we have not independently verified such
information.
Other Performance Data
We may disclose cumulative total return in conjunction with the standard format
described above. The cumulative total return will be calculated using the
following formula:
CTR = (ERV/P) - 1
where:
CTR = the cumulative total return for the period.
ERV = the ending redeemable
value (reflecting
deductions as described
above) of the
hypothetical investment
at the end of the
period.
P = a hypothetical single investment of $1,000.
Sales literature may also quote cumulative and/or average annual total return
that does not reflect the surrender charge. This is calculated in exactly the
same way as average annual total return, except that the ending redeemable value
of the hypothetical investment is replaced with an ending value for the period
that does not take into account any charges on withdrawn amounts.
Other non-standard quotations of Investment Subdivision performance may also be
used in sales literature. Such quotations will be accompanied by a description
of how they were calculated.
Federal Tax Matters
Taxation of GE Life & Annuity
We do not expect to incur any federal income tax liability attributable to
investment income or capital gains retained as part of the reserves under the
Policies. (See Federal Tax Matters section of the Prospectus.) Based upon these
expectations, no charge is being made currently to Account 4 for federal income
taxes which may be attributable to the Account. We will periodically review the
question of a charge to Account 4 for federal income taxes related to the
Account. Such a charge may be made in future years if we believe that we may
incur federal income taxes. This might become necessary if the tax treatment of
the Company is ultimately determined to be other than what we currently believe
it to be, if there are changes made in the federal income tax treatment of
annuities at the corporate level, or if there is a change in our tax status. In
the event that we should incur federal income taxes attributable to investment
income or capital gains retained as part of the reserves under the Policies, the
Account Value would be correspondingly adjusted by any provision or charge for
such taxes.
We may also incur state and local taxes (in addition to premium taxes) in
several states. At present, these taxes, with the exception of premium taxes,
are not significant. If there is a material change in applicable state or local
tax laws causing an increase in taxes other than premium taxes (for which we
currently impose a charge), charges for such taxes attributable to Account 4 may
be made.
IRS Required Distributions
In order to be treated as an annuity contract for federal income tax purposes,
section 72(s) of the Code requires any Non-Qualified Policy to provide that (a)
if any Owner dies on or after the Maturity Date but prior to the time the entire
interest in the Policy has been distributed, the remaining portion of such
interest will be distributed at least as rapidly as under the method of
distribution being used as of the date of that Owner's death; and (b) if any
Owner dies prior to the Maturity Date, the entire interest in the Policy will be
distributed (1) within five years after the date of that Owner's death, or (2)
as Income Payments which will begin within one year of that Owner's death and
which will be made over the life of the Owner's "designated beneficiary" or over
a period not extending beyond the life expectancy of that beneficiary. The
"designated beneficiary" generally is the person who will be treated as the sole
owner of the Policy following the death of the Owner, Joint Owner or, in certain
circumstances, the Annuitant. However, if the "designated beneficiary" is the
surviving spouse of the decedent, these distribution rules will not apply until
the surviving spouse's death (and this spousal exception will not again be
available). If any Owner is not an individual, the death of the Annuitant will
be treated as the death of an Owner for purposes of these rules.
The Non-Qualified Policies contain provisions which are intended to comply with
the requirements of section 72(s) of the Code, although no regulations
interpreting these requirements have yet been issued. We intends to review such
provisions and modify them if necessary to assure that they comply with the
requirements of Code section 72(s) when clarified by regulation or otherwise.
Other rules may apply to Qualified Policies.
General Provisions
Using the Policies as Collateral
A Non-Qualified Policy can be assigned as collateral security. We must be
notified in writing if a Policy is assigned. Any payment made before the
assignment is recorded at our Home Office will not be affected. We are not
responsible for the validity of an assignment. Your rights and the rights of a
Beneficiary may be affected by an assignment.
A Qualified Policy may not be sold, assigned, transferred, discounted, pledged
or otherwise transferred except under such conditions as may be allowed under
applicable law.
The basic benefits of the Policy are assignable. Additional benefits added by
rider may or may not be available/eligible for assignments.
Non-Participating
The Policy is non-participating. No dividends are payable.
Misstatement of Age or Sex
If an Annuitant's age or sex was misstated on the policy data page, any policy
benefits or proceeds, or availability thereof, will be determined using the
correct age and sex.
Incontestability We will not contest the Policy.
Statement of Values
At least once each year, we will send you a statement of values within 30 days
after each report date. The statement will show Account Value, Premium Payments
and charges made during the report period.
Written Notice
Any written notice should be sent to us at our Home Office at 6610 West Broad
Street, Richmond, Virginia 23230. The policy number and the Annuitant's full
name must be included.
We will send all notices to the Owner at the last known address on file with the
company.
Distribution of the Policies
Capital Brokerage Corporation, the principal underwriter of the Policies, is
registered with the Securities and Exchange Commission under the Securities
Exchange Act of 1934 as a broker-dealer and is a member of the National
Association of Securities Dealers, Inc.
The Policies are sold to the public through brokers licensed and registered
under the federal securities laws and state insurance laws that have entered
into agreements with Capital Brokerage Corporation. The Policy is also sold by
properly licensed and registered representatives of Capital Brokerage
Corporation. The offering is continuous and we do not anticipate discontinuing
the offering of the Policies. However, we do reserve the right to discontinue
the offering of the Policies.
Legal Developments Regarding Employment-Related Benefit Plans
On July 6, 1983, the Supreme Court held in Arizona Governing Committee for Tax
Deferred Annuity v. Norris, 463 U.S. 1073 (1983), that optional annuity benefits
provided under an employee's deferred compensation plan could not, under Title
VII of the Civil Rights Act of 1964, vary between men and women on the basis of
sex. The Policy contains guaranteed annuity purchase rates for certain optional
payment plans that distinguish between men and women. Accordingly, employers and
employee organizations should consider, in consultation with legal counsel, the
impact of Norris, and Title VII generally, on any employment-related insurance
or benefit program for which a Policy may be purchased.
In addition, we are subject to the insurance laws and regulations of other
states within which it is licensed to operate. Generally, the Insurance
Department of any other state applies the laws of the state of domicile in
determining permissible investments. Presently, we are licensed to do business
in the District of Columbia and all states, except New York.
Legal Matters
Sutherland Asbill & Brennan LLP of Washington, D.C. has provided advice on
certain legal matters relating to federal securities laws applicable to the
issue and sale of the Policies described in this Prospectus. Patricia L. Dysart,
Assistant Vice President and Associate General Counsel of the Company, has
provided advice on certain legal matters pertaining to the Policy, including the
validity of the Policy and the Company's right to issue the Policies under
Virginia insurance law.
Experts
KPMG Peat Marwick LLP.
The consolidated balance sheets of The Life Insurance Company of Virginia, now
known as GE Life and Annuity Assurance Company, and subsidiary as of December
31, 1997 and 1996, and the related consolidated statements of income,
stockholder's equity and cash flows for the year ended December 31, 1997, the
nine months ended December 31, 1996 and the preacquisition three months period
ended March 31, 1996, and the statement of assets and liabilities of Life of
Virginia Separate Account 4, now known as GE Life & Annuity Separate Account 4,
as of December 31, 1997 and the related statements of operations and changes in
net assets for each of the two years or lesser periods then ended have been
included herein and in the registration statement in reliance upon the reports
of KPMG Peat Marwick LLP, independent certified public accountants, appearing
elsewhere herein and upon the authority of such firm as experts in accounting
and auditing.
The report of KPMG Peat Marwick LLP with respect to the consolidated financial
statements of The Life Insurance Company of Virginia, now known as GE Life and
Annuity Assurance Company, and subsidiary contains an explanatory paragraph that
states that effective April 1, 1996, General Electric Capital Corporation
acquired all of the outstanding stock of The Life Insurance Company of Virginia,
now known as GE Life and Annuity Assurance Company, in a business combination
accounted for as a purchase. As a result of the acquisition, the consolidated
financial information for the periods after the acquisition is presented on a
different cost basis than that for the periods before the acquisition and,
therefore, is not comparable.
Ernst & Young LLP.
Ernst & Young LLP, independent auditors, have audited the consolidated
statements of income, stockholder's equity and cash flows of GE Life and Annuity
Assurance Company and subsidiaries (formerly The Life Insurance Company of
Virginia and subsidiaries) for the year ended December 31, 1995 and the
statements of operations and changes in net assets of GE Life & Annuity Separate
Account 4 (formerly Life of Virginia Separate Account 4) for the year or period
ended December 31, 1995 as set forth in their report, which is included in this
Statement of Additional Information and Registration Statement. The financial
statements are included herein in reliance on their report, given on their
authority as experts in accounting and auditing.
Change in Auditors
Subsequent to the acquisition of us by GNA Corporation on April 1, 1996, we
selected KPMG Peat Marwick LLP to be our auditor. Accordingly, our principal
auditor changed for the year ending December 31, 1996, from Ernst & Young LLP,
to KPMG Peat Marwick LLP. The former auditors were dismissed and KPMG Peat
Marwick LLP was retained because KPMG Peat Marwick LLP is the auditor for GE
Capital, the indirect parent of GNA Corporation. This change was approved by the
members of the Board of Directors of the Company.
Neither KPMG Peat Marwick LLP's nor Ernst & Youngs LLP's reports on the
financial statements contain any adverse opinion or a disclaimer of opinion, or
were qualified or modified as to uncertainty or audit scope. Furthermore, there
were no disagreements with either on any matter of accounting principle or
practice, financial statement disclosure or auditing scope or procedure which
would have caused them to make reference to the subject matter of the
disagreement in connection with their reports.
Financial Statements
This Statement of Additional Information contains financial statements for the
Company and Life of Virginia Separate Account 4, now known as GE Life & Annuity
Separate Account 4, as of December 31, 1997, and for each of the three years in
the period then ended.
Unaudited interim financial statements for the Company through September 30,
1998 have also been included.
The consolidated financial statements of The Life Insurance Company of Virginia,
now known as GE Life and Annuity Assurance Company, and subsidiaries included
herein should be distinguished from the financial statements of Account 4 and
should be considered only as bearing on the ability of the Company to meet its
obligations under the Policy.
Such consolidated financial statements of The Life Insurance Company of
Virginia, now known as GE Life and Annuity Assurance Company, and subsidiaries
should not be considered as bearing on the investment performance of the assets
held in Account 4.
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
All required financial statements are included in Part B of this Registration
Statement.
(b) Exhibits
(1)(a) Resolution of Board of Directors of Life of Virginia
authorizing the establishment of Separate Account 4. 12/
(1)(b) Resolution of Board of Directors of Life of Virginia authorizing
the establishment of additional investment subdivisions of
Separate Account 4, investing in shares of the Asset Manager
Portfolio of the Fidelity Variable Insurance Products Fund II
and the Balanced Portfolio of the Advisers Management Trust. 12/
(1)(c) Resolution of Board of Directors of Life of Virginia authorizing
the establishment of additional investment subdivisions of
Separate Account 4, investing in shares of the Growth Portfolio,
the Aggressive Growth Portfolio, and the Worldwide Growth
Portfolio of the Janus Aspen Series. 12/
(1)(d) Resolution of Board of Directors of Life of Virginia authorizing
the establishment of twenty-two (22) additional subdivisions of
Separate Account 4, investing in shares of Money Market
Portfolio, High Income Portfolio, Equity-Income Portfolio,
Growth Portfolio and Overseas Portfolio of the Fidelity Variable
Insurance Products Fund; Asset Manager Portfolio of the Fidelity
Variable Insurance Products Fund II; Money Market Portfolio,
Government Securities Portfolio, Common Stock Index Portfolio,
Total Return Portfolio of the Life of Virginia Series Fund,
Inc.; Limited Maturity Bond Portfolio, Growth Portfolio and
Balanced Portfolio of the Neuberger & Berman Advisers Management
Trust; Growth Portfolio, Aggressive Growth Portfolio, and
Worldwide Growth Portfolio of the Janus Aspen Series; Money
Fund, High Income Fund, Bond Fund, Capital Appreciation Fund,
Growth Fund, Multiple Strategies Fund of the Oppenheimer
Variable Account Funds. 12/
(1)(e) Resolution of Board of Directors of Life of Virginia authorizing
the establishment of three additional investment subdivisions of
Separate Account 4, investing in shares of the Utility Fund and
Corporate Bond Fund of the Insurance Management Series, and the
Contrafund Portfolio of the Variable Insurance Products Fund II.
12/
(1)(f) Resolution of Board of Directors of Life of Virginia authorizing
the establishment of two additional investment subdivisions of
Separate Account 4, investing in shares of the International
Equity Portfolio and the Real Estate Securities Portfolio of
Life of Virginia Series Fund. 12/
(1)(g) Resolution of Board of Directors of Life of Virginia authorizing
the establishment of four additional investment subdivisions of
Separate Account 4, investing in shares of the American Growth
Portfolio and the American Small Capitalization Portfolio of The
Alger American Fund, and the Growth Portfolio and Flexible
Income Portfolio of the Janus Aspen Series. 8/
(1)(h) Resolution of Board of Directors of Life of Virginia authorizing
the establishment of two additional investment subdivisions of
Separate Account 4, investing in shares of the Federated
American Leaders Fund II of the Federated Insurance Series, and
the International Growth Portfolio of the Janus Aspen Series. 9/
(1)(i) Resolution of Board of Directors of Life of Virginia authorizing
the establishment of twelve additional investment subdivisions
of Separate Account 4, investing in shares of the Growth &
Income Portfolio and Growth opportunities Portfolio of Variable
Insurance Products Fund III; Growth II Portfolio and Large Cap
Growth Portfolio of the PBHG Insurance Series Fund, Inc.; Global
Income Fund and Value Equity Fund of GE Investments Funds,
Inc.11/
(1)(j) Resolution of Board of Directors of Life of Virginia authorizing
the establishment of two additional investment subdivisions of
Separate Account 4, investing in shares of the Capital
Appreciation Portfolio of the Janus Aspen Series. 11/
(1)(k) Resolution of Board of Directors of Life of Virginia authorizing
the establishment of six additional investment subdivisions of
Separate Account 4, investing in shares of the U.S. Equity Fund
of the GE Investments Funds, Inc., Growth and Income Fund of the
Goldman Sachs Variable Insurance Trust Fund and Mid Cap Equity
Fund of Goldman Sachs Variable Insurance Trust. Further a name
change for Oppenheimer Variable Account Fund Capital
Appreciation fund to Oppenheimer Variable Account Fund
Aggressive Growth Fund. 12/
(1)(l) Resolution of Board of Directors of Life of Virginia authorizing
the establishment of Investment Subdivisions investing in shares
of the Salomon Brothers Variable Series Funds, Inc. 14/
(2).. Not Applicable.
(3)(a) Underwriting Agreement dated December 12, 1997 between The Life
Insurance Company of Virginia and Capital Brokerage
Corporation.12/
(b) Dealer Sales Agreement dated December 13, 1997. 12/
(4)(a) Form of Policy.
(i) Policy Form P1143 4/94 12/
(ii) Policy Form P1150 10/98 13/
(b) Endorsements to Policy.
(i) IRA Endorsement 12/
(ii) Pension Endorsement 12/
(iii) Section 403(b) Endorsement 12/
(iv) Guaranteed Minimum Death Benefit Rider 13/
(v) Optional Death Benefit at Death of Annuitant Endorsement 12/
(vi) Endorsement for Waiver of Surrender Charges 13/
(5)(a) Form of Application. 12/
(6)(a) Certificate of Incorporation of The Life Insurance Company of
Virginia. 12/
(b) By-Laws of The Life Insurance Company of Virginia. 12/
(7).. Not Applicable.
(8)(a) Stock Sale Agreement between The Life Insurance Company of
Virginia and The Life of Virginia Series Fund, Inc. 12/
(b) Participation Agreement among Variable Insurance Products Fund,
Fidelity Distributors Corporation, and The Life
Insurance Company of Virginia. 12/
(b)(i) Amendment to Participation Agreement Referencing Policy Form
Numbers. 12/
(b)(ii) Amendment to Participation Agreement among Variable Insurance
Products Fund II, Fidelity Distributors Corporation,
and The Life Insurance Company of Virginia. 9/
(b)(iii) Amendment to Participation Agreement among Variable Insurance
Products Fund, Fidelity Distributors Corporation, and
The Life Insurance Company of Virginia. 9/
(c) Agreement between Oppenheimer Variable Account Funds,
Oppenheimer Management Corporation, and The Life Insurance
Company of Virginia. 12/
(c)(i) Amendment to Agreement between Oppenheimer Variable Account
Funds, Oppenheimer Management Corporation, and The Life
Insurance Company of Virginia. 12/
(d) Participation Agreement among Variable Insurance Products
Fund II, Fidelity Distributors Corporation and The Life
Insurance Company of Virginia. 12/
(e) Participation Agreement between Janus Capital Corporation and
The Life Insurance Company of Virginia. 12/
(f) Participation Agreement between Insurance Management Series,
Federated Securities Corp., and The Life Insurance
Company of Virginia. 12/
(g) Participation Agreement between The Alger American Fund, Fred
Alger and Company, Inc., and The Life Insurance Company
of Virginia. 8/
(h) Participation Agreement between Variable Insurance Products
Fund III and The Life Insurance Company of Virginia. 11/
(i) Participation Agreement between PBHG Insurance Series Fund, Inc.
and The Life Insurance Company of Virginia.11/
(j) Participation Agreement between Goldman Sachs Variable
Insurance Trust Insurance and The Life Insurance Company of
Virginia.11/
(k) Form of Participation Agreement between Salomon Brothers
Variable Series Funds and The Life Insurance Company of
Virginia.14/
(l) Participation Agreement between GE Investments Funds, Inc. and
The Life Insurance Company of Virginia. 14/
(9) Opinion and Consent of Counsel.15/
(10)(a) Consent of Counsel.15/
(b) Consent of Independent Auditors.15/
(11). Not Applicable.
(12). Not Applicable.
(13). Schedule showing computation for Performance Data 12/
(14). Power of Attorney dated April 16, 1997.11/
--------------------------
8/ Incorporated herein by reference to post-effective amendment number 3 to
the Registrant's registration statement on Form N-4, File No. 33-76334,
filed with the Securities and Exchange Commission on September 28, 1995.
9/ Incorporated herein by reference to post-effective amendment number 4 to
the Registrant's registration statement on Form N-4, File No. 33-76334,
filed with the Securities and Exchange Commission on April 30, 1996.
10/ Incorporated herein by reference to post-effective amendment number 6 to
the Registrant's registration statement on Form N-4, File No. 33-76334,
filed with the Securities and Exchange Commission on March 24, 1997.
11/ Incorporated herein by reference to post-effective amendment number 7 to
the Registrant's registration statement on Form N-4, File No. 33-76334
filed with the Securities and Exchange Commission on May 1, 1997.
12/ Incorporated herein by reference to post-effective amendment number 9 to
the Registrant's registration statement on Form N-4, File No. 33-76334
filed with the Securities and Exchange Commission on May 1, 1998.
13/ Incorporated herein by reference to post-effective amendment number 11 to
the Registrant's registration statement on Form N-4, File No. 33-76334
filed with the Securities and Exchange Commission on July 17, 1998.
14/ Incorporated herein by reference to post-effective amendment number 13 to
the Registrant's registration statement on Form N-4, File No. 33-76334
filed with the Securities and Exchange Commission on September 30, 1998.
15/ To be filed in subsequent post-effective amendment..
Item 25. Directors and Officers of GE Life & Annuity
<TABLE>
<CAPTION>
Positions and Offices with
Name Address Depositor
<S> <C>
Ronald V. Dolan First Colony Life Director and Chairman of the
700 Main Street Board
Lynchburg, VA 24505
Pamela S. Schutz GE Life & Annuity Director and President
6610 W. Broad Street
Richmond, VA 23230
Selwyn L. Flournoy, Jr GE Life & Annuity Director and Senior Vice
6610 W. Broad Street President
Richmond, VA 23230
Robert D. Chinn GE Life & Annuity Director and Senior Vice
6610 W. Broad Street President - Agency
Richmond, VA 23230
Elliot Rosenthal GE Life & Annuity Senior Vice President -
6610 W. Broad Street Investment Products
Richmond, VA 23230
Victor C. Moses GE Financial Assurance Director
601 Union Street, Ste. 5600
Seattle, WA 98101
Geoffrey S. Stiff GE Life & Annuity Director
6610 W. Broad Street
Richmond, VA 23230
</TABLE>
Item 26. Persons Controlled by or Under Common Control With the Depositor or
Registrant
ORGANIZATIONAL CHART
---- GENERAL ELECTRIC
| COMPANY
Other Subsidiaries
(100%)
|
GENERAL ELECTRIC
CAPITAL SERVICES, INC.
|
(100%)
|
GENERAL ELECTRIC
CAPITAL CORPORATION
|
(100%)
|
----- GE FINANCIAL ASSURANCE
| HOLDINGS, INC.
| |
| (100%)
| |
| GNA CORPORATION
| |
|
20% (100%)
| |
| GENERAL ELECTRIC
| CAPITAL ASSURANCE COMPANY
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| (80%)
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| GE LIFE AND ANNUITY
----- ASSURANCE COMPANY
Item 27. Number of Policyowners
Not applicable.
Item 28. Indemnification
Section 13.1-698 and 13.1-702 of the Code of Virginia, in brief, allow a
corporation to indemnify any person made party to a proceeding because such
person is or was a director, officer, employee, or agent of the corporation,
against liability incurred in the proceeding if: (1) he conducted himself in
good faith; and (2) he believed that (a) in the case of conduct in his official
capacity with the corporation, his conduct was in its best interests; and (b) in
all other cases, his conduct was at least not opposed to the corporation's best
interests and (3) in the case of any criminal proceeding, he had no reasonable
cause to believe his conduct was unlawful. The termination of a proceeding by
judgment, order, settlement or conviction is not, of itself, determinative that
the director, officer, employee, or agent of the corporation did not meet the
standard of conduct described. A corporation may not indemnify a director,
officer, employee, or agent of the corporation in connection with a proceeding
by or in the right of the corporation, in which such person was adjudged liable
to the corporation, or in connection with any other proceeding charging improper
personal benefit to such person, whether or not involving action in his official
capacity, in which such person was adjudged liable on the basis that personal
benefit was improperly received by him. Indemnification permitted under these
sections of the Code of Virginia in connection with a proceeding by or in the
right of the corporation is limited to reasonable expenses incurred in
connection with the proceeding.
Section 5 of the By-Laws of The Life Insurance Company of Virginia further
provides that:
(a) The Corporation shall indemnify each director, officer and employee of
this Company who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, arbitrative, or investigative (other than an action
by or in the right of the Corporation) by reason of the fact that he is or
was a director, officer or employee of the Corporation, or is or was serving
at the request of the Corporation as a director, officer or employee of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgements [sic], fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in the best interests of the
Corporation, and with respect to any criminal action, had no cause to believe
his conduct unlawful. The termination of any action, suit or proceeding by
judgement [sic], order, settlement, conviction, or upon a plea of nolo
contendere, shall not of itself create a presumption that the person did not
act in good faith, or in a manner opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, believed
his conduct unlawful.
(b) The Corporation shall indemnify each director, officer or employee of the
Corporation who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
Corporation to procure a judgement [sic] in its favor by reason of the fact
that he is or was a director, officer or employee of the Corporation, or is
or was serving at the request of the Corporation as a director, officer or
employee of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation and
except that no indemnification shall be made in respect of any claim, issue
or matter as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to the Corporation
unless and only to the extent that the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
court shall deem proper.
(c) Any indemnification under subsections (a) and (b) (unless ordered by a
court) shall be made by the Corporation only as authorized in the specific
case upon a determination that indemnification of the director, officer or
employee is proper in the circumstances because he has met the applicable
standard of conduct set forth in subsections (a) and (b). Such determination
shall be made (1) by the Board of Directors of the Corporation by a majority
vote of a quorum consisting of the directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not obtainable, or
even if obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (3) by the stockholders of
the Corporation.
(d) Expenses (including attorneys' fees) incurred in defending an action,
suit or proceeding, whether civil, criminal, administrative, arbitrative or
investigative, may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized in the manner
provided in subsection (c) upon receipt of an undertaking by or on behalf of
the director, officer or employee to repay such amount to the Corporation
unless it shall ultimately be determined that he is entitled to be
indemnified by the Corporation as authorized in this Article.
(e) The Corporation shall have the power to make any other or further
indemnity to any person referred to in this section except an indemnity
against gross negligence or willful misconduct.
(f) Every reference herein to director, officer or employee shall include
every director, officer or employee, or former director, officer or employee
of the Corporation and its subsidiaries and shall enure to the benefit of the
heirs, executors and administrators of such person.
(g) The foregoing rights and indemnification shall not be exclusive of any
other rights and indemnification to which the directors, officers and
employees of the Corporation may be entitled according to law.
* * *
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
depositor pursuant to the foregoing provisions, or otherwise, the depositor has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the depositor of expenses incurred
or paid by a director, officer or controlling person of the depositor in
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the depositor will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Item 29. Principal Underwriters
(a) Capital Brokerage Corporation is the principal underwriter of the
Policies as defined in the Investment Company Act of 1940, and is also the
principal underwriter for flexible premium variable life insurance policies
issued through GE Life & Annuity Separate Accounts I, II, III, 4 and V.
<PAGE>
(b)
<TABLE>
<CAPTION>
Positions and Offices
Name Address with Underwriter
<S> <C>
Scott A. Curtis GE Financial Assurance President and Chief
6610 W. Broad St. Executive Officer
Richmond, VA 23230
Charles A. Kaminski GE Financial Assurance Senior Vice President
601 Union St., Ste. 5600
Seattle, WA 98101
Victor C. Moses GE Financial Assurance Senior Vice President
601 Union St., Ste. 5600
Seattle, WA 98101
Geoffrey S. Stiff GE Financial Assurance Senior Vice President
6610 W. Broad Street
Richmond, VA 23230
Mary Catherine Yeagley GE Financial Assurance Senior Vice President
601 Union St., Ste. 5600
Seattle, WA 98101
Jeffrey I. Hugunin GE Financial Assurance Treasurer
6604 W. Broad St.
Richmond, VA 23230
John W. Attey GE Financial Assurance Vice President, Counsel
7125 W. Jefferson Ave., Ste. 200 & Assistant Secretary
Lakewood, CO 80235
Thomas W. Casey GE Financial Assurance Vice President & Chief
6604 W. Broad St. Financial Officer
Richmond, VA 23230
Stephen N. DeVos GE Financial Assurance Vice President &
6604 W. Broad St. Controller
Richmond, VA 23230
Scott A. Reeks GE Financial Assurance Vice President &
6610 W. Broad St. Assistant Treasurer
Richmond, VA 23230
Edward J. Wiles, Jr. GE Financial Assurance Vice President, Counsel
777 Long Ridge Rd., Bldg. "B" & Secretary
Stamford, CT 06927
</TABLE>
Item 30. Location of Accounts and Records
All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and the rules under it are
maintained by GE Life & Annuity at its executive offices.
Item 31. Management Services
All management contracts are discussed in Part A or Part B of this Registration
Statement.
Item 32. Undertakings
(a) Registrant undertakes that it will file a post-effective amendment to
this Registration Statement as frequently as 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 undertakes that it will 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 post card 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 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 to GE Life & Annuity at the address or
phone number listed in the Prospectus.
STATEMENT PURSUANT TO RULE 6c-7
GE Life & Annuity offers and will offer Policies to participants in the Texas
Optional Retirement Program. In connection therewith, GE Life & Annuity and
Account 4 rely on 17 C.F.R. Section 270.6c-7 and represent that the
provisions of paragraphs (a)-(d) of the Rule have been or will be complied
with.
SECTION 403(b) REPRESENTATIONS
GE Life & Annuity represents that in connection with its offering of Policies
as funding vehicles for retirement plans meeting the requirements of Section
403(b) of the Internal Revenue Code of 1986, it is relying on a no-action
letter dated November 28, 1988, to the American Council of Life Insurance
(Ref. No. IP-6-88) regarding Sections 22(e), 27(c)(1), and 27(d) of the
Investment Company Act of 1940, and that paragraphs numbered (1) through (4)
of that letter will be complied with.
SECTION 26(e)(2)(A) REPRESENTATION
GE Life & Annuity hereby represents that the fees and charges deducted under
the Policy, in the aggregate, are reasonable in relation to the services
rendered, the expenses expected to be incurred, and the risks assumed by GE
Life & Annuity .
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the registrant, GE Life & Annuity Separate Account 4, has duly caused this
registration statement to be signed on its behalf by the undersigned thereunto
duly authorized, and its seal to be hereunto affixed and attested, in the County
of Henrico in the Commonwealth of Virginia, on the 25THof January, 1999.
GE Life & Annuity Separate Account 4
(Registrant)
By: /s/SELWYN L. FLOURNOY, JR.
Selwyn L. Flournoy, Jr.
Senior Vice President
GE Life and Annuity Assurance Company
GE Life and Annuity Assurance Company
(Depositor)
By: /s/SELWYN L. FLOURNOY, JR.
Selwyn L. Flournoy, Jr.
Senior Vice President
GE Life and Annuity Assurance Company
<PAGE>
As required by the Securities Act of 1933, this registration statement has been
signed below by the following persons in the capacities and on the dates
indicated.
Signature Title Date
/s/ RONALD V. DOLAN Director, Chairman of the Board 1/25/99
Ronald V. Dolan
/s/PAMELA S. SCHUTZ Director and President 1/25/99
Pamela S. Schutz
/s/SELWYN L. FLOURNOY, JR.
Selwyn L. Flournoy, Jr. Director, Senior Vice President 1/25/99
/s/ROBERT D. CHINN Director, Senior Vice President 1/25/99
Robert D. Chinn
/s/VICTOR C. MOSES Director 1/25/99
Victor C. Moses
/s/GEOFFREY S. STIFF Director, Senior Vice President 1/25/99
Geoffrey S. Stiff
By /s/SELWYN L. FLOURNOY, JR.,pursuant to Power of Attorney executed on
April 16, 1997.
<PAGE>
LIST OF EXHIBITS
To be added in a subsequent post-effective amendment
