<PAGE>
<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON October 6, 2000
Registration Nos. 333-66757, 811-5626
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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. 5 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 103 [X]
(Check appropriate box or boxes)
SEPARATE ACCOUNT B
(Exact Name of Registrant)
GOLDEN AMERICAN LIFE INSURANCE COMPANY
(Name of Depositor)
1475 Dunwoody Drive
West Chester, Pennsylvania 19380-1478
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (610) 425-3400
Myles R. Tashman, Esq. COPY TO:
Golden American Life Insurance Company Stephen E. Roth, Esq.
1475 Dunwoody Drive Sutherland Asbill & Brennan LLP
West Chester, PA 19380-1478 1275 Pennsylvania Avenue, N.W.
(610) 425-3516 Washington, D.C. 20004-2404
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering:
As soon as practical after the effective date of the Registration Statement
It is proposed that this filing will become effective (check appropriate box:
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] on (date) pursuant to paragraph (b) of Rule 485
[X] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[ ] on (date) pursuant to paragraph (a)(1) of Rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
Title of Securities Being Registered:
Deferred Combination Variable and Fixed Annuity Contracts
<PAGE>
<PAGE>
PART A
EXPLANATORY NOTE
This Post-Effective Amendment No. 5 to the Registration Statement on Form N-4
does not supercede the prospectuses found in Post-Effective Amendment No. 4
filed on September 13, 2000.
<PAGE>
<PAGE>
SUPPLEMENT
LINKING FID BROCHURE TO
PROSPECTUS OF GOLDENSELECT VALUE/R/
<PAGE>
<PAGE>
Registration Nos. 333-66757, 811-5626
ING VARIABLE ANNUITIES
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B OF GOLDEN AMERICAN LIFE INSURANCE COMPANY
PROFILE AND PROSPECTUS SUPPLEMENT
DATED JANUARY { }, 2001
Supplement to the Profile and
Prospectus dated January { }, 2001 for
DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY CONTRACTS
issued
by Golden American Life Insurance Company
(the "GoldenSelect VALUE Prospectuses")
__________
You should keep this supplement with your Prospectus.
A Fixed Interest Division option is available through the
group and individual deferred variable annuity contracts
offered by Golden American Life Insurance Company. The
Fixed Interest Division is part of the Golden American
General Account. Interests in the Fixed Interest Division
have not been registered under the Securities Act of 1933,
and neither the Fixed Interest Division nor the General
Account are registered under the Investment Company Act of
1940.
Interests in the Fixed Interest Division are offered through
an Offering Brochure, dated May 1, 1999. The Fixed
Interest Division is different from the Fixed Account which
is described in the prospectus but which is not available
in your state. When reading through the GoldenSelect
VALUE Prospectus, the Fixed Interest Division should
be counted among the various divisions available for the
allocation of your premiums, in lieu of the Fixed Account.
The Fixed Interest Division may not be available in some
states. Some restrictions may apply.
More complete information relating to the Fixed Interest
Division is found in the Offering Brochure. Please read the
Offering Brochure carefully before you invest in the Fixed
Interest Division.
ING VARIABLE ANNUITIES
Golden American Life Insurance Company
Golden American Life Insurance Company is a stock company domiciled
in Delaware
{ } FID VAL 01/{ }/01
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VALUE PROFILE AND PROSPECTUS
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<PAGE>
Value-New DB Special Funds-03.doc
ING VARIABLE ANNUITIES
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B OF GOLDEN AMERICAN LIFE INSURANCE COMPANY
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PROFILE OF
GOLDENSELECT VALUE
DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY CONTRACT
, 2000
-------------------------------------------------------------------------------
1. THE ANNUITY CONTRACT
The Contract offered in this prospectus is a deferred combination variable and
fixed annuity contract between you and Golden American Life Insurance Company.
The Contract provides a means for you to invest on a tax-deferred basis in (i)
one or more of the 32 mutual fund investment portfolios through our Separate
Account B and/or (ii) in a fixed account of Golden American with guaranteed
interest periods. The 32 mutual fund portfolios are listed on page 3 below. We
currently offer guaranteed interest periods of 6 months, 1, 3, 5, 7 and 10 years
in the fixed account. We set the interest rates in the fixed account (which will
never be less than 3%) periodically. We may credit a different interest rate for
each interest period. The interest you earn in the fixed account as well as your
principal is guaranteed by Golden American as long as you do not take your money
out before the maturity date for the applicable interest period. If you withdraw
your money from the fixed account more than 30 days before the applicable
maturity date, we will apply a market value adjustment. A market value
adjustment could increase or decrease your contract value and/or the amount you
take out. Generally, the investment portfolios are designed to offer a better
return than the fixed account. However, this is NOT guaranteed. You may not make
any money, and you can even lose the money you invest.
The Contract, like all deferred variable annuity contracts, has two phases: the
accumulation phase and the income phase. The accumulation phase is the period
between the contract date and the date on which you start receiving the annuity
payments under your Contract. The amounts you accumulate during the accumulation
phase will determine the amount of annuity payments you will receive. The income
phase begins on the annuity start date, which is the date you start receiving
regular annuity payments from your Contract.
VALUE PROFILE PROSPECTUS BEGINS AFTER
108--- PAGE 12 OF THIS PROFILE
<PAGE>
<PAGE>
You determine (1) the amount and frequency of premium
payments, (2) the investments, (3) transfers between investments, (4) the type
of annuity to be paid after the accumulation phase, (5) the beneficiary who will
receive the death benefits, (6) the type of death benefit, and (7) the amount
and frequency of withdrawals.
2. YOUR ANNUITY PAYMENTS (THE INCOME PHASE)
Annuity payments are the periodic payments you will begin receiving on the
annuity start date. You may choose one of the following annuity payment options:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
ANNUITY OPTIONS
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Option 1 Income for a fixed Payments are made for a specified number of years to you or your
period beneficiary.
------------------- ----------------------- ---------------------------------------------------------------------
Option 2 Income for life with Payments are made for the rest of your life or longer for a
a period certain specified period such as 10 or 20 years or until the total amount
used to buy this option has
been repaid. This option
comes with an added guarantee
that payments will continue
to your beneficiary for the
remainder of such period if
you should die during the
period.
------------------- ----------------------- ---------------------------------------------------------------------
Option 3 Joint life income Payments are made for your life and the life of another person
(usually your spouse).
------------------- ----------------------- ---------------------------------------------------------------------
Option 4 Annuity plan Any other annuitization plan that we choose to offer on the
annuity start date.
------------------- ----------------------- ---------------------------------------------------------------------
</TABLE>
Annuity payments under Options 1, 2 and 3 are fixed. Annuity payments under
Option 4 may be fixed or variable. If variable and subject to the Investment
Company Act of 1940, it will comply with requirements of such Act. Once you
elect an annuity option and begin to receive payments, it cannot be changed.
3. PURCHASE (BEGINNING OF THE ACCUMULATION PHASE)
You may purchase the Contract with an initial payment of $25,000 or more up to
and including age 85. You may make additional payments of $1,000 or more ($250
for a qualified Contract) at any time before you turn age 85 during the
accumulation phase. Under certain circumstances, we may waive the minimum
initial and additional premium payment requirement. Any initial or additional
premium payment that would cause the contract value of all annuities that you
maintain with us to exceed $1,000,000 requires our prior approval.
Who may purchase this Contract? The Contract may be purchased by individuals
as part of a personal retirement plan (a "non-qualified Contract"), or as
a Contract that qualifies for special tax treatment when purchased as either
an Individual Retirement Annuity (IRA) or in connection with a qualified
retirement plan (each a "qualified Contract").
IRAs and other qualified plans already have the tax-deferral feature found in
this Contract. For an additional cost, the Contract provides other benefits
including death benefits and the ability to receive a lifetime income. See
"Expenses" in this profile.
The Contract is designed for people seeking
long-term tax-deferred accumulation of assets, generally for retirement or other
long-term purposes. The tax-deferred feature is more attractive to people in
high federal and state tax brackets. You should not buy this Contract if you are
looking for a short-term investment or if you cannot risk getting back less
money than you put in.
108--- 2 VALUE PROFILE
<PAGE>
<PAGE>
4. THE INVESTMENT PORTFOLIOS
You can direct your money into (1) the fixed account with guaranteed interest
periods of 6 months, and 1, 3, 5, 7 and 10 years, and/or (2) into any one or
more of the following 32 mutual fund investment portfolios through our Separate
Account B. The investment portfolios are described in the prospectuses for the
GCG Trust, the PIMCO Variable Insurance Trust, the Warburg Pincus Trust, ING
Variable Insurance Trust and the Prudential Series Fund. Keep in mind that while
an investment in the fixed account earns a fixed interest rate, an investment in
any investment portfolio, depending on market conditions, may cause you to make
or lose money. The investment portfolios available under your Contract are:
<TABLE>
<CAPTION>
THE GCG TRUST
<S> <C> <C>
Liquid Asset Series Rising Dividends Series Strategic Equity Series
Limited Maturity Bond Series Diversified Mid-Cap Series Special Situations Series
Global Fixed Income Series Managed Global Series Mid-Cap Growth Series
Fully Managed Series Large Cap Value Series Small Cap Series
Total Return Series All Cap Series Growth Series
Asset Allocation Growth Series Research Series Real Estate Series
Equity Income Series Capital Appreciation Series Hard Assets Series
Investors Series Growth and Income Series Developing World Series
Value Equity Series Capital Growth Series
THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond Portfolio
PIMCO StocksPLUS Growth and Income Portfolio
THE WARBURG PINCUS TRUST
International Equity Portfolio
ING VARIABLE INSURANCE TRUST
ING Global Brand Names Fund
PRUDENTIAL SERIES FUND
Prudential Jennison Portfolio
SP Jennison International Growth Portfolio
</TABLE>
Restricted Funds. We may designate any investment option as a Restricted Fund
and limit the amount you may allocate or transfer to a Restricted Fund. We may
establish any such limitation, at our discretion, as a percentage of premium or
contract value or as a specified dollar amount and change the limitation at any
time. Currently, we have not designated any investment option as a Restricted
Fund. We may, with 30 days notice to you, designate any investment portfolio as
a Restricted Fund or change the limitations on existing contracts with respect
to new premiums added to such investment portfolio and also with respect to new
transfers to such investment portfolio. For more detailed information, see
"Restricted Funds" in the prospectus for the Contract.
5. EXPENSES
The Contract has insurance features and investment features, and there are
charges related to each. The Company currently does not deduct an annual
contract administrative charge but may in the future charge an annual contract
administrative fee of $30 or 2% of the contract value, whichever is less. We
also collect a mortality and expense risk charge and an asset-based
administrative charge. These 2 charges are deducted daily directly from the
amounts in the investment portfolios. The asset-based administrative charge is
0.15% annually. The annual rate of the mortality and expense risk charge is:
108--- 3 VALUE PROFILE
<PAGE>
<PAGE>
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STANDARD ENHANCED DEATH BENEFITS
DEATH BENEFIT ANNUAL RATCHET 5% SOLUTION
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Mortality & Expense Risk Charge 0.85% 1.00% 1.15%
Asset-Based Administrative Charge 0.15% 0.15% 0.15%
Total 1.00% 1.15% 1.30%
-------------------------------------------------------------------------------
If you choose to purchase one of the optional benefit riders we offer, we will
deduct a separate quarterly charge for the rider on each quarterly contract
anniversary and pro rata when the rider terminates. We deduct the rider charges
directly from your contract value in the investment portfolios; if the value in
the investment portfolios is insufficient, rider charges will be deducted from
the fixed account. The rider charges are as follows:
OPTIONAL BENEFIT RIDER CHARGES
Minimum Guaranteed Accumulation Benefit (MGAB) rider
Waiting Period Quarterly Charge
-------------- ----------------
10 Year.......... 0.125% of the MGAB Charge Base*(0.50% annually)
20 Year.......... 0.125% of the MGAB Charge Base (0.50% annually)
Minimum Guaranteed Income Benefit (MGIB) rider
MGIB Base Rate Quarterly Charge
-------------- ----------------
7%............... 0.125% of the MGIB Charge Base* (0.50% annually)
Minimum Guaranteed Withdrawal Benefit (MGWB) rider
Quarterly Charge
----------------
0.125% of the MGWB Eligible Payment Amount* (0.50% annually)
* See prospectus for a description.
Each investment portfolio has charges for investment management fees and other
expenses. These charges, which vary by investment portfolio, currently range
from 0.56% to 1.75% annually (see following table) of the portfolio's average
daily net asset balance.
If you withdraw money from your Contract, or if you
begin receiving annuity payments, the Company may deduct a premium tax of
0%-3.5% to pay to your state.
We deduct a surrender charge if you surrender your Contract or withdraw an
amount exceeding the free withdrawal amount. The free withdrawal amount in any
contract year is the greater of (i) any earnings less previous withdrawals; or
(ii) 10% of premium payments paid within the last 7 years and not previously
withdrawn, less any previous withdrawals taken in the same contract year. The
following table shows the schedule of the surrender charge that will apply. The
surrender charge is a percent of each premium payment withdrawn.
COMPLETE YEARS ELAPSED 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7+
SINCE PREMIUM PAYMENT | | | | | | |
| | | | | | |
SURRENDER CHARGE 6% | 6% | 6% | 5% | 4% | 3% | 1% | 0%
108--- 4 VALUE PROFILE
<PAGE>
<PAGE>
The following table is designed to help you understand the Contract charges. The
"Total Annual Insurance Charges" column includes the mortality and expense risk
charge, the asset-based administrative charge, and reflects the annual contract
administrative charge as 0.04% (based on an average contract value of $72,000)
and the highest optional rider charge as 0.75% in most cases, assuming the rider
base is equal to the initial premium and the rider base increases by 7% each
year. The second part reflects the same insurance charges, but without any rider
charges. The "Total Annual Investment Portfolio Charges" column reflects the
portfolio charges for each portfolio and is based on actual expenses as of
December 31, 1999, except for (i) portfolios that commenced operations during
2000; and (ii) newly formed portfolios where the charges have been estimated.
The column "Total Annual Charges" reflects the sum of the previous two columns.
The columns under the heading "Examples" show you how much you would pay under
the Contract for a 1-year period and for a 10-year period.
As required by the Securities and Exchange Commission, the examples assume that
you invested $1,000 in a Contract that earns 5% annually and that you withdraw
your money at the end of Year 1 or at the end of Year 10 (based on the 5%
Solution Enhanced Death Benefit). The 1 Year examples above include a 6%
surrender charge. For Years 1 and 10, the examples show the total annual charges
assessed during that time and assume that you have elected the 5% Solution
Enhanced Death Benefit. For these examples, the premium tax is assumed to be 0%.
108--- 5 VALUE PROFILE
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
EXAMPLES:
---------
TOTAL ANNUAL TOTAL ANNUAL TOTAL CHARGES AT THE END OF:
INSURANCE CHARGES CHARGES 1 YEAR 10 YEARS
----------------- ------------ ----------------------------
W/ THE W/O TOTAL ANNUAL W/ THE W/O W/ THE W/O W/ THE W/O
HIGHEST ANY INVESTMENT HIGHEST ANY HIGHEST ANY HIGHEST ANY
RIDER RIDER PORTFOLIO RIDER RIDER RIDER RIDER RIDER RIDER
INVESTMENT PORTFOLIO CHARGE CHARGE CHARGES CHARGE CHARGE CHARGE CHARGE CHARGE CHARGE
---------------------------------------------------------------------------------------------------------------------------
THE GCG TRUST
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Liquid Asset 2.09% 1.34% 0.56% 2.65% 1.90% $87 $79 $298 $222
---------------------------------------------------------------------------------------------------------------------------
Limited Maturity Bond 2.09% 1.34% 0.57% 2.66% 1.91% $87 $79 $299 $223
---------------------------------------------------------------------------------------------------------------------------
Global Fixed Income 2.09% 1.34% 1.60% 3.69% 2.94% $97 $90 $394 $326
---------------------------------------------------------------------------------------------------------------------------
Fully Managed 2.09% 1.34% 0.97% 3.06% 2.31% $91 $83 $337 $265
---------------------------------------------------------------------------------------------------------------------------
Total Return 2.09% 1.34% 0.91% 3.00% 2.25% $90 $83 $332 $258
---------------------------------------------------------------------------------------------------------------------------
Asset Allocation 2.09% 1.34% 1.01% 3.10% 2.35% $91 $84 $341 $269
---------------------------------------------------------------------------------------------------------------------------
Equity Income 2.09% 1.34% 0.96% 3.05% 2.30% $91 $83 $336 $264
---------------------------------------------------------------------------------------------------------------------------
Investors 2.09% 1.34% 1.01% 3.10% 2.35% $91 $84 $341 $269
---------------------------------------------------------------------------------------------------------------------------
Value Equity 2.09% 1.34% 0.96% 3.05% 2.30% $91 $83 $336 $264
---------------------------------------------------------------------------------------------------------------------------
Rising Dividends 2.09% 1.34% 0.96% 3.05% 2.30% $91 $83 $336 $264
---------------------------------------------------------------------------------------------------------------------------
Diversified Mid-Cap 2.09% 1.34% 1.01% 3.10% 2.35% $91 $84 $341 $269
---------------------------------------------------------------------------------------------------------------------------
Managed Global 2.09% 1.34% 1.25% 3.34% 2.59% $94 $86 $363 $292
---------------------------------------------------------------------------------------------------------------------------
Large Cap Value 2.09% 1.34% 1.01% 3.10% 2.35% $91 $84 $341 $269
---------------------------------------------------------------------------------------------------------------------------
All Cap 2.09% 1.34% 1.01% 3.10% 2.35% $91 $84 $341 $269
---------------------------------------------------------------------------------------------------------------------------
Research 2.09% 1.34% 0.91% 3.00% 2.25% $90 $83 $332 $258
---------------------------------------------------------------------------------------------------------------------------
Capital Appreciation 2.09% 1.34% 0.96% 3.05% 2.30% $91 $83 $336 $264
---------------------------------------------------------------------------------------------------------------------------
Growth & Income 2.09% 1.34% 1.11% 3.20% 2.45% $92 $85 $350 $279
---------------------------------------------------------------------------------------------------------------------------
Capital Growth 2.09% 1.34% 1.05% 3.14% 2.39% $92 $84 $345 $273
---------------------------------------------------------------------------------------------------------------------------
Strategic Equity 2.09% 1.34% 0.96% 3.05% 2.30% $91 $83 $336 $264
---------------------------------------------------------------------------------------------------------------------------
Special Situations 2.09% 1.34% 1.11% 3.20% 2.45% $92 $85 $350 $279
---------------------------------------------------------------------------------------------------------------------------
Mid-Cap Growth 2.09% 1.34% 0.91% 3.00% 2.25% $90 $83 $332 $258
---------------------------------------------------------------------------------------------------------------------------
Small Cap 2.09% 1.34% 0.96% 3.05% 2.30% $91 $83 $336 $264
---------------------------------------------------------------------------------------------------------------------------
Growth 2.09% 1.34% 1.04% 3.13% 2.38% $92 $84 $344 $272
---------------------------------------------------------------------------------------------------------------------------
Real Estate 2.09% 1.34% 0.96% 3.05% 2.30% $91 $83 $336 $264
---------------------------------------------------------------------------------------------------------------------------
Hard Assets 2.09% 1.34% 0.96% 3.05% 2.30% $91 $83 $336 $264
---------------------------------------------------------------------------------------------------------------------------
Developing World 2.09% 1.34% 1.75% 3.84% 3.09% $99 $91 $407 $340
---------------------------------------------------------------------------------------------------------------------------
THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield 2.09% 1.34% 0.75% 2.84% 2.09% $89 $81 $317 $242
---------------------------------------------------------------------------------------------------------------------------
PIMCO StocksPLUS 2.09% 1.34% 0.65% 2.74% 1.99% $88 $80 $307 $232
---------------------------------------------------------------------------------------------------------------------------
THE WARBURG PINCUS TRUST
WP International 2.09% 1.34% 1.32% 3.41% 2.66% $94 $87 $369 $299
---------------------------------------------------------------------------------------------------------------------------
ING VARIABLE INSURANCE TRUST
ING Global Brand
Names 2.09% 1.34% 1.23% 3.32% 2.57% $93 $86 $361 $290
---------------------------------------------------------------------------------------------------------------------------
THE PRUDENTIAL SERIES FUND
Prudential Jennison 2.09% 1.34% 1.03% 3.12% 2.37% $91 $84 $343 $271
---------------------------------------------------------------------------------------------------------------------------
SP Jennison
International Growth 2.09% 1.34% 1.64% 3.73% 2.98% $98 $90 $398 $330
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
For the newly formed portfolios, the charges have been estimated. The "Total
Annual Investment Portfolio Charges" column above reflects current expense
reimbursements for applicable investment portfolios. For more detailed
information, see "Fees and Expenses" in the prospectus for the Contract.
108--- 6 VALUE PROFILE
<PAGE>
<PAGE>
6. TAXES
Under a qualified Contract, your premiums are generally pre-tax contributions
and accumulate on a tax-deferred basis. Premiums and earnings are generally
taxed as income when you make a withdrawal or begin receiving annuity payments,
presumably when you are in a lower tax bracket.
Under a non-qualified Contract, premiums are paid with after-tax dollars, and
any earnings will accumulate tax-deferred. You will be taxed on these earnings,
but not on premiums, when you withdraw them from the Contract.
For owners of most qualified Contracts, when you reach age 70 1/2 (or, in
some cases, retire), you will be required by federal tax laws to begin
receiving payments from your annuity or risk paying a penalty tax. In those
cases, we can calculate and pay you the minimum required distribution amounts
at your request.
If you are younger than 59 1/2 when you take money out, in most cases, you will
be charged a 10% federal penalty tax on the taxable earnings withdrawn.
7. WITHDRAWALS
You can withdraw your money at any time during the accumulation phase. You may
elect in advance to take systematic withdrawals which are described on page 9.
Withdrawals above the free withdrawal amount may be subject to a surrender
charge. We will apply a market value adjustment if you withdraw your money from
the fixed account more than 30 days before the applicable maturity date. Income
taxes and a penalty tax may apply to amounts withdrawn.
8. PERFORMANCE
The value of your Contract will fluctuate depending on the investment
performance of the portfolio(s) you choose. The following chart shows average
annual total return for each portfolio that was in operation for the entire year
of 1999. These numbers reflect the deduction of the mortality and expense risk
charge (based on the 5% Solution Enhanced Death Benefit), the asset-based
administrative charge, the annual contract fee and the maximum optional benefit
rider charge on a rider base that accumulates at 7%. If surrender charges were
reflected, they would have the effect of reducing performance. Please keep in
mind that past performance is not a guarantee of future results.
108--- 7 VALUE PROFILE
<PAGE>
<PAGE>
CALENDAR YEAR
INVESTMENT PORTFOLIO 1999
Managed by A I M Capital Management, Inc.
Capital Appreciation(1) 23.48%
Strategic Equity(2) 54.80%
Managed by Alliance Capital Management L.P.
Capital Growth(2) 24.39%
Managed by Baring International Investment Limited
Developing World(2) 60.17%
Global Fixed Income -9.48%
Hard Assets(2 22.21%
Managed by Capital Guardian Trust Company
Large Cap Value --
Managed Global(3) 61.79%
Small Cap(3) 49.21%
Managed by Eagle Asset Management, Inc.
Value Equity -0.43%
Managed by Fidelity Management & Research Company
Asset Allocation Growth --
Diversified Mid-Cap --
Managed by ING Investment Management, LLC
Limited Maturity Bond 0.18%
Liquid Asset 3.75%
Managed by Janus Capital Corporation
Growth(2) 76.49%
Growth and Income --
Special Situations --
Managed by Kayne Anderson Investment Management, LLC
Rising Dividends 14.79%
Managed by Massachusetts Financial Services Company
Mid-Cap Growth 77.41%
Research 23.07%
Total Return 2.41%
Managed by The Prudential Investment Corporation
Real Estate(4) -4.71%
Managed by Salomon Brothers Management, Inc.
All Cap --
Investors --
Managed by T. Rowe Price Associates, Inc.
Equity Income(2) -1.66%
Fully Managed 5.92%
Managed By Pacific Investment Management Company
PIMCO High Yield Bond 2.05%
PIMCO StocksPLUS Growth and Income 18.73%
Managed by Credit Suisse Asset Management, LLC
International Equity 52.01%
Managed by ING Investment Management Advisors B.V.
ING Global Brand Names --
Managed by Jennison Associates LLC
Prudential Jennison --
SP Jennison International Growth --
(1) Prior to April 1, 1999, a different firm managed the Portfolio.
(2) Prior to March 1, 1999, a different firm managed the Portfolio.
(3) Prior to February 1, 2000, a different firm managed the Portfolio.
(4) Prior to May 1, 2000, a different firm managed the Portfolio.
108--- 8 VALUE PROFILE
<PAGE>
<PAGE>
9. DEATH BENEFIT
The death benefit is payable when the first of the following persons dies: the
contract owner, joint owner, or annuitant (if a contract owner is not an
individual). Assuming you are the contract owner, if you die during the
accumulation phase, your beneficiary will receive a death benefit unless the
beneficiary is your surviving spouse and elects to continue the Contract. The
death benefit paid depends on the death benefit you have chosen. The death
benefit value is calculated at the close of the business day on which we receive
written notice and due proof of death, as well as required claim forms, at our
Customer Service Center. If your beneficiary elects to delay receipt of the
death benefit until a date after the time of your death, the amount of the
benefit payable in the future may be affected. If you die after the annuity
start date and you are the annuitant, your beneficiary will receive the death
benefit you chose under the annuity option then in effect.
The death benefit may be subject to certain mandatory distribution rules
required by federal tax law.
THE FOLLOWING IS A DESCRIPTION OF THE DEATH BENEFIT OPTIONS FOR CONTRACT OWNERS
PURCHASING CONTRACTS AFTER JANUARY __, 2001. IF YOU PURCHASED YOUR CONTRACT
PRIOR TO THAT DATE, PLEASE SEE APPENDIX D FOR A DESCRIPTION OF THE CALCULATION
OF DEATH BENEFITS APPLICABLE TO YOUR CONTRACT.
You may choose one of the following Death Benefits: (a) the Standard Death
Benefit, (b) the 5% Solution Enhanced Death Benefit or (c) the Annual Ratchet
Enhanced Death Benefit. The 5% Solution Enhanced Death Benefit and the Annual
Ratchet Enhanced Death Benefit are available only if the contract owner or the
annuitant (if the contract owner is not an individual) is not more than 79 years
old at the time of purchase. The 5% Solution and Annual Ratchet Enhanced Death
Benefits may not be available where a Contract is held by joint owners.
Base Death Benefit. We use the Base Death Benefit to help determine the minimum
death benefit payable under each of the Enhanced Death Benefit options described
below. You do not elect the Base Death Benefit. The Base Death Benefit is equal
to the greater of:
1) the contract value; and
2) the cash surrender value.
The STANDARD DEATH BENEFIT equals the SUM of 1) and 2), where:
1) is the contract value allocated to Special Funds; and
2) is the Standard Minimum Guaranteed Death Benefit for amounts
allocated to non-Special Funds as further described in the
prospectus.
ENHANCED DEATH BENEFIT OPTIONS. Under the Enhanced Death Benefit options, if you
die before the annuity start date, your beneficiary will receive the greater of
the Base Death Benefit and the Enhanced Death Benefit option elected. For
purposes of calculating the Enhanced Death Benefits, certain investment
portfolios and the Fixed Account are designated as "Special Funds". In addition
to the Fixed Account, t he investment portfolios designated currently as Special
Funds are the Liquid Asset Portfolio and the Limited Maturity Bond Portfolio.
Selecting a Special Fund may limit or reduce the enhanced death benefit. You
will automatically receive the Standard Death Benefit unless you elect one of
the other enhanced death benefit options. The enhanced death benefit options are
available only at the time you purchase your Contract. The enhanced death
benefit options are not available where a Contract is owned by joint owners.
Once you choose a death benefit, it cannot be changed. We may in the future stop
or suspend offering any of the enhanced death benefit options to new Contracts.
A change in ownership of the Contract may affect the amount of the death benefit
and the enhanced death benefit. The MGWB rider may also affect the death
benefit. See "Minimum Guaranteed Withdrawal Benefit (MGWB) Rider -- Death
Benefit during Automatic Periodic Benefit Status."
Each of the enhanced death
benefit options is based on a minimum guaranteed death benefit for that option.
Please see "Death Benefit Choices" in the prospectus for details on the
calculation of the minimum guaranteed death benefit for each enhanced death
benefit and further details on the effect of withdrawals and transfers on the
calculation of the enhanced death benefits.
108--- 9 VALUE PROFILE
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The ANNUAL RATCHET ENHANCED DEATH BENEFIT equals the greater of:
1) the Standard Death Benefit; and
2) the sum of the contract value allocated to Special Funds and the
Annual Ratchet Minimum Guaranteed Death Benefit for amounts
allocated to Non-Special Funds as further described in the
prospectus.
The 5% SOLUTION ENHANCED DEATH BENEFIT, equals the GREATER of:
1) the Standard Death Benefit; and
2) the sum of the contract value allocated to Special Funds and the 5%
Solution Minimum Guaranteed Death Benefit for amounts allocated to
Non-Special Funds as further described in the prospectus.
Note: In all cases described above, the amount of the death benefit could be
reduced by premium taxes owed and withdrawals not previously deducted.
The enhanced death benefits may not be available in all states.
We may, with 30 days notice to you, designate any investment portfolio as a
Special Fund on existing contracts with respect to new premiums added to such
investment portfolio and also with respect to new transfers to such investment
portfolio. Keep in mind that selecting a Special Fund may limit or reduce the
Enhanced Death Benefit.
For the period during which a portion of the contract value is allocated to a
Special Fund, we may, at our discretion, reduce the mortality and expense risk
charge attributable to that portion of the contract value. The reduced mortality
and expense risk charge will be applicable only during the period contract value
is allocated to a Special Fund.
10. OTHER INFORMATION
FREE LOOK. If you cancel the Contract within 10 days after you receive it,
you will receive a refund of the adjusted contract value. We determine your
contract value at the close of business on the day we receive your written
refund request. For purposes of the refund during the free look period, (i) we
adjust your contract value for any market value adjustment (if you have invested
in the fixed account), and (ii) then we include a refund of any charges deducted
from your contract value. Because of the market risks associated with investing
in the portfolios and the potential positive or negative effect of the market
value adjustment, the contract value returned may be greater or less than the
premium payment you paid. Some states require us to return to you the amount of
the paid premium (rather than the contract value in which case you will not be
subject to investment risk during the free look period. Also, in some states,
you may be entitled to a longer free look period.
TRANSFERS AMONG INVESTMENT PORTFOLIOS AND THE FIXED ACCOUNT. You can make
transfers among your investment portfolios and your investment in the fixed
account as frequently as you wish without any current tax implications. The
minimum amount for a transfer is $100. There is currently no charge for
transfers, and we do not limit the number of transfers. The Company may, in the
future, charge a $25 fee for any transfer after the twelfth transfer in a
contract year or limit the number of transfers allowed. Keep in mind that if you
transfer or otherwise withdraw your money from the fixed account more than 30
days before the applicable maturity date, we will apply a market value
adjustment. A market value adjustment could increase or decrease your contract
value and/or the amount you transfer or withdraw. Keep in mind that transfers
between Special Funds and Non-Special Funds will impact your death benefit and
benefits under an optional benefit rider, if any. Also, a transfer to a
Restricted Fund will not be permitted to the extent that it would increase the
contract value in the Restricted Fund to more than the applicable limits
following the transfer. Transfers from Restricted Funds are not limited. If the
result of multiple transfers is to lower the percentage of total contract value
in the Restricted Fund, the reallocation will be permitted even if the
percentage of contract value in the Restricted Fund is greater than the limit.
108--- 10 VALUE PROFILE
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NO PROBATE. In most cases, when you die, the person you choose as your
beneficiary will receive the death benefit without going through probate. See
"Federal Tax Considerations -- Taxation of Death Benefit Proceeds" in the
prospectus for the Contract.
OPTIONAL RIDERS. Subject to state availability, you may purchase one of
three optional benefit riders for an additional charge. You may not add more
than one of these three riders to your Contract. There is a separate charge for
each rider. Once elected, the riders generally may not be cancelled. This means
once added the rider may not be removed and charges will be assessed regardless
of the performance of your Contract.
The following describes the optional riders for contract owners purchasing
Contracts after January __, 2001. If you purchased your Contract prior to that
date, please see Appendix E for a description of the calculation of the optional
rider benefits applicable under your Contract.
Minimum Guaranteed Accumulation Benefit (MGAB) Rider. The MGAB is an
optional benefit which offers you the ability to receive a one-time
adjustment to your contract value in the event your contract value on a
specified date is below the MGAB rider guarantee. When added at issue, the
MGAB rider guarantees that your contract value will at least equal your
initial premium payment at the end of ten years, or, at least equal two
times your initial premium payment at the end of twenty years, depending on
the waiting period you select, reduced pro rata for withdrawals and certain
transfers. The MGAB rider offers a ten-year option and a twenty-year
option, of which you may purchase only one. Investment in Special Funds may
limit or reduce the benefits provided under the rider. As is more fully
described in the prospectus, rider benefits are generally based on the
contract value for allocations to Special Funds. The MGAB rider may offer
you protection in the event of a lower contract value that may result from
unfavorable investment performance of your Contract. There are exceptions,
conditions, eligibility requirements, and important considerations
associated with the MGAB rider. See "Optional Riders" in the prospectus for
more complete information.
Minimum Guaranteed Income Benefit (MGIB) Rider. The MGIB rider is an
optional benefit which guarantees a minimum amount of income that will be
available to you upon annuitization, regardless of fluctuating market
conditions. Ordinarily, the amount of income that will be available to you
upon annuitization is based upon your contract value, the annuity option
you selected and the guaranteed or then current income factors in effect.
If you purchase the MGIB rider, the minimum amount of income that will be
available to you upon annuitization on the MGIB Benefit Date is the
greater of the amounts that are ordinarily available to you under your
Contract and the MGIB annuity benefit, which is based on your MGIB Base,
the MGIB annuity option you selected and the MGIB guaranteed income
factors specified in your rider. Your MGIB Base generally depends on the
amount of premiums you pay during the first five contract years after you
purchase the rider, and when you pay the premiums, accumulated at the MGIB
rate, less adjustments for withdrawals and transfers. Investment in
Special Funds may limit or reduce the benefits provided under the rider.
As is more fully described in the prospectus, rider benefits are generally
based on the contract value for allocations to Special Funds. There are
exceptions, conditions, eligibility requirements, and important
considerations associated with the MGIB rider. You should read the
prospectus for more complete information.
Minimum Guaranteed Withdrawal Benefit (MGWB) Rider. The MGWB rider is
an optional benefit which guarantees that you will receive annual periodic
payments, which, when added together, equal all premium payments paid
during the first two contract years, less adjustments for any prior
withdrawals and adjusted by transfers to Special Funds. If your contract
value is reduced to zero, your periodic payments will be 7% of your
Eligible Payment Amount every year. (Of course, any applicable income and
penalty taxes will apply to amounts withdrawn.) Your original Eligible
Payment Amount is your premium payments received during the first two
contract years. Withdrawals that you make in excess of the above periodic
payment amount may substantially reduce the guarantee. Investment in
Special Funds may limit or reduce the benefits provided under the rider.
As is more fully described in the prospectus, rider benefits are generally
based on the contract value for allocations to Special Funds. There are
exceptions, conditions, eligibility requirements, and important
considerations associated with the MGWB rider. You should read the
prospectus for more complete information.
108--- 11 VALUE PROFILE
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ADDITIONAL FEATURES. This Contract has other features you may be interested in.
These include:
Dollar Cost Averaging. This is a program that allows you to invest a
fixed amount of money in the investment portfolios each month. It may give
you a lower average cost per unit over time than a single one-time
purchase. Dollar cost averaging requires regular investments regardless of
fluctuating price levels, and does not guarantee profits or prevent losses
in a declining market. This option is currently available only if you have
$1,200 or more in the Limited Maturity Bond or the Liquid Asset investment
portfolios or in the fixed account with either a 6-month or 1-year
guaranteed interest period. Transfers from the fixed account under this
program will not be subject to a market value adjustment. If you invest in
Restricted Funds, your ability to dollar cost average may be limited.
Please see "Transfers Among Your Investments" in the prospectus for more
complete information.
Systematic Withdrawals. During the accumulation phase, you can arrange
to have money sent to you at regular intervals throughout the year. Within
limits these withdrawals will not result in any surrender charge.
Withdrawals from your money in the fixed account under this program are
not subject to a market value adjustment. Of course, any applicable income
and penalty taxes will apply on amounts withdrawn. If you invest in
Restricted Funds, your systematic withdrawals may be affected. Please see
"Withdrawals" in the prospectus for more complete information.
Automatic Rebalancing. If your contract value is $10,000 or more, you
may elect to have the Company automatically readjust the money between
your investment portfolios periodically to keep the blend you select.
Investments in the fixed account are not eligible for automatic
rebalancing. If you invest in Restricted Funds, automatic rebalancing may
be affected. Please see "Transfers Among Your Investments" in the
prospectus for more complete information.
11. INQUIRIES
If you need more information after reading this prospectus, please contact us
at:
CUSTOMER SERVICE CENTER
P.O. BOX 2700
WEST CHESTER, PA 19380
(800) 366-0066
or your registered representative.
108--- 12 VALUE PROFILE
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VAL-108205
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GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B OF GOLDEN AMERICAN LIFE INSURANCE COMPANY
DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY PROSPECTUS
GOLDENSELECT VALUE
-------------------------------------------------------------------------------
, 2000
This prospectus describes GoldenSelect Value, a group and individual
deferred variable annuity contract (the "Contract") offered by Golden
American Life Insurance Company ("Golden American," the "Company," "we" or
"our"). The Contract is available in connection with certain retirement
plans that qualify for special federal income tax treatment ("qualified
Contracts") as well as those that do not qualify for such treatment
("non-qualified Contracts").
The Contract provides a means for you to invest your premium payments
in one or more of 32 mutual fund investment portfolios. You may also
allocate premium payments to our Fixed Account with guaranteed interest
periods. Your contract value will vary daily to reflect the investment
performance of the investment portfolio(s) you select and any interest
credited to your allocations in the Fixed Account. The investment
portfolios available under your Contract and the portfolio managers are
listed on the back of this cover.
We will credit your Fixed Interest Allocation(s) with a fixed rate of
interest. We set the interest rates periodically. We will not set the
interest rate to be less than a minimum annual rate of 3%. You may choose
guaranteed interest periods of 6 months, and 1, 3, 5, 7 and 10 years. The
interest earned on your money as well as your principal is guaranteed as
long as you hold them until the maturity date. If you take your money out
from a Fixed Interest Allocation more than 30 days before the applicable
maturity date, we will apply a market value adjustment ("Market Value
Adjustment"). A Market Value Adjustment could increase or decrease your
contract value and/or the amount you take out. You bear the risk that you
may receive less than your principal if we take a Market Value Adjustment.
For Contracts sold in some states, not all Fixed Interest Allocations or
subaccounts are available. You have a right to return a Contract within 10
days after you receive it for a refund of the adjusted contract value
(which may be more or less than the premium payments you paid), or if
required by your state, the original amount of your premium payment. Longer
free look periods apply in some states and in certain situations.
This prospectus provides information that you should know before
investing and should be kept for future reference. A Statement of
Additional Information ("SAI"), dated, 2000, has been filed with the
Securities and Exchange Commission ("SEC"). It is available without charge
upon request. To obtain a copy of this document, write to our Customer
Service Center at P.O. Box 2700, West Chester, Pennsylvania 19380 or call
(800) 366-0066, or access the SEC's website (http://www.sec.gov). The table
of contents of the SAI is on the last page of this prospectus and the SAI
is made part of this prospectus by reference.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. AN INVESTMENT IN THE
SUBACCOUNTS THROUGH THE GCG TRUST, THE PIMCO VARIABLE INSURANCE TRUST, THE
WARBURG PINCUS TRUST, ING VARIABLE INSURANCE TRUST OR THE PRUDENTIAL SERIES
FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED BY ANY BANK OR
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
THIS PROSPECTUS MUST BE ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE GCG
TRUST, THE PIMCO VARIABLE INSURANCE TRUST, THE WARBURG PINCUS TRUST, ING
VARIABLE INSURANCE TRUST AND THE PRUDENTIAL SERIES FUND.
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THE INVESTMENT PORTFOLIOS AND THE MANAGERS ARE LISTED ON THE BACK OF THIS COVER.
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VAL-108---
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The investment portfolios available under your Contract and the
portfolio managers are:
A I M CAPITAL MANAGEMENT, INC.
Capital Appreciation Series
Strategic Equity Series
ALLIANCE CAPITAL MANAGEMENT L. P.
Capital Growth Series
BARING INTERNATIONAL INVESTMENT LIMITED (AN AFFILIATE)
Developing World Series
Global Fixed Income Series
Hard Assets Series
CAPITAL GUARDIAN TRUST COMPANY
Large Cap Value Series
Managed Global Series
Small Cap Series
EAGLE ASSET MANAGEMENT, INC
Value Equity Series
FIDELITY MANAGEMENT & RESEARCH COMPANY
Asset Allocation Growth Series
Diversified Mid-Cap Series
ING INVESTMENT MANAGEMENT, LLC (AN AFFILIATE)
Limited Maturity Bond Series
Liquid Asset Series
JANUS CAPITAL CORPORATION
Growth Series
Growth and Income Series
Special Situations Series
KAYNE ANDERSON INVESTMENT MANAGEMENT, LLC
Rising Dividends Series
MASSACHUSETTS FINANCIAL SERVICES COMPANY
Mid-Cap Growth Series
Research Series
Total Return Series
THE PRUDENTIAL INVESTMENT CORPORATION
Real Estate Series
SALOMON BROTHERS ASSET MANAGEMENT, INC
All Cap Series
Investors Series
T. ROWE PRICE ASSOCIATES, INC.
Equity Income Series
Fully Managed Series
PACIFIC INVESTMENT MANAGEMENT COMPANY
PIMCO High Yield Bond Portfolio
PIMCO StocksPLUS Growth and Income Portfolio
CREDIT SUISSE ASSET MANAGEMENT, LLC
International Equity Portfolio
ING INVESTMENT MANAGEMENT ADVISORS B.V. (AN AFFILIATE)
ING Global Brand Names Fund
JENNISON ASSOCIATES LLC
Prudential Jennison Portfolio
SP Jennison International Growth Portfolio
The above mutual fund investment portfolios are purchased and held by
corresponding divisions of our Separate Account B. We refer to the
divisions as "subaccounts" and the money you place in the Fixed Account's
guaranteed interest periods as "Fixed Interest Allocations" in this
prospectus.
VAL-108---
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TABLE OF CONTENTS
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PAGE
Index of Special Terms......................................... 1
Fees and Expenses.............................................. 2
Performance Information........................................ 9
Accumulation Unit........................................... 9
Net Investment Factor....................................... 9
Condensed Financial Information............................. 9
Financial Statements........................................ 9
Performance Information..................................... 9
Golden American Life Insurance Company......................... 10
The Trusts..................................................... 10
Golden American Separate Account B............................. 11
The Investment Portfolios...................................... 12
Investment Objectives....................................... 12
Investment Management Fees.................................. 15
Restricted Funds............................................
The Fixed Interest Allocation.................................. 16
Selecting a Guaranteed Interest Period...................... 16
Guaranteed Interest Rates................................... 17
Transfers from a Fixed Interest Allocation.................. 17
Withdrawals from a Fixed Interest Allocation................ 17
Market Value Adjustment..................................... 18
The Annuity Contract........................................... 19
Contract Date and Contract Year............................. 19
Annuity Start Date.......................................... 19
Contract Owner.............................................. 19
Annuitant................................................... 20
Beneficiary................................................. 20
Purchase and Availability of the Contract................... 20
Crediting of Premium Payments............................... 21
Administrative Procedures................................... 22
Contract Value.............................................. 22
Cash Surrender Value........................................ 22
Surrendering to Receive the Cash Surrender Value............ 23
The Subaccounts............................................. 23
Addition, Deletion or Substitution of Subaccounts and
Other Changes............................................ 23
The Fixed Account........................................... 23
Optional Riders...................................................
Rider Date..................................................
Special Funds...............................................
No Cancellation.............................................
Termination.................................................
Minimum Guaranteed Accumulation Benefit Rider...............
Minimum Guaranteed Income Benefit Rider.....................
Minimum Guaranteed Withdrawal Benefit Rider.................
Other Contracts............................................. 23
Other Important Provisions.................................. 24
Withdrawals.................................................... 24
Regular Withdrawals......................................... 24
108--- i VALUE PROFILE
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TABLE OF CONTENTS (CONTINUED)
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PAGE
Systematic Withdrawals...................................... 24
IRA Withdrawals............................................. 26
Transfers Among Your Investments............................... 26
Transfers by Third Parties.................................. 28
Dollar Cost Averaging....................................... 28
Automatic Rebalancing....................................... 28
Death Benefit Choices.......................................... 28
Death Benefit During the Accumulation Phase................. 28
Standard Death Benefit......................................
Enhanced Death Benefits.....................................
Death Benefit During the Income Phase....................... 28
Continuation After Death- Spouse..................................
Continuation After Death- Non-Spouse..............................
Required Distributions upon Contract Owner's Death.......... 28
Charges and Fees............................................... 29
Charge Deduction Subaccount................................. 29
Charges Deducted from the Contract Value.................... 29
Surrender Charge............................................ 29
Waiver of Surrender Charge for Extended Medical Care........ 30
Free Withdrawal Amount...................................... 30
Surrender Charge for Excess Withdrawals..................... 30
Premium Taxes............................................... 30
Administrative Charge....................................... 30
Transfer Charge............................................. 30
Charges Deducted from the Subaccounts....................... 31
Mortality and Expense Risk Charge........................... 31
Asset-Based Administrative Charge........................... 31
Optional Rider Charges......................................
Trust Expenses.............................................. 31
The Annuity Options............................................ 31
Annuitization of Your Contract.............................. 31
Selecting the Annuity Start Date............................ 32
Frequency of Annuity Payments............................... 32
The Annuity Options......................................... 32
Income for a Fixed Period................................... 32
Income for Life with a Period Certain....................... 32
Joint Life Income........................................... 33
Annuity Plan................................................ 33
Payment When Named Person Dies.............................. 33
Other Contract Provisions...................................... 33
Reports to Contract Owners.................................. 33
Suspension of Payments...................................... 33
In Case of Errors in Your Application....................... 33
Assigning the Contract as Collateral........................ 34
Contract Changes-Applicable Tax Law......................... 34
Free Look................................................... 34
Group or Sponsored Arrangements............................. 34
Selling the Contract........................................ 34
Other Information.............................................. 35
Voting Rights............................................... 35
108--- ii VALUE PROFILE
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TABLE OF CONTENTS (CONTINUED)
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PAGE
State Regulation............................................ 35
Legal Proceedings........................................... 35
Legal Matters............................................... 35
Experts..................................................... 36
Federal Tax Considerations..................................... 36
More Information About Golden American......................... 41
Financial Statements of Golden American Life Insurance
Company..................................................... 61
Statement of Additional Information
Table of Contents........................................... 91
Appendix A
Condensed Financial Information............................. A1
Appendix B
Market Value Adjustment Examples............................ B1
Appendix C
Surrender Charge for Excess Withdrawals Example............. C1
Appendix D
Death Benefits for Existing Contract Owners................. D1
108--- iii VALUE PROFILE
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INDEX OF SPECIAL TERMS
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The following special terms are used throughout this prospectus. Refer to the
page(s) listed for an explanation of each term:
SPECIAL TERM PAGE
Accumulation Unit 9
Annuitant 20
Annuity Start Date 19
Cash Surrender Value 22
Contract Date 19
Contract Owner 19
Contract Value 22
Contract Year 19
Fixed Interest Allocation 16
Free Withdrawal Amount 30
Market Value Adjustment 18
Net Investment Factor 9
Restricted Fund 28
Rider Date
5% Solution Enhanced Death Benefit
Special Fund
Standard Death Benefit
The following terms as used in this prospectus have the same or substituted
meanings as the corresponding terms currently used in the Contract:
TERM USED IN THIS PROSPECTUS CORRESPONDING TERM USED IN THE CONTRACT
Accumulation Unit Value Index of Investment Experience
Annuity Start Date Annuity Commencement Date
Contract Owner Owner or Certificate Owner
Contract Value Accumulation Value
Transfer Charge Excess Allocation Charge
Fixed Interest Allocation Fixed Allocation
Free Look Period Right to Examine Period
Guaranteed Interest Period Guarantee Period
Subaccount(s) Division(s)
Net Investment Factor Experience Factor
Regular Withdrawals Conventional Partial Withdrawals
Withdrawals Partial Withdrawals
VAL-108--- 1
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FEES AND EXPENSES
--------------------------------------------------------------------------------
CONTRACT OWNER TRANSACTION EXPENSES*
Surrender Charge:
COMPLETE YEARS ELAPSED 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7+
SINCE PREMIUM PAYMENT | | | | | | |
| | | | | | |
SURRENDER CHARGE 6% | 6% | 6% | 5% | 4% | 3% | 1% | 0%
Transfer Charge................................... None**
* If you invested in a Fixed Interest Allocation, a Market Value
Adjustment may apply to certain transactions. This may increase or
decrease your contract value and/or your transfer or surrender
amount.
** We may in the future charge $25 per transfer if you make more than
12 transfers in a contract year.
ANNUAL CONTRACT ADMINISTRATIVE CHARGE*
Administrative Charge............................. $0
(We may in the future charge an annual contract administrative charge of
$30 or 2% of your contract value, whichever is less.)
* We deduct this charge on each contract anniversary and on surrender.
SEPARATE ACCOUNT ANNUAL CHARGES*
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STANDARD ENHANCED DEATH BENEFITS
DEATH BENEFIT ANNUAL RATCHET 5% SOLUTION
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Mortality & Expense Risk Charge 0.85% 1.00% 1.15%
Asset-Based Administrative Charge 0.15% 0.15% 0.15%
Total 1.00% 1.15% 1.30%
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* As a percentage of average daily assets in each subaccount. The
Separate Account Annual Charges are deducted daily.
OPTIONAL RIDER CHARGES*
Minimum Guaranteed Accumulation Benefit rider:
Waiting Period Quarterly Charge
-------------- ----------------
10 Year.......... 0.125% of the MGAB Charge Base(1) (0.50% annually)
20 Year.......... 0.125% of the MGAB Charge Base (0.50% annually)
Minimum Guaranteed Income Benefit rider:
MGIB Rate Quarterly Charge
-------------- ----------------
7%............. 0.125% of the MGIB Charge Base(2) (0.50% annually)
Minimum Guaranteed Withdrawal Benefit rider:
Quarterly Charge
----------------
0.125% of the MGWB Eligible Payment Amount(3) (0.50% annually)
* We deduct optional rider charges from the subaccounts in which you
are invested on each quarterly contract anniversary and pro rata
on termination of the Contract; if the value in the subaccounts is
insufficient, the optional rider charges will be deducted from the
Fixed Interest Allocation nearest maturity.
VAL-108--- 2
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(1) The MGAB Charge Base is the total of premiums added during the two
year period commencing on the rider date if you purchase the rider on
the contract date, or, your contract value on the rider date plus
premiums added during the two year period commencing on the rider
date if you purchased the rider after the contract date, reduced pro
rata for all withdrawals taken while the MGAB rider is in effect, and
reduced pro rata for transfers made during the three year period
before the MGAB Benefit Date. The MGAB Charge Base is tracked
separately for Special and Non-Special Funds, based on initial
allocation of premium (or contract value), subsequent allocation of
eligible premium, withdrawals and transfers. Withdrawals and
transfers may reduce the Charge Base by more than the amount
withdrawn or transferred.
(2) The MGIB Charge Base generally depends on the amount of premiums you
pay during the first five contract years after you purchase the
rider, when you pay the premiums, and less a pro rata deduction for
any withdrawal made while the MGIB rider is in effect. The MGIB
Charge Base is tracked separately for Special and Non-Special Funds,
based on initial allocation of premium (or contract value),
subsequent allocation of eligible premium, withdrawals and transfers.
Withdrawals and transfers between Special and Non-Special Funds may
reduce the MGIB Charge Base by more than the amount withdrawn or
transferred.
(3) The MGWB Eligible Payment Amount is (i) the total of premiums paid
during the 2-year period commencing on the rider date if you purchase
the rider on the contract date; or (ii) your contract value on the
rider date plus subsequent premiums received during the two-year
period commencing on the rider date.
VAL-108--- 3
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THE GCG TRUST ANNUAL EXPENSES (as a percentage of the average daily net assets
of a portfolio):
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MANAGEMENT OTHER TOTAL
PORTFOLIO FEE(1) EXPENSES(2) EXPENSES(3)
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Liquid Asset 0.56% 0.00% 0.56%
Limited Maturity Bond 0.56% 0.01% 0.57%
Global Fixed Income 1.60% 0.00% 1.60%
Fully Managed 0.96% 0.01% 0.97%
Total Return 0.91% 0.00% 0.91%
Asset Allocation Growth 1.00% 0.01% 1.01%
Equity Income 0.96% 0.00% 0.96%
Investors 1.00% 0.01% 1.01%
Value Equity 0.96% 0.00% 0.96%
Rising Dividends 0.96% 0.00% 0.96%
Diversified Mid-Cap 1.00% 0.01% 1.01%
Managed Global 1.25% 0.00% 1.25%
Large Cap Value 1.00% 0.01% 1.01%
All Cap 1.00% 0.01% 1.01%
Research 0.91% 0.00% 0.91%
Capital Appreciation 0.96% 0.00% 0.96%
Growth and Income 1.10% 0.01% 1.11%
Capital Growth 1.04% 0.01% 1.05%
Strategic Equity 0.96% 0.00% 0.96%
Special Situations 1.10% 0.01% 1.11%
Mid-Cap Growth 0.91% 0.00% 0.91%
Small Cap 0.96% 0.00% 0.96%
Growth 1.04% 0.00% 1.04%
Real Estate 0.96% 0.00% 0.96%
Hard Assets 0.96% 0.00% 0.96%
Developing World 1.75% 0.00% 1.75%
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(1) Fees decline as the total assets of certain combined portfolios
increase. See the prospectus for the GCG Trust for
more information.
(2) Other expenses generally consist of independent trustees fees and
certain expenses associated with investing in international
markets. Other expenses are based on actual expenses for the year
ended December 31, 1999, except for (i) portfolios that commenced
operations in 2000; and (ii) newly formed portfolios where the
charges have been estimated.
(3) Total Expenses are based on actual expenses for the fiscal year ended
December 31, 1999.
VAL-108--- 4
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THE PIMCO VARIABLE INSURANCE TRUST ANNUAL EXPENSES (as a percentage of the
average daily net assets of a portfolio):
--------------------------------------------------------------------------
MANAGEMENT OTHER TOTAL
PORTFOLIO FEE(1) EXPENSES(1) EXPENSES(1)
--------------------------------------------------------------------------
PIMCO High Yield Bond 0.25% 0.50% 0.75%
PIMCO StocksPLUS Growth and Income 0.40% 0.25% 0.65%
--------------------------------------------------------------------------
(1) PIMCO has contractually agreed to reduce total annual portfolio
operating expenses to the extent they would exceed, due to the
payment of organizational expenses and Trustees' fees, 0.65% and
0.75% for the High Yield Bond and the StocksPLUS Growth and Income
Portfolios, respectively, of average daily net assets. Without such
reductions, total annual operating expenses for the fiscal year
ended December 31, 1999 would have remained unchanged for both
Portfolios. Under the Expense Limitation Agreement, PIMCO may
recoup any such waivers and reimbursements in future periods, not
exceeding three years, provided total expenses, including such
recoupment, do not exceed the annual expense limit. The fees
expressed are restated as of April 1, 2000.
THE WARBURG PINCUS TRUST ANNUAL EXPENSES (as a percentage of the average daily
net assets of the portfolio):
---------------------------------------------------------------------------
MANAGEMENT OTHER TOTAL
PORTFOLIO FEE EXPENSES EXPENSES(1)
---------------------------------------------------------------------------
International Equity 1.00% 0.32% 1.32%
---------------------------------------------------------------------------
(1) Total expenses are based on actual expenses for the fiscal year ended
December 31, 1999.
ING VARIABLE INSURANCE TRUST ANNUAL EXPENSES (as a percentage of the average
daily net assets of the portfolio):
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
OTHER TOTAL EXPENSES
MANAGEMENT 12B-1 FEE (3) EXPENSES AFTER FEE WAIVER
FEE AFTER AFTER AFTER EXPENSE AND EXPENSE
PORTFOLIO FEE WAIVER(1) (2) FEE WAIVER REIMBURSEMENT(1) (2) REIMBURSEMENT(1)(2)
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ING Global Brand Names 0.30% 0.15% 0.78% 1.23%
-------------------------------------------------------------------------------------------------------
</TABLE>
(1) Since the portfolio had not commenced operations as of December 31,
1999, expenses as shown are based on estimates of the portfolio's
operating expenses for the portfolio's first fiscal year.
(2) ING Mutual Funds Management Co. LLC, the investment manager, has
entered into an expense limitation contract with the portfolio,
under which it will limit expenses of the portfolio as shown,
excluding interest, taxes, brokerage, and extraordinary expenses
through December 31, 2000. Fee waiver and/or reimbursements by the
investment manager may vary in order to achieve such contractually
obligated Total Expenses. Without this contract, and based on
estimates for the fiscal year ending December 31, 2000, total
expenses are estimated to be 2.03% for the portfolio.
(3) Pursuant to a Plan of Distribution adopted by the portfolio under
Rule 12b-1 under the Investment Company Act of 1940, the portfolio
pays its distributor an annual fee of up to 0.25% of average daily
net assets attributable to portfolio shares. The distribution fee
may be used by the distributor for the purpose of financing any
activity which is primarily intended to result in the sale of
shares of the portfolio. For more information see the portfolio's
Statement of Additional Information.
VAL-108--- 5
<PAGE>
<PAGE>
THE PRUDENTIAL SERIES FUND ANNUAL EXPENSES (as a percentage of the average daily
net assets of the portfolio):
------------------------------------------------------------------------------
MANAGEMENT OTHER TOTAL
PORTFOLIO FEE 12B-1 FEE(1) EXPENSES(2) EXPENSES(2)
------------------------------------------------------------------------------
Prudential Jennison 0.60% 0.25% 0.18% 1.03%
SP Jennison International
Growth 0.85% 0.25% 0.54% 1.64%
------------------------------------------------------------------------------
(1) The 12b-1 fees for the Prudential Jennison Portfolio and SP
Jennison International Growth Portfolio are imposed to enable the
portfolios to recover certain sales expenses, including
compensation to broker-dealers, the cost of printing prospectuses
for delivery to prospective investors and advertising costs for
each portfolio. Over a long period of time, the total amount of
12b-1 fees paid may exceed the amount of sales charges imposed by
the product.
(2) Since the Prudential Jennison Portfolio and SP Jennison
International Portfolio had not commenced operations as of December
31, 1999, expenses as shown are based on estimates of the
portfolio's operating expenses for the portfolio's first fiscal
year.
The purpose of the foregoing tables is to help you understand the various costs
and expenses that you will bear directly and indirectly. See the prospectuses of
the GCG Trust, the PIMCO Variable Insurance Trust, the Warburg Pincus Trust, the
ING Variable Insurance Trust, and the Prudential Series Fund for additional
information on management or advisory fees and in some cases other portfolio
expenses.
Premium taxes (which currently range from 0% to 3.5% of premium payments) may
apply, but are not reflected in the tables above or in the examples below.
EXAMPLES:
The following four examples are designed to show you the expenses you would pay
on a $1,000 investment, that earns 5% annually. Each example assumes election of
the 5% Solution Enhanced Death Benefit. The examples reflect the deduction of a
mortality and expense risk charge, an asset-based administrative charge, and the
annual contract administrative charge as an annual charge of 0.05% of assets
(based on an average contract value of $77,000). In addition, Examples 1 and 2
assume you elected an optional benefit rider with the highest charge 0.75%
annually where the rider base is equal to the initial premium and increases by
7% annually, and assume the rider charge is assessed each quarter on a base
equal to the hypothetical $1,000 premium increasing at 7% per year. The annual
charge of 0.75% results from the assumption of a 7% annual increase in the rider
base but only a 5% earnings increase in the contract value before expenses.
Thus, 0.75% represents an annual charge over the 10-year period which is
equivalent to an increasing charge of 0.125% per quarter over the same period.
If the Standard Death Benefit, or the Annual Ratchet Enhanced Death Benefit is
elected instead of the 5% Solution Enhanced Death Benefit used in the examples,
the actual expenses will be less than those represented in the examples. Note
that surrender charges may apply if you choose to annuitize your Contract within
the first 5 contract years, and under certain circumstances, within the first 9
contract years. Thus, in the event you annuitize your Contract under
circumstances which require a surrender charge, you should refer to Examples 1
and 3 below which assume applicable surrender charges.
VAL-108--- 6
<PAGE>
<PAGE>
Example 1:
If you surrender your Contract at the end of the applicable time period and
elected an optional benefit rider with the highest charge, you would pay the
following expenses for each $1,000 invested:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
THE GCG TRUST
Liquid Asset $87 $142 $181 $298
Limited Maturity Bond $87 $143 $181 $299
Global Fixed Income $97 $173 $231 $394
Fully Managed $91 $155 $201 $337
Total Return $90 $153 $198 $332
Asset Allocation Growth $91 $156 $203 $341
Equity Income $91 $154 $200 $336
Investors $91 $156 $203 $341
Value Equity $91 $154 $200 $336
Rising Dividends $91 $154 $200 $336
Diversified Mid-Cap $91 $156 $203 $341
Managed Global $94 $163 $214 $363
Large Cap Value $91 $156 $203 $341
All Cap $91 $156 $203 $341
Research $90 $153 $198 $332
Capital Appreciation $91 $154 $200 $336
Growth and Income $92 $159 $207 $350
Capital Growth $92 $157 $204 $345
Strategic Equity $91 $154 $200 $336
Special Situations $92 $159 $207 $350
Mid-Cap Growth $90 $153 $198 $332
Small Cap $91 $154 $200 $336
Growth $92 $157 $204 $344
Real Estate $91 $154 $200 $336
Hard Assets $91 $154 $200 $336
Developing World $99 $177 $238 $407
THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond $89 $148 $190 $317
PIMCO StocksPLUS
Growth and Income $88 $145 $185 $307
THE WARBURG PINCUS TRUST
International Equity $94 $165 $217 $369
ING VARIABLE INSURANCE TRUST
ING Global Brand Names $93 $162 $213 $361
PRUDENTIAL SERIES FUND
Prudential Jennison $91 $156 $203 $343
SP Jennison International
Growth $98 $174 $233 $398
--------------------------------------------------------------------------------------------------------------
</TABLE>
VAL-108--- 7
<PAGE>
<PAGE>
Example 2:
If you do not surrender your Contract at the end of the applicable time period
and elected an optional benefit rider with the highest charge, you would pay the
following expenses for each $1,000 invested:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------------------------------------------------------------------------------------------------
THE GCG TRUST
<S> <C> <C> <C> <C>
Liquid Asset $27 $ 82 $141 $298
Limited Maturity Bond $27 $ 83 $141 $299
Global Fixed Income $37 $113 $191 $394
Fully Managed $31 $ 95 $161 $337
Total Return $30 $ 93 $158 $332
Asset Allocation Growth $31 $ 96 $163 $341
Equity Income $31 $ 94 $160 $336
Investors $31 $ 96 $163 $341
Value Equity $31 $ 94 $160 $336
Rising Dividends $31 $ 94 $160 $336
Diversified Mid-Cap $31 $ 96 $163 $341
Managed Global $34 $103 $174 $363
Large Cap Value $31 $ 96 $163 $341
All Cap $31 $ 96 $163 $341
Research $30 $ 93 $158 $332
Capital Appreciation $31 $ 94 $160 $336
Growth and Income $32 $ 99 $167 $350
Capital Growth $32 $ 97 $164 $345
Strategic Equity $31 $ 94 $160 $336
Special Situations $32 $ 99 $167 $350
Mid-Cap Growth $30 $ 93 $158 $332
Small Cap $31 $ 94 $160 $336
Growth $32 $ 97 $164 $344
Real Estate $31 $ 94 $160 $336
Hard Assets $31 $ 94 $160 $336
Developing World $39 $117 $198 $407
THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond $29 $ 88 $150 $317
PIMCO StocksPLUS
Growth and Income $28 $ 85 $145 $307
THE WARBURG PINCUS TRUST
International Equity $34 $105 $177 $369
ING VARIABLE INSURANCE TRUST
ING Global Brand Names $33 $102 $173 $361
PRUDENTIAL SERIES FUND
Prudential Jennison $31 $ 96 $163 $343
SP Jennison International
Growth $38 $114 $193 $398
--------------------------------------------------------------------------------------------------------------
</TABLE>
VAL-108--- 8
<PAGE>
<PAGE>
Example 3:
If you surrender your Contract at the end of the applicable time period and did
not elect any optional benefit rider, you would pay the following expenses for
each $1,000 invested:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------------------------------------------------------------------------------------------------
THE GCG TRUST
<S> <C> <C> <C> <C>
Liquid Asset $79 $120 $143 $222
Limited Maturity Bond $79 $120 $143 $223
Global Fixed Income $90 $151 $195 $326
Fully Managed $83 $132 $164 $265
Total Return $83 $130 $160 $258
Asset Allocation Growth $84 $133 $166 $269
Equity Income $83 $132 $163 $264
Investors $84 $133 $166 $269
Value Equity $83 $132 $163 $264
Rising Dividends $83 $132 $163 $264
Diversified Mid-Cap $84 $133 $166 $269
Managed Global $86 $141 $178 $292
Large Cap Value $84 $133 $166 $269
All Cap $84 $133 $166 $269
Research $83 $130 $160 $258
Capital Appreciation $83 $132 $163 $264
Growth and Income $85 $136 $171 $279
Capital Growth $84 $135 $168 $273
Strategic Equity $83 $132 $163 $264
Special Situations $85 $136 $171 $279
Mid-Cap Growth $83 $130 $160 $258
Small Cap $83 $132 $163 $264
Growth $84 $134 $167 $272
Real Estate $83 $132 $163 $264
Hard Assets $83 $132 $163 $264
Developing World $91 $155 $202 $340
THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond $81 $125 $152 $242
PIMCO StocksPLUS
Growth and Income $80 $122 $147 $232
THE WARBURG PINCUS TRUST
International Equity $87 $143 $181 $299
ING VARIABLE INSURANCE TRUST
ING Global Brand Names $86 $140 $177 $290
PRUDENTIAL SERIES FUND
Prudential Jennison $84 $134 $167 $271
SP Jennison International
Growth $90 $152 $197 $330
--------------------------------------------------------------------------------------------------------------
</TABLE>
VAL-108--- 9
<PAGE>
<PAGE>
Example 4:
If you do not surrender your Contract at the end of the applicable time period
and did not elect any optional benefit rider, you would pay the following
expenses for each $1,000 invested:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------------------------------------------------------------------------------------------------
THE GCG TRUST
<S> <C> <C> <C> <C>
Liquid Asset $19 $60 $103 $222
Limited Maturity Bond $19 $60 $103 $223
Global Fixed Income $30 $91 $155 $326
Fully Managed $23 $72 $124 $265
Total Return $23 $70 $120 $258
Asset Allocation Growth $24 $73 $126 $269
Equity Income $23 $72 $123 $264
Investors $24 $73 $126 $269
Value Equity $23 $72 $123 $264
Rising Dividends $23 $72 $123 $264
Diversified Mid-Cap $24 $73 $126 $269
Managed Global $26 $81 $138 $292
Large Cap Value $24 $73 $126 $269
All Cap $24 $73 $126 $269
Research $23 $70 $120 $258
Capital Appreciation $23 $72 $123 $264
Growth and Income $25 $76 $131 $279
Capital Growth $24 $75 $128 $273
Strategic Equity $23 $72 $123 $264
Special Situations $25 $76 $131 $279
Mid-Cap Growth $23 $70 $120 $258
Small Cap $23 $72 $123 $264
Growth $24 $74 $127 $272
Real Estate $23 $72 $123 $264
Hard Assets $23 $72 $123 $264
Developing World $31 $95 $162 $340
THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond $21 $65 $112 $242
PIMCO StocksPLUS
Growth and Income $20 $62 $107 $232
THE WARBURG PINCUS TRUST
International Equity $27 $83 $141 $299
ING VARIABLE INSURANCE TRUST
ING Global Brand Names $26 $80 $137 $290
PRUDENTIAL SERIES FUND
Prudential Jennison $24 $74 $127 $271
SP Jennison International
Growth $30 $92 $157 $330
</TABLE>
THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN SUBJECT TO THE
TERMS OF YOUR CONTRACT.
VAL-108--- 10
<PAGE>
<PAGE>
--------------------------------------------------------------------------------
PERFORMANCE INFORMATION
--------------------------------------------------------------------------------
ACCUMULATION UNIT
We use accumulation units to calculate the value of a Contract. Each subaccount
of Separate Account B has its own accumulation unit value. The accumulation
units are valued each business day that the New York Stock Exchange is open for
trading. Their values may increase or decrease from day to day according to a
Net Investment Factor, which is primarily based on the investment performance of
the applicable investment portfolio. Shares in the investment portfolios are
valued at their net asset value.
THE NET INVESTMENT FACTOR
The Net Investment Factor is an index number which reflects certain charges
under the Contract and the investment performance of the subaccount. The Net
Investment Factor is calculated for each subaccount as follows:
1) We take the net asset value of the subaccount at the end of each
business day.
2) We add to (1) the amount of any dividend or capital gains
distribution declared for the subaccount and reinvested in such
subaccount. We subtract from that amount a charge for our taxes, if
any.
3) We divide (2) by the net asset value of the subaccount at the end
of the preceding business day.
4) We then subtract the applicable daily mortality and expense risk
charge and the daily asset-based administrative charge from the
subaccount.
Calculations for the subaccounts are made on a per share basis.
CONDENSED FINANCIAL INFORMATION
Tables containing (i) the accumulation unit value history of each subaccount of
Golden American Separate Account B offered in this prospectus and (ii) the total
investment value history of each such subaccount are presented in Appendix
A--Condensed Financial Information.
FINANCIAL STATEMENTS
The audited financial statements of Separate Account B for the year ended
December 31, 1999 are included in the Statement of Additional Information. The
unaudited consolidated financial statements of Golden American for the six
months ended June 30, 2000 and audited consolidated financial statements of
Golden American for the years ended December 31, 1999, 1998 and 1997 are
included in this prospectus.
PERFORMANCE INFORMATION
From time to time, we may advertise or include in reports to contract owners
performance information for the subaccounts of Separate Account B, including the
average annual total return performance, yields and other nonstandard measures
of performance. Such performance data will be computed, or accompanied by
performance data computed, in accordance with standards defined by the SEC.
Except for the Liquid Asset subaccount, quotations of yield for the subaccounts
will be based on all investment income per unit (contract value divided by the
accumulation unit) earned during a given 30-day period, less expenses accrued
during such period. Information on standard total average annual return
performance will include average annual rates of total return for 1, 5 and 10
year periods, or lesser periods depending on how long Separate Account B has
been investing in the portfolio. We may show other total returns for periods of
less than one year. Total return figures will be based on the actual historic
performance of the subaccounts of Separate Account B, assuming an investment at
the beginning of the period when the separate account first invested in the
portfolio. Withdrawal of the investment at the end of the period, adjusted to
reflect the deduction of all applicable portfolio and current contract charges.
We may also show rates of total return on amounts invested at the beginning of
the period with no withdrawal at the end of the period. Total return figures
which assume no withdrawals at the end of the period will reflect all recurring
charges, but will not reflect the surrender charge. Quotations of average annual
return for the Managed Global subaccount take into account the period before
September 3, 1996, during which it was maintained as a subaccount of Golden
American Separate Account D. In addition, we may present historic performance
data for the investment portfolios since their inception reduced by some or all
of the fees and charges under the Contract. Such adjusted historic performance
includes data that precedes the inception dates of the subaccounts of Separate
Account B. This data is designed to show the performance that would have
resulted if the Contract had been in existence before the separate account began
investing in the portfolios.
Current yield for the Liquid Asset subaccount is
based on income received by a hypothetical investment over a given 7-day period,
less expenses accrued, and then "annualized" (i.e., assuming that the 7-day
yield would be received for 52 weeks). We calculate "effective yield" for the
Liquid Asset subaccount in a manner similar to that used to calculate yield, but
when annualized, the income earned by the investment is assumed to be
reinvested. The "effective yield" will thus be slightly higher than the "yield"
because of the compounding effect of earnings. We calculate quotations of yield
for the remaining subaccounts on all investment income per accumulation unit
earned during a given 30-day period, after subtracting fees and expenses accrued
during the period, assuming no surrender.
We may compare performance information for a subaccount to: (i) the Standard &
Poor's 500 Stock Index, Dow Jones Industrial Average, Donoghue Money Market
Institutional Averages, or any other applicable market indices, (ii) other
variable annuity separate accounts or other investment products tracked by
Lipper Analytical Services (a widely used independent research firm which ranks
mutual funds and other investment companies), or any other rating service, and
(iii) the Consumer Price Index (measure for inflation) to determine the real
rate of return of an investment in the Contract. Our reports and promotional
literature may also contain other information including the ranking of any
subaccount based on rankings of variable annuity separate accounts or other
investment products tracked by Lipper Analytical Services or by similar rating
services.
Performance information reflects only the performance of a hypothetical contract
and should be considered in light of other factors, including the investment
objective of the investment portfolio and market conditions. Please keep in mind
that past performance is not a guarantee of future results.
--------------------------------------------------------------------------------
GOLDEN AMERICAN LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------
Golden American Life Insurance Company is a Delaware stock life insurance
company, which was originally incorporated in Minnesota on January 2, 1973.
Golden American is a wholly owned subsidiary of Equitable of Iowa Companies,
Inc. ("Equitable of Iowa"). Equitable of Iowa is a wholly owned subsidiary of
ING Groep N.V. ("ING"), a global financial services holding company based in The
Netherlands. Golden American is authorized to sell insurance and annuities in
all states, except New York, and the District of Columbia. In May 1996, Golden
American established a subsidiary, First Golden American Life Insurance Company
of New York, which is authorized to sell annuities in New York and Delaware.
Golden American's consolidated financial statements appear in this prospectus.
Equitable of Iowa is the holding company for Golden American, Directed Services,
Inc., the investment manager of the GCG Trust and the distributor of the
Contracts, and other interests. Equitable of Iowa and another ING affiliate own
ING Investment Management, LLC, a portfolio manager of the GCG Trust. ING also
owns Baring International Investment Limited, another portfolio manager of the
GCG Trust and ING Investment Management Advisors B.V., a portfolio manager of
the ING Variable Insurance Trust.
Our principal office is located at 1475 Dunwoody Drive, West Chester,
Pennsylvania 19380.
VAL-108--- 12
<PAGE>
<PAGE>
--------------------------------------------------------------------------------
THE TRUSTS
--------------------------------------------------------------------------------
The GCG Trust is a mutual fund whose shares are offered to separate accounts
funding variable annuity and variable life insurance policies offered by Golden
American and other affiliated insurance companies. The GCG Trust may also sell
its shares to separate accounts of insurance companies not affiliated with
Golden American. Pending SEC approval, shares of the GCG Trust may also be sold
to certain qualified pension and retirement plans. The address of the GCG Trust
is 1475 Dunwoody Drive, West Chester, PA 19380.
The PIMCO Variable Insurance
Trust is also a mutual fund whose shares are available to separate accounts of
insurance companies, including Golden American, for both variable annuity
contracts and variable life insurance policies and to qualified pension and
retirement plans. The address of the PIMCO Variable Insurance Trust is 840
Newport Center Drive, Suite 300, Newport Beach, CA 92660.
The Warburg Pincus
Trust is also a mutual fund whose shares are available to separate accounts of
life insurance companies, including Golden American and Equitable Life Insurance
Company of Iowa, and to certain qualified and retirement plans. The address of
the Warburg Pincus Trust is 153 East 53rd Street, New York, NY 10022.
ING Variable Insurance Trust is also a mutual fund whose shares are offered to
separate accounts funding variable annuity contracts offered by Golden American.
Pending SEC approval, shares of ING Variable Insurance Trust may also be sold to
variable annuity and variable life insurance policies offered by other insurance
companies, both affiliated and unaffiliated with Golden American. The address of
ING Variable Insurance Trust is 1475 Dunwoody Drive, West Chester, PA 19380.
The Prudential Series Fund, Inc. is also a mutual fund whose shares are
available to separate accounts funding variable annuity and variable life
insurance polices offered by The Prudential Insurance Company of America, its
affiliated insurers and other life insurance companies not affiliated with
Prudential, including Golden American. The address of the Prudential Series Fund
is 751 Broad Street, Newark, NJ 07102.
In the event that, due to differences in tax treatment or other considerations,
the interests of contract owners of various contracts participating in the
Trusts conflict, we, the Boards of Trustees of the GCG Trust, the PIMCO Variable
Insurance Trust, the Warburg Pincus Trust, the ING Variable Insurance Trust, the
Board of Directors of the Prudential Series Fund, and the management of Directed
Services, Inc., Pacific Investment Management Company, Credit Suisse Asset
Management, LLC, ING Mutual Funds Management Co. LLC, The Prudential Insurance
Company of America, and any other insurance companies participating in the
Trusts will monitor events to identify and resolve any material conflicts that
may arise.
YOU WILL FIND COMPLETE INFORMATION ABOUT THE GCG TRUST, THE PIMCO VARIABLE
INSURANCE TRUST, THE WARBURG PINCUS TRUST, ING VARIABLE INSURANCE TRUST AND THE
PRUDENTIAL SERIES FUND IN THE ACCOMPANYING PROSPECTUS FOR EACH TRUST. YOU SHOULD
READ THEM CAREFULLY BEFORE INVESTING.
--------------------------------------------------------------------------------
GOLDEN AMERICAN SEPARATE ACCOUNT B
--------------------------------------------------------------------------------
Golden American Separate Account B ("Separate Account B") was established as a
separate account of the Company on July 14, 1988. It is registered with the SEC
as a unit investment trust under the 1940 Act. Separate Account B is a separate
investment account used for our variable annuity contracts. We own all the
assets in Separate Account B but such assets are kept separate from our other
accounts.
Separate Account B is divided into subaccounts. Each subaccount invests
exclusively in shares of one investment portfolio of the GCG Trust, the PIMCO
Variable Insurance Trust, the Warburg Pincus Trust, the ING Variable Insurance
Trust or the Prudential Series Fund. Each investment portfolio has its own
distinct investment objectives and policies. Income, gains and losses, realized
or unrealized, of a portfolio are credited to or charged against the
corresponding subaccount of Separate Account B without regard to any other
income, gains or losses of the Company. Assets equal to the reserves and other
contract liabilities with respect to each are not chargeable with liabilities
arising out of any other business of the Company. They
VAL-108--- 13
<PAGE>
<PAGE>
may, however, be subject
to liabilities arising from subaccounts whose assets we attribute to other
variable annuity contracts supported by Separate Account B. If the assets in
Separate Account B exceed the required reserves and other liabilities, we may
transfer the excess to our general account. We are obligated to pay all benefits
and make all payments provided under the Contracts.
We currently offer other variable annuity contracts that invest in Separate
Account B but are not discussed in this prospectus. Separate Account B may also
invest in other investment portfolios which are not available under your
Contract Under certain circumstances, we may make certain changes to the
subaccounts. For more information, see "The Annuity Contract -- Addition,
Deletion, or Substitution of Subaccounts and Other Changes."
--------------------------------------------------------------------------------
THE INVESTMENT PORTFOLIOS
--------------------------------------------------------------------------------
During the accumulation phase, you may allocate your premium payments and
contract value to any of the investment portfolios listed in the section below.
YOU BEAR THE ENTIRE INVESTMENT RISK FOR AMOUNTS YOU ALLOCATE TO ANY INVESTMENT
PORTFOLIO, AND YOU MAY LOSE YOUR PRINCIPAL.
INVESTMENT OBJECTIVES
The investment objective of each investment portfolio is set forth below. You
should understand that there is no guarantee that any portfolio will meet its
investment objectives. Meeting objectives depends on various factors, including,
in certain cases, how well the portfolio managers anticipate changing economic
and market conditions. Separate Account B also has other subaccounts investing
in other portfolios which are not available to the Contract described in this
prospectus. YOU CAN FIND MORE DETAILED INFORMATION ABOUT THE INVESTMENT
PORTFOLIOS IN THE PROSPECTUSES FOR THE GCG TRUST, THE PIMCO VARIABLE INSURANCE
TRUST, THE WARBURG PINCUS TRUST, ING VARIABLE INSURANCE TRUST AND THE PRUDENTIAL
SERIES FUND. YOU SHOULD READ THESE PROSPECTUSES BEFORE INVESTING.
INVESTMENT PORTFOLIO INVESTMENT OBJECTIVE
----------------------------------- -----------------------------------
THE GCG TRUST
Liquid Asset Seeks high level of current
income consistent with the
preservation of capital and
liquidity.
Invests primarily in obligations
of the U.S. Government and its
agencies and instrumentalities,
bank obligations, commercial
paper and short-term corporate
debt securities. All securities
will mature in less than one year.
-----------------------------------
Limited Maturity Bond Seeks highest current
income consistent with low risk to
principal and liquidity. Also seeks
to enhance its total return through
capital appreciation when market
factors, such as falling interest
rates and rising bond prices,
indicate that capital appreciation
may be available without
significant risk to principal.
Invests primarily in diversified
limited maturity debt securities
with average maturity dates of five
years or shorter and in no cases
more than seven years.
-----------------------------------
Global Fixed Income Seeks high total return.
Invests primarily in high-grade
fixed income securities, both
foreign and domestic.
-----------------------------------
VAL-108--- 14
<PAGE>
<PAGE>
INVESTMENT PORTFOLIO INVESTMENT OBJECTIVE
----------------------------------- -----------------------------------
Fully Managed Seeks, over the long term,
a high total investment return
consistent with the preservation of
capital and with prudent investment
risk.
Invests primarily in the
common stocks of established
companies believed by the portfolio
manager to have above-average
potential for capital growth.
-----------------------------------
Total Return Seeks above-average income
(compared to a portfolio entirely
invested in equity securities)
consistent with the prudent
employment of capital. Growth of
capital and income is a secondary
goal.
Invests primarily in a
combination of equity and fixed
income securities.
-----------------------------------
Asset Allocation Growth Seeks to maximize
total return over the long term by
allocating assets among stocks,
bonds, short-term instruments and
other investments.
Allocates
investments primarily in a neutral
mix over time of 70% of its assets
in stocks, 25% of its assets in
bonds, and 5% of its assets in
short-term and money market
investments.
-----------------------------------
Equity Income Seeks substantial dividend
income as well as long-term growth
of capital.
Invests primarily in
common stocks of well-established
companies paying above-average
dividends.
-----------------------------------
Investors Seeks long-term growth of capital.
Current income is a secondary
objective.
Invests primarily in equity
securities of U.S. companies and
to a lesser degree, debt
securities.
-----------------------------------
Value Equity Seeks capital appreciation.
Dividend income is a secondary
objective.
Invests primarily in
common stocks of domestic and
foreign issuers which meet
quantitative standards relating to
financial soundness and high
intrinsic value relative to price.
-----------------------------------
Rising Dividends Seeks capital appreciation. A
secondary objective is dividend
income.
Invests in equity securities that
meet the following quality
criteria: regular dividend
increases; 35% of earnings
reinvested annually; and a
credit rating of "A" to "AAA."
-----------------------------------
Diversified Mid-Cap Seeks long-term growth of capital.
Normally invests at least 65% of
its total assets in common stocks
of companies with medium market
capitalizations.
-----------------------------------
Managed Global Seeks capital appreciation.
Current income is only an
incidental consideration.
Invests primarily in common stocks
traded in securities markets
throughout the world.
-----------------------------------
Large Cap Value Seeks long-term growth of
capital and income.
Invests primarily in equity and
equity-related securities of
companies with market
capitalization greater than $1
billion.
-----------------------------------
All Cap Seeks capital appreciation
through investment in securities
which the portfolio manager
believes have above-average capital
appreciation potential.
Invests primarily in equity
securities of U.S. companies of
any size.
-----------------------------------
VAL-108--- 15
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<PAGE>
INVESTMENT PORTFOLIO INVESTMENT OBJECTIVE
----------------------------------- -----------------------------------
Research Seeks long-term growth of capital
and future income.
Invests primarily in common stocks
or securities convertible into
common stocks of companies believed
to have better than average
prospects for long-term growth.
-----------------------------------
Capital Appreciation Seeks long-term capital growth.
Invests primarily in equity
securities believed by the
portfolio manager to be
undervalued.
-----------------------------------
Growth and Income Seeks long-term capital growth and
current income.
Normally invests up to 75% of its
assets in equity securities
selected primarily for their growth
potential and at least 25% of its
assets in securities the portfolio
manager believes have income
potential.
-----------------------------------
Capital Growth Seeks long-term total return.
Invests primarily in common stocks
of companies where the potential
for change (earnings acceleration)
is significant.
-----------------------------------
Strategic Equity Seeks capital appreciation.
Invests primarily in common stocks
of medium- and small-sized
companies.
-----------------------------------
Special Situations Seeks capital appreciation.
Invests primarily in common stocks
selected for their capital
appreciation potential. The
Portfolio emphasizes "special
situation" companies that the
portfolio manager believes have
been overlooked or undervalued by
other investors.
-----------------------------------
Mid-Cap Growth Seeks long-term growth of capital.
Invests primarily in equity
securities of companies with medium
market capitalization which the
portfolio manager believes have
above-average growth potential.
-----------------------------------
Small Cap Seeks long-term capital
appreciation.
Invests primarily in equity
securities of companies that have a
total market capitalization within
the range of companies in the
Russell 2000 Growth Index or the
Standard & Poor's Small-Cap 600
Index.
-----------------------------------
Growth Seeks capital appreciation.
Invests primarily in common stocks
of growth companies that have
favorable relationships between
price/earnings ratios and growth
rates in sectors offering the
potential for above-average
returns.
-----------------------------------
Real Estate Seeks capital appreciation.
Current income is a secondary
objective.
Invests primarily in publicly
traded real estate equity
securities.
-----------------------------------
Hard Assets Seeks long-term capital
appreciation.
Invests primarily in hard asset
securities. Hard asset companies
produce a commodity which the
portfolio manager is able to price
on a daily or weekly basis.
-----------------------------------
Developing World Seeks capital appreciation.
Invests primarily in equity
securities of companies in
developing or emerging countries.
-----------------------------------
VAL-108--- 16
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INVESTMENT PORTFOLIO INVESTMENT OBJECTIVE
----------------------------------- -----------------------------------
THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond Seeks to maximize total return,
consistent with preservation of
capital and prudent investment
management.
Invests at least 65% of its assets
in a diversified portfolio of
junk bonds rated at least B by
Moody's Investor Services, Inc.
or Standard & Poor's or, if
unrated, determined by the
portfolio manager to be of
comparable quality.
-----------------------------------
PIMCO StocksPLUS Seeks to achieve a total return
which exceeds the total return
performance Growth and Income of
the S&P 500.
Invests primarily in common stocks,
options, futures, options on
futures and swaps.
-----------------------------------
THE WARBURG PINCUS TRUST
International Equity Seeks long-term appreciation.
Invests primarily in a broadly
diversified portfolio of equity
securities of companies that have
their principal business activities
outside of the United States.
-----------------------------------
ING VARIABLE INSURANCE TRUST
ING Global Brand Names Fund Seeks to
provide investors with long-term
capital appreciation. Invests at
least 65% of its total assets in
equity securities of companies that
have a well recognized franchise, a
global presence and derive most of
their revenues from sales of
consumer goods.
-----------------------------------
THE PRUDENTIAL SERIES FUND
Prudential Jennison Seeks long-term growth of capital.
Invests primarily in companies that
have shown growth in earnings and
sales, high return on equity and
assets or other strong financial
data and are also attractively
valued in the opinion of the
manager. Dividend income from
investments will be incidental.
-----------------------------------
SP Jennison International Growth Seeks long-term growth of capital.
Invests primarily in equity-related
securities of issuers located in at
least five different foreign
countries.
-----------------------------------
INVESTMENT MANAGEMENT FEES
Directed Services, Inc. serves as the overall manager to each portfolio of the
GCG Trust. The GCG Trust pays Directed Services a monthly fee for its investment
advisory and management services. The monthly fee is based on the average daily
net assets of an investment portfolio, and in some cases, the combined total
assets of certain grouped portfolios, including retaining portfolio managers to
manage the assets of the various portfolios. Directed Services provides or
procures, at its own expense, the services necessary for the operation of the
portfolios. Directed Services (and not the GCG Trust) pays each portfolio
manager a monthly fee for managing the assets of a portfolio, based on the
annual rates of the average daily net assets of a portfolio. For a list of the
portfolio managers, see the front cover of this prospectus. Directed Services
does not bear the expense of brokerage fees and other transactional expenses for
securities, taxes (if any) paid by a portfolio, interest on borrowing, fees and
expenses of the independent trustees, and extraordinary expenses, such as
litigation or indemnification expenses.
VAL-108--- 17
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<PAGE>
Pacific Investment Management Company
("PIMCO") serves as investment advisor to each portfolio of the PIMCO Variable
Insurance Trust. PIMCO provides the overall business management and
administrative services necessary for each portfolio's operation. PIMCO provides
or procures, at its own expense, the services and information necessary for the
proper conduct of business and ordinary operation of each portfolio. The PIMCO
Variable Insurance Trust pays PIMCO a monthly advisory fee and a separate
monthly administrative fee per year, each fee based on the average daily net
assets of each of the investment portfolios, for managing the assets of the
portfolios and for administering the PIMCO Variable Insurance Trust. PIMCO does
not bear the expense of brokerage fees and other transactional expenses for
securities, taxes (if any) paid by a portfolio, interest on borrowing, fees and
expense of the independent trustees, and extraordinary expenses, such as
litigation or indemnification expenses.
Credit Suisse Asset Management, LLC serves as the investment advisor of the
Warburg Pincus Trust. The Warburg Trust pays Credit Suisse Asset Management a
monthly advisory fee based on the average daily net assets of the investment
portfolio and also procures the services necessary for the operation of its
portfolios. The Warburg Trust pays monthly administrative fees to two
co-administrators for administrative services, one of which is an affiliate of
Credit Suisse Asset Management. The monthly administrative fee is based on the
portfolio's average daily net assets. Credit Suisse Asset Management does not
bear any portfolio expenses.
ING Mutual Funds Management Co. LLC ("ING MFMC") serves as the overall manager
of ING Variable Insurance Trust. ING MFMC supervises all aspects of the Trust's
operations and provides investment advisory services to the portfolios of the
Trust, including engaging portfolio managers, as well as monitoring and
evaluating the management of the assets of each portfolio by its portfolio
manager. ING MFMC, as well as each portfolio manager it engages, is a wholly
owned indirect subsidiary of ING Groep N.V.
The Prudential Insurance Company of
America ("Prudential") and its subsidiary, Prudential Investments Fund
Management LLC ("PIFM") serve as the overall investment advisers to the
Prudential Series Fund. Prudential and PIFM are responsible for the management
of the Prudential Series Fund and provide investment advice and related
services. For the Prudential Jennison Portfolio and SP Jennison International
Growth Portfolio, Prudential and PIFM engage Jennison Associates LLC to serve as
sub-adviser and to provide day-to-day management. Prudential and PIFM pay the
sub-adviser out of the fee they receive from the Prudential Series Fund.
Each portfolio deducts portfolio management fees and charges from the amounts
you have invested in the portfolios. In addition, three portfolios deduct a
distribution or 12b-1 fee, which is used to finance any activity that is
primarily intended to result in the sale of shares of the applicable portfolio.
For 1999, total portfolio fees and charges ranged from 0.56% to 1.75%. See "Fees
and Expenses" in this prospectus.
We may receive compensation from the investment advisors, administrators and
distributors or directly from the portfolios in connection with administrative,
distribution or other services and cost savings attributable to our services. It
is anticipated that such compensation will be based on assets of the particular
portfolios attributable to the Contract. The compensation paid by advisors,
administrators or distributors may vary.
You can find more detailed information about each portfolio including its
management fees in the prospectus for each trust. You should read these
prospectuses before investing.
RESTRICTED FUNDS
We may designate any investment option as a Restricted Fund and limit the amount
you may allocate or transfer to a Restricted Fund. We may establish any such
limitation, at our discretion, as a percentage of premium or contract value or
as a specified dollar amount and change the limitation at any time. Currently,
we have not designated any investment option as a Restricted Fund. We may, with
30 days notice to you, designate any investment portfolio as a Restricted Fund
or change the limitations on existing contracts with respect to new premiums
added to such investment portfolio and also with respect to new transfers to
such investment portfolio. If a change is made with regard to designation as a
Restricted Fund or applicable limitations, such change will apply only to
transactions effected after such change.
VAL-108--- 18
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<PAGE>
We limit your investment in the Restricted Funds on both an aggregate basis for
all Restricted Funds and for each individual Restricted Fund. The aggregate
limits for investment in all Restricted Funds are expressed as a percentage of
contract value, percentage of premium and maximum dollar amount. Currently, your
investment in two or more Restricted Funds would be subject to each of the
following three limitations: no more than 30 percent of contract value, up to
100 percent of each premium and no more than $999,999,999. We may change these
limits, in our discretion, for new contracts, premiums, transfers or
withdrawals.
We also limit your investment in each individual Restricted Fund.
The limits for investment in each Restricted Fund are expressed as a percentage
of contract value, percentage of premium and maximum dollar amount. Currently,
the limits for investment in an individual Restricted Fund are the same as the
aggregate limits set forth above. We may change these limits, in our discretion,
for new contracts, premiums, transfers or withdrawals.
We monitor the aggregate and individual limits on investments in Restricted
Funds for each transaction (e.g. premium payments, reallocations, withdrawals,
dollar cost averaging). If the contract value in the Restricted Fund has
increased beyond the applicable limit due to market growth, we will not require
the reallocation or withdrawal of contract value from the Restricted Fund.
However, if an aggregate limit has been exceeded, withdrawals must be taken
either from the Restricted Funds or taken pro-rata from all investment options
in which contract value is allocated, so that the percentage of contract value
in the Restricted Funds following the withdrawal is less than or equal to the
percentage of contract value in the Restricted Funds prior to the withdrawal.
We will not permit a transfer to the Restricted Funds to the extent that it
would increase the contract value in the Restricted Fund or in all Restricted
Funds to more than the applicable limits set forth above. We will not limit
transfers from Restricted Funds. If the result of multiple reallocations is
to lower the percentage of total contract value in Restricted Funds, the
reallocation will be permitted even if the percentage of contract value in
a Restricted Fund is greater than its limit.
Please see "Withdrawals" and "Transfers Among Your Investments" in this
prospectus for more information on the effect of Restricted Funds.
--------------------------------------------------------------------------------
THE FIXED INTEREST ALLOCATION
--------------------------------------------------------------------------------
You may allocate premium payments and transfer your contract value to the
guaranteed interest periods of our Fixed Account at any time during the
accumulation period. Every time you allocate money to the Fixed Account, we set
up a Fixed Interest Allocation for the guaranteed interest period you select. We
currently offer guaranteed interest periods of 6 months, 1, 3, 5, 7, and 10
years, although we may not offer all these periods in the future. You may select
one or more guaranteed interest periods at any one time. We will credit your
Fixed Interest Allocation with a guaranteed interest rate for the interest
period you select, so long as you do not withdraw money from that Fixed Interest
Allocation before the end of the guaranteed interest period. Each guaranteed
interest period ends on its maturity date which is the last day of the month in
which the interest period is scheduled to expire.
If you surrender, withdraw,
transfer or annuitize your investment in a Fixed Interest Allocation more than
30 days before the end of the guaranteed interest period, we will apply a Market
Value Adjustment to the transaction. A market value adjustment could increase or
decrease the amount you surrender, withdraw, transfer or annuitize, depending on
current interest rates at the time of the transaction. YOU BEAR THE RISK THAT
YOU MAY RECEIVE LESS THAN YOUR PRINCIPAL IF WE APPLY A MARKET VALUE ADJUSTMENT.
Assets supporting amounts allocated to the Fixed Account are available to fund
the claims of all classes of our customers, contract owners and other creditors.
Interests under your Contract relating to the Fixed Account are registered under
the Securities Act of 1933 but the Fixed Account is not registered under the
1940 Act.
VAL-108--- 19
<PAGE>
<PAGE>
SELECTING A GUARANTEED INTEREST PERIOD
You may select one or more Fixed Interest Allocations with specified guaranteed
interest periods. A guaranteed interest period is the period that a rate of
interest is guaranteed to be credited to your Fixed Interest Allocation. We may
at any time decrease or increase the number of guaranteed interest periods
offered. In addition, we may offer DCA Fixed Interest Allocations, which are
6-month and 1-year Fixed Interest Allocations available exclusively in
connection with our dollar cost averaging program. For more information on DCA
Fixed Interest Allocations, see "Transfers Among Your Investments -- Dollar Cost
Averaging."
Your contract value in the Fixed Account is the sum of your Fixed
Interest Allocations and the interest credited, as adjusted for any withdrawals
(including any Market Value Adjustment applied to such withdrawal), transfers or
other charges we may impose. Your Fixed Interest Allocation will be credited
with the guaranteed interest rate in effect for the guaranteed interest period
you selected when we receive and accept your premium or reallocation of contract
value. We will credit interest daily at a rate which yields the quoted
guaranteed interest rate.
GUARANTEED INTEREST RATES
Each Fixed Interest Allocation will have an interest rate that is guaranteed as
long as you do not take your money out until its maturity date. We do not have a
specific formula for establishing the guaranteed interest rates for the
different guaranteed interest periods. We determine guaranteed interest rates at
our sole discretion. To find out the current guaranteed interest rate for a
guaranteed interest period you are interested in, please contact our Customer
Service Center or your registered representative. The determination may be
influenced by the interest rates on fixed income investments in which we may
invest with the amounts we receive under the Contracts. We will invest these
amounts primarily in investment-grade fixed income securities (i.e., rated by
Standard & Poor's rating system to be suitable for prudent investors) although
we are not obligated to invest according to any particular strategy, except as
may be required by applicable law. You will have no direct or indirect interest
in these investments. We will also consider other factors in determining the
guaranteed interest rates, including regulatory and tax requirements, sales
commissions and administrative expenses borne by us, general economic trends and
competitive factors. We cannot predict the level of future interest rates but no
Fixed Interest Allocation will ever have a guaranteed interest rate of less than
3% per year.
We may from time to time at our discretion offer interest rate
specials for new premiums that are higher than the current base interest rate
then offered. Renewal rates for such rate specials will be based on the base
interest rate and not on the special rates initially declared.
TRANSFERS FROM A FIXED INTEREST ALLOCATION
You may transfer your contract value in a Fixed Interest Allocation to one or
more new Fixed Interest Allocations with new guaranteed interest periods, or to
any of the subaccounts of Separate Account B. We will transfer amounts from your
Fixed Interest Allocations starting with the guaranteed interest period nearest
its maturity date, until we have honored your transfer request.
The minimum
amount that you can transfer to or from any Fixed Interest Allocation is $100.
If a transfer request would reduce the contract value remaining in a Fixed
Interest Allocation to less than $100, we will treat such transfer request as a
request to transfer the entire contract value in such Fixed Interest Allocation.
Transfers from a Fixed Interest Allocation may be subject to a Market Value
Adjustment. If you have a special Fixed Interest Allocation that was offered
exclusively with our dollar cost averaging program, cancelling dollar cost
averaging will cause a transfer of the entire contract value in such Fixed
Interest Allocation to the Liquid Asset subaccount, and such a transfer will be
subject to a Market Value Adjustment.
On the maturity date of a guaranteed interest period, you may transfer amounts
from the applicable Fixed Interest Allocation to the subaccounts and/or to new
Fixed Interest Allocations with guaranteed interest periods of any length we are
offering at that time. You may not, however, transfer amounts to any Fixed
Interest Allocation with a guaranteed interest period that extends beyond the
annuity start date.
VAL-108--- 20
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<PAGE>
At least 30 calendar days before a maturity date of any of your Fixed Interest
Allocations, or earlier if required by state law, we will send you a notice of
the guaranteed interest periods that are available. You must notify us which
subaccounts or new guaranteed interest periods you have selected before the
maturity date of your Fixed Interest Allocations. If we do not receive timely
instructions from you, we will transfer the contract value in the maturing Fixed
Interest Allocation to a new Fixed Interest Allocation with a guaranteed
interest period that is the same as the expiring guaranteed interest period. If
such guaranteed interest period is not available or would go beyond the annuity
start date, we will transfer your contract value in the maturing Fixed Interest
Allocation to the next shortest guaranteed interest period which does not go
beyond the annuity start date. If no such guaranteed interest period is
available, we will transfer the contract value to a subaccount specially
designated by the Company for such purpose. Currently we use the Liquid Asset
subaccount for such purpose.
Please be aware that the benefit we pay under certain optional benefit riders
will be adjusted by any transfers you make to and from the Fixed Interest
Allocations during specified periods while the rider is in effect. See "Optional
Riders."
WITHDRAWALS FROM A FIXED INTEREST ALLOCATION
During the accumulation phase, you may withdraw a portion of your contract value
in any Fixed Interest Allocation. You may make systematic withdrawals of only
the interest earned during the prior month, quarter or year, depending on the
frequency chosen, from a Fixed Interest Allocation under our systematic
withdrawal option. Systematic withdrawals from a Fixed Interest Allocation are
not permitted if such Fixed Interest Allocation is currently participating in
the dollar cost averaging program. A withdrawal from a Fixed Interest Allocation
may be subject to a Market Value Adjustment and, in some cases, a surrender
charge. Be aware that withdrawals may have federal income tax consequences,
including a 10% penalty tax, as well as state income tax consequences.
If you
tell us the Fixed Interest Allocation from which your withdrawal will be made,
we will assess the withdrawal against that Fixed Interest Allocation. If you do
not, we will assess your withdrawal against the subaccounts in which you are
invested, unless the withdrawal exceeds the contract value in the subaccounts.
If there is no contract value in those subaccounts, we will deduct your
withdrawal from your Fixed Interest Allocations starting with the guaranteed
interest periods nearest their maturity dates until we have honored your
request.
Please be aware that the benefit we pay under any of the optional riders will be
reduced by any withdrawals you make from the Fixed Interest Allocations during
the period while the rider is in effect. See "Optional Riders."
MARKET VALUE ADJUSTMENT
A Market Value Adjustment may decrease, increase or have no effect on your
contract value. We will apply a Market Value Adjustment (i) whenever you
withdraw or transfer money from a Fixed Interest Allocation (unless made within
30 days before the maturity date of the applicable guaranteed interest period,
or under the systematic withdrawal or dollar cost averaging programs) and (ii)
if on the annuity start date a guaranteed interest period for any Fixed Interest
Allocation does not end on or within 30 days of the annuity start date.
We determine the Market Value Adjustment by multiplying the amount you withdraw,
transfer or apply to an income plan by the following factor:
N/365
((1+I)/(1+J+.0050)) -1
VAL-108--- 21
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<PAGE>
Where,
o "I" is the Index Rate for a Fixed Interest Allocation on the first
day of the guaranteed interest period;
o "J" is equal to the
following:
(1) If calculated for a Fixed Interest Allocation of 1 year or
more, then "J" is the Index Rate for a new Fixed Interest
Allocation with a guaranteed interest period equal to the time
remaining (rounded up to the next full year except in
Pennsylvania) in the guaranteed interest period;
(2) If calculated for a Fixed Interest Allocation of 6 months,
then "J" is the lesser of the Index Rate for a new Fixed
Interest Allocation with (i) a 6 month guaranteed interest
period, or (ii) a 1 year guaranteed interest period, at the
time of calculation; and
o "N" is the remaining number of days in the guaranteed interest
period at the time of calculation.
The Index Rate is the average of the Ask Yields for U.S. Treasury Strips as
quoted by a national quoting service for a period equal to the applicable
guaranteed interest period. The average currently is based on the period
starting from the 22nd day of the calendar month two months prior to the month
of the Index Rate determination and ending the 21st day of the calendar month
immediately before the month of determination. We currently calculate the Index
Rate once each calendar month but have the right to calculate it more
frequently. The Index Rate will always be based on a period of at least 28 days.
If the Ask Yields are no longer available, we will determine the Index Rate by
using a suitable and approved, if required, replacement method.
A Market Value Adjustment may be positive, negative or result in no change. In
general, if interest rates are rising, you bear the risk that any Market Value
Adjustment will likely be negative and reduce your contract value. On the other
hand, if interest rates are falling, it is more likely that you will receive a
positive Market Value Adjustment that increases your contract value. In the
event of a full surrender, transfer or annuitization from a Fixed Interest
Allocation, we will add or subtract any Market Value Adjustment from the amount
surrendered, transferred or annuitized. In the event of a partial withdrawal,
transfer or annuitization, we will add or subtract any Market Value Adjustment
from the total amount withdrawn, transferred or annuitized in order to provide
the amount requested. If a negative Market Value Adjustment exceeds your
contract value in the Fixed Interest Allocation, we will consider your request
to be a full surrender, transfer or annuitization of the Fixed Interest
Allocation.
Several examples which illustrate how the Market Value Adjustment
works are included in Appendix B.
--------------------------------------------------------------------------------
SPECIAL FUNDS
--------------------------------------------------------------------------------
We use the term Special Funds in the discussion of the enhanced death benefit
options and the optional riders. The Special Funds currently include the Liquid
Asset subaccount, Limited Maturity Bond subaccount and the Fixed Interest
Allocations. . The Company may, at any time, designate new and/or existing
subaccounts as a Special Fund with 30 days notice with respect to new premiums
added or transfers to such subaccounts.
--------------------------------------------------------------------------------
THE ANNUITY CONTRACT
--------------------------------------------------------------------------------
The Contract described in this prospectus is a deferred combination variable and
fixed annuity contract. The Contract provides a means for you to invest in one
or more of the available mutual fund portfolios of the GCG Trust, the PIMCO
Variable Insurance Trust, the Warburg Pincus Trust, the ING Variable Insurance
Trust and the Prudential Series Fund through Separate Account B. It also
provides a means for you to invest in a Fixed Interest Allocation through the
Fixed Account.
VAL-108--- 22
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<PAGE>
CONTRACT DATE AND CONTRACT YEAR
The date the Contract became effective is the contract date. Each 12-month
period following the contract date is a contract year.
ANNUITY START DATE
The annuity start date is the date you start receiving annuity payments under
your Contract. The Contract, like all deferred variable annuity contracts, has
two phases: the accumulation phase and the income phase. The accumulation phase
is the period between the contract date and the annuity start date. The income
phase begins when you start receiving regular annuity payments from your
Contract on the annuity start date.
CONTRACT OWNER
You are the contract owner. You are also the annuitant unless another annuitant
is named in the application. You have the rights and options described in the
Contract. One or more persons may own the Contract. If there are multiple owners
named, the age of the oldest owner will determine the applicable death benefit
if such death benefit is available for multiple owners. The death benefit
becomes payable when you die. In the case of a sole contract owner who dies
before the income phase begins, we will pay the beneficiary the death benefit
then due. The sole contract owner's estate will be the beneficiary if no
beneficiary has been designated or the beneficiary has predeceased the contract
owner. In the case of a joint owner of the Contract dying before the income
phase begins, we will designate the surviving contract owner as the beneficiary.
This will override any previous beneficiary designation.
If the contract owner is a trust and a beneficial owner of the trust has been
designated, the beneficial owner will be treated as the contract owner for
determining the death benefit. If a beneficial owner is changed or added after
the contract date, this will be treated as a change of contract owner for
determining the death benefit.
JOINT OWNER. For non-qualified Contracts only, joint owners may be named in
a written request before the Contract is in effect. Joint owners may
independently exercise transfers and other transactions allowed under the
Contract. All other rights of ownership must be exercised by both owners. Joint
owners own equal shares of any benefits accruing or payments made to them.
All rights of a joint owner end at death of that owner if the other joint owner
survives. The entire interest of the deceased joint owner in the Contract will
pass to the surviving joint owner and the death benefit will be payable. Joint
owners may only select the Standard Death Benefit option. Upon adding an
additional owner to a contract which was issued with an Enhanced Death Benefit
option, generally, your death benefit will be changed automatically to a
Standard Death Benefit and your mortality and expense risk charges will be
lowered correspondingly to that which is charged under the Standard Death
Benefit Option. Note that if any owner's age is 86 or greater, even the Standard
Death Benefit guarantee will be lost. Also note that returning a Contract to
single owner status will not restore any Enhanced Death Benefit. Unless
otherwise specified, the term "age" when used for joint owners shall mean the
age of the oldest owner.
Any addition or deletion of a joint owner is treated as a change of owner which
may affect the amount of the death benefit. See "Change of Contract Owner or
Beneficiary" below. If you have elected an enhanced death benefit, and you add a
joint owner, if the older joint owner is attained age 85 or under, the enhanced
death benefit from the date of change will end, and the Standard Death Benefit
will apply. For all death benefit options, if the older joint owner's attained
age is 86 or over on the date of the ownership change, the death benefit will be
the cash surrender value.
ANNUITANT
The annuitant is the person designated by you to be the measuring life in
determining annuity payments. The annuitant's age determines when the income
phase must begin and the amount of the annuity payments to be paid. You are the
annuitant unless you choose to name another person. The annuitant may not be
changed after the Contract is in effect.
VAL-108--- 23
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<PAGE>
The contract owner will receive the
annuity benefits of the Contract if the annuitant is living on the annuity start
date. If the annuitant dies before the annuity start date and a contingent
annuitant has been named, the contingent annuitant becomes the annuitant (unless
the contract owner is not an individual, in which case the death benefit becomes
payable).
VAL-108--- 24
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<PAGE>
If there is no contingent annuitant when the annuitant dies before the
annuity start date, the contract owner will become the annuitant. The contract
owner may designate a new annuitant within 60 days of the death of the
annuitant. If there is no contingent annuitant when the annuitant dies before
the annuity start date and the contract owner is not an individual, we will pay
the designated beneficiary the death benefit then due. If a beneficiary has not
been designated, or if there is no designated beneficiary living, the contract
owner will be the beneficiary. If the annuitant was the sole contract owner and
there is no beneficiary designation, the annuitant's estate will be the
beneficiary.
Regardless of whether a death benefit is payable, if the annuitant dies and any
contract owner is not an individual, distribution rules under federal tax law
will apply. You should consult your tax advisor for more information if you are
not an individual.
BENEFICIARY
The beneficiary is named by you in a written request. The beneficiary is the
person who receives any death benefit proceeds and who becomes the successor
contract owner if the contract owner (or the annuitant if the contract owner is
other than an individual) dies before the annuity start date. We pay death
benefits to the primary beneficiary (unless there are joint owners, in which
case death proceeds are payable to the surviving owner(s)).
If the beneficiary dies before the annuitant or the contract owner, the death
benefit proceeds are paid to the contingent beneficiary, if any. If there is no
surviving beneficiary, we pay the death benefit proceeds to the contract owner's
estate.
One or more persons may be a beneficiary or contingent beneficiary. In
the case of more than one beneficiary, we will assume any death benefit proceeds
are to be paid in equal shares to the surviving beneficiaries.
You have the right to change beneficiaries during the annuitant's lifetime
unless you have designated an irrevocable beneficiary. When an irrevocable
beneficiary has been designated, you and the irrevocable beneficiary may have to
act together to exercise some of the rights and options under the Contract.
CHANGE OF CONTRACT OWNER OR BENEFICIARY. During the annuitant's lifetime,
you may transfer ownership of a non-qualified Contract. A change in ownership
may affect the amount of the death benefit, the guaranteed minimum death
benefit, and/or the death benefit option applied to the contract If you have
elected the Standard Death Benefit option, the minimum guaranteed death benefit
will continue if the new owner is age 85 or under on the date of the ownership
change. For all other death benefit options, if the new owner is age 79 or under
on the date that ownership changes, the minimum guaranteed death benefit will
continue. If the new owner is age 80 to 85, the enhanced death benefit will end,
and the death benefit will become the Standard Death Benefit. The mortality and
expense risk charge will reflect this change in death benefit. For all death
benefit options, if the new owner's attained age is 86 or over on the date of
the ownership change, the death benefit will be the cash surrender value, and
the Standard Death Benefit mortality and expense risk charge will apply. Please
note that guaranteed minimum death benefits do not reset upon a change of owner.
Once a death benefit has been changed due to a change in owner, a subsequent
change to a younger owner will not restore any Enhanced Death Benefits.
You may also change the beneficiary. All requests for changes must be in writing
and submitted to our Customer Service Center in good order. The change will be
effective as of the day you sign the request. The change will not affect any
payment made or action taken by us before recording the change.
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PURCHASE AND AVAILABILITY OF THE CONTRACT
We will issue a Contract only if both the annuitant and the contract owner are
not older than age 85. The initial premium payment must be $25,000 or more. You
may make additional payments of at least $1,000 or more at any time after the
free look period before you turn age 85. Under certain circumstances, we may
waive the minimum premium payment requirement. We may also change the minimum
initial or additional premium requirements for certain group or sponsored
arrangements. Any initial or additional premium payment that would cause the
contract value of all annuities that you maintain with us to exceed $1,000,000
requires our prior approval.
IRAs and other qualified plans already have the
tax-deferral feature found in this Contract. For an additional cost, the
Contract provides other benefits including death benefits and the ability to
receive a lifetime income. See "Fees and Expenses" in this prospectus.
CREDITING OF PREMIUM PAYMENTS
We will process your initial premium within 2 business days after receipt, if
the application and all information necessary for processing the Contract are
complete. Subsequent premium payments will be processed within 1 business day if
we receive all information necessary. In certain states we also accept initial
and additional premium payments by wire order. Wire transmittals must be
accompanied by sufficient electronically transmitted data. We may retain your
initial premium payment for up to 5 business days while attempting to complete
an incomplete application. If the application cannot be completed within this
period, we will inform you of the reasons for the delay. We will also return the
premium payment immediately unless you direct us to hold the premium payment
until the application is completed.
We will allocate your initial payment according to the instructions you
specified. If a subaccount is not available or requested in error, we will make
inquiry about a replacement subaccount. If we are unable to reach you or your
representative, we will consider the application incomplete. For initial premium
payments, the payment will be credited at the accumulation unit value next
determined after we receive your premium payment and the completed application.
Once the completed application is received, we will allocate the payment to the
subaccounts and/or Fixed Interest Allocation specified by you within 2 business
days.
We will make inquiry to discover any missing information related to
subsequent payments. We will allocate the subsequent payment(s) pro rata
according to the current variable subaccount allocation unless you specify
otherwise. Any fixed allocation(s) will not be considered in the pro rata
calculations. If a subaccount is no longer available or requested in error, we
will allocate the subsequent payment(s) proportionally among the other
subaccount(s) in your current allocation or your allocation instructions. For
any subsequent premium payments, the payment will be credited at the
accumulation unit value next determined after receipt of your premium payment
and instructions.
Once we allocate your premium payment to the subaccounts selected by you, we
convert the premium payment into accumulation units. We divide the amount of the
premium payment allocated to a particular subaccount by the value of an
accumulation unit for the subaccount to determine the number of accumulation
units of the subaccount to be held in Separate Account B with respect to your
Contract. The net investment results of each subaccount vary with its investment
performance.
If your premium payment was transmitted by wire order from your broker-dealer,
we will follow one of the following two procedures after we receive and accept
the wire order and investment instructions. The procedure we follow depends on
state availability and the procedures of your broker-dealer.
(1) If either your state or broker-dealer do not permit us to issue a
Contract without an application, we reserve the right to rescind
the Contract if we do not receive and accept a properly completed
application or enrollment form within 5 days of the premium
payment. If we do not receive the application or form within 5 days
of the premium payment, we will refund the contract value plus any
charges we deducted, and the Contract will be voided. Some states
require that we return the premium paid, in which case we will
comply.
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(2) If your state and broker-dealer allow us to issue a Contract
without an application, we will issue and mail the Contract to you
or your representative, together with an Application
Acknowledgement Statement for your execution. Until our Customer
Service Center receives the executed Application Acknowledgement
Statement, neither you nor the broker-dealer may execute any
financial transactions on your Contract unless they are requested
in writing by you. We may require additional information before
complying with your request (e.g., signature guarantee).
In some states, we may require that an initial premium designated for a
subaccount of Separate Account B or the Fixed Account be allocated to a
subaccount specially designated by the Company (currently, the Liquid Asset
subaccount) during the free look period. After the free look period, we will
convert your contract value (your initial premium plus any earnings less any
expenses) into accumulation units of the subaccounts you previously selected.
The accumulation units will be allocated based on the accumulation unit value
next computed for each subaccount. Initial premiums designated for Fixed
Interest Allocations will be allocated to a Fixed Interest Allocation with the
guaranteed interest period you have chosen; however, in the future we may
allocate the premiums to the specially designated subaccount during the free
look period.
ADMINISTRATIVE PROCEDURES
We may accept a request for Contract service in writing, by telephone, or other
approved electronic means, subject to our administrative procedures, which vary
depending on the type of service requested and may include proper completion of
certain forms, providing appropriate identifying information, and/or other
administrative requirements. We will process your request at the contract value
next determined only after you have met all administrative requirements.
CONTRACT VALUE
We determine your contract value on a daily basis beginning on the contract
date. Your contract value is the sum of (a) the contract value in the Fixed
Interest Allocations, and (b) the contract value in each subaccount in which you
are invested.
CONTRACT VALUE IN FIXED INTEREST ALLOCATIONS. The contract value in your
Fixed Interest Allocation is the sum of premium payments allocated to the Fixed
Interest Allocation under the Contract, plus contract value transferred to the
Fixed Interest Allocation, plus credited interest, minus any transfers and
withdrawals from the Fixed Interest Allocation (including any Market Value
Adjustment applied to such withdrawal), contract fees (including, in some cases,
fees for optional benefit riders), and premium taxes.
CONTRACT VALUE IN THE SUBACCOUNTS. On the contract date, the contract value
in the subaccount in which you are invested is equal to the initial premium paid
and designated to be allocated to the subaccount. On the contract date, we
allocate your contract value to each subaccount and/or a Fixed Interest
Allocation specified by you, unless the Contract is issued in a state that
requires the return of premium payments during the free look period, in which
case, the portion of your initial premium not allocated to a Fixed Interest
Allocation may be allocated to a subaccount specially designated by the Company
during the free look period for this purpose (currently, the Liquid Asset
subaccount).
On each business day after the contract date, we calculate the amount of
contract value in each subaccount as follows:
(1) We take the contract value in the subaccount at the end of the
preceding business day.
(2) We multiply (1) by the subaccount's Net Investment Factor since
the preceding business day.
(3) We add (1) and (2).
(4) We add to (3) any additional premium payments, and then add or
subtract any transfers to or from that subaccount.
(5) We subtract from (4) any withdrawals and any related charges,
and then subtract any contract fees (including any rider
charges) and premium taxes.
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CASH SURRENDER VALUE
The cash surrender value is the amount you receive when you surrender the
Contract. The cash surrender value will fluctuate daily based on the investment
results of the subaccounts in which you are invested, and interest credited to
Fixed Interest Allocations and any Market Value Adjustment. We do not guarantee
any minimum cash surrender value. On any date during the accumulation phase, we
calculate the cash surrender value as follows: we start with your contract
value, then we adjust for any Market Value Adjustment, then we deduct any
surrender charge, any charge for premium taxes, and any other charges incurred
but not yet deducted.
SURRENDERING TO RECEIVE THE CASH SURRENDER VALUE
You may surrender the Contract at any time while the annuitant is living and
before the annuity start date. A surrender will be effective on the date your
written request and the Contract are received at our Customer Service Center. We
will determine and pay the cash surrender value at the price next determined
after receipt of all paperwork required in order for us to process your
surrender. Once paid, all benefits under the Contract will be terminated. For
administrative purposes, we will transfer your money to a specially designated
subaccount (currently the Liquid Asset subaccount) prior to processing the
surrender. This transfer will have no effect on your cash surrender value. You
may receive the cash surrender value in a single sum payment or apply it under
one or more annuity options. We will usually pay the cash surrender value within
7 days.
Consult your tax advisor regarding the tax consequences associated with
surrendering your Contract. A surrender made before you reach age 59 1/2 may
result in a 10% tax penalty. See "Federal Tax Considerations" for more details.
THE SUBACCOUNTS
Each of the 32 subaccounts of Separate Account B offered under this prospectus
invests in an investment portfolio with its own distinct investment objectives
and policies. Each subaccount of Separate Account B invests in a corresponding
portfolio of the GCG Trust, a corresponding portfolio of the PIMCO Variable
Insurance Trust, a corresponding portfolio of the Warburg Pincus Trust, a
corresponding portfolio of the ING Variable Insurance Trust or a corresponding
portfolio of the Prudential Series Fund.
ADDITION, DELETION OR SUBSTITUTION OF SUBACCOUNTS AND OTHER CHANGES
We may make additional subaccounts available to you under the Contract. These
subaccounts will invest in investment portfolios we find suitable for your
Contract.
We may amend the Contract to conform to applicable laws or
governmental regulations. If we feel that investment in any of the investment
portfolios has become inappropriate to the purposes of the Contract, we may,
with approval of the SEC (and any other regulatory agency, if required)
substitute another portfolio for existing and future investments. If you have
elected the dollar cost averaging, systematic withdrawals, or automatic
rebalancing programs or if you have other outstanding instructions, and we
substitute or otherwise eliminate a portfolio which is subject to those
instructions, we will execute your instructions using the substituted or
proposed replacement portfolio, unless you request otherwise.
We also reserve the right to: (i) deregister Separate Account B under the 1940
Act; (ii) operate Separate Account B as a management company under the 1940 Act
if it is operating as a unit investment trust; (iii) operate Separate Account B
as a unit investment trust under the 1940 Act if it is operating as a managed
separate account; (iv) restrict or eliminate any voting rights as to Separate
Account B; and (v) combine Separate Account B with other accounts. We will, of
course, provide you with written notice before any of these changes are
effected.
THE FIXED ACCOUNT
The Fixed Account is a segregated asset account which contains the assets that
support a contract owner's Fixed Interest Allocations. See "The Fixed Interest
Allocations" for more information.
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OPTIONAL RIDERS
Subject to state availability, you may elect one of three optional benefit
riders discussed below. You may not add more than one of these three riders to
your Contract. There is a separate charge for each rider. Once elected, the
riders generally may not be cancelled. This means once you add the rider you may
not remove it, and charges will be assessed regardless of the performance of
your Contract. Please see "Charges and Fees -- Optional Rider Charges" for
information on rider charges.
The following describes the optional riders for
contract owners purchasing Contracts after January __, 2001. If you purchased
your Contract prior to that date, please see Appendix E for a description of the
calculation of the optional rider benefits applicable under your Contract.
THE OPTIONAL RIDERS MAY NOT BE AVAILABLE FOR ALL INVESTORS. YOU SHOULD ANALYZE
EACH RIDER THOROUGHLY AND UNDERSTAND COMPLETELY BEFORE YOU SELECT ANY. THE
OPTIONAL RIDERS DO NOT GUARANTEE ANY RETURN OF PRINCIPAL OR PREMIUM PAYMENTS AND
DO NOT GUARANTEE PERFORMANCE OF ANY SPECIFIC INVESTMENT PORTFOLIO UNDER THE
CONTRACT. YOU SHOULD CONSULT A QUALIFIED FINANCIAL ADVISER IN EVALUATING THE
RIDERS.
THE OPTIONAL RIDERS MAY NOT BE APPROVED IN ALL STATES. CHECK WITH OUR CUSTOMER
SERVICE CENTER FOR AVAILABILITY IN YOUR STATE. THE TELEPHONE NUMBER IS (800)
366-0066.
RIDER DATE. We use the term rider date in the discussion of the
optional benefit riders below. The rider date is the date an optional benefit
rider becomes effective. The rider date is also the contract date if the rider
was purchased at the time the Contract is issued.
NO CANCELLATION. Once you purchase a rider, the rider may not be cancelled,
unless you cancel the Contract during the Contract's free look period,
surrender, annuitize or otherwise terminate the Contract which automatically
cancels any attached rider. Once the Contract continues beyond the free look
period, you may not at any time cancel the rider, except with respect to a
one-time right to cancel the twenty-year option of the Minimum Guaranteed
Accumulation Benefit rider under specified conditions. The Company may, at its
discretion, cancel and/or replace a rider at your request in order to renew or
reset a rider.
TERMINATION. The optional riders are "living benefits." This
means that the guaranteed benefits offered by the riders are intended to be
available to you while you are living and while your Contract is in the
accumulation phase. The optional riders automatically terminate (and all
benefits under the rider will cease) if you annuitize, surrender or otherwise
terminate your Contract or die (first owner to die if there are multiple
contract owners, or at death of annuitant if contract owner is not a natural
person), unless your spouse beneficiary elects to continue the Contract, during
the accumulation phase. The optional rider will also terminate if there is a
change in contract ownership (other than a spousal beneficiary continuation on
your death). Other circumstances which may cause a particular optional rider to
terminate automatically are discussed below with the applicable rider.
MINIMUM
GUARANTEED ACCUMULATION BENEFIT (MGAB) RIDER. The MGAB rider is an optional
benefit which provides you with an MGAB benefit intended to guarantee a minimum
contract value at the end of a specified waiting period. The MGAB is a one-time
adjustment to your contract value in the event your contract value on the MGAB
Benefit Date is less than the MGAB Base. The MGAB rider may offer you protection
in the event your Contract loses value during the MGAB waiting period. For a
discussion of the charges we deduct under the MGAB rider, see "Optional Rider
Charges."
The MGAB rider offers a ten-year option and a twenty-year option, of
which you may purchase only one. The ten-year option has a waiting period of ten
years and, other than for allocations to Special Funds, guarantees that your
contract value at the end of ten years will at least equal your initial premium
payment, reduced pro rata for withdrawals. Transfers made within 3 years prior
to the MGAB Benefit Date will also reduce the benefit pro rata. The twenty-year
option has a waiting period of twenty years and, other than allocations to
Special Funds, guarantees that your contract value at the end of twenty years
will at least equal two times your initial premium payment, reduced pro rata for
withdrawals, and reduced for transfers made within 3 years prior to the MGAB
Benefit Date. If you add the 20 year option rider after the contract date, any
payment of premiums after the rider date, and/or investments in the Special
Funds, may prevent the MGAB
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Base from doubling over the waiting period.On the
MGAB Benefit Date, which is the next business day after the applicable waiting
period, we calculate your Minimum Guaranteed Accumulation Benefit.
CALCULATING THE MGAB. We calculate your MGAB as follows:
1. WE FIRST DETERMINE YOUR MGAB BASEThe MGAB Base is only a
calculation used to determine the MGAB. The MGAB Base does not
represent a contract value, nor does it guarantee performance
of the subaccounts in which you are invested. It is also
not used in determining the amount of your annuity income, cash
surrender value and death benefits.
The MGAB Base is tracked separately for Special and Non-Special
Funds, based on the initial allocation of premium (or
contract value), subsequently allocated eligible premiums,
withdrawals and transfers. Contract value is used as the
initial value if the rider is added after the contract date.
The aggregate MGAB Base is used to determine the MGAB on
the MGAB Benefit Date. THE AGGREGATE MGAB BASE EQUALS THE SUM
OF (1) THE LESSER OF THE MGAB BASE ALLOCATED TO SPECIAL
FUNDS AND THE CONTRACT VALUE IN THE SPECIAL FUNDS; AND (2) THE
MGAB BASE FOR NON-SPECIAL FUNDS. THUS, INVESTING IN THE
SPECIAL FUNDS MAY LIMIT THE MGAB BENEFIT.
If you purchased the MGAB rider on the contract date, and
(i) elected the ten-year option, your MGAB Base for Special and
Non-Special Funds is equal to your initial premium, plus any
additional premium added to your Contract during the 2-year
period after your rider date, reduced pro rata for any
withdrawals and reduced for any transfers made within the last
3 years prior to the MGAB Benefit Date; or
(ii) elected the twenty-year option, your MGAB Base for Special and
Non-Special Funds is equal to your initial premium, plus any
additional premium added to your Contract during the 2-year
period after your contract date, accumulated at the MGAB Rate,
reduced pro rata for any withdrawals and reduced for any
transfers made within the last 3 years prior to the MGAB
Benefit Date. The MGAB Rate is the annual effective rate of
3.5265%. Accumulation of eligible additional premiums starts
on the date the premium was received.
Net transfers from Special Funds to Non-Special Funds will reduce
the MGAB Base and MGAB Charge Base allocated to Special Funds on a
pro-rata basis. If the transfer is made more than 3 years before
the Benefit Date, there will be a corresponding increase in the
MGAB Base for Non-Special Funds equal to the lesser of the
reduction in the MGAB Base for Special Funds and the net contract
value transferred.
Net transfers from Non-Special Funds to Special Funds will reduce
the MGAB Base and MGAB Charge Base allocated to Non-Special Funds
on a pro-rata basis. If the transfer is made more than 3 years
before the Benefit Date, there will be a corresponding increase in
the MGAB Base for Special Funds equal to the reduction in the MGAB
Base for Non-Special Funds.
If you purchased the MGAB rider after the contract date, your MGAB
Base is equal to your contract value on the rider date, plus
premiums added during the 2-year period after your rider date.
Withdrawals taken while the MGAB rider is in effect, as well as
transfers made within 3 years prior to the MGAB Benefit Date, will
reduce the value of your MGAB Base pro rata. This means that the
MGAB Base (and the MGAB Charge Base) will be reduced by the same
percent as the percent of contract value that was withdrawn (or
transferred). We will look to your contract value immediately
before the withdrawal or transfer when we determine this percent.
ONLY PREMIUMS ADDED TO YOUR CONTRACT DURING THE 2-YEAR PERIOD AFTER
YOUR RIDER DATE ARE INCLUDED IN THE MGAB BASE. ANY ADDITIONAL
PREMIUM PAYMENTS YOU ADDED TO YOUR CONTRACT AFTER THE SECOND RIDER
ANNIVERSARY ARE NOT INCLUDED IN THE MGAB BASE. Thus, the MGAB rider
may not be appropriate for you if you plan to add substantial
premium payments after your second rider anniversary.
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2. WE THEN SUBTRACT YOUR CONTRACT VALUE ON THE MGAB BENEFIT DATE FROM
YOUR AGGREGATE MGAB BASE. The contract value that we subtract
includes both the contract value in the subaccounts in which you
are invested and the contract value in your Fixed Interest
Allocations, if any.
3. ANY POSITIVE DIFFERENCE IS YOUR MGAB. If there is a MGAB, we will
automatically credit it on the MGAB Benefit Date to the subaccounts
in which you are invested pro rata based on the proportion of your
contract value in the subaccounts on that date, unless you have
previously given us other allocation instructions. If you do not
have an investment in any subaccount on the MGAB Benefit Date, we
will allocate the MGAB to the Liquid Asset subaccount on your
behalf. After the crediting of the MGAB, the amount of your annuity
income, cash surrender value and death benefits will reflect the
crediting of the MGAB to your contract value to the extent the
contract value is used to determine such value.
PURCHASE. To purchase the MGAB rider, you must be age 80 or younger on the
rider date if you choose the ten-year option and age 65 or younger on the rider
date if you choose the twenty-year option. The waiting period must end at or
before your annuity start date. The MGAB rider may be purchased (i) on the
contract date, and (ii) within 30 days following the contract date. For
contracts issued more than 30 days before the date this rider first became
available in your state, the Company may in its discretion allow purchase of
this rider during the 30-day period preceding the first contract anniversary
after the date of this prospectus, or the date of state approval, whichever is
later.
THE MGAB BENEFIT DATE. If you purchased the MGAB rider on the contract date
or added the MGAB rider within 30 days following the contract date, the MGAB
Benefit Date is your 10th contract anniversary for the ten-year option or 20th
contract anniversary for the twenty-year option. If you added the MGAB rider
during the 30-day period preceding your first contract anniversary after the
date of this prospectus, your MGAB Benefit Date will be the first contract
anniversary occurring after 10 years (for the ten-year option) or 20 years (for
the twenty-year option) after the rider date. The MGAB rider is not available if
the MGAB Benefit Date would fall beyond the latest annuity start date.
CANCELLATION. If you elected the twenty-year option, you have a one-time
right to cancel the MGAB rider on your first contract anniversary that is at
least 10 years after the rider date. If you purchased the MGAB rider during the
30-day period following the contract date, your one-time right to cancel the
rider occurs on the tenth anniversary of your contract date. To cancel, you need
to send written notice to our Customer Service Center at least 30 days before
such anniversary date. If the MGAB rider is terminated before the MGAB Benefit
Date, you will not be credited with the MGAB and we will assess the pro rata
portion of the MGAB rider charge for the current quarter.
NOTIFICATION. Any crediting of the MGAB will be reported in your first
quarterly statement following the MGAB Benefit Date.
MINIMUM GUARANTEED INCOME
BENEFIT (MGIB) RIDER. The MGIB rider is an optional benefit which guarantees
that a minimum amount of annuity income will be available to you if you
annuitize on the MGIB Benefit Date, regardless of fluctuating market conditions.
The amount of the Minimum Guaranteed Income Benefit will depend on the amount of
premiums you pay during the five contract years after you purchase the rider,
the amount of contract value you allocate or transfer to the Special Funds, the
MGIB rate, the adjustments for Special Fund transfers, and any withdrawals you
take while the rider is in effect. For a discussion of the charges we deduct
under the MGIB rider, see "Optional Rider Charges." Ordinarily, the amount of
income that will be available to you on the annuity start date is based on your
contract value, the annuity option you selected and the guaranteed or income
factors in effect on the date you annuitize. If you purchase the MGIB rider, the
minimum amount of income that will be available to you upon annuitization on the
MGIB Benefit Date is the greatest of:
(i) your annuity income based on your contract value adjusted for
any Market Value Adjustment on the MGIB Benefit Date applied
to the guaranteed income factors specified in your Contract
for the annuity option you selected;
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(ii) your annuity income based on your contract value adjusted for
any Market Value Adjustment on the MGIB Benefit Date applied
to the then current income factors in effect for the annuity
option you selected; and
(iii)the MGIB annuity income based on your MGIB Base on the MGIB
Benefit Date applied to the MGIB income factors specified in
your rider for the MGIB annuity option you selected. Prior to
applying the MGIB income factors, we will adjust the MGIB Base
for any surrender charges, premium tax recovery and Market
Value Adjustments that would otherwise apply at annuitization.
Prior to your latest annuity start date, you may choose to exercise your right
to receive payments under the MGIB rider on the MGIB Benefit Date. Payments
under the rider begin on the MGIB Benefit Date. We require a 10-year waiting
period before you can annuitize under the MGIB rider benefit. The MGIB must be
exercised in the 30-day period prior to the end of the waiting period or any
subsequent contract anniversary. At your request, the Company may in its
discretion extend the latest contract annuity start date without extending the
MGIB Benefit Date.
DETERMINING THE MGIB ANNUITY INCOME. On the MGIB Benefit Date, we
calculate your MGIB annuity income as follows:
1. WE FIRST DETERMINE YOUR MGIB BENEFIT BASE. The MGIB Benefit
Base is only a calculation used to determine the MGIB. The
MGIB Benefit Base does not represent a contract value, nor does it
guarantee performance of the subaccounts in which you are invested.
It is also not used in determining the amount of your cash
surrender value and death benefits. Any reset of contract value
under provisions of the Contract or other riders will not increase
the MGIB Benefit Base or MGIB Benefit Base Maximum.
The MGIB Benefit Base is tracked separately for Special and
Non-Special Funds, based on initial allocation of eligible premium
(or contract value) and subsequently allocated eligible premiums,
withdrawals and transfers. Contract value is used as the initial
value if the rider is added after the contract date. The MGIB
Benefit Base equals the sum of (1) the contract value of Special
Funds, and (2) the MGIB Benefit Base for Non-Special Funds. Thus,
investing in the Special Funds may limit the MGIB benefit.
The MGIB Benefit Base is equal to the lesser of (a) and (b) where:
(i) is your initial premium (or contract value on the rider date
if you purchased the MGIB rider after the contract date), plus
any eligible additional premiums added to your Contract,
reduced pro rata by all withdrawals taken while the MGIB rider
is in effect, accumulated at the MGIB Rate to the earlier of
the oldest owner reaching age 80 and reaching the MGIB Benefit
Base Maximum, and at 0% thereafter; and
(ii) is the MGIB Benefit Base Maximum, which equals 200% of
allocated eligible premiums, adjusted for withdrawals and
transfers. Eligible additional premium payments are those
added more than 5 years before the earliest MGIB Benefit Date
and are included in the MGIB Benefit Base. Premiums paid after
that are excluded from the MGIB Benefit Base.
Net transfers from Special Funds to Non-Special Funds will reduce
the MGIB Benefit Base and MGIB Benefit Base Maximum allocated to
Special Funds on a pro-rata basis. The resulting increase in the
MGIB Benefit Base for Non-Special Funds will equal the lesser of
the reduction in the MGIB Benefit Base for Special Funds and the
net contract value transferred. The increase in the MGIB Benefit
Base Maximum for Non-Special Funds equals the reduction in the MGIB
Benefit Base Maximum for Special Funds.
Net transfers from Non-Special Funds to Special Funds will reduce
the MGIB Benefit Base and MGIB Benefit Base Maximum allocated to
Non-Special Funds on a pro-rata basis. The resulting increase in
the MGIB Benefit Base and the MGIB Benefit Base Maximum for Special
Funds
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equals the reduction in the MGIB Benefit Base and MGIB
Benefit Base Maximum for Non-Special Funds. Transfers to one or
more Special Funds could reduce the MGIB benefit. The MGIB Rate is
currently 7%. The Company may at its discretion discontinue
offering this rate. The MGIB Rate is an annual effective rate.
2. THEN WE DETERMINE THE MGIB ANNUITY INCOME BY MULTIPLYING YOUR MGIB
Benefit BASE (ADJUSTED FOR ANY MARKET VALUE ADJUSTMENT, SURRENDER
CHARGE AND PREMIUM TAXES) BY THE INCOME FACTOR, AND THEN DIVIDE BY
$1,000. Two MGIB Income Options are available under the MGIB Rider:
(i) Income for Life (Single Life or Joint with 100% Survivor) and
10-30 Year Certain;
(ii) Income for a 20-30 Year Period Certain; or
(iii)Any other income plan offered by the Company in connection
with the MGIB rider on the MGIB Benefit Date.
On the MGIB Benefit Date, we would apply the MGIB Benefit Base using the
Table of Income Factors specified in the MGIB rider for the Income Option you
selected. The guaranteed factors contained in the MGIB rider generally provide
lower payout per $1,000 of value applied than the guaranteed factors found in
your Contract.
Then we compare the MGIB annuity income under the rider guarantee for the
option selected with the annuity income under your Contract guarantee for the
same option. The greater amount of income will be available to you on the MGIB
Benefit Date.
PURCHASE. To purchase the MGIB rider, you must be age 79 or younger on the
rider date and the ten-year waiting period must end at or prior to the latest
annuity start date. The MGIB rider must be purchased (i) on the contract date,
or (ii) within thirty days after the contract date. For contracts issued more
than 30 days before the date this rider first became available in your state,
the Company may in its discretion allow purchase of this rider during the 30-day
period preceding the first contract anniversary after the date of this
prospectus, or the date of state approval, whichever is later. There is a ten
year waiting period before you can annuitize under the MGIB rider..
THE MGIB BENEFIT DATE. If you purchased the MGIB rider on the contract date
or added the MGIB rider within 30 days following the contract date, the MGIB
Benefit Date is the contract anniversary on or after the tenth contract
anniversary when you decide to exercise your right to annuitize under the MGIB
rider. If you added the MGIB rider at any other time, your MGIB Benefit Date is
the contract anniversary at least 10 years after the rider date when you decide
to exercise your right to annuitize under the MGIB rider.
NO CHANGE OF ANNUITANT. Once the MGIB rider is purchased, the annuitant may
not be changed except for the following exception. If an annuitant who is not a
contract owner dies prior to annuitization, a new annuitant may be named in
accordance with the provisions of your Contract. The MGIB Base is unaffected and
continues to accumulate.
NOTIFICATION. On or about 30 days prior to the MGIB Benefit Date, we will
provide you with notification which will include an estimate of the amount of
MGIB annuity benefit available if you choose to exercise. The actual amount of
the MGIB annuity benefit will be determined as of the MGIB Benefit Date.
THE MGIB RIDER DOES NOT RESTRICT OR LIMIT YOUR RIGHT TO ANNUITIZE THE CONTRACT
AT ANY TIME PERMITTED UNDER THE CONTRACT. THE MGIB RIDER DOES NOT RESTRICT YOUR
RIGHT TO ANNUITIZE THE CONTRACT USING CONTRACT VALUES THAT MAY BE HIGHER THAN
THE MGIB ANNUITY BENEFIT.
THE BENEFITS ASSOCIATED WITH THE MGIB RIDER ARE
AVAILABLE ONLY IF YOU ANNUITIZE YOUR CONTRACT UNDER THE RIDER AND IN ACCORDANCE
WITH THE PROVISIONS SET FORTH ABOVE. ANNUITIZING USING THE MGIB MAY RESULT IN
THE MORE FAVORABLE STREAM OF INCOME PAYMENTS UNDER YOUR CONTRACT. BECAUSE THE
MGIB RIDER IS BASED ON CONSERVATIVE ACTUARIAL FACTORS, THE LEVEL OF LIFETIME
INCOME
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THAT IT GUARANTEES MAY BE LESS THAN THE LEVEL THAT MIGHT BE PROVIDED BY
THE APPLICATION OF YOUR CONTRACT VALUE TO THE CONTRACT'S APPLICABLE ANNUITY
FACTORS. YOU SHOULD CONSIDER ALL OF YOUR OPTIONS AT THE TIME YOU BEGIN THE
INCOME PHASE OF YOUR CONTRACT.
MINIMUM GUARANTEED WITHDRAWAL BENEFIT (MGWB) RIDER.
The MGWB rider is an optional benefit which guarantees that if your
contract value is reduced to zero you will receive periodic payments equal to
all premium payments paid during the first two contract years (Eligible Payment
Amount) adjusted for any prior withdrawals. To maintain this guarantee,
withdrawals in any contract year may not exceed 7% of your adjusted Eligible
Payment Amount. If your contract value is reduced to zero, your periodic
payments will be 7% of your Eligible Payment Amount every year. Payments
continue until your MGWB Withdrawal Account is reduced to zero. For a discussion
of the charges we deduct under the MGWB rider, see "Optional Rider Charges."
Each payment you receive under the MGWB rider will be taxed as a withdrawal and
may be subject to a penalty tax. See "Withdrawals" and "Federal Tax
Considerations" for more information. Your original Eligible Payment Amount
depends on when you purchase the MGWB rider and is:
(i) if you purchased the MGWB rider on the contract date, your
premium payments received during the first two contract
years; or
(ii) if you purchased the MGWB rider after the contract date, your
contract value on the rider date, including any premiums
received that day, and any subsequent premium payments
received during the two-year period commencing on the rider
date.
THE MGWB WITHDRAWAL ACCOUNT. The MGWB Withdrawal Account is only a
calculation which represents the remaining amount available for periodic
payments under the MGWB rider. It does not represent a contract value, nor does
it guarantee performance of the subaccounts in which you are invested. It will
not affect your annuitization, surrender and death benefits.
The MGWB Withdrawal
Account is equal to the Eligible Payment Amount, tracked separately for Special
and Non-Special Funds, adjusted for any withdrawals and transfers between
Special and Non-Special Funds. THE MGWB WITHDRAWAL ACCOUNT EQUALS THE SUM OF (A)
THE MGWB WITHDRAWAL ACCOUNT ALLOCATED TO NON-SPECIAL FUNDS, AND (B) THE LESSER
OF (1) THE MGWB WITHDRAWAL ACCOUNT ALLOCATED TO SPECIAL FUNDS AND (2) THE
CONTRACT VALUE IN THE SPECIAL FUNDS. THUS, INVESTING IN THE SPECIAL FUNDS MAY
LIMIT THE MGWB WITHDRAWAL ACCOUNT.
Withdrawals of up to 7% per year of the
Eligible Payment Amount will reduce the value of your MGWB Withdrawal Account by
the dollar amount of the withdrawal for Non-Special Funds and pro-rata for
Special Funds, based on the source of the withdrawal. Any withdrawals greater
than the 7% per year of the Eligible Payment Amount will cause a reduction in
the MGWB Withdrawal Account of the Special and Non-Special Funds, by the
proportion that the withdrawal bears to the contract value in Special and
Non-Special Funds, respectively, at the time of the withdrawal. If a single
withdrawal involves both Special and Non-Special Funds and causes the 7% to be
exceeded, the withdrawal will be treated as taken first from Non-Special Funds.
Any withdrawals greater than 7% per year of the Eligible Payment Amount will
also cause a reduction in the Eligible Payment Amount by the proportion that the
withdrawal bears to the contract value at the time of the withdrawal. The MGWB
Withdrawal Account is also reduced by the amount of any periodic payments paid
under the MGWB rider once your contract value is zero. If a withdrawal reduces
the MGWB Withdrawal Account to zero, the MGWB rider terminates and no further
benefits are payable under the rider.Net transfers from Special Funds to
Non-Special Funds will reduce the MGWB Withdrawal Account allocated to Special
Funds on a pro-rata basis. The resulting increase in the MGWB Withdrawal Account
allocated to Non-Special Funds will equal the lesser of the reduction in the
MGWB Withdrawal Account for Special Funds and the net contract value
transferred.
Net transfers from Non-Special Funds to Special Funds will reduce the MGWB
Withdrawal Account allocated to Non-Special Funds on a pro-rata basis. The
resulting increase in the MGWB Withdrawal Account allocated to Special Funds
equals the reduction in the MGWB Withdrawal Account for Non-Special Funds.
GUARANTEED WITHDRAWAL STATUS. You may continue to make withdrawals in any amount
permitted under your Contract so long as your contract value is greater than
zero. See "Withdrawals." However, making any
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withdrawals in any year greater
than 7% per year of the Eligible Payment Amount will reduce the Eligible Payment
Amount for future withdrawals and payments under the MGWB rider by the
proportion that the withdrawal bears to the contract value at the time of the
withdrawal. The MGWB rider will remain in force and you may continue to make
withdrawals each year so long as:
(i) your contract value is greater than zero; (ii) your MGWB
Withdrawal Account is greater than zero; (iii)your latest
allowable annuity start date has not been reached; (iv) you
have not elected to annuitize your Contract; and
(ii)you have not died (unless your spouse has elected to continue
the contract), changed the ownership of the Contract or
surrendered the Contract.
The standard Contract provision limiting withdrawals to no more than 90% of the
cash surrender value is not applicable under the MGWB rider.
AUTOMATIC PERIODIC BENEFIT STATUS. Under the MGWB rider, in the event your
contract value is reduced to zero your Contract is given what we refer to as
Automatic Periodic Benefit Status, if:
(i) your MGWB Withdrawal Account is greater than zero;
(ii) your latest allowable annuity start date has not been reached;
(iii)you have not elected to annuitize your Contract; and
(iv) you have not died, changed the ownership of the Contract or
surrendered the Contract.
Once your Contract is given Automatic Periodic Benefit Status, we will pay you
the annual MGWB periodic payments, beginning on the next contract anniversary,
equal to the lesser of the remaining MGWB Withdrawal Account or 7% annually of
your Eligible Payment Amount until the earliest of (i) your contract's latest
annuity start date, (ii) the death of the owner; or (iii) until your MGWB
Withdrawal Account is exhausted. We will reduce the MGWB Withdrawal Account by
the amount of each payment. Once your Contract is given Automatic Periodic
Benefit Status, we will not accept any additional premium payments in your
Contract and the Contract will not provide any benefits except those provided by
the MGWB rider. Any other rider terminates. Your Contract will remain in
Automatic Periodic Benefit Status until the earliest of (i) payment of all MGWB
periodic payments (ii) payment of the Commuted Value (defined below) or (iii)
the owner's death has occurred.
On the contract's latest annuity start date, in lieu of making the remaining
MGWB periodic payments, we will pay you the Commuted Value of your MGWB periodic
payments remaining. We may, at our option, extend your annuity start date in
order to continue the MGWB periodic payments. The Commuted Value is the present
value of any then remaining MGWB periodic payments at the current interest rate
plus 0.50%. The current interest rate will be determined by the average of the
Ask Yields for U.S. Treasury Strips as quoted by a national quoting service for
period(s) applicable to the remaining payments. Once the last MGWB periodic
payment is made or we pay you the Commuted Value, your Contract and the MGWB
rider terminate.
DEATH BENEFIT DURING AUTOMATIC PERIODIC BENEFIT STATUS. If you have never
withdrawn more than 5% per year of the Eligible Payment Amount and you elected
the 5% Solution Enhanced Death Benefit in your Contract, the death benefit
otherwise payable under the terms of your Contract will remain in force during
any Automatic Periodic Benefit Status. Please note that if you withdrawal more
than 5%, the withdrawal will reduce your death benefit on a pro-rata basis, and
your remaining death benefit could be minimal. In determining the amount of the
death benefit during the Automatic Periodic Benefit Status we deem your contract
value to be zero and treat the MGWB periodic payments as withdrawals. In all
other cases, the death benefit payable during Automatic Periodic Benefit Status
is your MGWB Withdrawal Account which equals the sum of the remaining MGWB
periodic payments.
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PURCHASE. To purchase the MGWB rider, you must be age 80 or younger on the
rider date. The MGWB rider must be purchased (i) on the contract date, or (ii)
within 30 days after the contract date. For contracts issued more than 30 days
before the date this rider first became available in your state, the Company may
in its discretion allow purchase of this rider during the 30-day period
preceding the first contract anniversary after the date of this prospectus, or
the date of state approval, whichever is later.
OTHER CONTRACTS
We offer other variable annuity contracts that also invest in the same
investment portfolios of the Trusts. These contracts have different charges that
could effect their performance, and may offer different benefits more suitable
to your needs. To obtain more information about these other contracts, contact
our Customer Service Center or your registered representative.
OTHER IMPORTANT PROVISIONS
See "Withdrawals," "Transfers Among Your Investments," "Death Benefit Choices,"
"Charges and Fees," "The Annuity Options" and "Other Contract Provisions" in
this prospectus for information on other important provisions in your Contract.
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WITHDRAWALS
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Any time during the accumulation phase and before the death of the contract
owner, you may withdraw all or part of your money. Keep in mind that if you
request a withdrawal for more than 90% of the cash surrender value, we will
treat it as a request to surrender the Contract. If any single withdrawal or the
sum of withdrawals exceeds the Free Withdrawal Amount, you will incur a
surrender charge. The Free Withdrawal Amount in any contract year is the greater
of (i) any earnings less previous free withdrawals, or (ii) 10% of premium
payments paid within the past 7 years not previously withdrawn, less any
previous free withdrawals taken in the same contract year.
You need to submit to us a written request specifying the Fixed Interest
Allocations or subaccounts from which amounts are to be withdrawn, otherwise the
withdrawal will be made on a pro rata basis from all of the subaccounts in which
you are invested. If there is not enough contract value in the subaccounts, we
will deduct the balance of the withdrawal from your Fixed Interest Allocations
starting with the guaranteed interest periods nearest their maturity dates until
we have honored your request. We will apply a Market Value Adjustment to any
withdrawal from your Fixed Interest Allocation taken more than 30 days before
its maturity date. Definitive guidance on the proper federal tax treatment of
the Market Value Adjustment has not been issued. You may want to discuss the
potential tax consequences of a Market Value Adjustment with your tax adviser.
We will determine the contract value as of the close of business on the day we
receive your withdrawal request at our Customer Service Center. The contract
value may be more or less than the premium payments made.
If the aggregate percentage cap on allocations to the Restricted Funds has been
exceeded, any subsequent withdrawals must be taken so that the percentage of
contract value in the Restricted Funds following the withdrawal would not be
greater than the percentage of contract value in the Restricted Funds prior to
the withdrawal. If a requested withdrawal would cause the percentage cap to be
exceeded, the amount of the withdrawal in excess of the cap would be taken
pro-rata from all variable subaccounts.
For administrative purposes, we will
transfer your money to a specially designated subaccount (currently, the Liquid
Asset subaccount) prior to processing the withdrawal. This transfer will not
affect the withdrawal amount you receive. We offer the following three
withdrawal options:
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REGULAR WITHDRAWALS
After the free look period, you may make regular withdrawals. Each withdrawal
must be a minimum of $100. We will apply a Market Value Adjustment to any
regular withdrawals from a Fixed Interest Allocation taken more than 30 days
before its maturity date.
SYSTEMATIC WITHDRAWALS
You may choose to receive automatic systematic withdrawal payments (1) from the
contract value in the subaccounts in which you are invested, or (2) from the
interest earned in your Fixed Interest Allocations. Systematic withdrawals may
be taken monthly, quarterly or annually. If you have contract value allocated to
one or more Restricted Funds, and you elect to receive systematic withdrawals
from the subaccounts in which you are invested, the systematic withdrawals must
be taken pro-rata from all subaccounts in which contract value is invested. If
you do not have contract value allocated to a Restricted Fund and choose
systematic withdrawals on a non-pro-rata basis, we will monitor the withdrawals
annually. If you subsequently allocate contract value to one or more Restricted
Funds, we will require you to take your systematic withdrawals on a pro-rata
basis from all subaccounts in which contract value is invested.
You decide when you would like systematic payments to start as long as it starts
at least 28 days after your contract date. You also select the date on which the
systematic withdrawals will be made, but this date cannot be later than the 28th
day of the month. If you have elected to receive systematic withdrawals but have
not chosen a date, we will make the withdrawals on the same calendar day of each
month as your contract date. If your contract date is after the 28th, your
systematic withdrawal will be made on the 28th day of each month.
Each systematic withdrawal amount must be a minimum of $100. The amount of your
systematic withdrawal can either be (1) a fixed dollar amount, or (2) an amount
based on a percentage of the premiums not previously withdrawn from the
subaccounts in which you are invested. Both forms of systematic withdrawals are
subject to the following maximum, which is calculated on each withdrawal date:
FREQUENCY MAXIMUM PERCENTAGE
Monthly 0.833%
Quarterly 2.50%
Annually 10.00%
If your systematic withdrawal is a fixed dollar amount and the amount to be
withdrawn would exceed the applicable maximum percentage of your premium
payments not previously withdrawn on any withdrawal date, we will automatically
reduce the amount withdrawn so that it equals such percentage. Thus, your fixed
dollar systematic withdrawals will never exceed the maximum percentage. If you
want fixed dollar systematic withdrawals to exceed the maximum percentage and
are willing to incur associated surrender charges, consider the Fixed Dollar
Systematic Withdrawal Feature which you may add to your regular systematic
withdrawal program.
If your systematic withdrawal is based on a percentage of
the premiums not previously withdrawn from the subaccounts in which you are
invested and the amount to be withdrawn based on that percentage would be less
than $100, we will automatically increase the amount to $100 as long as it does
not exceed the maximum percentage. If the systematic withdrawal would exceed the
maximum percentage, we will send the amount, and then automatically cancel your
systematic withdrawal option.
Systematic withdrawals from Fixed Interest Allocations are limited to interest
earnings during the prior month, quarter, or year, depending on the frequency
you chose. Systematic withdrawals are not subject to a Market Value Adjustment,
unless you have added the Fixed Dollar Systematic Withdrawal Feature discussed
below and the payments exceed interest earnings. Systematic withdrawals from
Fixed Interest Allocations under the Fixed Dollar Systematic Withdrawal Feature
are available only in connection with
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Section 72(q) or 72(t) distributions. A
Fixed Interest Allocation may not participate in both the systematic withdrawal
option and the dollar cost averaging program at the same time.
You may change the amount or percentage of your systematic withdrawal once each
contract year or cancel this option at any time by sending satisfactory notice
to our Customer Service Center at least 7 days before the next scheduled
withdrawal date. If you submit a subsequent premium payment after you have
applied for systematic withdrawals, we will not adjust future withdrawals under
the systematic withdrawal program unless you specifically request that we do so.
The systematic withdrawal option may commence in a contract year where a regular
withdrawal has been taken but you may not change the amount or percentage of
your withdrawals in any contract year during which you have previously taken a
regular withdrawal. You may not elect the systematic withdrawal option if you
are taking IRA withdrawals.
FIXED DOLLAR SYSTEMATIC WITHDRAWAL FEATURE. You may add the Fixed Dollar
Systematic Withdrawal Feature to your regular fixed dollar systematic withdrawal
program. This feature allows you to receive a systematic withdrawal in a fixed
dollar amount regardless of any surrender charges or Market Value Adjustments.
Systematic withdrawals from Fixed Interest Allocations under the Fixed Dollar
Systematic Withdrawal Feature are available only in connection with Section
72(q) or 72(t) distributions. You choose the amount of the fixed systematic
withdrawals, which may total up to an annual maximum of 10% of your premium
payments not previously withdrawn as determined on the day we receive your
election of this feature. The maximum limit will not be recalculated when you
make additional premium payments, unless you instruct us to do us. We will
assess a surrender charge on the withdrawal date if the withdrawal exceeds the
maximum limit as calculated on the withdrawal date. We will assess a Market
Value Adjustment on the withdrawal date if the withdrawal from a Fixed Interest
Allocation exceeds your interest earnings on the withdrawal date. We will apply
the surrender charge and any Market Value Adjustment directly to your contract
value (rather than to the systematic withdrawal) so that the amount of each
systematic withdrawal remains fixed.
Flat dollar systematic withdrawals which are intended to satisfy the
requirements of Section 72(q) or 72(t) of the Tax Code may exceed the maximum.
Such withdrawals are subject to surrender charges and Market Value Adjustment
when they exceed the applicable maximum percentage.
IRA WITHDRAWALS
If you have a non-Roth IRA Contract and will be at least age 70 1/2 during the
current calendar year, you may elect to have distributions made to you to
satisfy requirements imposed by federal tax law. IRA withdrawals provide payout
of amounts required to be distributed by the Internal Revenue Service ("IRS")
rules governing mandatory distributions under qualified plans. We will send you
a notice before your distributions commence. You may elect to take IRA
withdrawals at that time, or at a later date. You may not elect IRA withdrawals
and participate in systematic withdrawals at the same time. If you do not elect
to take IRA withdrawals, and distributions are required by federal tax law,
distributions adequate to satisfy the requirements imposed by federal tax law
may be made. Thus, if you are participating in systematic withdrawals,
distributions under that option must be adequate to satisfy the mandatory
distribution rules imposed by federal tax law.
You may choose to receive IRA withdrawals on a monthly, quarterly or annual
basis. Under this option, you may elect payments to start as early as 28 days
after the contract date. You select the day of the month when the withdrawals
will be made, but it cannot be later than the 28th day of the month. If no date
is selected, we will make the withdrawals on the same calendar day of the month
as the contract date.
You may request that we calculate for you the amount that is required to be
withdrawn from your Contract each year based on the information you give us and
various choices you make. For information regarding the calculation and choices
you have to make, see the SAI. The minimum dollar amount you can withdraw is
$100. When we determine the required IRA withdrawal amount for a taxable year
based on the frequency you select, if that amount is less than $100, we will pay
$100. At any time where the IRA withdrawal amount is greater than the contract
value, we will cancel the Contract and send you the amount of the cash surrender
value.
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You may change the payment frequency of your IRA withdrawals once each
contract year or cancel this option at any time by sending satisfactory notice
to our Customer Service Center at least 7 days before the next scheduled
withdrawal date. An IRA withdrawal in excess of the amount allowed under
systematic withdrawals will be subject to a Market Value Adjustment.
CONSULT YOUR TAX ADVISOR REGARDING THE TAX CONSEQUENCES ASSOCIATED WITH
TAKING WITHDRAWALS. You are responsible for determining that withdrawals comply
with applicable law. A withdrawal made before the taxpayer reaches age 59 1/2
may result in a 10% penalty tax. See "Federal Tax Considerations" for more
details.
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TRANSFERS AMONG YOUR INVESTMENTS
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You may transfer your contract value among the subaccounts in which you are
invested and your Fixed Interest Allocations at the end of the free look period
until the annuity start date. We currently do not charge you for transfers made
during a contract year, but reserve the right to charge $25 for each transfer
after the twelfth transfer in a contract year. We also reserve the right to
limit the number of transfers you may make and may otherwise modify or terminate
transfer privileges if required by our business judgement or in accordance with
applicable law. We will apply a Market Value Adjustment to transfers from a
Fixed Interest Allocation taken more than 30 days before its maturity date,
unless the transfer is made under the dollar cost averaging program. Keep in
mind that transfers between Special Funds and other investment portfolios may
negatively impact your death benefit or rider benefits.
If you allocate contract value to an investment option that has been designated
as a Restricted Fund, your ability to transfer contract value to the Restricted
Fund may be limited. A transfer to the Restricted Funds will not be permitted to
the extent that it would increase the contract value in the Restricted Fund to
more than the applicable limits following the transfer. We do not limit
transfers from Restricted Funds. If the result of multiple reallocations is to
lower the percentage of total contract value in the Restricted Fund, the
reallocation will be permitted even if the percentage of contract value in the
Restricted Fund is greater than the limit.
Transfers will be based on values at the end of the business day in which the
transfer request is received at our Customer Service Center. The minimum amount
that you may transfer is $100 or, if less, your entire contract value held in a
subaccount or a Fixed Interest Allocation.
To make a transfer, you must notify our Customer Service Center and all other
administrative requirements must be met. Any transfer request received after
4:00 p.m. Eastern Time or the close of the New York Stock Exchange will be
effected on the next business day. Separate Account B and the Company will not
be liable for following instructions communicated by telephone or other approved
electronic means that we reasonably believe to be genuine. We require personal
identifying information to process a request for transfer made over the
telephone.
TRANSFERS BY THIRD PARTIES
As a convenience to you, we currently allow you to give third parties the right
to effect transfers on your behalf. However, when the third party makes
transfers for many contract owners, the result can be simultaneous transfers
involving large amounts of account values. Such transfers can disrupt the
orderly management of the investment portfolios available to the Contract, can
result in higher costs to contract owners, and may not be compatible with the
long term goals of contract owners. Therefore, we may at any time exercise our
business judgment and limit transfers made by a third party.
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DOLLAR COST AVERAGING
You may elect to participate in our dollar cost averaging program if you have at
least $1,200 of contract value in the (i) Limited Maturity Bond subaccount or
the Liquid Asset subaccount, or (ii) a Fixed Interest Allocation with either a
6-month or a 1-year guaranteed interest period. These subaccounts or Fixed
Interest Allocations serve as the source accounts from which we will, on a
monthly basis, automatically transfer a set dollar amount of money to other
subaccounts selected by you. We also may offer DCA Fixed Interest Allocations,
which are 6-month and 1-year Fixed Interest Allocations available exclusively
for use with the dollar cost averaging program. The DCA Fixed Interest
Allocations require a minimum premium payment of $1,200 directed into a DCA
Fixed Interest Allocation.
The dollar cost averaging program is designed to lessen the impact of market
fluctuation on your investment. Since we transfer the same dollar amount to
other subaccounts each month, more units of a subaccount are purchased if the
value of its unit is low and fewer units are purchased if the value of its unit
is high. Therefore, a lower than average value per unit may be achieved over the
long term. However, we cannot guarantee this. When you elect the dollar cost
averaging program, you are continuously investing in securities regardless of
fluctuating price levels. You should consider your tolerance for investing
through periods of fluctuating price levels.
Unless you have a DCA Fixed Interest Allocation, you elect the dollar amount you
want transferred under this program. Each monthly transfer must be at least
$100. If your source account is the Limited Maturity Bond subaccount, the Liquid
Asset subaccount or a 1-year Fixed Interest Allocation, the maximum amount that
can be transferred each month is your contract value in such source account
divided by 12. If your source account is a 6-month Fixed Interest Allocation,
the maximum amount that can be transferred each month is your contract value in
such source account divided by 6. You may change the transfer amount once each
contract year. If you have a DCA Fixed Interest Allocation, there is no minimum
or maximum transfer amount; we will transfer all your money allocated to that
source account into the subaccount(s) in equal payments over the selected
6-month or 1-year period. The last payment will include earnings accrued over
the course of the selected period. If you make an additional premium payment
into a Fixed Interest Allocation subject to dollar cost averaging, the amount of
your transfers under the dollar cost averaging program remains the same, unless
you instruct us to increase the transfer amount.
Transfers from a Fixed Interest Allocation or a DCA Fixed Interest Allocation
under the dollar cost averaging program are not subject to a Market Value
Adjustment. However, if you terminate the dollar cost averaging program for a
DCA Fixed Interest Allocation and there is money remaining in the DCA Fixed
Interest Allocation, we will transfer the remaining money to the Liquid Asset
subaccount. Such transfer will trigger a Market Value Adjustment if the transfer
is made more than 30 days before the maturity date of the DCA Fixed Interest
Allocation.
If you do not specify the subaccounts to which the dollar amount of the source
account is to be transferred, we will transfer the money to the subaccounts in
which you are invested on a proportional basis. The transfer date is the same
day each month as your contract date. If, on any transfer date, your contract
value in a source account is equal or less than the amount you have elected to
have transferred, the entire amount will be transferred and the program will
end. You may terminate the dollar cost averaging program at any time by sending
satisfactory notice to our Customer Service Center at least 7 days before the
next transfer date. A Fixed Interest Allocation or DCA Fixed Interest Allocation
may not participate in the dollar cost averaging program and in systematic
withdrawals at the same time.
You are permitted to transfer contract value to a Restricted Fund, subject to
the limitations described above in this section and in "The Investment
Portfolios". Compliance with the individual and aggregate Restricted Fund limits
will be reviewed when the dollar cost averaging program is established.
Transfers under the dollar cost averaging program must be within those limits.
We will not review again your dollar cost averaging election for compliance with
the individual and aggregate limits for investment in the Restricted Funds
except in the case of the transactions described below.
o Amount added to source account: If you add amounts to the source
account which would increase the amount to be transferred under the
dollar cost averaging program, we will review the amounts to be
transferred to ensure that the individual and aggregate limits are not
being exceeded. If such limits
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would be exceeded, we will require that
the dollar cost averaging transfer amounts be changed to ensure that
the transfers are within the limits based on the then current
allocation of contract value to the Restricted Fund(s) and the then
current value of the amount designated to be transferred to that
Restricted Fund(s).
o Additional premium paid: Up to the individual Restricted Fund
percentage limit may be allocated to a Restricted Fund . If more than
the individual limit has been requested to be allocated to a Restricted
Fund, we will look at the aggregate limit, subtract the current
allocation to Restricted Funds, and subtract the current value of
amounts to be transferred under the dollar cost averaging program to
Restricted Funds. The excess, if any, is the maximum that may be
allocated pro-rata to Restricted Funds.
o Reallocation request is made while the dollar cost averaging program is
active: If the reallocation would increase the amount allocated to
Restricted Funds, the maximum that may be so allocated is the
individual Restricted Fund percentage limit, less the current
allocation to Restricted Funds and less the current value of any
remaining amounts to be transferred under the dollar cost averaging
program to the Restricted Funds.
We may in the future offer additional subaccounts or withdraw any subaccount or
Fixed Interest Allocation to or from the dollar cost averaging program, stop
offering DCA Fixed Interest Allocations or otherwise modify, suspend or
terminate this program. Of course, such change will not affect any dollar cost
averaging programs in operation at the time.
AUTOMATIC REBALANCING
If you have at least $10,000 of contract value invested in the subaccounts of
Separate Account B, you may elect to have your investments in the subaccounts
automatically rebalanced. You are permitted to reallocate between Restricted and
non-Restricted Funds, subject to the limitations described above in this section
and in "The Investment Portfolios". If the reallocation would increase the
amount allocated to the Restricted Funds, the maximum that may be so allocated
is the individual Restricted Fund percentage limit, less the current allocation
to all Restricted Funds.
We will transfer funds under your Contract on a quarterly, semi-annual, or
annual calendar basis among the subaccounts to maintain the investment blend of
your selected subaccounts. The minimum size of any allocation must be in full
percentage points. Rebalancing does not affect any amounts that you have
allocated to the Fixed Account. The program may be used in conjunction with the
systematic withdrawal option only if withdrawals are taken pro rata. Automatic
rebalancing is not available if you participate in dollar cost averaging.
Automatic rebalancing will not take place during the free look period.
To participate in automatic rebalancing send satisfactory notice to our Customer
Service Center. We will begin the program on the last business day of the period
in which we receive the notice. You may cancel the program at any time. The
program will automatically terminate if you choose to reallocate your contract
value among the subaccounts or if you make an additional premium payment or
partial withdrawal on other than a pro rata basis. Additional premium payments
and partial withdrawals effected on a pro rata basis will not cause the
automatic rebalancing program to terminate.
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DEATH BENEFIT CHOICES
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DEATH BENEFIT DURING THE ACCUMULATION PHASE
During the accumulation phase, a death benefit is payable when either the
annuitant (when a contract owner is not an individual), the contract owner or
the first of joint owners dies. Assuming you are the contract owner, your
beneficiary will receive a death benefit unless the beneficiary is your
surviving spouse and elects to continue the Contract. The death benefit value is
calculated at the close of the business day on which we receive written notice
and due proof of death, as well as any required paperwork, at our Customer
Service Center. If your beneficiary elects to delay receipt of the death benefit
until a date after the time of death, the amount of the benefit payable in the
future may be affected. The proceeds may be received in a
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single sum or applied
to any of the annuity options. If we do not receive a request to apply the death
benefit proceeds to an annuity option, we will make a single sum distribution.
We will generally pay death benefit proceeds within 7 days after our Customer
Service Center has received sufficient information to make the payment. For more
information on required distributions under federal income tax laws, see
"Required Distributions upon Contract Owner's Death."
The following describes
the death benefit options for contract owners purchasing Contracts after January
__, 2001. If you purchased your Contract prior to that date, please see Appendix
D for a description of the calculation of the death benefits applicable under
your Contract.
You may choose one of the following Death Benefits: (a) the
Standard Death Benefit, (b) the 5% Solution Enhanced Death Benefit or (c) the
Annual Ratchet Enhanced Death Benefit. The 5% Solution Enhanced Death Benefit
and the Annual Ratchet Enhanced Death Benefit are available only if the contract
owner or the annuitant (if the contract owner is not an individual) is not more
than 79 years old at the time of purchase. The 5% Solution and Annual Ratchet
Enhanced Death Benefits may not be available where a Contract is held by joint
owners.
Once you choose a death benefit, it cannot be changed. We may in the
future stop or suspend offering any of the Enhanced Death Benefit options to new
Contracts. A change in ownership of the Contract may affect the amount of the
death benefit and the Enhanced Death Benefit. The MGWB rider may also affect the
death benefit. See "Minimum Guaranteed Withdrawal Benefit (MGWB) Rider -- Death
Benefit during Automatic Periodic Benefit Status." The Enhanced Death Benefits
are available only at the time you purchase your Contract. The enhanced death
benefits are not available where a Contract is owned by joint owners.
The death
benefit is payable when the first of the following persons dies: the contract
owner, joint owner, or annuitant (if a contract owner is not an individual).
Assuming you are the contract owner, if you die during the accumulation phase,
your beneficiary will receive a death benefit unless the beneficiary is your
surviving spouse and elects to continue the Contract. The death benefit paid
depends on the death benefit you have chosen. The death benefit value is
calculated at the close of the business day on which we receive written notice
and due proof of death, as well as required claim forms, at our Customer Service
Center. If your beneficiary elects to delay receipt of the death benefit until a
date after the time of your death, the amount of the benefit payable in the
future may be affected. If you die after the annuity start date and you are the
annuitant, your beneficiary will receive the death benefit you chose under the
annuity option then in effect.
The death benefit may be subject to certain mandatory distribution rules
required by federal tax law.
We use the Base Death Benefit to help determine the minimum death
benefit payable under each of the Enhanced Death Benefit options described
below. You do not elect the Base Death Benefit. The Base Death Benefit is
equal to the greater of:
1) the contract value; and
2) the cash surrender value.
The STANDARD DEATH BENEFIT equals the sum of:
1) the contract value allocated to Special Funds; and
2) the Standard Minimum Guaranteed Death Benefit for amounts
allocated to Non-Special Funds.
The Standard Minimum Guaranteed Death Benefit equals:
1) the initial premium payment, allocated to Special and Non-Special
Funds, respectively ;
2) increased by premium payments, and adjusted for transfers,
allocated to Special and Non-Special Funds, respectively,
after issue; and
3) reduced by a pro-rata adjustment for any withdrawal or
transfer taken from the Special and Non-Special Funds,
respectively.
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In the event of transfers from Special to Non-Special funds, the increase in the
Minimum Guaranteed Death Benefit of the Non-Special Fund will equal the lesser
of the reduction in the Minimum Guaranteed Death Benefit in the Special Fund and
the contract value transferred. In the event of transfers from Non-Special to
Special Funds, the increase in the Minimum Guaranteed Death Benefit of the
Special Fund will equal the reduction in the Minimum Guaranteed Death Benefit in
the Non-Special Fund.
ENHANCED DEATH BENEFIT OPTIONS. Under the Enhanced Death
Benefit options, if you die before the annuity start date, your beneficiary will
receive the greater of the Base Death Benefit and the Enhanced Death Benefit
option elected. For purposes of calculating the Enhanced Death Benefits, certain
investment portfolios, and the Fixed Account are designated as "Special Funds".
In addition to the Fixed Account, the investment portfolios designated currently
as Special Funds are the Liquid Asset Portfolio and the Limited Maturity Bond
Portfolio.
We may, with 30 days notice to you, designate any investment portfolio as a
Special Fund on existing contracts with respect to new premiums added to such
investment portfolio and also with respect to new transfers to such investment
portfolio. Selecting a Special Fund may limit or reduce the enhanced death
benefit.
For the period during which a portion of the contract value is allocated to a
Special Fund, we may, at our discretion, reduce the mortality and expense risk
charge attributable to that portion of the contract value. The reduced mortality
and expense risk charge will be applicable only during that period.
The 5% SOLUTION ENHANCED DEATH BENEFIT, equals the GREATER of:
1) the Standard Death Benefit; and
2) the sum of the contract value allocated to Special Funds and
the 5% Solution Minimum Guaranteed Death Benefit for
Non-Special Funds.
The 5% Solution Minimum Guaranteed Death Benefit for Special and Non-Special
Funds equals the lesser of:
1) premiums, adjusted for withdrawals and transfers, accumulated at 5%
until the earlier of attainment of age 80 or reaching the cap
(equal to 3 times all premium payment, as reduced by adjustments
for withdrawals) and thereafter at 0%, and
2) the cap.
Withdrawals of up to 5% per year of cumulative premiums are referred to as
special withdrawals. Special withdrawals reduce the 5% Solution Minimum
Guaranteed Death Benefit by the amount of contract value withdrawn. For any
withdrawals in excess of the amount available as a special withdrawal, a
pro-rata adjustment to the 5% Solution Minimum Guaranteed Death Benefit is made.
The amount of the pro-rata adjustment for withdrawals from Non-Special Funds
will equal (a) times (b) divided by (c): where (a) is the 5% Solution Minimum
Guaranteed Death Benefit for Non-Special Funds prior to the withdrawal; (b) is
the contract value of the withdrawal; and (c) is the contract value allocated to
Non-Special Funds before the withdrawal. The amount of the pro-rata adjustment
for withdrawals from Special Funds will equal (a) times (b) divided by (c):
where (a) is the 5% Solution Minimum Guaranteed Death Benefit for Special Funds
prior to the withdrawal; (b) is the contract value of the withdrawal; and (c) is
the contract value allocated to Special Funds before the withdrawal.
Transfers from Special to Non-Special Funds will reduce the 5% Solution Minimum
Guaranteed Death Benefit and the cap for Special Funds on a pro-rata basis. The
resulting increase in the 5% Solution Minimum Guaranteed Death Benefit in the
Non-Special Funds will equal the lesser of the reduction in the 5% Solution
Minimum Guaranteed Death Benefit in the Special Funds and the contract value
transferred. The increase in the cap for Non-Special Funds will equal the
reduction in the cap for Special Funds.
Transfers from Non-Special to Special
Funds will reduce the 5% Solution Minimum Guaranteed Death Benefit and the cap
in the Non-Special Funds on a pro-rata basis. The resulting increase in the 5%
Solution
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Minimum Guaranteed Death Benefit and the cap for the Special Funds will
equal the reduction in the 5% Solution Minimum Guaranteed Death Benefit and the
cap for the Non-Special Funds.
The ANNUAL RATCHET ENHANCED DEATH BENEFIT equals the greater of:
1) the Standard Death Benefit; and
2) the sum of the contract value allocated to Special Funds and the
Annual Ratchet Minimum Guaranteed Death Benefit allocated to
Non-Special Funds.
The Annual Ratchet Minimum Guaranteed Death Benefit equals:
1) the initial premium allocated at issue to Special and Non-Special
Funds, respectively;
2) increased dollar for dollar by any premium allocated after issue to
Special and Non-Special funds, respectively; 3) for Non-Special
Funds, adjusted on each anniversary prior to attainment of age 80
to the greater of the Annual Ratchet
3) Minimum Guaranteed Death Benefit for Non-Special Funds from the
prior anniversary (adjusted for new premiums, partial withdrawals
allocated to Non-Special Funds, and transfers between Special and
Non-Special Funds) and the current contract value allocated to
Non-Special Funds;
4) for Special Funds, adjusted on each anniversary prior to attainment
of age 80 to the greater of the Annual Ratchet Minimum Guaranteed
Death Benefit for Special Funds from the prior anniversary
(adjusted for new premiums, partial withdrawals allocated to
Special Funds, and transfers between Special and Non-Special Funds)
and the current contract value allocated to Special Funds.
Withdrawals reduce the Annual Ratchet Minimum Guaranteed Death Benefit on a
pro-rata basis, based on the amount withdrawn from the Special and Non-Special
Funds, respectively. The amount of the pro-rata adjustment for withdrawals from
Non-Special Funds will equal (a) times (b) divided by (c): where (a) is the
Annual Ratchet Minimum Guaranteed Death Benefit for Non-Special Funds prior to
the withdrawal; (b) is the contract value of the withdrawal; and (c) is the
contract value allocated to Non-Special Funds before withdrawal. The amount of
the pro-rata adjustment for Special Funds will equal (a) times (b) divided by
(c): where (a) is the Annual Ratchet Minimum Guaranteed Death Benefit for
Special Funds prior to the withdrawal; (b) is the contract value of the
withdrawal; and (c) is the contract value allocated to Special Funds before the
withdrawal.
Transfers from Special to Non-Special Funds will reduce the Annual Ratchet
Minimum Guaranteed Death Benefit for Special Funds on a pro-rata basis. The
resulting increase in the Annual Ratchet Minimum Guaranteed Death Benefit in the
Non-Special Funds will equal the lesser of the reduction in the Annual Ratchet
Minimum Guaranteed Death Benefit in the Special Funds and the contract value
transferred.
Transfers from Non-Special to Special Funds will reduce the Annual Ratchet
Minimum Guaranteed Death Benefit for Non-Special Funds on a pro-rata basis. The
resulting increase in the Annual Ratchet Minimum Guaranteed Death Benefit for
the Special Funds will equal the reduction in the Annual Ratchet Minimum
Guaranteed Death Benefit for the Non-Special Funds.
Note: In all cases described above, the amount of the death benefit could be
reduced by premium taxes owed and withdrawals not previously deducted. The
enhanced death benefits may not be available in all states.
DEATH BENEFIT DURING THE INCOME PHASE
If any contract owner or the annuitant dies after the annuity start date, we
will pay the beneficiary any certain benefit remaining under the annuity in
effect at the time.
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CONTINUATION AFTER DEATH -- SPOUSE
If at the contract owner's death, the surviving spouse of the deceased contract
owner is the beneficiary and such surviving spouse elects to continue the
contract as his or her own the following will apply:
If the guaranteed death
benefit as of the date we receive due proof of death, minus the contract value
also on that date, is greater than zero, we will add such difference to the
contract value. Such addition will be allocated to the variable subaccounts in
proportion to the contract value in the subaccounts, unless we are directed
otherwise. If there is no contract value in any subaccount, the addition will be
allocated to the Liquid Asset subaccount, or its successor.
The death benefits under each of the available options will continue as
described below, based on the surviving spouse's age on the date that ownership
changes:
1) Standard Death Benefit: If the surviving spouse is attained age
85 or under, the minimum guaranteed death benefit will
continue. If he or she is over age 85, the death benefit will
equal the contract value.
2) Annual Ratchet Death Benefit: If the surviving spouse is attained
age 79 or under, the annual ratchet death benefit will continue (or
resume, if the deceased owner had already attained age 80), until
the surviving spouse reaches age 80. If he or she is between age 80
and 85, the death benefit becomes the Standard Death Benefit. If
the surviving spouse is over age 85, the death benefit will equal
the contract value.
3) 5% Solution Death Benefit: If the surviving spouse is attained age
79 or under, the 5% Solution death benefit will continue to
accumulate until the surviving spouse attains age 80. If he or she
is between age 80 and 85, the death benefit becomes the Standard
Death Benefit. If the surviving spouse is over age 85, the death
benefit will equal the contract value.
At subsequent surrender, any surrender charge applicable to premiums paid prior
to the date we receive due proof of death of the contract owner will be waived.
Any premiums paid later will be subject to any applicable surrender charge.
This addition to contract value is available only to the spouse of the owner
as of the date of death of the owner if such spouse under the provisions of
the contract elects to continue the contract as his or her own.
CONTINUATION AFTER DEATH -- NON SPOUSE
If the beneficiary or surviving joint owner is not the spouse of the owner, the
contract may continue in force subject to the required distribution rules of the
Internal Revenue Code (the "Code"). See next section.
REQUIRED DISTRIBUTIONS UPON CONTRACT OWNER'S DEATH
We will not allow any payment of benefits provided under a non-qualified
Contract which do not satisfy the requirements of Section 72(s) of the Code.
If any owner of a non-qualified Contract dies before the annuity start date, the
death benefit payable to the beneficiary will be distributed as follows: (a) the
death benefit must be completely distributed within 5 years of the contract
owner's date of death; or (b) the beneficiary may elect, within the 1-year
period after the contract owner's date of death, to receive the death benefit in
the form of an annuity from us, provided that (i) such annuity is distributed in
substantially equal installments over the life of such beneficiary or over a
period not extending beyond the life expectancy of such beneficiary; and (ii)
such distributions begin not later than 1 year after the contract owner's date
of death.
Notwithstanding (a) and (b) above, if the sole contract owner's beneficiary is
the deceased owner's surviving spouse, then such spouse may elect to continue
the Contract under the same terms as before the contract owner's death. Upon
receipt of such election from the spouse at our Customer Service Center: (1) all
rights of the spouse as contract owner's beneficiary under the Contract in
effect prior to such election will cease; (2) the spouse will become the owner
of the Contract and will also be treated as the contingent annuitant, if none
has been named and only if the deceased owner was the annuitant; and (3) all
rights and privileges granted by the Contract or allowed by Golden American will
belong to the spouse as contract owner of the
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Contract. This election will be
deemed to have been made by the spouse if such spouse makes a premium payment to
the Contract or fails to make a timely election as described in this paragraph.
If the owner's beneficiary is a nonspouse, the distribution provisions described
in subparagraphs (a) and (b) above, will apply even if the annuitant and/or
contingent annuitant are alive at the time of the contract owner's death.
If we
do not receive an election from a non-spouse owner's beneficiary within the
1-year period after the contract owner's date of death, then we will pay the
death benefit to the owner's beneficiary in a cash payment within five years
from date of death. We will determine the death benefit as of the date we
receive proof of death. We will make payment of the proceeds on or before the
end of the 5-year period starting on the owner's date of death. Such cash
payment will be in full settlement of all our liability under the Contract.
If a contract owner dies after the annuity start date, we will continue to
distribute any benefit payable at least as rapidly as under the annuity option
then in effect. All of the contract owner's rights granted under the Contract or
allowed by us will pass to the contract owner's beneficiary.
If the Contract has joint owners we will consider the date of death of the first
joint owner as the death of the contract owner and the surviving joint owner
will become the contract owner of the Contract. If any contract owner is not an
individual, the death of an annuitant shall be treated as the death of a
contract owner.
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CHARGES AND FEES
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We deduct the charges described below to cover our cost and expenses, services
provided and risks assumed under the Contracts. We incur certain costs and
expenses for distributing and administrating the Contracts, for paying the
benefits payable under the Contracts and for bearing various risks associated
with the Contracts. The amount of a charge will not always correspond to the
actual costs associated. For example, the surrender charge collected may not
fully cover all of the distribution expenses incurred by us with the service or
benefits provided. In the event there are any profits from fees and charges
deducted under the Contract, we may use such profits to finance the distribution
of contracts.
CHARGE DEDUCTION SUBACCOUNT
You may elect to have all charges against your contract value deducted directly
from a single subaccount designated by the Company. Currently we use the Liquid
Asset subaccount for this purpose. If you do not elect this option, or if the
amount of the charges is greater than the amount in the designated subaccount,
the charges will be deducted as discussed below. You may cancel this option at
any time by sending satisfactory notice to our Customer Service Center.
CHARGES DEDUCTED FROM THE CONTRACT VALUE We deduct the following charges from
your contract value:
SURRENDER CHARGE. We will deduct a contingent deferred sales charge (a
"surrender charge") if you surrender your Contract or if you take a withdrawal
in excess of the Free Withdrawal Amount during the 7-year period from the date
we receive and accept a premium payment. The surrender charge is based on a
percentage of each premium payment withdrawn. This charge is intended to cover
sales expenses that we have incurred. We may in the future reduce or waive the
surrender charge in certain situations and will never charge more than the
maximum surrender charges. The percentage of premium payments deducted at the
time of surrender or excess withdrawal depends on the number of complete years
that have elapsed since that premium payment was made. We determine the
surrender charge as a percentage of each premium payment withdrawn as follows:
COMPLETE YEARS ELAPSED 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7+
SINCE PREMIUM PAYMENT | | | | | | |
| | | | | | |
SURRENDER CHARGE 6% | 6% | 6% | 5% | 4% | 3% | 1% | 0%
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WAIVER OF SURRENDER CHARGE FOR EXTENDED MEDICAL CARE. We will waive the
surrender charge in most states in the following events: (i) you begin receiving
qualified extended medical care on or after the first contract anniversary for
at least 45 days during a 60-day period and your request for the surrender or
withdrawal, together with all required documentation is received at our Customer
Service Center during the term of your care or within 90 days after the last day
of your care; or (ii) you are first diagnosed by a qualifying medical
professional, on or after the first contract anniversary, as having a qualifying
terminal illness. We have the right to require an examination by a physician of
our choice. If we require such an examination, we will pay for it. You are
required to send us satisfactory written proof of illness. See your Contract for
more information. The waiver of surrender charge may not be available in all
states.
FREE WITHDRAWAL AMOUNT. The Free Withdrawal Amount in any contract year is
the greater of (i) any earnings less previous free withdrawals or (ii) 10% of
premium payments paid within the past 7 years and not previously withdrawn, less
any previous free withdrawals taken in the same contract year.
SURRENDER CHARGE FOR EXCESS WITHDRAWALS. We will deduct a surrender charge
for excess withdrawals. We consider a withdrawal to be an "excess withdrawal"
when the amount you withdraw in any contract year exceeds the Free Withdrawal
Amount. Where you are receiving systematic withdrawals, any combination of
regular withdrawals taken and any systematic withdrawals expected to be received
in a contract year will be included in determining the amount of the excess
withdrawal. Such a withdrawal will be considered a partial surrender of the
Contract and we will impose a surrender charge and any associated premium tax.
We will deduct such charges from the contract value in proportion to the
contract value in each subaccount or Fixed Interest Allocation from which the
excess withdrawal was taken. In instances where the excess withdrawal equals the
entire contract value in such subaccounts or Fixed Interest Allocations, we will
deduct charges proportionately from all other subaccounts and Fixed Interest
Allocations in which you are invested. ANY WITHDRAWAL FROM A FIXED INTEREST
ALLOCATION MORE THAN 30 DAYS BEFORE ITS MATURITY DATE WILL TRIGGER A MARKET
VALUE ADJUSTMENT.
For the purpose of calculating the surrender charge for an excess withdrawal: a)
we treat premiums as being withdrawn on a first-in, first-out basis; and b)
amounts withdrawn which are not considered an excess withdrawal are not
considered a withdrawal of any premium payments. We have included an example of
how this works in Appendix C. Although we treat premium payments as being
withdrawn before earnings for purpose of calculating the surrender charge for
excess withdrawals, the federal tax law treats earnings as withdrawn first.
PREMIUM TAXES. We may make a charge for state and local premium taxes
depending on your state of residence. The tax can range from 0% to 3.5% of the
premium payment. We have the right to change this amount to conform with changes
in the law or if you change your state of residence.
We deduct the premium tax from your contract value on the annuity start date.
However, some jurisdictions impose a premium tax at the time that initial and
additional premiums are paid, regardless of when the annuity payments begin. In
those states we may defer collection of the premium taxes from your contract
value and deduct it when you surrender the Contract, when you take an excess
withdrawal, or on the annuity start date.
ADMINISTRATIVE CHARGE. We currently do not charge an annual administrative
charge but may in the future deduct an annual administrative charge of $30 or 2%
of the contract value, whichever is smaller. Such charge, if any, will be made
on each Contract anniversary, or if you surrender your Contract prior to a
Contract anniversary, at the time we determine the cash surrender value payable
to you. We deduct the charge proportionately from all subaccounts in which you
are invested. If there is no contract value in those subaccounts, we will deduct
the charge from your Fixed Interest Allocations starting with the guarantee
interest periods nearest their maturity dates until the charge has been paid.
TRANSFER CHARGE. We currently do not deduct any charges for transfers made
during a contract year. We have the right, however, to assess up to $25 for each
transfer after the twelfth transfer in a contract year. If such a charge is
assessed, we would deduct the charge from the subaccounts and the Fixed Interest
Allocations from which each such transfer is made in proportion to the amount
being transferred from each subaccount and Fixed Interest Allocation, unless you
have chosen to have all charges deducted from a single
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subaccount. The charge
will not apply to any transfers due to the election of dollar cost averaging,
automatic rebalancing and transfers we make to and from any subaccount specially
designated by the Company for such purpose.
CHARGES DEDUCTED FROM THE SUBACCOUNTS
MORTALITY AND EXPENSE RISK CHARGE. The mortality and expense risk charge is
deducted each business day. The amount of the mortality and expense risk charge
depends on the death benefit you have elected. The charge is deducted on each
business day based on the assets you have in each subaccount. The charge for
each death benefit option, on an annual basis, is equal to 0.85% for the
Standard Death Benefit, 1.00% for the Annual Ratchet Enhanced Death Benefit and
1.15% for the 5% Solution Enhanced Death Benefit of the assets you have in each
subaccount. The charge is deducted each business day at the rate of .002339%
(Standard), .002753% (Annual Ratchet) and .003169% (5% Solution) respectively,
for each day since the previous business day.
ASSET-BASED ADMINISTRATIVE CHARGE. The amount of the asset-based
administrative charge, on an annual basis, is equal to 0.15% of the assets you
have in each subaccount. The charge is deducted on each business day at the rate
of .000411% for each day since the previous business day. This charge is
deducted daily from your assets in each subaccount.
OPTIONAL RIDER CHARGES
Subject to state availability, you may purchase one of three optional benefit
riders that you may elect at issue. So long as the rider is in effect, we will
deduct a separate quarterly charge for each optional benefit rider through a pro
rata reduction of the contract value of the subaccounts in which you are
invested. If there is insufficient contract value in the subaccount, we will
deduct the charges from your Fixed Interest Allocations nearest their maturity
date. We deduct each rider charge on each quarterly contract anniversary in
arrears, meaning the first charge will be deducted on the first quarterly
anniversary following the rider date. For a description of the riders and the
defined terms used in connection with the riders, see "The Annuity Contract --
Optional Riders."
MINIMUM GUARANTEED ACCUMULATION BENEFIT (MGAB).
The quarterly charge for the MGAB rider is as follows:
Waiting Period Quarterly Charge
-------------- ----------------
10 Year........... 0.125% of the MGAB Charge Base (0.50% annually)
20 Year........... 0.125% of the MGAB Charge Base (0.50% annually)
The MGAB Charge Base is the total of (i) the MGAB Base on the rider date, and
(ii) premiums during the 2-year period commencing on the rider date, reduced pro
rata for withdrawals and reduced for transfers made within the last 3 years
prior to the MGAB Benefit Date. We will deduct charges only during your ten-year
or twenty-year waiting period, as applicable. If you surrender or annuitize your
Contract, we will deduct a pro rata portion of the charge for the current
quarter based on the current quarterly charge rate and MGAB Charge Base
immediately prior to the surrender or annuitization. The MGAB Charge Base is
adjusted for transfers between Special and Non-Special Funds.
MINIMUM GUARANTEED INCOME BENEFIT (MGIB).
The quarterly charge for the MGIB rider is as follows:
MGIB Base Rate Quarterly Charge
-------------- ----------------
7%................ 0.125% of the MGIB Charge Base (0.50% annually)
The MGIB Charge Base is the total of premiums paid added more than 5 years
before the earliest MGIB Benefit Date, reduced pro rata for all withdrawals
taken while the MGIB rider is in effect, and accumulated at the MGIB Rate (7%) .
If you surrender or annuitize your Contract, we will deduct a pro rata portion
of the charge for the current quarter based on the current quarterly charge rate
and your MGIB Charge Base
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immediately prior to the surrender or annuitization.
The MGIB Charge Base is adjusted for transfers between Special and Non-Special
Funds.
MINIMUM GUARANTEED WITHDRAWAL BENEFIT (MGWB). The quarterly charge for the
MGWB rider is 0.125% (0.50% annually) of the original MGWB Eligible Payment
Amount. The original MGWB Eligible Payment Amount is equal to all premiums paid
added during the first two contract years following the rider date. When we
calculate the MGWB rider charge, we do not reduce the Eligible Payment Amount by
the amount of any withdrawals taken while the MGWB rider is in effect. We will
deduct charges only during the period before your Contract's Automatic Periodic
Benefit Status. If you surrender or annuitize your Contract, we will deduct a
pro rata portion of the charge for the current quarter based on the current
quarterly charge rate and your original MGWB Eligible Payment Amount immediately
prior to the surrender or annuitization.
TRUST EXPENSES
There are fees and charges deducted from each investment portfolio of the
Trusts. Each portfolio deducts portfolio management fees and charges from the
amounts you have invested in the portfolios. In addition, three portfolios
deduct 12b-1 fees. For 1999, total portfolio fees and charges ranged from 0.56%
to 1.75%. See "Fees and Expenses" in this prospectus.
Additionally, we may
receive compensation from the investment advisers, administrators or
distributors of the portfolios in connection with administrative, distribution,
or other services and cost savings experienced by the investment advisers,
administrators or distributors. It is anticipated that such compensation will be
based on assets of the particular portfolios attributable to the Contract. Some
advisers, administrators or distributors may pay us more than others.
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THE ANNUITY OPTIONS
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ANNUITIZATION OF YOUR CONTRACT
If the annuitant and contract owner are living on the annuity start date, we
will begin making payments to the contract owner under an income plan. We will
make these payments under the annuity option chosen. You may change annuity
option by making a written request to us at least 30 days before the annuity
start date. The amount of the payments will be determined by applying your
contract value adjusted for any applicable Market Value Adjustment on the
annuity start date in accordance with the annuity option you chose.
You may also
elect an annuity option on surrender of the Contract for its cash surrender
value or you may choose one or more annuity options for the payment of death
benefit proceeds while it is in effect and before the annuity start date. If, at
the time of the contract owner's death or the annuitant's death (if the contract
owner is not an individual), no option has been chosen for paying death benefit
proceeds, the beneficiary may choose an annuity option within 60 days. In all
events, payments of death benefit proceeds must comply with the distribution
requirements of applicable federal tax law.
The minimum monthly annuity income payment that we will make is $20. We may
require that a single sum payment be made if the contract value is less than
$2,000 or if the calculated monthly annuity income payment is less than $20.
For each annuity option we will issue a separate written agreement putting the
annuity option into effect. Before we pay any annuity benefits, we require the
return of your Contract. If your Contract has been lost, we will require that
you complete and return the applicable lost Contract form. Various factors will
affect the level of annuity benefits, such as the annuity option chosen, the
applicable payment rate used and the investment performance of the portfolios
and interest credited to the Fixed Interest Allocations.
Our current annuity
options provide only for fixed payments. Fixed annuity payments are regular
payments, the amount of which is fixed and guaranteed by us. Some fixed annuity
options provide fixed payments either for a specified period of time or for the
life of the annuitant. The amount of life income payments will
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depend on the
form and duration of payments you chose, the age of the annuitant or beneficiary
(and gender, where appropriate) under applicable law, the total contract value
applied to purchase a Fixed Interest Allocation, and the applicable payment
rate.
Our approval is needed for any option where:
(1) The person named to receive payment is other than the contract owner
or beneficiary;
(2) The person named is not a natural person, such as a
corporation; or
(3) Any income payment would be less than the minimum
annuity income payment allowed.
SELECTING THE ANNUITY START DATE
You select the annuity start date, which is the date on which the annuity
payments commence. The annuity start date must be at least 5 years from the
contract date but before the month immediately following the annuitant's 90th
birthday, or 10 years from the contract date, if later. If, on the annuity start
date, a surrender charge remains, the elected annuity option must include a
period certain of at least 5 years.
If you do not select an annuity start date, it will automatically begin in the
month following the annuitant's 90th birthday, or 10 years from the contract
date, if later.
If the annuity start date occurs when the annuitant is at an
advanced age, such as over age 85, it is possible that the Contract will not be
considered an annuity for federal tax purposes. See "Federal Tax Considerations"
and the SAI. For a Contract purchased in connection with a qualified plan, other
than a Roth IRA, distributions must commence not later than April 1st of the
calendar year following the calendar year in which you attain age 70 1/2 or, in
some cases, retire. Distributions may be made through annuitization or
withdrawals. You should consult your tax adviser for tax advice.
FREQUeNCY OF ANNUITY PAYMENTS
You choose the frequency of the annuity payments. They may be monthly,
quarterly, semi-annually or annually. If we do not receive written notice from
you, we will make the payments monthly. There may be certain restrictions on
minimum payments that we will allow.
THE ANNUITY OPTIONS
We offer the 4 annuity options shown below. Payments under Options 1, 2 and 3
are fixed. Payments under Option 4 may be fixed or variable, although only fixed
are currently available. For a fixed annuity option, the contract value in the
subaccounts is transferred to the Company's general account.
OPTION 1. INCOME FOR A FIXED PERIOD. Under this option, we make monthly
payments in equal installments for a fixed number of years based on the contract
value on the annuity start date. We guarantee that each monthly payment will be
at least the amount stated in your Contract. If you prefer, you may request that
payments be made in annual, semi-annual or quarterly installments. We will
provide you with illustrations if you ask for them. If the cash surrender value
or contract value is applied under this option, a 10% penalty tax may apply to
the taxable portion of each income payment until the contract owner reaches age
59 1/2.
OPTION 2. INCOME FOR LIFE WITH A PERIOD CERTAIN. Payment is made for the
life of the annuitant in equal monthly installments and guaranteed for at least
a period certain such as 10 or 20 years. Other periods certain may be available
to you on request. You may choose a refund period instead. Under this
arrangement, income is guaranteed until payments equal the amount applied. If
the person named lives beyond the guaranteed period, payments continue until his
or her death. We guarantee that each payment will be at least the amount
specified in the Contract corresponding to the person's age on his or her last
birthday before the annuity start date. Amounts for ages not shown in the
Contract are available if you ask for them.
OPTION 3. JOINT LIFE INCOME. This option is available when there are 2
persons named to determine annuity payments. At least one of the persons named
must be either the contract owner or beneficiary of the Contract. We guarantee
monthly payments will be made as long as at least one of the named persons is
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living. There is no minimum number of payments. Monthly payment amounts are
available if you ask for them.
OPTION 4. ANNUITY PLAN. The contract value can be applied to any other
annuitization plan that we choose to offer on the annuity start date. Annuity
payments under Option 4 may be fixed and variable. If variable and subject to
the 1940 Act, it will comply with the requirements of such Act.
PAYMENT WHEN NAMED PERSON DIES
When the person named to receive payment dies, we will pay any amounts still due
as provided in the annuity agreement between you and Golden American. The
amounts we will pay are determined as follows:
(1) For Option 1, or any remaining guaranteed payments under Option 2,
we will continue payments. Under Options 1 and 2, the discounted
values of the remaining guaranteed payments may be paid in a single
sum. This means we deduct the amount of the interest each remaining
guaranteed payment would have earned had it not been paid out
early. The discount interest rate is never less than 3% for Option
1 and Option 2 per year. We will, however, base the discount
interest rate on the interest rate used to calculate the payments
for Options 1 and 2 if such payments were not based on the tables
in the Contract.
(2) For Option 3, no amounts are payable after both named persons have
died. (3) For Option 4, the annuity option agreement will state the
amount we will pay, if any.
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OTHER CONTRACT PROVISIONS
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REPORTS TO CONTRACT OWNERS
We will send you a quarterly report within 31 days after the end of each
calendar quarter. The report will show the contract value, cash surrender value,
and the death benefit as of the end of the calendar quarter. The report will
also show the allocation of your contract value and reflects the amounts
deducted from or added to the contract value since the last report. You have 30
days to notify our Customer Service Center of any errors or discrepancies
contained in the report or in any confirmation notices. We will also send you
copies of any shareholder reports of the investment portfolios in which Separate
Account B invests, as well as any other reports, notices or documents we are
required by law to furnish to you.
SUSPENSION OF PAYMENTS
The Company reserves the right to suspend or postpone the date of any payment or
determination of values on any business day (1) when the New York Stock Exchange
is closed; (2) when trading on the New York Stock Exchange is restricted; (3)
when an emergency exists as determined by the SEC so that the sale of securities
held in Separate Account B may not reasonably occur or so that the Company may
not reasonably determine the value of Separate Account B's net assets; or (4)
during any other period when the SEC so permits for the protection of security
holders. We have the right to delay payment of amounts from a Fixed Interest
Allocation for up to 6 months.
IN CASE OF ERRORS IN YOUR APPLICATION
If an age or sex given in the application or enrollment form is misstated, the
amounts payable or benefits provided by the Contract shall be those that the
premium payment would have bought at the correct age or sex.
ASSIGNING THE CONTRACT AS COLLATERAL
You may assign a non-qualified Contract as collateral security for a loan but
you should understand that your rights and any beneficiary's rights may be
subject to the terms of the assignment. An assignment may have federal tax
consequences. You must give us satisfactory written notice at our Customer
Service Center in order to make or release an assignment. We are not responsible
for the validity of any assignment.
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CONTRACT CHANGES -- APPLICABLE TAX LAW
We have the right to make changes in the Contract to continue to qualify the
Contract as an annuity under applicable federal tax law. You will be given
advance notice of such changes.
FREE LOOK
You may cancel your Contract within your 10-day free look period. We deem the
free look period to expire 15 days after we mail the Contract to you. Some
states may require a longer free look period. To cancel, you need to send your
Contract to our Customer Service Center or to the agent from whom you purchased
it. We will refund the contract value. For purposes of the refund during the
free look period, (i) we adjust your contract value for any market value
adjustment (if you have invested in the fixed account), and (ii) then we include
a refund of any charges deducted from your contract value. Because of the market
risks associated with investing in the portfolios, the contract value returned
may be greater or less than the premium payment you paid. Some states require us
to return to you the amount of the paid premium (rather than the contract value)
in which case you will not be subject to investment risk during the free look
period. In these states, your premiums designated for investment in the
subaccounts may be allocated during the free look period to a subaccount
specially designated by the Company for this purpose (currently, the Liquid
Asset subaccount). We may, in our discretion, require that premiums designated
for investment in the subaccounts from all other states as well as premiums
designated for a Fixed Interest Allocation be allocated to the specially
designated subaccount during the free look period. Your Contract is void as of
the day we receive your Contract and cancellation request. We determine your
contract value at the close of business on the day we receive your written
request. If you keep your Contract after the free look period and your
investment is allocated to a subaccount specially designated by the Company, we
will put your money in the subaccount(s) chosen by you, based on the
accumulation unit value next computed for each subaccount, and/or in the Fixed
Interest Allocation chosen by you.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce any surrender,
administration, and mortality and expense risk charges. We may also change the
minimum initial and additional premium requirements, or offer an alternative or
reduced death benefit.
SELLING THE CONTRACT
Directed Services, Inc. is the principal underwriter and distributor of the
Contract as well as for other contracts issued through Separate Account B and
other separate accounts of Golden American. We pay Directed Services for acting
as principal underwriter under a distribution agreement which in turn pays the
writing agent. The principal address of Directed Services is 1475 Dunwoody
Drive, West Chester, Pennsylvania 19380-1478.
Services enters into sales agreements with broker-dealers to sell the Contracts
through registered representatives who are licensed to sell securities and
variable insurance products. These broker-dealers are registered with the SEC
and are members of the National Association of Securities Dealers, Inc. Directed
Services receives a maximum of 6.75% commission, and passes through 100% of the
commission to the broker-dealer whose registered representative sold the
contract:
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----------------------------------------------------------------------------
UNDERWRITER COMPENSATION
----------------------------------------------------------------------------
NAME OF PRINCIPAL AMOUNT OF COMMISSION OTHER
UNDERWRITER TO BE PAID COMPENSATION
Directed Services, Inc. Maximum of 6.75% Reimbursement of any
of any initial covered expenses
or incurred
additional by registered
premium payments representatives
except when in connection
combined with the
with some annual distribution
trail commissions. of the Contracts.
----------------------------------------------------------------------------
Certain sales agreements may provide for a combination of a certain percentage
of commission at the time of sale and an annual trail commission (which when
combined could exceed 6.5% of total premium payments).
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OTHER INFORMATION
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VOTING RIGHTS
We will vote the shares of a Trust owned by Separate Account B according to your
instructions. However, if the 1940 Act or any related regulations should change,
or if interpretations of it or related regulations should change, and we decide
that we are permitted to vote the shares of a Trust in our own right, we may
decide to do so.
We determine the number of shares that you have in a subaccount by dividing the
Contract's contract value in that subaccount by the net asset value of one share
of the portfolio in which a subaccount invests. We count fractional votes. We
will determine the number of shares you can instruct us to vote 180 days or less
before a Trust's meeting. We will ask you for voting instructions by mail at
least 10 days before the meeting. If we do not receive your instructions in
time, we will vote the shares in the same proportion as the instructions
received from all contracts in that subaccount. We will also vote shares we hold
in Separate Account B which are not attributable to contract owners in the same
proportion.
STATE REGULATION
We are regulated by the Insurance Department of the State of Delaware. We are
also subject to the insurance laws and regulations of all jurisdictions where we
do business. The variable Contract offered by this prospectus has been approved
where required by those jurisdictions. We are required to submit annual
statements of our operations, including financial statements, to the Insurance
Departments of the various jurisdictions in which we do business to determine
solvency and compliance with state insurance laws and regulations.
LEGAL PROCEEDINGS
The Company, like other insurance companies, may be involved in lawsuits,
including class action lawsuits. In some class action and other lawsuits
involving insurers, substantial damages have been sought and/or material
settlement payments have been made. We believe that currently there are no
pending or threatened lawsuits that are reasonably likely to have a materially
adverse impact on the Company or Separate Account B.
LEGAL MATTERS
The legal validity of the Contracts was passed on by Myles R. Tashman,
Esquire, Executive Vice President, General Counsel and Secretary of Golden
American. Sutherland Asbill & Brennan LLP of Washington, D.C. has provided
advice on certain matters relating to federal securities laws.
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EXPERTS
The audited financial statements of Golden American and Separate Account B
appearing or incorporated by reference in the SAI and Registration Statement
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their reports thereon appearing or incorporated by reference in the SAI and in
the Registration Statement and are included or incorporated by reference in
reliance upon such reports given upon the authority of such firm as experts in
accounting and auditing.
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FEDERAL TAX CONSIDERATIONS
--------------------------------------------------------------------------------
The following summary provides a general description of the federal income tax
considerations associated with this Contract and does not purport to be complete
or to cover all tax situations. This discussion is not intended as tax advice.
You should consult your counsel or other competent tax advisers for more
complete information. This discussion is based upon our understanding of the
present federal income tax laws. We do not make any representations as to the
likelihood of continuation of the present federal income tax laws or as to how
they may be interpreted by the IRS.
TYPES OF CONTRACTS: NON-QUALIFIED OR QUALIFIED
The Contract may be purchased on a non-tax-qualified basis or purchased on a
tax-qualified basis. Qualified Contracts are designed for use by individuals
whose premium payments are comprised solely of proceeds from and/or
contributions under retirement plans that are intended to qualify as plans
entitled to special income tax treatment under Sections 401(a), 403(b), 408, or
408A of the Code. The ultimate effect of federal income taxes on the amounts
held under a Contract, or annuity payments, depends on the type of retirement
plan, on the tax and employment status of the individual concerned, and on our
tax status. In addition, certain requirements must be satisfied in purchasing a
qualified Contract with proceeds from a tax-qualified plan and receiving
distributions from a qualified Contract in order to continue receiving favorable
tax treatment. Some retirement plans are subject to distribution and other
requirements that are not incorporated into our Contract administration
procedures. Contract owners, participants and beneficiaries are responsible for
determining that contributions, distributions and other transactions with
respect to the Contract comply with applicable law. Therefore, you should seek
competent legal and tax advice regarding the suitability of a Contract for your
particular situation. The following discussion assumes that qualified Contracts
are purchased with proceeds from and/or contributions under retirement plans
that qualify for the intended special federal income tax treatment.
TAX STATUS OF THE CONTRACTS
DIVERSIFICATION REQUIREMENTS. The Code requires that the investments of a
variable account be "adequately diversified" in order for nonqualified Contracts
to be treated as annuity contracts for federal income tax purposes. It is
intended that Separate Account B, through the subaccounts, will satisfy these
diversification requirements.
In certain circumstances, owners of variable annuity contracts have been
considered for federal income tax purposes to be the owners of the assets of the
separate account supporting their contracts due to their ability to exercise
investment control over those assets. When this is the case, the contract owners
have been currently taxed on income and gains attributable to the separate
account assets. There is little guidance in this area, and some features of the
Contracts, such as the flexibility of a contract owner to allocate premium
payments and transfer contract values, have not been explicitly addressed in
published rulings. While we believe that the Contracts do not give contract
owners investment control over Separate Account B assets, we reserve the right
to modify the Contracts as necessary to prevent a contract owner from being
treated as the owner of the Separate Account B assets supporting the Contract.
REQUIRED DISTRIBUTIONS. In order to be treated as an annuity contract for
federal income tax purposes, the Code requires any non-qualified Contract to
contain certain provisions specifying how your interest in the Contract will be
distributed in the event of your death. The non-qualified Contracts contain
provisions that are intended to comply with these Code requirements, although no
regulations interpreting these requirements have yet been issued. We intend to
review such provisions and modify them if necessary to
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assure that they comply
with the applicable requirements when such requirements are clarified by
regulation or otherwise. Other rules may apply to Qualified Contracts. The
following discussion assumes that the Contracts will qualify as annuity
contracts for federal income tax purposes.
TAX TREATMENT OF ANNUITIES
IN GENERAL. We believe that if you are a natural person you will generally
not be taxed on increases in the value of a Contract until a distribution occurs
or until annuity payments begin. (For these purposes, the agreement to assign or
pledge any portion of the contract value, and, in the case of a qualified
Contract, any portion of an interest in the qualified plan, generally will be
treated as a distribution.)
TAXATION OF NON-QUALIFIED CONTRACTS
NON-NATURAL PERSON. The owner of any annuity contract who is not a natural
person generally must include in income any increase in the excess of the
contract value over the "investment in the contract" (generally, the premiums or
other consideration you paid for the contract less any nontaxable withdrawals)
during the taxable year. There are some exceptions to this rule and a
prospective contract owner that is not a natural person may wish to discuss
these with a tax adviser. The following discussion generally applies to
Contracts owned by natural persons.
WITHDRAWALS. When a withdrawal from a non-qualified Contract occurs, the
amount received will be treated as ordinary income subject to tax up to an
amount equal to the excess (if any) of the contract value (unreduced by the
amount of any surrender charge) immediately before the distribution over the
contract owner's investment in the Contract at that time. The tax treatment of
market value adjustments is uncertain. You should consult a tax adviser if you
are considering taking a withdrawal from your Contract in circumstances where a
market value adjustment would apply.
In the case of a surrender under a non-qualified Contract, the amount received
generally will be taxable only to the extent it exceeds the contract owner's
investment in the Contract.
PENALTY TAX ON CERTAIN WITHDRAWALS. In the case of a distribution from a
non-qualified Contract, there may be imposed a federal tax penalty equal to 10%
of the amount treated as income. In general, however, there is no penalty on
distributions:
o made on or after the taxpayer reaches age 59 1/2;
o made on or after the death of a contract owner;
o attributable to the taxpayer's becoming disabled; or
o made as part of a series of substantially equal periodic payments
for the life (or life expectancy) of the taxpayer.
Other exceptions may be applicable under certain circumstances and special
rules may be applicable in connection with the exceptions enumerated above.
A tax adviser should be consulted with regard to exceptions from the penalty
tax.
ANNUITY PAYMENTS. Although tax consequences may vary depending on the
payment option elected under an annuity contract, a portion of each annuity
payment is generally not taxed and the remainder is taxed as ordinary income.
The non-taxable portion of an annuity payment is generally determined in a
manner that is designed to allow you to recover your investment in the Contract
ratably on a tax-free basis over the expected stream of annuity payments, as
determined when annuity payments start. Once your investment in the Contract has
been fully recovered, however, the full amount of each annuity payment is
subject to tax as ordinary income.
TAXATION OF DEATH BENEFIT PROCEEDS. Amounts may be distributed from a
Contract because of your death or the death of the annuitant. Generally, such
amounts are includible in the income of recipient as
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follows: (i) if distributed
in a lump sum, they are taxed in the same manner as a surrender of the Contract,
or (ii) if distributed under a payment option, they are taxed in the same way as
annuity payments.
TRANSFERS, ASSIGNMENTS, EXCHANGES AND ANNUITY DATES OF A CONTRACT. A
transfer or assignment of ownership of a Contract, the designation of an
annuitant, the selection of certain dates for commencement of the annuity phase,
or the exchange of a Contract may result in certain tax consequences to you that
are not discussed herein. A contract owner contemplating any such transfer,
assignment or exchange, should consult a tax advisor as to the tax consequences.
WITHHOLDING. Annuity distributions are generally subject to
withholding for the recipient's federal income tax liability.
Recipients can generally elect, however, not to have tax withheld from
distributions.
MULTIPLE CONTRACTS. All non-qualified deferred annuity contracts that are
issued by us (or our affiliates) to the same contract owner during any calendar
year are treated as one annuity contract for purposes of determining the amount
includible in such contract owner's income when a taxable distribution occurs.
TAXATION OF QUALIFIED CONTRACTS
The Contracts are designed for use with several types of qualified plans. The
tax rules applicable to participants in these qualified plans vary according to
the type of plan and the terms and conditions of the plan itself. Special
favorable tax treatment may be available for certain types of contributions and
distributions. Adverse tax consequences may result from: contributions in excess
of specified limits; distributions before age 59 1/2 (subject to certain
exceptions); distributions that do not conform to specified commencement and
minimum distribution rules; and in other specified circumstances. Therefore, no
attempt is made to provide more than general information about the use of the
Contracts with the various types of qualified retirement plans. Contract owners,
annuitants, and beneficiaries are cautioned that the rights of any person to any
benefits under these qualified retirement plans may be subject to the terms and
conditions of the plans themselves, regardless of the terms and conditions of
the Contract, but we shall not be bound by the terms and conditions of such
plans to the extent such terms contradict the Contract, unless the Company
consents.
DISTRIBUTIONS. Annuity payments are generally taxed in the same manner as
under a non-qualified Contract. When a withdrawal from a qualified Contract
occurs, a pro rata portion of the amount received is taxable, generally based on
the ratio of the contract owner's investment in the Contract (generally, the
premiums or other consideration paid for the Contract) to the participant's
total accrued benefit balance under the retirement plan. For qualified
Contracts, the investment in the Contract can be zero. For Roth IRAs,
distributions are generally not taxed, except as described below.
For qualified plans under Section 401(a) and 403(b), the Code requires that
distributions generally must commence no later than the later of April 1 of the
calendar year following the calendar year in which the contract owner (or plan
participant) (i) reaches age 70 1/2 or (ii) retires, and must be made in a
specified form or manner. If the plan participant is a "5 percent owner" (as
defined in the Code), distributions generally must begin no later than April 1
of the calendar year following the calendar year in which the contract owner (or
plan participant) reaches age 70 1/2. For IRAs described in Section 408,
distributions generally must commence no later than April 1 of the calendar year
following the calendar year in which the contract owner (or plan participant)
reaches age 70 1/2. Roth IRAs under Section 408A do not require distributions at
any time before the contract owner's death.
WITHHOLDING. Distributions from certain qualified plans generally are
subject to withholding for the contract owner's federal income tax liability.
The withholding rates vary according to the type of distribution and the
contract owner's tax status. The contract owner may be provided the opportunity
to elect not to have tax withheld from distributions. "Eligible rollover
distributions" from section 401(a) plans and section 403(b) tax-sheltered
annuities are subject to a mandatory federal income tax withholding of 20%. An
eligible rollover distribution is the taxable portion of any distribution from
such a plan, except certain distributions that are required by the Code or
distributions in a specified annuity form. The 20% withholding does not apply,
however, if the contract owner chooses a "direct rollover" from the plan to
another tax-qualified plan or IRA.
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Brief descriptions of the various types of
qualified retirement plans in connection with a Contract follow. We will endorse
the Contract as necessary to conform it to the requirements of such plan.
If we do not receive an election from a nonspouse owner's beneficiary within the
1-year period after the contract owner's date of death, then we will pay the
death benefit to the owner's beneficiary in a cash payment within five years
from date of death. We will determine the death benefit as of the date we
receive proof of death. We will make payment of the proceeds on or before the
end of the 5-year period starting on the owner's date of death. Such cash
payment will be in full settlement of all our liability under the Contract.
If the contract owner dies after the annuity start date, we will continue to
distribute any benefit payable at least as rapidly as under the annuity option
then in effect. All of the contract owner's rights granted under the Contract or
allowed by us will pass to the contract owner's beneficiary.
CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS
Section 401(a) of the Code permits corporate employers to establish various
types of retirement plans for employees, and permits self-employed individuals
to establish these plans for themselves and their employees. These retirement
plans may permit the purchase of the Contracts to accumulate retirement savings
under the plans. Adverse tax or other legal consequences to the plan, to the
participant, or to both may result if this Contract is assigned or transferred
to any individual as a means to provide benefit payments, unless the plan
complies with all legal requirements applicable to such benefits before transfer
of the Contract. Employers intending to use the Contract with such plans should
seek competent advice.
INDIVIDUAL RETIREMENT ANNUITIES
Section 408 of the Code permits eligible individuals to contribute to an
individual retirement program known as an "Individual Retirement Annuity" or
"IRA." These IRAs are subject to limits on the amount that can be contributed,
the deductible amount of the contribution, the persons who may be eligible, and
the time when distributions commence. Also, distributions from certain other
types of qualified retirement plans may be "rolled over" or transferred on a
tax-deferred basis into an IRA. There are significant restrictions on rollover
or transfer contributions from Savings Incentive Match Plans (SIMPLE), under
which certain employers may provide contributions to IRAs on behalf of their
employees, subject to special restrictions. Employers may establish Simplified
Employee Pension (SEP) Plans to provide IRA contributions on behalf of their
employees. Sales of the Contract for use with IRAs may be subject to special
requirements of the IRS.
ROTH IRA
Section 408A of the Code permits certain eligible individuals to contribute to a
Roth IRA. Contributions to a Roth IRA, which are subject to certain limitations,
are not deductible, and must be made in cash or as a rollover or transfer from
another Roth IRA or other IRA. A rollover from or conversion of an IRA to a Roth
IRA may be subject to tax, and other special rules may apply. Distributions from
a Roth IRA generally are not taxed, except that, once aggregate distributions
exceed contributions to the Roth IRA, income tax and a 10% penalty tax may apply
to distributions made (1) before age 59 1/2 (subject to certain exceptions) or
(2) during the five taxable years starting with the year in which the first
contribution is made to any Roth IRA. A 10% penalty may apply to amounts
attributable from an IRA if they are distributed during the five taxable years
beginning with the year in which the conversion was made.
TAX SHELTERED ANNUITIES
Section 403(b) of the Code allows employees of certain Section 501(c)(3)
organizations and public schools to exclude from their gross income the premium
payments made, within certain limits, on a Contract that will provide an annuity
for the employee's retirement. These premium payments may be subject to FICA
(Social Security) tax. Distributions of (1) salary reduction contributions made
in years beginning after December 31, 1988; (2) earnings on those contributions;
and (3) earnings on amounts held as of the last year beginning before January 1,
1989, are not allowed prior to age 59 1/2, separation from service, death or
disability. Salary reduction contributions may also be distributed upon
hardship, but would generally be subject to penalties.
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ENHANCED DEATH BENEFIT
The Contract includes an Enhanced Death Benefit that in some cases may exceed
the greater of the premium payments or the contract value. The IRS has not ruled
whether an Enhanced Death Benefit could be characterized as an incidental
benefit, the amount of which is limited in any Code section 401(a) pension or
profit-sharing plan or Code section 403(b) tax-sheltered annuity. Employers
using the Contract may want to consult their tax adviser regarding such
limitation. Further, the Internal Revenue Service has not addressed in a ruling
of general applicability whether a death benefit provision such as the Enhanced
Death Benefit provision in the Contract comports with IRA or Roth IRA
qualification requirements. A tax advisor should be consulted.
OTHER TAX CONSEQUENCES
As noted above, the foregoing comments about the federal tax consequences under
the Contracts are not exhaustive, and special rules are provided with respect to
other tax situations not discussed in this prospectus. Further, the federal
income tax consequences discussed herein reflect our understanding of current
law, and the law may change. Federal estate and state and local estate,
inheritance and other tax consequences of ownership or receipt of distributions
under a Contract depend on the individual circumstances of each contract owner
or recipient of the distribution. A competent tax adviser should be consulted
for further information.
POSSIBLE CHANGES IN TAXATION
Although the likelihood of legislative change is uncertain, there is always the
possibility that the tax treatment of the Contracts could change by legislation
or other means. It is also possible that any change could be retroactive (that
is, effective before the date of the change). You should consult a tax adviser
with respect to legislative developments and their effect on the Contract.
VAL-108--- 57
<PAGE>
<PAGE>
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STATEMENT OF ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
TABLE OF CONTENTS
ITEM PAGE
Introduction............................................. 1
Description of Golden American Life Insurance Company.... 1
Safekeeping of Assets.................................... 1
The Administrator........................................ 1
Independent Auditors..................................... 1
Distribution of Contracts................................ 1
Performance Information.................................. 2
IRA Partial Withdrawal Option............................ 8
Other Information........................................ 9
Financial Statements of Separate Account B............... 9
PLEASE TEAR OFF, COMPLETE AND RETURN THE FORM BELOW TO ORDER A FREE STATEMENT OF
ADDITIONAL INFORMATION FOR THE CONTRACTS OFFERED UNDER THE PROSPECTUS. ADDRESS
THE FORM TO OUR CUSTOMER SERVICE CENTER; THE ADDRESS IS SHOWN ON THE PROSPECTUS
COVER.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
PLEASE SEND ME A FREE COPY OF THE STATEMENT OF ADDITIONAL INFORMATION FOR
SEPARATE ACCOUNT B.
Please Print or Type:
--------------------------------------------------
NAME
--------------------------------------------------
SOCIAL SECURITY NUMBER
--------------------------------------------------
STREET ADDRESS
--------------------------------------------------
CITY, STATE, ZIP
108--- VALUE 10/00 91
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
<PAGE>
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APPENDIX A
--------------------------------------------------------------------------------
CONDENSED FINANCIAL INFORMATION
Except for the Asset Allocation Growth, Diversified Mid-Cap, Growth and Income,
Special Situations, Investors, Large Cap Value, All Cap, ING Global Brand Names,
Prudential Jennison and the SP Jennison International Growth subaccounts which
did not commence operations as of December 31, 1999, the following tables give
(1) the accumulation unit value ("AUV"), (2) the total number of accumulation
units, and (3) the total accumulation unit value, for each subaccount of Golden
American Separate Account B available under the Contract for the indictated
periods. The subaccounts below became available to investors on February 22,
1999. The starting accumulation unit value is indicated on the last row of each
table.
LIQUID ASSET
----------------------------------------------------------
STANDARD DEATH BENEFIT
----------------------------------------------------------
TOTAL # OF
ACCUMULATION
AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------
1999 $15.61 7,391 $116
2/23/99 15.12 -- --
----------------------------------------------------------
LIMITED MATURITY BOND
----------------------------------------------------------
STANDARD DEATH BENEFIT
----------------------------------------------------------
TOTAL # OF
ACCUMULATION
AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------
1999 $17.65 655 $11
2/23/99 17.53 -- --
----------------------------------------------------------
GLOBAL FIXED INCOME
----------------------------------------------------------
STANDARD DEATH BENEFIT
----------------------------------------------------------
TOTAL # OF
ACCUMULATION
AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------
1999 $12.11 982 $12
2/23/99 12.78 -- --
----------------------------------------------------------
VAL-108--- A1
<PAGE>
<PAGE>
FULLY MANAGED
----------------------------------------------------------
STANDARD DEATH BENEFIT
----------------------------------------------------------
TOTAL # OF
ACCUMULATION
AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------
1999 $22.85 1,564 $36
2/23/99 20.98 -- --
----------------------------------------------------------
TOTAL RETURN
----------------------------------------------------------
STANDARD DEATH BENEFIT
----------------------------------------------------------
TOTAL # OF
ACCUMULATION
AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------
1999 $18.54 3,045 $56
2/23/99 17.93 -- --
----------------------------------------------------------
EQUITY INCOME
----------------------------------------------------------
STANDARD DEATH BENEFIT
----------------------------------------------------------
TOTAL # OF
ACCUMULATION
AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------
1999 $22.66 2,555 $58
2/23/99 22.90 -- --
----------------------------------------------------------
VALUE EQUITY
----------------------------------------------------------
STANDARD DEATH BENEFIT
----------------------------------------------------------
TOTAL # OF
ACCUMULATION
AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------
1999 $18.58 3,333 $62
2/23/99 17.52 -- --
----------------------------------------------------------
VAL-108--- A2
<PAGE>
<PAGE>
RISING DIVIDENDS
----------------------------------------------------------
STANDARD DEATH BENEFIT
----------------------------------------------------------
TOTAL # OF
ACCUMULATION
AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------
1999 $26.62 10,416 $277
2/23/99 24.22 -- --
----------------------------------------------------------
RESEARCH
----------------------------------------------------------
STANDARD DEATH BENEFIT
----------------------------------------------------------
TOTAL # OF
ACCUMULATION
AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------
1999 $28.78 10,661 $307
2/23/99 23.91 -- --
----------------------------------------------------------
CAPITAL APPRECIATION
----------------------------------------------------------
STANDARD DEATH BENEFIT
----------------------------------------------------------
TOTAL # OF
ACCUMULATION
AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------
1999 $31.26 5,832 $182
2/23/99 25.37 -- --
----------------------------------------------------------
CAPITAL GROWTH
----------------------------------------------------------
STANDARD DEATH BENEFIT
----------------------------------------------------------
TOTAL # OF
ACCUMULATION
AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------
1999 $21.46 5,650 $121
2/23/99 17.23 -- --
----------------------------------------------------------
VAL-108--- A3
<PAGE>
<PAGE>
STRATEGIC EQUITY
----------------------------------------------------------
STANDARD DEATH BENEFIT
----------------------------------------------------------
TOTAL # OF
ACCUMULATION
AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------
1999 $22.37 3,862 $86
2/23/99 13.78 -- --
----------------------------------------------------------
MID-CAP GROWTH
----------------------------------------------------------
STANDARD DEATH BENEFIT
----------------------------------------------------------
TOTAL # OF
ACCUMULATION
AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------
1999 $40.71 10,373 $422
2/23/99 22.79 -- --
----------------------------------------------------------
SMALL CAP
----------------------------------------------------------
STANDARD DEATH BENEFIT
----------------------------------------------------------
TOTAL # OF
ACCUMULATION
AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------
1999 $23.28 13,606 $316
2/23/99 15.73 -- --
----------------------------------------------------------
GROWTH
----------------------------------------------------------
STANDARD DEATH BENEFIT
----------------------------------------------------------
TOTAL # OF
ACCUMULATION
AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------
1999 $29.16 27,642 $806
2/23/99 18.48 -- --
----------------------------------------------------------
VAL-108--- A4
<PAGE>
<PAGE>
REAL ESTATE
----------------------------------------------------------
STANDARD DEATH BENEFIT
----------------------------------------------------------
TOTAL # OF
ACCUMULATION
AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------
1999 -- -- --
2/23/99 $22.20 -- --
----------------------------------------------------------
HARD ASSETS
----------------------------------------------------------
STANDARD DEATH BENEFIT
----------------------------------------------------------
TOTAL # OF
ACCUMULATION
AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------
1999 $18.33 497 $9
2/23/99 14.51 -- --
----------------------------------------------------------
DEVELOPING WORLD
----------------------------------------------------------
STANDARD DEATH BENEFIT
----------------------------------------------------------
TOTAL # OF
ACCUMULATION
AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------
1999 $11.72 5,500 $64
2/23/99 7.00 -- --
----------------------------------------------------------
PIMCO HIGH YIELD BOND
----------------------------------------------------------
STANDARD DEATH BENEFIT
----------------------------------------------------------
TOTAL # OF
ACCUMULATION
AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------
1999 $10.33 8,722 $90
2/23/99 10.23 -- --
----------------------------------------------------------
VAL-108--- A5
<PAGE>
<PAGE>
PIMCO STOCKSPLUS GROWTH
AND INCOME
----------------------------------------------------------
STANDARD DEATH BENEFIT
----------------------------------------------------------
TOTAL # OF
ACCUMULATION
AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------
1999 $13.24 3,634 $48
2/23/99 11.47 -- --
----------------------------------------------------------
INTERNATIONAL EQUITY
----------------------------------------------------------
STANDARD DEATH BENEFIT
----------------------------------------------------------
TOTAL # OF
ACCUMULATION
AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------
1999 $15.97 8,033 $128
2/23/99 10.26 -- --
----------------------------------------------------------
VAL-108--- A6
<PAGE>
<PAGE>
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APPENDIX B
--------------------------------------------------------------------------------
MARKET VALUE ADJUSTMENT EXAMPLES
EXAMPLE #1: FULL SURRENDER -- EXAMPLE OF A NEGATIVE MARKET VALUE ADJUSTMENT
Assume $100,000 was allocated to a Fixed Interest Allocation with a
guaranteed interest period of 10 years, a guaranteed interest rate of 7.5%, an
initial Index Rate ("I") of 7%; that a full surrender is requested 3 years into
the guaranteed interest period; that the then Index Rate for a 7 year guaranteed
interest period ("J") is 8%; and that no prior transfers or withdrawals
affecting this Fixed Interest Allocation have been made.
CALCULATE THE MARKET VALUE ADJUSTMENT
1. The contract value of the Fixed Interest Allocation on the date of
3
surrender is $124,230 ($100,000 x 1.075 )
2. N = 2,555 ( 365 x 7 )
2,555/365
3. Market Value Adjustment = $124,230 x [((1.07/1.0850) )-1] = $11,535
Therefore, the amount paid to you on full surrender ignoring any surrender
charge is $112,695 ($124,230 - $11,535 ).
EXAMPLE #2: FULL SURRENDER -- EXAMPLE OF A POSITIVE MARKET VALUE ADJUSTMENT
Assume $100,000 was allocated to a Fixed Interest Allocation with a
guaranteed interest period of 10 years, a guaranteed interest rate of 7.5%, an
initial Index Rate ("I") of 7%; that a full surrender is requested 3 years into
the guaranteed interest period; that the then Index Rate for a 7 year guaranteed
interest period ("J") is 6%; and that no prior transfers or withdrawals
affecting this Fixed Interest Allocation have been made.
CALCULATE THE MARKET VALUE ADJUSTMENT
1. The contract value of the Fixed Interest Allocation on the date of
3
surrender is $124,230 ($100,000 x 1.075 )
2. N = 2,555 ( 365 x 7 )
2,555/365
3. Market Value Adjustment = $124,230 x [((1.07/1.0650) )-1] = $4,141
Therefore, the amount paid to you on full surrender ignoring any surrender
charge is $128,371 ($124,230 + $4,141 ).
EXAMPLE #3: WITHDRAWAL -- EXAMPLE OF A NEGATIVE MARKET VALUE ADJUSTMENT
Assume $200,000 was allocated to a Fixed Interest Allocation with a
guaranteed interest period of 10 years, a guaranteed interest rate of 7.5%, an
initial Index Rate ("I") of 7%; that a withdrawal of $112,695 is requested 3
years into the guaranteed interest period; that the then Index Rate ("J") for a
7 year guaranteed interest period is 8%; and that no prior transfers or
withdrawals affecting this Fixed Interest Allocation have been made.
First calculate the amount that must be withdrawn from the Fixed Interest
Allocation to provide the amount requested.
1. The contract value of the Fixed Interest Allocation on the date of
3
withdrawal is $248,459 ( $200,000 x 1.075 )
2. N = 2,555 ( 365 x 7 )
3. Amount that must be withdrawn =
2,555/365
[ $112,695 / ((1.07/1.0850) )] = $124,230
Then calculate the Market Value Adjustment on that amount.
VAL-108--- B1
<PAGE>
<PAGE>
2,555/365
4. Market Value Adjustment = $124,230 x [((1.07/1.0850) )-1] = $11,535
Therefore, the amount of the withdrawal paid to you is $112,695, as
requested. The Fixed Interest Allocation will be reduced by the amount of the
withdrawal, $112,695, and also reduced by the Market Value Adjustment of
$11,535, for a total reduction in the Fixed Interest Allocation of $124,230.
EXAMPLE #4: WITHDRAWAL -- EXAMPLE OF A POSITIVE MARKET VALUE ADJUSTMENT
Assume $200,000 was allocated to a Fixed Interest Allocation with a
guaranteed interest period of 10 years, a guaranteed interest rate of 7.5%, an
initial Index Rate of 7%; that a withdrawal of $128,371 requested 3 years into
the guaranteed interest period; that the then Index Rate ("J") for a 7 year
guaranteed interest period is 6%; and that no prior transfers or withdrawals
affecting this Fixed Interest Allocation have been made.
First calculate the amount that must be withdrawn from the Fixed Interest
Allocation to provide the amount requested.
1. The contract value of Fixed Interest Allocation on the date of surrender is
3
$248,459 ( $200,000 x 1.075 )
2. N = 2,555 ( 365 x 7 )
3. Amount that must be withdrawn =
2,555/365
[ $128,371 / ((1.07/1.0650) )] = $124,230
Then calculate the Market Value Adjustment on that amount.
2,555/365
4. Market Value Adjustment = $124,230 x [((1.07/1.0650) )-1 ] = $4,141
Therefore, the amount of the withdrawal paid to you is $128,371, as
requested. The Fixed Interest Allocation will be reduced by the amount of the
withdrawal, $128,371, but increased by the Market Value Adjustment of $4,141,
for a total reduction in the Fixed Interest Allocation of $124,230.
VAL-108--- B2
<PAGE>
<PAGE>
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APPENDIX C
--------------------------------------------------------------------------------
SURRENDER CHARGE FOR EXCESS WITHDRAWALS EXAMPLE
The following assumes you made an initial premium payment of $25,000 and
additional premium payments of $25,000 in each of the second and third contract
years, for total premium payments under the Contract of $75,000. It also assumes
a withdrawal at the beginning of the fifth contract year of 30% of the contract
value of $90,000.
In this example, $15,000 (maximum of $15,000 in earnings or $75,000 x .10) is
the maximum free withdrawal amount that you may withdraw during the contract
year without a surrender charge. The total withdrawal would be $27,000 ($90,000
x .30). Therefore, $12,000 ($27,000 - $15,000) is considered an excess
withdrawal of a part of the initial premium payment of $25,000 and would be
subject to a 4% surrender charge of $480 ($12,000 x .04). This example does not
take into account any Market Value Adjustment or deduction of any premium taxes.
VAL-108--- C1
<PAGE>
<PAGE>
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APPENDIX D
--------------------------------------------------------------------------------
DEATH BENEFITS FOR EXISTING CONTRACT OWNERS
The following is a description of the death benefit options for contract owners
who purchased contracts prior to the effective date of this prospectus.
Effective with the date of this prospectus, we will be designating certain
investment portfolios as "Excluded Funds". We may add new portfolios as Excluded
Funds. We may also reclassify an existing portfolio as an Excluded Fund or
remove such classification upon 30 days notice to you. Such reclassification
will apply only to amounts transferred or otherwise added to such portfolio
after the effective date of the reclassification. Investment in Excluded Funds
will impact your death benefit. OTHER THAN AS SPECIFIED BELOW, PLEASE SEE THE
PROSPECTUS FOR A COMPLETE DESCRIPTION OF YOUR DEATH BENEFIT OPTIONS.
DEATH BENEFIT FOR EXCLUDED FUNDS
For the period of time, and to the extent, that you allocate premium or contract
value to Excluded Funds, your death benefit attributable to that allocation will
equal the contract value of that allocation. Any guarantee of death benefit in
excess of contract value otherwise provided with regard to allocations to
Non-Excluded Funds, does not apply to allocations to Excluded Funds. The death
benefit provided under the Contract may be reduced to the extent that you
allocate premium or contract value to Excluded Funds.
Transfers from Excluded Funds to Non-Excluded funds will reduce all death
benefit components for Excluded Funds on a pro-rata basis. Except with respect
to any maximum guaranteed death benefit, the resulting increase in the
Non-Excluded Funds death benefit component will equal the lesser of the
reduction in the death benefit for Excluded Funds and the contract value
transferred. With respect to the maximum guaranteed death benefit, where
applicable, the resulting increase in the Non-Excluded Funds maximum guaranteed
death benefit will equal the reduction in the maximum guaranteed death benefit
for Excluded Funds.
Transfers from Non-Excluded Funds to Excluded Funds will reduce the Non-Excluded
Funds death benefit components on a pro-rata basis. The resulting increase in
the death benefit components of Excluded Funds will equal the reduction in the
Non-Excluded Funds death benefit components.
Adjustments for transfers involving both Excluded Funds and Special Funds will
be calculated separately from adjustments for transfers involving Excluded Funds
and Non-Special Funds, where applicable.
DEATH BENEFIT FOR NON-EXCLUDED FUNDS
Under the death benefit, if you die before the annuity start date, your
beneficiary will receive the greatest of:
1) the contract value;
2) the total premium payments made under the Contract after subtracting
any withdrawals; or
3) the cash surrender value.
Note: The amount of the death benefit could be reduced by premium taxes owed
and withdrawals not previously deducted.
VAL-108--- D1
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<PAGE>
ING VARIABLE ANNUITIES
GOLDEN AMERICAN LIFE INSURANCE COMPANY
Golden American Life Insurance Company is a stock company domiciled in Delaware.
--------------------------------------------------------------------------------
108--- VALUE 10/02/2000
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PART B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
<PAGE>
Statement of Additional Information
GOLDENSELECT VALUE
DEFERRED COMBINATION VARIABLE
AND FIXED ANNUITY CONTRACT
ISSUED BY
SEPARATE ACCOUNT B
OF
GOLDEN AMERICAN LIFE INSURANCE COMPANY
This Statement of Additional Information is not a prospectus. The information
contained herein should be read in conjunction with the Prospectus for the
Golden American Life Insurance Company Deferred Variable Annuity Contract, which
is referred to herein. The Prospectus sets forth information that a prospective
investor ought to know before investing. For a copy of the Prospectus, send a
written request to Golden American Life Insurance Company, Customer Service
Center, P.O. Box 2700, West Chester, Pennsylvania 19380-1478 or telephone
1-800-366-0066.
DATE OF PROSPECTUS AND
STATEMENT OF ADDITIONAL INFORMATION:
January [ ], 2000
<PAGE>
TABLE OF CONTENTS
ITEM PAGE
Introduction 1
Description of Golden American Life Insurance Company 1
Safekeeping of Assets 1
The Administrator 1
Independent Auditors 1
Distribution of Contracts 1
Performance Information 2
IRA Partial Withdrawal Option 8
Other Information 9
Financial Statements of Separate Account B 9
<PAGE>
INTRODUCTION
This Statement of Additional Information provides background information
regarding Separate Account B.
DESCRIPTION OF GOLDEN AMERICAN LIFE INSURANCE COMPANY
Golden American Life Insurance Company ("Golden American") is a stock life
insurance company organized under the laws of the State of Delaware. On August
13, 1996, Equitable of Iowa Companies, Inc. (formerly Equitable of Iowa
Companies) ("Equitable of Iowa") acquired all of the interest in Golden American
and Directed Services, Inc. On October 24, 1997, Equitable of Iowa and ING
Groep, N.V. ("ING") completed a merger agreement, and Equitable of Iowa became a
wholly owned subsidiary of ING. ING, headquartered in The Netherlands, is a
global financial services holding company with approximately $495.0 billion in
assets as of December 31, 1999.
As of December 31, 1999, Golden American had approximately $477.8 million in
stockholder's equity and approximately $9.4 billion in total assets, including
approximately $7.6 billion of separate account assets. Golden American is
authorized to do business in all jurisdictions except New York. Golden American
offers variable insurance products. Golden American formed a subsidiary, First
Golden American Life Insurance Company of New York ("First Golden"), which is
licensed to do variable annuity business in the states of New York and Delaware.
SAFEKEEPING OF ASSETS
Golden American acts as its own custodian for Separate Account B.
THE ADMINISTRATOR
Effective January 1, 1997, Equitable Life Insurance Company of Iowa ("Equitable
Life") and Golden American became parties to a service agreement pursuant to
which Equitable Life agreed to provide certain accounting, actuarial, tax,
underwriting, sales, management and other services to Golden American. Expenses
incurred by Equitable Life in relation to this service agreement were reimbursed
by Golden American on an allocated cost basis. No charges were billed to Golden
American by Equitable Life pursuant to the service agreement in 1997. Equitable
Life billed Golden American $364,086 and $892,903 pursuant to the service
agreement in 1999 and 1998, respectively.
INDEPENDENT AUDITORS
Ernst & Young LLP, independent auditors, performs annual audits of Golden
American and Separate Account B.
DISTRIBUTION OF CONTRACTS
The offering of contracts under the prospectus associated with this Statement of
Additional Information is continuous. Directed Services, Inc., an affiliate of
Golden American, acts as the principal underwriter (as defined in the Securities
Act of 1933 and the Investment Company Act of 1940, as amended) of the variable
insurance products (the "variable insurance products") issued by Golden
American. The variable insurance products were sold primarily through two
broker/dealer institutions, during the year ended December 31, 1997, through two
broker/dealer institutions
1
<PAGE>
during the year ended December 31, 1998 and through two broker/dealer
institutions during the year ended December 31, 1999. For the years ended 1999,
1998 and 1997 commissions paid by Golden American, including amounts paid by its
subsidiary, First Golden American Life Insurance Company of New York, to
Directed Services, Inc. aggregated $181,536,000, $117,470,000 and $36,350,000,
respectively. All commissions received by the distributor were passed through to
the broker-dealers who sold the contracts. Directed Services, Inc. is located at
1475 Dunwoody Drive, West Chester, Pennsylvania 19380-1478.
Under a management services agreement, last amended in 1995, Golden American
provides to Directed Services, Inc. certain of its personnel to perform
management, administrative and clerical services and the use of certain
facilities. Golden American charges Directed Services, Inc. for such expenses
and all other general and administrative costs, first on the basis of direct
charges when identifiable, and the remainder allocated based on the estimated
amount of time spent by Golden American's employees on behalf of Directed
Services, Inc. In the opinion of management, this method of cost allocation is
reasonable. This fee, calculated as a percentage of average assets in the
variable separate accounts, was $10,136,000, $4,771,000 and $2,770,000 for the
years ended 1999, 1998 and 1997, respectively.
PERFORMANCE INFORMATION
Performance information for the subaccounts of Separate Account B, including
yields, standard annual returns and other non-standard measures of performance
of all subaccounts, may appear in reports or promotional literature to current
or prospective owners. Such non-standard measures of performance will be
computed, or accompanied by performance data computed, in accordance with
standards defined by the SEC. Negative values are denoted by minus signs ("-").
Performance information for measures other than total return do not reflect any
applicable premium tax that can range from 0% to 3.5%. As described in the
prospectus, four death benefit options are available. The following performance
values reflect the election at issue of the 5% Solution Enhanced Death Benefit,
thus providing values reflecting the highest aggregate contract charges. In
addition, the performance values reflect the selection of the most costly
optional benefit rider. If one of the other death benefit options had been
elected, or if another optional benefit rider or no rider had been elected, the
historical performance values would be higher than those represented in the
examples.
SEC STANDARD MONEY MARKET SUBACCOUNT YIELDS
Current yield for the Liquid Asset Subaccount will be based on the change in the
value of a hypothetical investment (exclusive of capital changes or income other
than investment income) over a particular 7-day period, less a pro rata share of
subaccount expenses which includes deductions for the mortality and expense risk
charge and the administrative charge accrued over that period (the "base
period"), and stated as a percentage of the investment at the start of the base
period (the "base period return"). The base period return is then annualized by
multiplying by 365/7, with the resulting yield figure carried to at least the
nearest hundredth of one percent. Calculation of "effective yield" begins with
the same "base period return" used in the calculation of yield, which is then
annualized to reflect weekly compounding pursuant to the following formula:
Effective Yield = [(Base Period Return) +1) ^ 365/7] - 1
The current yield and effective yield of the Liquid Asset Subaccount for the
7-day period December 25, 1999 to December 31, 1999 were 4.64% and 4.75%,
respectively.
2
<PAGE>
SEC STANDARD 30-DAY YIELD FOR NON-MONEY MARKET SUBACCOUNTS
Quotations of yield for the remaining subaccounts will be based on all
investment income per subaccount earned during a particular 30-day period, less
expenses accrued during the period ("net investment income"), and will be
computed by dividing net investment income by the value of an accumulation unit
on the last day of the period, according to the following formula:
Yield = 2 x [((a - b)/(c x d) + 1)^6 - 1]
Where:
[a] equals the net investment income earned during the period by the
investment portfolio attributable to shares owned by a subaccount
[b] equals the expenses accrued for the period (net of
reimbursements)
[c] equals the average daily number of units outstanding during the
period based on the accumulation unit value
[d] equals the value (maximum offering price) per accumulation unit
value on the last day of the period
Yield on subaccounts of Separate Account B is earned from the increase in net
asset value of shares of the investment portfolio in which the subaccount
invests and from dividends declared and paid by the investment portfolio, which
are automatically reinvested in shares of the investment portfolio.
SEC STANDARD AVERAGE ANNUAL TOTAL RETURN FOR ALL SUBACCOUNTS
Quotations of average annual total return for any subaccount will be expressed
in terms of the average annual compounded rate of return of a hypothetical
investment in a contract over a period of one, five and 10 years (or, if less,
up to the life of the subaccount), calculated pursuant to the formula:
P(1+T)^(n)=ERV
Where:
(1) [P] equals a hypothetical initial premium payment of $1,000
(2) [T] equals an average annual total return
(3) [n] equals the number of years
(4) [ERV] equals the ending redeemable value of a hypothetical $1,000
initial premium payment made at the beginning of the period
(or fractional portion thereof)
All total return figures reflect the deduction of the maximum sales load, the
administrative charges, the mortality and expense risk charges and maximum
optional benefit rider charge. The Securities and Exchange Commission (the
"SEC") requires that an assumption be made that the contract owner surrenders
the entire contract at the end of the one, five and 10 year periods (or, if
less, up to the life of the security) for which performance is required to be
calculated. This assumption may not be consistent with the typical contract
owner's intentions in purchasing a contract and may adversely affect returns.
Quotations of total return may simultaneously be shown for other periods, as
well as quotations of total return that do not take into account certain
contractual charges such as sales load.
3
<PAGE>
Except for the All Cap, Investors, Large Cap Value, ING Global Brand Names and
Prudential Jennison subaccounts which had not commenced as of December 31, 1999,
Average Annual Total Return for the subaccounts is presented on a standardized
basis, which includes deductions for the maximum mortality and expense risk
charge of 0.75%, administrative charges of 0.15%, contract administration charge
at 0.04%, and applicable surrender charges of 6% for the one year period and 3%
for the five year period for the year ending December 31, 1999 were as follows:
Average Annual Total Return for Periods Ending 12/31/99 - Standardized
----------------------------------------------------------------------
<TABLE>
<CAPTION>
From Inception
1 Year 5 Year 10 Year Inception Date
THE GCG TRUST
<S> <C> <C> <C> <C> <C>
Liquid Asset -2.25% 3.40% 3.83%* 4.13%* 1/25/89
Limited Maturity Bond -5.82% 4.42% 4.92%* 5.30%* 1/25/89
Global Fixed Income -15.48% 3.00%* n/a 3.19%* 10/7/94
Fully Managed -0.08% 11.33% 8.25%* 7.82%* 1/25/89
Total Return -3.60% 13.00%* n/a 12.13%* 10/7/94
Equity Income -7.66% 8.70% 7.65%* 7.74%* 1/25/89
Investors n/a n/a n/a n/a 2/1/00
Value Equity -6.43% n/a n/a 12.66% 1/1/95
Rising Dividends 8.79% 20.58% n/a 16.88% 10/4/93
Managed Global 55.79% 21.81%* n/a 13.42%* 10/21/92
Large Cap n/a n/a n/a n/a 2/1/00
All Cap n/a n/a n/a n/a 2/1/00
Research 17.07% 23.81%* n/a 22.10%* 10/7/94
Capital Appreciation 17.48% 21.65% n/a 16.01%* 5/4/92
Capital Growth 18.38% n/a n/a 21.77% 4/1/96
Strategic Equity 48.80% n/a n/a 20.31% 10/2/95
Mid-Cap Growth 71.41% 31.14%* n/a 30.54%* 10/7/94
Small Cap 43.21% n/a n/a 22.84% 1/2/96
Growth 70.49% n/a n/a 32.36%* 4/1/96
Real Estate -10.71% 8.42% 8.27%* 7.34%* 1/25/89
Hard Assets 16.21% 4.69% 4.47%* 5.67%* 1/25/89
Developing World 54.17% n/a n/a 5.81% 2/18/98
THE PIMCO TRUST
High Yield Bond -3.95%* n/a n/a -1.66%* 5/1/98
StocksPLUS Growth and Income 12.73%* n/a n/a 15.03%* 5/1/98
THE WARBURG PINCUS TRUST
International Equity 46.01% n/a n/a 12.30%* 4/1/96
ING VARIABLE INSURANCE TRUST
ING Global Brand Names n/a n/a n/a n/a 5/1/00
THE PRUDENTIAL SERIES FUND, INC
Prudential Jennison n/a n/a n/a n/a 5/1/00
</TABLE>
---------------
* Total return calculation reflects certain waivers of portfolio fees and
expenses.
NON-STANDARD AVERAGE ANNUAL TOTAL RETURN FOR ALL SUBACCOUNTS
Quotations of non-standard average annual total return for any subaccount will
be expressed in terms of the average annual compounded rate of return of a
hypothetical investment in a contract over a period of one, five and 10 years
(or, if less, up to the life of the subaccount), calculated pursuant to the
formula:
4
<PAGE>
P(1+T)^(n)]=ERV
Where:
(1) [P] equals a hypothetical initial premium payment of $1,000
(2) [T] equals an average annual total return
(3) [n] equals the number of years
(4) [ERV] equals the ending redeemable value of a hypothetical $1,000
initial premium payment made at the beginning of the period
(or fractional portion thereof) assuming certain loading and
charges are zero.
All total return figures reflect the deduction of the mortality and expense risk
charge for the death benefit and the administrative charges but not the
deduction of the maximum sales load and the annual contract fee.
Except for the All Cap, Investors, Large Cap Value, ING Global Brand Names and
Prudential Jennison subaccounts which had not commenced as of December 31, 1999,
Average Annual Total Return for the subaccounts is presented on a standardized
basis, which includes deductions for the maximum mortality and expense risk
charge of 0.75%, and administrative charges of 0.15%, for the year ending
December 31, 1999 were as follows:
5
<PAGE>
Average Annual Total Return for Periods Ending 12/31/99 - Non-Standardized
--------------------------------------------------------------------------
<TABLE>
<CAPTION>
From Inception
1 Year 5 Year 10 Year Inception Date
THE GCG TRUST
<S> <C> <C> <C> <C> <C>
Liquid Asset 3.79% 4.13% 3.87%* 4.16%* 1/25/89
Limited Maturity Bond 0.22% 5.12% 4.95%* 5.33%* 1/25/89
Global Fixed Income -9.44% 3.74%* n/a 3.72%* 10/7/94
Fully Managed 5.96% 11.87% 8.28%* 7.85%* 1/25/89
Total Return 2.45% 13.52%* n/a 12.51%* 10/7/94
Equity Income -1.61% 9.30% 7.69%* 7.77%* 1/25/89
Investors n/a n/a n/a n/a 2/1/00
Value Equity -0.39% n/a n/a 13.18% 1/1/95
Rising Dividends 14.83% 20.99% n/a 16.98% 10/4/93
Managed Global 61.83% 22.21%* n/a 13.46%* 10/21/92
Large Cap n/a n/a n/a n/a 2/1/00
All Cap n/a n/a n/a n/a 2/1/00
Research 23.11% 24.18%* n/a 22.37%* 10/7/94
Capital Appreciation 23.52% 22.04% n/a 16.04%* 5/4/92
Capital Growth 24.43% n/a n/a 22.56% 4/1/96
Strategic Equity 54.84% n/a n/a 20.86% 10/2/95
Mid-Cap Growth 77.45% 31.44%* n/a 30.75%* 10/7/94
Small Cap 49.25% n/a n/a 23.55% 1/2/96
Growth 76.53% n/a n/a 33.00%* 4/1/96
Real Estate -4.67% 9.03% 8.30%* 7.37%* 1/25/89
Hard Assets 22.25% 5.38% 4.50%* 5.70%* 1/25/89
Developing World 60.21% n/a n/a 8.87% 2/18/98
THE PIMCO TRUST
High Yield Bond 2.10% n/a n/a 1.95% 5/1/98
StocksPLUS Growth and Income 18.77% n/a n/a 18.30% 5/1/98
THE WARBURG PINCUS TRUST
International Equity 52.05% n/a n/a 13.29% 4/1/96
ING VARIABLE INSURANCE TRUST
ING Global Brand Names n/a n/a n/a n/a 5/1/00
THE PRUDENTIAL SERIES FUND, INC
Prudential Jennison n/a n/a n/a n/a 5/1/00
</TABLE>
--------------------
* Total return calculation reflects certain waivers of portfolio fees and
expenses.
Performance information for a subaccount may be compared, in reports and
promotional literature, to: (i) the Standard & Poor's 500 Stock Index ("S&P
500"), Dow Jones Industrial Average ("DJIA"), Donoghue Money Market
Institutional Averages, or other indices that measure performance of a pertinent
group of securities so that investors may compare a subaccount's results with
those of a group of securities widely regarded by investors as representative of
the securities markets in general; (ii) other groups of variable annuity
separate accounts or other investment products tracked by Lipper Analytical
Services, a widely used independent research firm which ranks mutual funds and
other investment companies by overall performance, investment objectives, and
assets, or tracked by other services, companies, publications, or persons who
rank such investment companies on overall performance or other criteria; and
(iii) the Consumer Price Index (measure for inflation) to assess the real rate
of return from an investment in the contract. Unmanaged indices may assume the
reinvestment of dividends but generally do not reflect deductions for
administrative and management costs and expenses.
6
<PAGE>
Performance information for any subaccount reflects only the performance of a
hypothetical contract under which contract value is allocated to a subaccount
during a particular time period on which the calculations are based. Performance
information should be considered in light of the investment objectives and
policies, characteristics and quality of the investment portfolio of the Trust
in which the Separate Account B subaccounts invest, and the market conditions
during the given time period, and should not be considered as a representation
of what may be achieved in the future.
Reports and promotional literature may also contain other information including
the ranking of any subaccount derived from rankings of variable annuity separate
accounts or other investment products tracked by Lipper Analytical Services or
by other rating services, companies, publications, or other persons who rank
separate accounts or other investment products on overall performance or other
criteria.
PUBLISHED RATINGS
From time to time, the rating of Golden American as an insurance company by A.M.
Best may be referred to in advertisements or in reports to contract owners. Each
year the A.M. Best Company reviews the financial status of thousands of
insurers, culminating in the assignment of Best's Ratings. These ratings reflect
their current opinion of the relative financial strength and operating
performance of an insurance company in comparison to the norms of the
life/health insurance industry. Best's ratings range from A+ + to F. An A++ and
A+ ratings mean, in the opinion of A.M. Best, that the insurer has demonstrated
the strongest ability to meet its respective policyholder and other contractual
obligations.
ACCUMULATION UNIT VALUE
The calculation of the Accumulation Unit Value ("AUV") is discussed in the
prospectus for the Contracts under Performance Information. Note that in your
Contract, accumulation unit value is referred to as the Index of Investment
Experience. The following illustrations show a calculation of a new AUV and the
purchase of Units (using hypothetical examples). Note that the examples below
are calculated for a Contract issued with the 7% Solution Enhanced Death Benefit
Option, the death benefit option with the highest mortality and expense risk
charge. The mortality and expense risk charge associated with the 7% Solution
Enhanced Death Benefit, the Annual Ratchet Enhanced Death Benefit Option and the
Standard Death Benefit are lower than that used in the examples and would result
in higher AUV's or contract values.
ILLUSTRATION OF CALCULATION OF AUV
EXAMPLE 1.
1. AUV, beginning of period $10.00
2. Value of securities, beginning of period $10.00
3. Change in value of securities $ 0.10
4. Gross investment return [(3) divided by (2)] 0.01
5. Less daily mortality and expense charge 0.00002063
6. Less asset based administrative charge 0.00000411
7. Net investment return [(4) minus (5) minus (6)]. 0.00997526
8. Net investment factor [(1.000000) plus (7)] 1.00997526
9. AUV, end of period [(1) multiplied by (8)] $10.0997526
7
<PAGE>
ILLUSTRATION OF PURCHASE OF UNITS (ASSUMING NO STATE PREMIUM TAX)
EXAMPLE 2.
1. Initial premium payment $1,000
2. AUV on effective date of purchase (see Example 1). $10.00
3. Number of units purchased [(1) divided by (2)] 100
4. AUV for valuation date following purchase
(see Example 1) $10.0997526
5. Contract Value in account for valuation date
following purchase [(3) multiplied by (4)] $ 1,009.98
IRA PARTIAL WITHDRAWAL OPTION
If the contract owner has an IRA contract and will attain age 70 1/2 in the
current calendar year, distributions will be made in accordance with the
requirements of Federal tax law. This option is available to assure that the
required minimum distributions from qualified plans under the Internal Revenue
Code (the "Code") are made. Under the Code, distributions must begin no later
than April 1st of the calendar year following the calendar year in which the
contract owner attains age 70 1/2. If the required minimum distribution is
notwithdrawn, there may be a penalty tax in an amount equal to 50% of the
difference between the amount required to be withdrawn and the amount actually
withdrawn. Even if the IRA Partial Withdrawal Option is not elected,
distributions must nonetheless be made in accordance with the requirements of
Federal tax law.
Golden American notifies the contract owner of these regulations with a letter
mailed on January 1st of the calendar year in which the contract owner reaches
age 70 1/2 which explains the IRA Partial Withdrawal Option and supplies an
election form. If electing this option, the owner specifies whether the
withdrawal amount will be based on a life expectancy calculated on a single life
basis (contract owner's life only) or, if the contract owner is married, on a
joint life basis (contract owner's and spouse's lives combined). The contract
owner selects the payment mode on a monthly, quarterly or annual basis. If the
payment mode selected on the election form is more frequent than annually, the
payments in the first calendar year in which the option is in effect will be
based on the amount of payment modes remaining when Golden American receives the
completed election form. Golden American calculates the IRA Partial Withdrawal
amount each year based on the minimum distribution rules. We do this by dividing
the contract value by the life expectancy. In the first year withdrawals begin,
we use the contract value as of the date of the first payment. Thereafter, we
use the contract value on December 31st of each year. The life expectancy is
recalculated each year. Certain minimum distribution rules govern payouts if the
designated beneficiary is other than the contract owner's spouse and the
beneficiary is more than ten years younger than the contract owner.
OTHER INFORMATION
Registration statements have been filed with the SEC under the Securities Act of
1933, as amended, with respect to the Contracts discussed in this Statement of
Additional Information. Not all of the information set forth in the registration
statements, amendments and exhibits thereto has been included in this Statement
of Additional Information. Statements contained in this Statement of Additional
Information concerning the content of the Contracts and other legal instruments
are intended to be summaries. For a complete statement of the terms of these
documents, reference should be made to the instruments filed with the SEC.
8
<PAGE>
FINANCIAL STATEMENTS OF SEPARATE ACCOUNT B
The audited financial statements of Separate Account B are listed below and are
included in this Statement of Additional Information:
Report of Independent Auditors
Audited Financial Statements
Statement of Net Assets as of December 31, 1999 Statements of
Operations for the year ended December 31, 1999 Statements of
Changes in Net Assets for the years ended December 31, 1999 and 1998
Notes to Financial Statements
9
<PAGE>
<PAGE>
FINANCIAL STATEMENTS
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
YEAR ENDED DECEMBER 31, 1999
WITH REPORT OF INDEPENDENT AUDITORS
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1999
TABLE OF CONTENTS
Report of Independent Auditors................................................1
Audited Financial Statements
Statement of Net Assets.......................................................2
Statements of Operations......................................................3
Statements of Changes in Net Assets..........................................10
Notes to Financial Statements................................................17
<PAGE>
Report of Independent Auditors
The Board of Directors
Golden American Life Insurance Company
We have audited the accompanying statement of net assets of Golden American Life
Insurance Company Separate Account B (comprised of the Liquid Asset, Limited
Maturity Bond, Hard Assets, All-Growth, Real Estate, Fully Managed, Equity
Income, Capital Appreciation, Rising Dividends, Emerging Markets, Market
Manager, Value Equity, Strategic Equity, Small Cap, Managed Global, Mid-Cap
Growth, Capital Growth, Research, Total Return, Growth, Global Fixed Income,
Developing World, Growth Opportunities, PIMCO High Yield Bond, PIMCO StocksPLUS
Growth and Income, Appreciation, Smith Barney High Income, Smith Barney Large
Cap Value, Smith Barney International Equity, Smith Barney Money Market,
International Equity, Asset Allocation, Equity, Growth & Income, and High
Quality Bond Divisions) as of December 31, 1999, and the related statements of
operations and changes in net assets for in the periods disclosed in the
financial statements. These financial statements are the responsibility of the
Account's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1999, by
correspondence with the mutual funds' transfer agents. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Golden American Life Insurance
Company Separate Account B at December 31, 1999, and the results of its
operations and changes in its net assets for the periods described above, in
conformity with accounting principles generally accepted in the United States.
Des Moines, Iowa
February 25, 2000
1
<PAGE>
<TABLE>
<CAPTION>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF NET ASSETS
DECEMBER 31, 1999
(DOLLARS IN THOUSANDS)
ASSETS COMBINED
----------------
<S> <C>
Investments at net asset value:
The GCG Trust:
Liquid Asset Series, 522,325,545 shares (cost - $522,326)........................................... $522,326
Limited Maturity Bond Series, 14,433,887 shares (cost - $154,603)................................... 150,401
Hard Assets Series, 3,310,341 shares (cost - $37,918)............................................... 38,929
All-Growth Series, 5,797,423 shares (cost - $94,713)................................................ 145,863
Real Estate Series, 4,593,787 shares (cost - $70,855)............................................... 55,677
Fully Managed Series, 17,755,369 shares (cost - $265,708)........................................... 267,218
Equity Income Series, 24,135,542 shares (cost - $297,021)........................................... 271,284
Capital Appreciation Series, 20,078,304 shares (cost - $350,171).................................... 401,967
Rising Dividends Series, 32,733,235 shares (cost - $673,802)........................................ 813,094
Emerging Markets Series, 2,895,632 shares (cost - $27,343).......................................... 35,472
Market Manager Series, 377,319 shares (cost - $4,795)............................................... 7,320
Value Equity Series, 8,851,843 shares (cost - $143,594)............................................. 137,380
Strategic Equity Series, 9,901,055 shares (cost - $141,166)......................................... 197,526
Small Cap Series, 13,840,816 shares (cost - $249,047)............................................... 324,429
Managed Global Series, 9,085,422 shares (cost - $154,794)........................................... 181,345
Mid-Cap Growth Series, 18,222,880 shares (cost - $408,884).......................................... 539,215
Capital Growth Series, 23,231,448 shares (cost - $371,151).......................................... 430,246
Research Series, 25,665,469 shares (cost - $520,404)................................................ 636,760
Total Return Series, 28,821,536 shares (cost - $458,931)............................................ 455,380
Growth Series, 43,852,669 shares (cost - $866,601).................................................. 1,205,510
Global Fixed Income Series, 2,113,119 shares (cost - $21,930)....................................... 21,258
Developing World Series, 4,470,012 shares (cost - $44,018).......................................... 51,673
Growth Opportunities Series, 598,117 shares (cost - $6,203)......................................... 6,663
PIMCO Variable Insurance Trust:
PIMCO High Yield Bond Portfolio, 15,910,545 shares (cost - $150,798)................................ 146,059
PIMCO StocksPLUS Growth and Income Portfolio, 16,314,904 shares (cost - $215,031)................... 221,230
Greenwich Street Series Fund Inc.:
Appreciation Portfolio, 42,012 shares (cost - $864)................................................. 983
Travelers Series Fund Inc.:
Smith Barney High Income Portfolio, 45,269 shares (cost - $600)..................................... 547
Smith Barney Large Cap Value Portfolio, 32,943 shares (cost - $680)................................. 643
Smith Barney International Equity Portfolio, 23,358 shares (cost - $330)............................ 537
Smith Barney Money Market Portfolio, 579,382 shares (cost - $579)................................... 579
Warburg Pincus Trust:
International Equity Portfolio, 10,513,073 shares (cost - $149,816)................................. 175,569
The Galaxy VIP Fund:
Asset Allocation Portfolio, 7,851 shares (cost - $132).............................................. 133
Equity Portfolio, 13,379 shares (cost - $292)....................................................... 297
Growth & Income Portfolio, 9,830 shares (cost - $105)............................................... 107
High Quality Bond Portfolio, 2,818 shares (cost - $27).............................................. 27
----------------
TOTAL ASSETS (cost - $6,405,232).................................................................... 7,443,647
LIABILITY
Payable to Golden American Life Insurance Company (all pertaining to Market Manager Division).......... 236
----------------
TOTAL NET ASSETS..................................................................................... $7,443,411
================
NET ASSETS
For variable annuity insurance contracts............................................................... $7,446,504
Retained in Separate Account B by Golden American Life Insurance Company............................... 3,093
----------------
TOTAL NET ASSETS..................................................................................... $7,443,411
================
2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999, EXCEPT AS NOTED
(DOLLARS IN THOUSANDS)
LIMITED
LIQUID MATURITY HARD ALL- REAL
ASSET BOND ASSETS GROWTH ESTATE
DIVISION DIVISION DIVISION DIVISION DIVISION
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends .................................. $15,368 $5,178 $257 $22,107 $2,278
Capital gains distributions ................ -- -- -- 5,823 1,527
---------------------------------------------------------------------
TOTAL INVESTMENT INCOME ..................... 15,368 5,178 257 27,930 3,805
Expenses:
Mortality and expense risk and other charges 4,755 1,698 494 1,297 818
Annual administrative charges .............. 94 37 16 46 27
Minimum death benefit guarantee charges .... 8 1 1 1 1
Contingent deferred sales charges .......... 3,171 129 119 89 112
Other contract charges ..................... 7 3 2 3 1
Amortization of deferred charges related to:
Deferred sales load ...................... 553 275 85 326 159
Premium taxes ............................ 18 2 -- 2 1
---------------------------------------------------------------------
TOTAL EXPENSES .............................. 8,606 2,145 717 1,764 1,119
---------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) ................ 6,762 3,033 (460) 26,166 2,686
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments .... -- (153) (9,098) 12,611 452
Net unrealized appreciation (depreciation)
of investments ........................... -- (3,486) 15,365 41,917 (6,895)
---------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ................... $6,762 $(606) $5,807 $80,694 $(3,757)
=====================================================================
<FN>
(a) Commencement of operations, October 25, 1999.
(b) Commencement of operations, November 1, 1999.
(c) Commencement of operations, December 3, 1999.
</FN>
See accompanying notes.
3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
FULLY EQUITY CAPITAL RISING EMERGING
MANAGED INCOME APPRECIATION DIVIDENDS MARKETS
DIVISION DIVISION DIVISION DIVISION DIVISION
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends .................................. $10,485 $13,369 $6,809 $4,048 $350
Capital gains distributions ................ 9,191 14,763 35,936 16,664 --
--------------------------------------------------------------------
TOTAL INVESTMENT INCOME ..................... 19,676 28,132 42,745 20,712 350
Expenses:
Mortality and expense risk and other charges 3,284 3,262 3,945 9,409 321
Annual administrative charges .............. 102 143 113 209 14
Minimum death benefit guarantee charges .... 1 6 1 1 1
Contingent deferred sales charges .......... 170 137 246 725 27
Other contract charges ..................... 6 9 8 13 1
Amortization of deferred charges related to:
Deferred sales load ...................... 570 1,165 763 776 100
Premium taxes ............................ 2 2 3 3 1
--------------------------------------------------------------------
TOTAL EXPENSES .............................. 4,135 4,724 5,079 11,136 465
--------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) ................ 15,541 23,408 37,666 9,576 (115)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments .... 4,586 604 12,525 12,658 (839)
Net unrealized appreciation (depreciation)
of investments ........................... (8,712) (30,854) 16,816 60,461 17,638
--------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ................... $11,415 $(6,842) $67,007 $82,695 $16,684
====================================================================
<FN>
(a) Commencement of operations, October 25, 1999.
(b) Commencement of operations, November 1, 1999.
(c) Commencement of operations, December 3, 1999.
</FN>
See accompanying notes.
4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
MARKET VALUE STRATEGIC SMALL MANAGED
MANAGER EQUITY EQUITY CAP GLOBAL
DIVISION DIVISION DIVISION DIVISION DIVISION
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends .................................. $110 $1,231 $211 $6,243 $9,130
Capital gains distributions ................ 973 2,440 549 2,817 15,707
---------------------------------------------------------------------
TOTAL INVESTMENT INCOME ..................... 1,083 3,671 760 9,060 24,837
Expenses:
Mortality and expense risk and other charges -- 1,869 1,454 2,692 1,667
Annual administrative charges .............. -- 52 29 57 54
Minimum death benefit guarantee charges .... -- -- -- -- 1
Contingent deferred sales charges .......... -- 129 252 157 195
Other contract charges ..................... -- 2 1 2 4
Amortization of deferred charges related to:
Deferred sales load ...................... 40 151 75 82 397
Premium taxes ............................ -- -- 1 1 1
---------------------------------------------------------------------
TOTAL EXPENSES .............................. 40 2,203 1,812 2,991 2,319
---------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) ................ 1,043 1,468 (1,052) 6,069 22,518
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments .... 861 5,066 5,704 30,614 42,644
Net unrealized appreciation (depreciation)
of investments ........................... (880) (9,606) 54,916 54,213 6,404
---------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ................... $1,024 $(3,072) $59,568 $90,896 $71,566
=====================================================================
<FN>
(a) Commencement of operations, October 25, 1999.
(b) Commencement of operations, November 1, 1999.
(c) Commencement of operations, December 3, 1999.
</FN>
See accompanying notes.
5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
MID-CAP CAPITAL TOTAL
GROWTH GROWTH RESEARCH RETURN GROWTH
DIVISION DIVISION DIVISION DIVISION DIVISION
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends .................................. $41,872 $22,161 $7,421 $12,635 $12,825
Capital gains distributions ................ 2,355 669 2,686 1,756 1,124
------------------------------------------------------------------
TOTAL INVESTMENT INCOME ..................... 44,227 22,830 10,107 14,391 13,949
Expenses:
Mortality and expense risk and other charges 3,582 4,167 6,574 5,403 7,294
Annual administrative charges .............. 59 91 117 106 102
Minimum death benefit guarantee charges .... -- -- -- -- 1
Contingent deferred sales charges .......... 244 294 380 297 405
Other contract charges ..................... 2 1 3 1 3
Amortization of deferred charges related to:
Deferred sales load ...................... 68 68 110 83 95
Premium taxes ............................ 1 -- 1 1 1
------------------------------------------------------------------
TOTAL EXPENSES .............................. 3,956 4,621 7,185 5,891 7,901
------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) ................ 40,271 18,209 2,922 8,500 6,048
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments .... 27,166 3,969 2,750 531 46,796
Net unrealized appreciation (depreciation)
of investments ........................... 122,970 50,167 99,090 (4,991) 324,922
------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ................... $190,407 $72,345 $104,762 $4,040 $377,766
==================================================================
<FN>
(a) Commencement of operations, October 25, 1999.
(b) Commencement of operations, November 1, 1999.
(c) Commencement of operations, December 3, 1999.
</FN>
See accompanying notes.
6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
PIMCO PIMCO
GLOBAL HIGH STOCKSPLUS
FIXED DEVELOPING GROWTH YIELD GROWTH AND
INCOME WORLD OPPORTUNITIES BOND INCOME
DIVISION DIVISION DIVISION DIVISION DIVISION
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends .................................. $345 $1,400 $162 $8,321 $12,203
Capital gains distributions ................ -- -- 130 -- 6,865
-------------------------------------------------------------------
TOTAL INVESTMENT INCOME ..................... 345 1,400 292 8,321 19,068
Expenses:
Mortality and expense risk and other charges 237 260 95 1,537 2,030
Annual administrative charges .............. 3 4 1 19 20
Minimum death benefit guarantee charges .... -- -- -- -- --
Contingent deferred sales charges .......... 22 11 2 68 95
Other contract charges ..................... -- -- -- -- --
Amortization of deferred charges related to:
Deferred sales load ...................... 2 -- 1 13 16
Premium taxes ............................ -- -- -- -- --
-------------------------------------------------------------------
TOTAL EXPENSES .............................. 264 275 99 1,637 2,161
-------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) ................ 81 1,125 193 6,684 16,907
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments .... (939) 2,134 732 (974) 4,397
Net unrealized appreciation (depreciation)
of investments ........................... (662) 7,506 111 (4,721) 1,944
-------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ................... $(1,520) $10,765 $1,036 $989 $23,248
===================================================================
<FN>
(a) Commencement of operations, October 25, 1999.
(b) Commencement of operations, November 1, 1999.
(c) Commencement of operations, December 3, 1999.
</FN>
See accompanying notes.
7
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
SMITH SMITH SMITH SMITH
BARNEY BARNEY BARNEY BARNEY
HIGH LARGE CAP INTERNATIONAL MONEY
APPRECIATION INCOME VALUE EQUITY MARKET
DIVISION DIVISION DIVISION DIVISION DIVISION
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends .................................. $7 $53 $10 $1 $11
Capital gains distributions ................ 17 -- 21 -- --
--------------------------------------------------------------------
TOTAL INVESTMENT INCOME ..................... 24 53 31 1 11
Expenses:
Mortality and expense risk and other charges 14 9 10 5 3
Annual administrative charges .............. 1 1 1 -- --
Minimum death benefit guarantee charges .... -- -- -- -- --
Contingent deferred sales charges .......... 2 -- 1 -- --
Other contract charges ..................... -- -- -- -- --
Amortization of deferred charges related to:
Deferred sales load ...................... -- -- -- -- --
Premium taxes ............................ -- -- -- -- --
--------------------------------------------------------------------
TOTAL EXPENSES .............................. 17 10 12 5 3
--------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) ................ 7 43 19 (4) 8
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments .... 23 (48) 10 20 --
Net unrealized appreciation (depreciation)
of investments ........................... 76 10 (47) 214 --
--------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ................... $106 $5 $(18) $230 $8
====================================================================
<FN>
(a) Commencement of operations, October 25, 1999.
(b) Commencement of operations, November 1, 1999.
(c) Commencement of operations, December 3, 1999.
</FN>
See accompanying notes.
8
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
INTERNATIONAL ASSET GROWTH & HIGH QUALITY
EQUITY ALLOCATION EQUITY INCOME BOND
DIVISION DIVISION(b) DIVISION(b) DIVISION(a) DIVISION(c) COMBINED
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends ...................................... $1,432 $1 -- -- -- $218,034
Capital gains distributions .................... -- 1 $7 $1 -- 122,022
------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME ......................... 1,432 2 7 1 -- 340,056
Expenses:
Mortality and expense risk and other charges ... 1,371 -- -- -- -- 69,556
Annual administrative charges .................. 21 -- -- -- -- 1,539
Minimum death benefit guarantee charges ........ -- -- -- -- -- 24
Contingent deferred sales charges .............. 87 -- -- -- -- 7,566
Other contract charges ......................... -- -- -- -- -- 72
Amortization of deferred charges related to:
Deferred sales load .......................... -- -- -- -- -- 5,973
Premium taxes ................................ 1 -- -- -- -- 42
------------------------------------------------------------------------------
TOTAL EXPENSES .................................. 1,480 -- -- -- -- 84,772
------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) .................... (48) 2 7 1 -- 255,284
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments ........ 30,975 -- -- -- $(1) 235,776
Net unrealized appreciation (depreciation)
of investments ............................... 24,199 1 5 2 -- 828,093
------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ....................... $55,126 $3 $12 $3 $(1) $1,319,153
==============================================================================
<FN>
(a) Commencement of operations, October 25, 1999.
(b) Commencement of operations, November 1, 1999.
(c) Commencement of operations, December 3, 1999.
</FN>
See accompanying notes.
9
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, EXCEPT AS NOTED
(DOLLARS IN THOUSANDS)
LIMITED
LIQUID MATURITY HARD ALL- REAL
ASSET BOND ASSETS GROWTH ESTATE
DIVISION DIVISION DIVISION DIVISION DIVISION
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSETS AT JANUARY 1, 1998 ................... $57,254 $52,467 $45,503 $71,738 $74,700
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ................ 3,131 1,782 2,033 (905) 8,244
Net realized gain (loss) on investments ..... -- 872 (6,941) 330 3,708
Net unrealized appreciation (depreciation)
of investments ............................ -- 739 (8,620) 6,240 (24,689)
----------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations ................. 3,131 3,393 (13,528) 5,665 (12,737)
Changes from principal transactions:
Purchase payments ........................... 227,924 42,180 7,508 15,762 24,639
Contract distributions and terminations ..... (38,803) (9,265) (4,524) (9,206) (6,988)
Transfer payments from (to) Fixed Accounts
and other Divisions ....................... (73,759) 14,051 (5,266) (2,159) (10,631)
Addition to assets retained in the Account by
Golden American Life Insurance Company .... 12 6 10 7 12
----------------------------------------------------------------------
Increase (decrease) in net assets derived
from principal transactions ............... 115,374 46,972 (2,272) 4,404 7,032
----------------------------------------------------------------------
Total increase (decrease) ..................... 118,505 50,365 (15,800) 10,069 (5,705)
----------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1998 ............... 175,759 102,832 29,703 81,807 68,995
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ................ 6,762 3,033 (460) 26,166 2,686
Net realized gain (loss) on investments ..... -- (153) (9,098) 12,611 452
Net unrealized appreciation (depreciation)
of investments ............................ -- (3,486) 15,365 41,917 (6,895)
----------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations ................. 6,762 (606) 5,807 80,694 (3,757)
Changes from principal transactions:
Purchase payments ........................... 466,501 67,604 7,898 9,526 9,108
Contract distributions and terminations ..... (123,045) (15,384) (5,361) (15,134) (9,074)
Transfer payments from (to) Fixed Accounts
and other Divisions ....................... (3,655) (4,046) 881 (11,033) (9,597)
Addition to assets retained in the Account by
Golden American Life Insurance Company .... 4 1 1 3 2
----------------------------------------------------------------------
Increase (decrease) in net assets derived
from principal transactions ............... 339,805 48,175 3,419 (16,638) (9,561)
----------------------------------------------------------------------
Total increase (decrease) ..................... 346,567 47,569 9,226 64,056 (13,318)
----------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1999 ............... $522,326 $150,401 $38,929 $145,863 $55,677
======================================================================
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
(d) Commencement of operations, October 25, 1999.
(e) Commencement of operations, November 1, 1999.
(f) Commencement of operations, December 3, 1999.
</FN>
See accompanying notes.
10
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
FULLY EQUITY CAPITAL RISING EMERGING
MANAGED INCOME APPRECIATION DIVIDENDS MARKETS
DIVISION DIVISION DIVISION DIVISION DIVISION
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSETS AT JANUARY 1, 1998 ................... $158,650 $261,869 $187,817 $215,943 $34,501
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ................ 15,626 23,815 18,956 12,920 (524)
Net realized gain (loss) on investments ..... 1,704 2,288 6,551 3,842 (3,524)
Net unrealized appreciation (depreciation)
of investments ............................ (10,501) (10,125) (3,987) 17,344 (4,266)
----------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations ................. 6,829 15,978 21,520 34,106 (8,314)
Changes from principal transactions:
Purchase payments ........................... 74,467 34,793 63,892 216,682 2,520
Contract distributions and terminations ..... (19,367) (39,339) (26,711) (26,449) (2,973)
Transfer payments from (to) Fixed Accounts
and other Divisions ....................... 5,756 581 10,035 60,274 (3,483)
Addition to assets retained in the Account by
Golden American Life Insurance Company..... 31 28 25 60 3
----------------------------------------------------------------------
Increase (decrease) in net assets derived
from principal transactions ............... 60,887 (3,937) 47,241 250,567 (3,933)
----------------------------------------------------------------------
Total increase (decrease) ..................... 67,716 12,041 68,761 284,673 (12,247)
----------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1998 ............... 226,366 273,910 256,578 500,616 22,254
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ................ 15,541 23,408 37,666 9,576 (115)
Net realized gain (loss) on investments ..... 4,586 604 12,525 12,658 (839)
Net unrealized appreciation (depreciation)
of investments ............................ (8,712) (30,854) 16,816 60,461 17,638
----------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations ................. 11,415 (6,842) 67,007 82,695 16,684
Changes from principal transactions:
Purchase payments ........................... 62,680 62,880 107,357 245,047 1,445
Contract distributions and terminations ..... (30,839) (54,241) (44,732) (59,723) (3,546)
Transfer payments from (to) Fixed Accounts
and other Divisions ....................... (2,413) (4,436) 15,746 44,445 (1,366)
Addition to assets retained in the Account by
Golden American Life Insurance Company .... 9 13 11 14 1
----------------------------------------------------------------------
Increase (decrease) in net assets derived
from principal transactions ............... 29,437 4,216 78,382 229,783 (3,466)
----------------------------------------------------------------------
Total increase (decrease) ..................... 40,852 (2,626) 145,389 312,478 13,218
----------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1999 ............... $267,218 $271,284 $401,967 $813,094 $35,472
======================================================================
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
(d) Commencement of operations, October 25, 1999.
(e) Commencement of operations, November 1, 1999.
(f) Commencement of operations, December 3, 1999.
</FN>
See accompanying notes.
11
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
MARKET VALUE STRATEGIC SMALL MANAGED
MANAGER EQUITY EQUITY CAP GLOBAL
DIVISION DIVISION DIVISION DIVISION DIVISION
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSETS AT JANUARY 1, 1998 ................... $6,716 $77,025 $50,437 $52,725 $104,681
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ................ 299 1,994 3,586 (1,343) 3,296
Net realized gain (loss) on investments ..... 135 1,237 1,365 2,148 7,634
Net unrealized appreciation (depreciation)
of investments ............................ 1,090 (4,208) (6,078) 15,952 16,611
----------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations ................. 1,524 (977) (1,127) 16,757 27,541
Changes from principal transactions:
Purchase payments ........................... (36) 51,484 25,972 44,851 11,958
Contract distributions and terminations ..... (188) (7,869) (5,201) (6,104) (13,329)
Transfer payments from (to) Fixed Accounts
and other Divisions ....................... (309) 6,521 1,265 16,010 (176)
Addition to assets retained in the Account by
Golden American Life Insurance Company .... -- 10 2 6 9
----------------------------------------------------------------------------
Increase (decrease) in net assets derived
from principal transactions ............... (533) 50,146 22,038 54,763 (1,538)
----------------------------------------------------------------------------
Total increase (decrease) ..................... 991 49,169 20,911 71,520 26,003
----------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1998 ............... 7,707 126,194 71,348 124,245 130,684
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ................ 1,043 1,468 (1,052) 6,069 22,518
Net realized gain (loss) on investments ..... 861 5,066 5,704 30,614 42,644
Net unrealized appreciation (depreciation)
of investments ............................ (880) (9,606) 54,916 54,213 6,404
----------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations ................. 1,024 (3,072) 59,568 90,896 71,566
Changes from principal transactions:
Purchase payments ........................... 77 33,542 56,281 94,650 8,846
Contract distributions and terminations ..... (1,399) (13,124) (11,518) (11,971) (21,244)
Transfer payments from (to) Fixed Accounts
and other Divisions ....................... (325) (6,161) 21,844 26,607 (8,510)
Addition to assets retained in the Account by
Golden American Life Insurance Company .... -- 1 3 2 3
----------------------------------------------------------------------------
Increase (decrease) in net assets derived
from principal transactions ............... (1,647) 14,258 66,610 109,288 (20,905)
----------------------------------------------------------------------------
Total increase (decrease) ..................... (623) 11,186 126,178 200,184 50,661
----------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1999 ............... $7,084 $137,380 $197,526 $324,429 $181,345
============================================================================
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
(d) Commencement of operations, October 25, 1999.
(e) Commencement of operations, November 1, 1999.
(f) Commencement of operations, December 3, 1999.
</FN>
See accompanying notes.
12
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
MID-CAP CAPITAL TOTAL
GROWTH GROWTH RESEARCH RETURN GROWTH
DIVISION DIVISION DIVISION DIVISION DIVISION
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSETS AT JANUARY 1, 1998 ................... $20,361 $44,922 $34,402 $26,231 $23,178
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ................ 3,991 2,904 10,068 9,099 4,697
Net realized gain (loss) on investments ..... 899 911 972 185 (807)
Net unrealized appreciation (depreciation)
of investments ............................ 6,574 7,679 16,878 1,028 15,417
----------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations ................. 11,464 11,494 27,918 10,312 19,307
Changes from principal transactions:
Purchase payments ........................... 66,121 105,760 167,295 156,492 77,977
Contract distributions and terminations ..... (3,065) (7,503) (6,740) (7,889) (3,834)
Transfer payments from (to) Fixed Accounts
and other Divisions ....................... 21,962 24,270 60,643 42,666 26,430
Addition to assets retained in the Account by
Golden American Life Insurance Company .... 1 7 11 23 10
----------------------------------------------------------------------------
Increase (decrease) in net assets derived
from principal transactions ............... 85,019 122,534 221,209 191,292 100,583
----------------------------------------------------------------------------
Total increase (decrease) ..................... 96,483 134,028 249,127 201,604 119,890
----------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1998 ............... 116,844 178,950 283,529 227,835 143,068
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ................ 40,271 18,209 2,922 8,500 6,048
Net realized gain (loss) on investments ..... 27,166 3,969 2,750 531 46,796
Net unrealized appreciation (depreciation)
of investments ............................ 122,970 50,167 99,090 (4,991) 324,922
----------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations ................. 190,407 72,345 104,762 4,040 377,766
Changes from principal transactions:
Purchase payments ........................... 167,461 158,765 232,103 191,000 444,759
Contract distributions and terminations ..... (15,116) (16,970) (24,594) (22,055) (28,748)
Transfer payments from (to) Fixed Accounts
and other Divisions ....................... 79,613 37,151 40,954 54,551 268,657
Addition to assets retained in the Account by
Golden American Life Insurance Company .... 6 5 6 9 8
----------------------------------------------------------------------------
Increase (decrease) in net assets derived
from principal transactions ............... 231,964 178,951 248,469 223,505 684,676
----------------------------------------------------------------------------
Total increase (decrease) ..................... 422,371 251,296 353,231 227,545 1,062,442
----------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1999 ............... $539,215 $430,246 $636,760 $455,380 $1,205,510
============================================================================
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
(d) Commencement of operations, October 25, 1999.
(e) Commencement of operations, November 1, 1999.
(f) Commencement of operations, December 3, 1999.
</FN>
See accompanying notes.
13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
PIMCO PIMCO
GLOBAL HIGH STOCKSPLUS
FIXED DEVELOPING GROWTH YIELD GROWTH AND
INCOME WORLD OPPORTUNITIES BOND INCOME
DIVISION DIVISION(a) DIVISION(a) DIVISION(c) DIVISION(b)
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSETS AT JANUARY 1, 1998 ................... $206 -- -- -- --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ................ 174 $(22) $(8) $817 $814
Net realized gain (loss) on investments ..... 216 (266) (235) (318) (97)
Net unrealized appreciation (depreciation)
of investments ............................ -- 149 349 (18) 4,255
---------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations ................. 390 (139) 106 481 4,972
Changes from principal transactions:
Purchase payments ........................... 5,820 2,757 4,097 32,399 29,368
Contract distributions and terminations ..... (219) (34) (45) (912) (361)
Transfer payments from (to) Fixed Accounts
and other Divisions ....................... 3,331 1,928 (27) 14,150 17,822
Addition to assets retained in the Account by
Golden American Life Insurance Company .... -- -- -- -- 1
---------------------------------------------------------------------------
Increase (decrease) in net assets derived
from principal transactions ............... 8,932 4,651 4,025 45,637 46,830
---------------------------------------------------------------------------
Total increase (decrease) ..................... 9,322 4,512 4,131 46,118 51,802
---------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1998 ............... 9,528 4,512 4,131 46,118 51,802
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ................ 81 1,125 193 6,684 16,907
Net realized gain (loss) on investments ..... (939) 2,134 732 (974) 4,397
Net unrealized appreciation (depreciation)
of investments ............................ (662) 7,506 111 (4,721) 1,944
---------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations ................. (1,520) 10,765 1,036 989 23,248
Changes from principal transactions:
Purchase payments ........................... 10,947 14,639 1,833 73,017 122,580
Contract distributions and terminations ..... (1,341) (740) (256) (6,247) (5,161)
Transfer payments from (to) Fixed Accounts
and other Divisions ....................... 3,644 22,497 (81) 32,181 28,758
Addition to assets retained in the Account by
Golden American Life Insurance Company .... -- -- -- 1 3
---------------------------------------------------------------------------
Increase (decrease) in net assets derived
from principal transactions ............... 13,250 36,396 1,496 98,952 146,180
---------------------------------------------------------------------------
Total increase (decrease) ..................... 11,730 47,161 2,532 99,941 169,428
---------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1999 ............... $21,258 $51,673 $6,663 $146,059 $221,230
===========================================================================
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
(d) Commencement of operations, October 25, 1999.
(e) Commencement of operations, November 1, 1999.
(f) Commencement of operations, December 3, 1999.
</FN>
See accompanying notes.
14
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
SMITH SMITH SMITH SMITH
BARNEY BARNEY BARNEY BARNEY
HIGH LARGE CAP INTERNATIONAL MONEY
APPRECIATION INCOME VALUE EQUITY MARKET
DIVISION DIVISION DIVISION DIVISION DIVISION
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSETS AT JANUARY 1, 1998 ................... $263 $209 $215 $96 $181
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ................ 30 36 14 (3) 14
Net realized gain (loss) on investments ..... 3 8 2 (1) --
Net unrealized appreciation (depreciation)
of investments ............................ 52 (66) 3 (2) --
---------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations ................. 85 (22) 19 (6) 14
Changes from principal transactions:
Purchase payments ........................... 595 530 429 178 565
Contract distributions and terminations ..... (21) (15) (5) (4) (25)
Transfer payments from (to) Fixed Accounts
and other Divisions ....................... 52 104 43 62 (417)
Addition to assets retained in the Account by
Golden American Life Insurance Company .... -- -- -- -- --
---------------------------------------------------------------------------
Increase (decrease) in net assets derived
from principal transactions ............... 626 619 467 236 123
---------------------------------------------------------------------------
Total increase (decrease) ..................... 711 597 486 230 137
---------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1998 ............... 974 806 701 326 318
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ................ 7 43 19 (4) 8
Net realized gain (loss) on investments ..... 23 (48) 10 20 --
Net unrealized appreciation (depreciation)
of investments ............................ 76 10 (47) 214 --
---------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations ................. 106 5 (18) 230 8
Changes from principal transactions:
Purchase payments ........................... 40 3 42 18 210
Contract distributions and terminations ..... (149) (77) (59) (5) (11)
Transfer payments from (to) Fixed Accounts
and other Divisions ....................... 12 (190) (23) (32) 54
Addition to assets retained in the Account by
Golden American Life Insurance Company .... -- -- -- -- --
---------------------------------------------------------------------------
Increase (decrease) in net assets derived
from principal transactions ............... (97) (264) (40) (19) 253
---------------------------------------------------------------------------
Total increase (decrease) ..................... 9 (259) (58) 211 261
---------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1999 ............... $983 $547 $643 $537 $579
===========================================================================
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
(d) Commencement of operations, October 25, 1999.
(e) Commencement of operations, November 1, 1999.
(f) Commencement of operations, December 3, 1999.
</FN>
See accompanying notes.
15
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
HIGH
INTERNATIONAL ASSET GROWTH & QUALITY
EQUITY ALLOCATION EQUITY INCOME BOND
DIVISION DIVISION(e) DIVISION(e) DIVISION(d) DIVISION(f) COMBINED
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS AT JANUARY 1, 1998 ..................... $1,981 -- -- -- -- $1,604,271
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) .................. (179) -- -- -- -- 125,356
Net realized gain (loss) on investments ....... (556) -- -- -- -- 22,265
Net unrealized appreciation (depreciation)
of investments .............................. 1,647 -- -- -- -- 39,447
-------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations ................... 912 -- -- -- -- 187,068
Changes from principal transactions:
Purchase payments ............................. 41,775 -- -- -- -- 1,536,754
Contract distributions and terminations ....... (940) -- -- -- -- (247,928)
Transfer payments from (to) Fixed Accounts
and other Divisions ......................... 6,037 -- -- -- -- 237,766
Addition to assets retained in the Account by
Golden American Life Insurance Company ....... -- -- -- -- -- 274
-------------------------------------------------------------------------------
Increase (decrease) in net assets derived
from principal transactions ................. 46,872 -- -- -- -- 1,526,866
-------------------------------------------------------------------------------
Total increase (decrease) ....................... 47,784 -- -- -- -- 1,713,934
-------------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1998 ................. 49,765 -- -- -- -- 3,318,205
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) .................. (48) $2 $7 $1 -- 255,284
Net realized gain (loss) on investments ....... 30,975 -- -- -- $(1) 235,776
Net unrealized appreciation (depreciation)
of investments .............................. 24,199 1 5 2 -- 828,093
-------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations ................... 55,126 3 12 3 (1) 1,319,153
Changes from principal transactions:
Purchase payments ............................. 55,479 127 281 98 127 2,706,971
Contract distributions and terminations ....... (3,729) -- -- -- (4) (545,597)
Transfer payments from (to) Fixed Accounts
and other Divisions ......................... 18,928 3 4 6 (95) 644,573
Addition to assets retained in the Account by
Golden American Life Insurance Company ...... -- -- -- -- -- 106
-------------------------------------------------------------------------------
Increase (decrease) in net assets derived
from principal transactions ................. 70,678 130 285 104 28 2,806,053
-------------------------------------------------------------------------------
Total increase (decrease) ....................... 125,804 133 297 107 27 4,125,206
-------------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1999 ................. $175,569 $133 $297 $107 $27 $7,443,411
===============================================================================
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
(d) Commencement of operations, October 25, 1999.
(e) Commencement of operations, November 1, 1999.
(f) Commencement of operations, December 3, 1999.
</FN>
See accompanying notes.
16
</TABLE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - ORGANIZATION
Golden American Life Insurance Company Separate Account B (the "Account") was
established by Golden American Life Insurance Company ("Golden American") to
support the operations of variable annuity contracts ("Contracts"). Golden
American is primarily engaged in the issuance of variable insurance products and
is licensed as a life insurance company in the District of Columbia and all
states except New York. The Account is registered as a unit investment trust
with the Securities and Exchange Commission under the Investment Company Act of
1940, as amended. Golden American provides for variable accumulation and
benefits under the Contracts by crediting annuity considerations to one or more
divisions within the Account or the Golden American Guaranteed Interest
Division, the Golden American Fixed Interest Division, and the Fixed Separate
Account, which are not part of the Account, as directed by the Contractowners.
The portion of the Account's assets applicable to Contracts will not be
chargeable with liabilities arising out of any other business Golden American
may conduct, but obligations of the Account, including the promise to make
benefit payments, are obligations of Golden American. The assets and liabilities
of the Account are clearly identified and distinguished from the other assets
and liabilities of Golden American.
During 1999, the Account had GoldenSelect Contracts and Granite PrimElite
Contracts. GoldenSelect Contracts sold by Golden American during 1999 include
DVA 100, DVA Series 100, DVA Plus, Access, Premium Plus, ESII, and Value. During
1999, the Account had GoldenSelect Contracts (DVA 80) which were no longer being
sold.
At December 31, 1999, the Account had, under GoldenSelect Contracts, thirty-one
investment divisions: Liquid Asset, Limited Maturity Bond, Hard Assets,
All-Growth, Real Estate, Fully Managed, Equity Income (formerly Multiple
Allocation), Capital Appreciation, Rising Dividends, Emerging Markets, Market
Manager, Value Equity, Strategic Equity, Small Cap, Managed Global, Mid-Cap
Growth, Capital Growth (formerly Growth & Income), Research, Total Return,
Growth (formerly Value + Growth), Global Fixed Income, Developing World, Growth
Opportunities, PIMCO High Yield Bond, PIMCO StocksPLUS Growth and Income,
International Equity, Asset Allocation, Equity, Growth & Income, and High
Quality Bond Divisions ("Divisions"). The Account also had, under Granite
PrimElite Contracts, eight investments divisions: Mid-Cap Growth, Research,
Total Return, Appreciation, Smith Barney High Income, Smith Barney Large Cap
Value, Smith Barney International Equity, and Smith Barney Money Market
Divisions (collectively with the divisions noted above, "Divisions"). The assets
in each Division are invested in shares of a designated series ("Series," which
may also be referred to as "Portfolio") of mutual funds, The GCG Trust, PIMCO
Variable Insurance Trust, Greenwich Street Series Fund Inc., Travelers Series
Fund Inc., Warburg Pincus Trust, or The Galaxy VIP Fund (the "Trusts"). The
Account also includes The Fund For Life Division, which is not included in the
accompanying financial statements, and which ceased to accept new Contracts
effective December 31, 1994.
Prior to August 14, 1998, the Account also had certain investment divisions
available from the Equi-Select Series Trust. In an effort to consolidate
operations, Golden American requested permission from the Securities and
Exchange Commission ("SEC") to substitute shares of each Portfolio of the
Equi-Select Series Trust with shares of a similar Series of The GCG Trust. On
August 14, 1998, after approval from the SEC, shares of each Portfolio of the
Equi-Select Series Trust were substituted with shares of a similar Series of The
GCG Trust. The consolidation resulted in the following Series being substituted
from The GCG Trust:
Equi-Select Series Trust The GCG Trust
Investment Division Investment Division
------------------------------- ----------------------------------------------
International Fixed Income Global Fixed Income
OTC Mid-Cap Growth
Research Research
Total Return Total Return
Value + Growth Growth (formerly Value + Growth)
Growth & Income Capital Growth (formerly Growth & Income)
17
<PAGE>
NOTE 1 - ORGANIZATION (CONTINUED)
The Market Manager Division was open for investment for only a brief period
during 1994 and 1995. This Division is now closed and Contractowners are not
permitted to direct their investments into this Division.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies of the
Account:
USE OF ESTIMATES: The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
INVESTMENTS: Investments are made in shares of a Series or Portfolio of the
Trusts and are valued at the net asset value per share of the respective Series
or Portfolio of the Trusts. Investment transactions in each Series or Portfolio
of the Trusts are recorded on the trade date. Distributions of net investment
income and capital gains from each Series or Portfolio of the Trusts are
recognized on the ex-distribution date. Realized gains and losses on redemptions
of the shares of the Series or Portfolio of the Trusts are determined on the
specific identification basis.
FEDERAL INCOME TAXES: Operations of the Account form a part of, and are taxed
with, the total operations of Golden American which is taxed as a life insurance
company under the Internal Revenue Code. Earnings and realized capital gains of
the Account attributable to the Contractowners are excluded in the determination
of the federal income tax liability of Golden American.
NOTE 3 - CHARGES AND FEES
DVA Plus, Access, and the Premium Plus each have three different death benefit
options referred to as Standard, Annual Ratchet, and 7% Solution; however, in
the state of Washington, the 5.5% Solution is offered instead of the 7%
Solution. Granite PrimElite has two death benefit options referred to as
Standard and Annual Ratchet. Golden American discontinued external sales of DVA
80 in May 1991. Golden American has also discontinued external sales of DVA 100.
Under the terms of the Contract, certain charges are allocated to the Contracts
to cover Golden American's expenses in connection with the issuance and
administration of the Contracts. Following is a summary of these charges:
MORTALITY AND EXPENSE RISK CHARGES: Golden American assumes mortality and
expense risks related to the operations of the Account and, in accordance with
the terms of the Contracts, deducts a daily charge from the assets of the
Account.
Daily charges deducted at annual rates to cover these risks follows:
SERIES ANNUAL RATES
--------- ------------
DVA 80.................................................. 0.80%
DVA 100................................................. 0.90
DVA Series 100.......................................... 1.25
DVA Plus - Standard..................................... 1.10
DVA Plus - Annual Ratchet............................... 1.25
DVA Plus - 5.5% Solution................................ 1.25
DVA Plus - 7% Solution.................................. 1.40
Access - Standard....................................... 1.25
Access - Annual Ratchet................................. 1.40
Access - 5.5% Solution.................................. 1.40
Access - 7% Solution.................................... 1.55
Premium Plus - Standard................................. 1.25
Premium Plus - Annual Ratchet........................... 1.40
Premium Plus - 5.5% Solution............................ 1.40
Premium Plus - 7% Solution.............................. 1.55
ESII.................................................... 1.25
Granite PrimElite - Standard............................ 1.10
Granite PrimElite - Annual Ratchet...................... 1.25
Value................................................... 0.75
18
<PAGE>
NOTE 3 - CHARGES AND FEES (CONTINUED)
ASSET BASED ADMINISTRATIVE CHARGES: A daily charge at an annual rate of 0.10% is
deducted from assets attributable to DVA 100 and DVA Series 100 Contracts. A
daily charge at an annual rate of 0.15% is deducted from the assets attributable
to the DVA Plus, Access, Premium Plus, ESII, Value, and Granite PrimElite
Contracts.
ADMINISTRATIVE CHARGES: An administrative charge is deducted from the
accumulation value of Deferred Annuity Contracts to cover ongoing administrative
expenses. The charge is $30 per Contract year for ES II and Value contracts. For
all other Contracts the charge is $40. The charge is incurred at the beginning
of the Contract processing period and deducted at the end of the Contract
processing period. This charge had been waived for certain offerings of the
Contracts.
MINIMUM DEATH BENEFIT GUARANTEE CHARGES: For certain Contracts, a minimum death
benefit guarantee charge of up to $1.20 per $1,000 of guaranteed death benefit
per Contract year is deducted from the accumulation value of Deferred Annuity
Contracts on each Contract anniversary date.
CONTINGENT DEFERRED SALES CHARGES: Under DVA Plus, Premium Plus, ES II, Value,
and Granite PrimElite Contracts, a contingent deferred sales charge ("Surrender
Charge") is imposed as a percentage of each premium payment if the Contract is
surrendered or an excess partial withdrawal is taken. The following table
reflects the surrender charge that is assessed based upon the date a premium
payment is received.
<TABLE>
<CAPTION>
Complete Years Elapsed
Since Premium Payment Surrender Charge
--------------------------------------------------------------------------------------------------------------------------------
DVA PLUS PREMIUM PLUS ES II VALUE GRANITE PRIMELITE
-------- ------------ ----- ----- -----------------
<S> <C> <C> <C> <C> <C>
0............. 7% 8% 8% 6% 7%
1............. 7 8 7 6 7
2............. 6 8 6 6 6
3............. 5 8 5 5 5
4............. 4 7 4 4 4
5............. 3 6 3 3 3
6............. 1 5 2 1 1
7............. -- 3 1 -- --
8............. -- 1 -- -- --
9+............ -- -- -- -- --
</TABLE>
OTHER CONTRACT CHARGES: Under DVA 80, DVA 100, and DVA Series 100 Contracts, a
charge is deducted from the accumulation value for Contracts taking more than
one conventional partial withdrawal during a Contract year. For DVA 80 and DVA
100 Contracts, annual distribution fees are deducted from the Contract
accumulation values.
DEFERRED SALES LOAD: Under Contracts offered prior to October 1995, a sales load
of up to 7.5 % was assessed against each premium payment for sales-related
expenses as specified in the Contracts. For DVA Series 100, the sales load is
deducted in equal annual installments over the period the Contract is in force,
not to exceed 10 years. For DVA 80 and DVA 100 Contracts, although the sales
load is chargeable to each premium when it is received by Golden American, the
amount of such charge is initially advanced by Golden American to Contractowners
and included in the accumulation value and then deducted in equal installments
on each Contract anniversary date over a period of six years. Upon surrender of
the Contract, the unamortized deferred sales load is deducted from the
accumulation value. In addition, when partial withdrawal limits are exceeded, a
portion of the unamortized deferred sales load is deducted.
PREMIUM TAXES: For certain Contracts, premium taxes are deducted, where
applicable, from the accumulation value of each Contract. The amount and timing
of the deduction depend on the annuitant's state of residence and currently
ranges up to 3.5% of premiums.
FEES WAIVED BY GOLDEN AMERICAN: Certain charges and fees for various types of
Contracts are currently waived by Golden American. Golden American reserves the
right to discontinue these waivers at its discretion or to conform with changes
in the law.
19
<PAGE>
NOTE 3 - CHARGES AND FEES (CONTINUED)
A summary of the net assets retained in the Account, representing the
unamortized deferred sales load and premium taxes advanced by Golden American
previously noted, follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
--------------------------------------------
1999 1998
-------------------- -------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Balance at beginning of year............................ $9,003 $17,009
Sales load advanced..................................... 105 274
Amortization of deferred sales load and premium tax..... (6,015) (8,280)
-------------------- -------------------
Balance at end of year.................................. $3,093 $9,003
==================== ===================
</TABLE>
NOTE 4 - PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------------------------------------
1999 1998
---------------------------- -------------------------------
PURCHASES SALES PURCHASES SALES
---------------------------- -------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
The GCG Trust:
Liquid Asset Series.................................. $1,632,496 $1,285,868 $570,537 $452,115
Limited Maturity Bond Series......................... 81,290 30,122 71,742 22,970
Hard Assets Series................................... 41,433 38,490 17,730 17,975
All-Growth Series.................................... 46,095 36,607 16,647 13,146
Real Estate Series................................... 20,497 27,401 29,007 13,733
Fully Managed Series................................. 68,756 23,879 83,688 7,148
Equity Income Series................................. 70,767 43,280 52,037 32,159
Capital Appreciation Series.......................... 148,975 33,036 83,259 17,034
Rising Dividends Series.............................. 261,711 22,554 270,955 7,361
Emerging Markets Series.............................. 9,244 12,838 2,644 7,107
Market Manager Series................................ 1,084 1,813 342 292
Value Equity Series.................................. 43,808 28,137 58,297 6,136
Strategic Equity Series.............................. 90,233 24,704 31,008 5,375
Small Cap Series..................................... 225,813 110,509 63,182 9,735
Managed Global Series................................ 178,228 176,669 41,119 39,355
Mid-Cap Growth Series................................ 391,543 119,357 97,494 8,444
Capital Growth Series................................ 220,384 23,307 132,350 6,850
Research Series...................................... 270,703 19,426 237,915 6,540
Total Return Series.................................. 236,379 4,467 202,032 1,560
Growth Series........................................ 860,731 170,066 119,241 13,912
Global Fixed Income Series........................... 26,185 12,857 14,270 5,161
Developing World Series.............................. 58,318 20,799 7,293 2,662
Growth Opportunities Series.......................... 7,288 5,600 7,214 3,196
PIMCO Variable Insurance Trust:
PIMCO High Yield Bond Portfolio...................... 124,005 18,385 52,726 6,256
PIMCO StocksPLUS Growth and Income Portfolio......... 188,819 25,749 49,898 2,237
Greenwich Street Series Fund Inc.:
Appreciation Portfolio............................... 111 202 739 82
Travelers Series Fund Inc.:
Smith Barney High Income Portfolio................... 98 320 878 222
Smith Barney Large Cap Value Portfolio............... 167 189 513 32
Smith Barney International Equity Portfolio.......... 44 67 245 12
Smith Barney Money Market Portfolio.................. 483 222 630 494
Warburg Pincus Trust:
International Equity Portfolio....................... 696,223 625,613 370,938 324,226
The Galaxy VIP Fund:
Asset Allocation Portfolio........................... 141 9 -- --
Equity Portfolio..................................... 292 -- -- --
Growth & Income Portfolio............................ 105 -- -- --
High Quality Bond Portfolio.......................... 127 99 -- --
----------------------------------------------------------------
COMBINED.................................................. $6,002,576 $2,942,641 $2,686,570 $1,033,527
================================================================
20
</TABLE>
<PAGE>
NOTE 5 - SUMMARY OF CHANGES FROM UNIT TRANSACTIONS
Contractowners' transactions shown in the following table reflect gross inflows
("Purchases") and outflows ("Sales") in units for each Division. The activity
includes Contractowners electing to update a DVA 100 or DVA Series 100 Contract
to a DVA PLUS Contract. Updates to DVA PLUS Contracts resulted in both a sale
(surrender of the old Contract) and a purchase (acquisition of the new
Contract). All of the purchases transactions for the Market Manager Division
resulted from such updates.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
---------------------------------------------------------------------------
1999 1998
---------------------------------- ----------------------------------
PURCHASES SALES PURCHASES SALES
---------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
Liquid Asset Division............................ 124,478,649 101,109,842 46,713,872 38,496,936
Limited Maturity Bond Division................... 6,043,778 3,110,174 5,263,273 2,390,944
Hard Assets Division............................. 2,900,594 2,714,660 1,390,271 1,503,254
All-Growth Division.............................. 1,593,344 2,299,652 1,876,296 1,557,867
Real Estate Division............................. 1,107,500 1,561,932 1,269,259 1,003,769
Fully Managed Division........................... 3,844,658 2,421,187 4,432,536 1,393,191
Equity Income Division........................... 4,105,827 3,799,977 2,439,316 2,628,892
Capital Appreciation Division.................... 6,021,915 3,037,582 3,704,327 1,712,022
Rising Dividends Division........................ 12,519,925 3,029,038 13,285,423 1,798,264
Emerging Markets Division........................ 1,467,567 1,902,732 737,697 1,279,884
Market Manager Division.......................... 435 75,755 16,579 26,443
Value Equity Division............................ 2,852,986 2,154,579 3,639,566 936,377
Strategic Equity Division........................ 6,344,054 2,305,045 2,329,825 828,876
Small Cap Division............................... 14,347,399 8,174,181 5,737,867 1,727,666
Managed Global Division.......................... 9,633,015 10,824,049 3,637,963 3,808,355
Mid-Cap Growth Division.......................... 14,316,514 5,846,579 5,201,859 1,073,702
Capital Growth Division.......................... 12,561,878 2,575,149 8,700,243 1,061,928
Research Division................................ 12,204,579 1,771,319 11,776,149 1,145,700
Total Return Division............................ 13,447,324 976,323 11,841,572 542,519
Growth Division.................................. 46,544,853 13,013,005 8,862,606 1,834,396
Global Fixed Income Division..................... 2,406,215 1,322,576 1,199,981 486,199
Developing World Division........................ 6,615,294 2,774,781 1,034,819 414,729
Growth Opportunities Division.................... 726,528 570,950 801,993 373,469
PIMCO High Yield Bond Division................... 12,707,468 2,989,676 5,575,890 995,489
PIMCO StocksPLUS Growth and
Income Division............................... 15,418,741 3,191,901 5,235,676 567,893
Appreciation Division............................ 5,856 11,558 45,518 5,062
Smith Barney High Income Division................ 3,730 23,271 59,777 15,706
Smith Barney Large Cap Value Division............ 6,907 9,522 25,818 1,496
Smith Barney International Equity Division....... 2,838 2,934 13,627 659
Smith Barney Money Market Division............... 40,398 19,082 55,074 43,687
International Equity Division.................... 63,405,114 56,947,666 34,755,360 31,779,305
Asset Allocation Division........................ 13,289 844 -- --
Equity Division.................................. 26,039 835 -- --
Growth & Income Division......................... 11,266 1,139 -- --
High Quality Bond Division....................... 12,671 9,915 -- --
---------------------------------- ----------------------------------
COMBINED......................................... 397,739,148 240,579,410 191,660,032 101,434,679
================================== ==================================
</TABLE>
21
<PAGE>
NOTE 6 - NET ASSETS
Investments at net asset value less the payable to Golden American for charges
and fees at December 31, 1999 consisted of the following:
<TABLE>
<CAPTION>
LIMITED
LIQUID MATURITY HARD ALL- REAL FULLY
ASSET BOND ASSETS GROWTH ESTATE MANAGED
DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
--------------------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Unit transactions.................. $506,425 $133,838 $30,475 $47,531 $41,701 $197,026
Accumulated net investment
income (loss) and net realized
gain (loss) on investments...... 15,901 20,765 7,443 47,182 29,154 68,682
Net unrealized appreciation
(depreciation) of investments... -- (4,202) 1,011 51,150 (15,178) 1,510
--------------------------------------------------------------------------------------------
$522,326 $150,401 $38,929 $145,863 $55,677 $267,218
============================================================================================
</TABLE>
<TABLE>
<CAPTION>
EQUITY CAPITAL RISING EMERGING MARKET VALUE
INCOME APPRECIATION DIVIDENDS MARKETS MANAGER EQUITY
DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
--------------------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Unit transactions.................. $138,807 $225,256 $624,736 $43,209 $595 $123,500
Accumulated net investment
income (loss) and net realized
gain (loss) on investments...... 158,214 124,915 49,066 (15,866) 3,964 20,094
Net unrealized appreciation
(depreciation) of investments... (25,737) 51,796 139,292 8,129 2,525 (6,214)
--------------------------------------------------------------------------------------------
$271,284 $401,967 $813,094 $35,472 $7,084 $137,380
============================================================================================
</TABLE>
<TABLE>
<CAPTION>
STRATEGIC SMALL MANAGED MID-CAP CAPITAL
EQUITY CAP GLOBAL GROWTH GROWTH RESEARCH
DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
--------------------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Unit transactions.................. $128,188 $212,831 $69,455 $335,683 $341,923 $502,872
Accumulated net investment
income (loss) and net realized
gain (loss) on investments...... 12,978 36,216 85,339 73,201 29,228 17,532
Net unrealized appreciation
(depreciation) of investments... 56,360 75,382 26,551 130,331 59,095 116,356
--------------------------------------------------------------------------------------------
$197,526 $324,429 $181,345 $539,215 $430,246 $636,760
============================================================================================
</TABLE>
<TABLE>
<CAPTION>
PIMCO
GLOBAL HIGH
TOTAL FIXED DEVELOPING GROWTH YIELD
RETURN GROWTH INCOME WORLD OPPORTUNITIES BOND
DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
--------------------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Unit transactions.................. $439,911 $809,489 $22,390 $41,047 $5,521 $144,589
Accumulated net investment
income (loss) and net realized
gain (loss) on investments...... 19,020 57,112 (460) 2,971 682 6,209
Net unrealized appreciation
(depreciation) of investments... (3,551) 338,909 (672) 7,655 460 (4,739)
--------------------------------------------------------------------------------------------
$455,380 $1,205,510 $21,258 $51,673 $6,663 $146,059
============================================================================================
22
</TABLE>
<PAGE>
NOTE 6 - NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
PIMCO SMITH SMITH SMITH SMITH
STOCKSPLUS BARNEY BARNEY BARNEY BARNEY
GROWTH AND HIGH LARGE CAP INTERNATIONAL MONEY
INCOME APPRECIATION INCOME VALUE EQUITY MARKET
DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
-------------------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Unit transactions................... $193,010 $785 $561 $636 $318 $557
Accumulated net investment
income (loss) and net realized
gain (loss) on investments....... 22,021 79 39 44 12 22
Net unrealized appreciation
(depreciation) of investments.... 6,199 119 (53) (37) 207 --
-------------------------------------------------------------------------------------------
$221,230 $983 $547 $643 $537 $579
===========================================================================================
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL ASSET GROWTH & HIGH QUALITY
EQUITY ALLOCATION EQUITY INCOME BOND
DIVISION DIVISION DIVISION DIVISION DIVISION COMBINED
-------------------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Unit transactions................... $119,555 $130 $285 $104 $28 $5,482,967
Accumulated net investment
income (loss) and net realized
gain (loss) on investments....... 30,261 2 7 1 (1) 922,029
Net unrealized appreciation
(depreciation) of investments.... 25,753 1 5 2 -- 1,038,415
-------------------------------------------------------------------------------------------
$175,569 $133 $297 $107 $27 $7,443,411
===========================================================================================
</TABLE>
NOTE 7 - UNIT VALUES
Accumulation unit value information for units outstanding, by Contract type, as
of December 31, 1999 follows:
<TABLE>
<CAPTION>
UNIT EXTENDED
DIVISION/CONTRACT UNITS VALUE VALUE
--------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)
<S> <C> <C> <C>
LIQUID ASSET
Currently payable annuity products:
DVA 80................................................................. 2,484 $15.78 $39
DVA 100................................................................ 3,692 15.44 57
Contracts in accumulation period:
DVA 80................................................................. 428,664 15.78 6,766
DVA 100................................................................ 2,108,284 15.44 32,553
DVA Series 100......................................................... 65,836 14.85 978
DVA Plus - Standard.................................................... 683,989 15.04 10,287
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 13,701,797 14.79 202,706
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 7,668,618 14.55 111,594
Access - 7% Solution, Premium Plus - 7% Solution....................... 11,002,421 14.29 157,230
Value.................................................................. 7,391 15.61 116
-------------------
522,326
23
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE 7 - UNIT VALUES (CONTINUED)
UNIT EXTENDED
DIVISION/CONTRACT UNITS VALUE VALUE
--------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)
<S> <C> <C> <C>
LIMITED MATURITY BOND
Currently payable annuity products:
DVA 80................................................................. 5,775 $17.82 $103
DVA 100................................................................ 13,160 17.44 229
Contracts in accumulation period:
DVA 80................................................................. 55,752 17.82 994
DVA 100................................................................ 1,611,603 17.44 28,100
DVA Series 100......................................................... 15,728 16.77 264
DVA Plus - Standard.................................................... 279,468 17.00 4,751
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 2,938,050 16.72 49,127
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 1,835,680 16.45 30,192
Access - 7% Solution, Premium Plus - 7% Solution....................... 2,267,799 16.15 36,630
Value.................................................................. 655 17.65 11
-------------------
150,401
HARD ASSETS
Currently payable annuity products:
DVA 80................................................................. 64 18.54 1
DVA 100................................................................ 4,504 18.13 82
Contracts in accumulation period:
DVA 80................................................................. 47,623 18.54 883
DVA 100................................................................ 442,621 18.13 8,025
DVA Series 100......................................................... 21,674 17.44 378
DVA Plus - Standard.................................................... 112,564 17.66 1,988
DVA Plus - Annual Ratchet & 5.5% Solution, Access-
Standard, Premium Plus - Standard, ES II............................. 355,052 17.37 6,168
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 696,931 17.09 11,909
Access - 7% Solution, Premium Plus - 7% Solution....................... 565,255 16.78 9,486
Value.................................................................. 497 18.33 9
-------------------
38,929
24
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE 7 - UNIT VALUES (CONTINUED)
UNIT EXTENDED
DIVISION/CONTRACT UNITS VALUE VALUE
--------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)
<S> <C> <C> <C>
ALL-GROWTH
Currently payable annuity products:
DVA 100................................................................ 10,034 $33.33 $334
Contracts in accumulation period:
DVA 80................................................................. 30,780 34.07 1,049
DVA 100................................................................ 1,659,536 33.33 55,306
DVA Series 100......................................................... 17,272 32.06 554
DVA Plus - Standard.................................................... 177,295 32.46 5,755
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 680,978 31.93 21,744
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 1,363,281 31.41 42,819
Access - 7% Solution, Premium Plus - 7% Solution....................... 593,365 30.85 18,302
-------------------
145,863
REAL ESTATE
Currently payable annuity products:
DVA 80................................................................. 337 22.00 7
DVA 100................................................................ 4,675 21.52 101
Contracts in accumulation period:
DVA 80................................................................. 17,562 22.00 387
DVA 100................................................................ 698,949 21.52 15,043
DVA Series 100......................................................... 7,595 20.70 157
DVA Plus - Standard.................................................... 136,122 20.96 2,854
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 534,577 20.62 11,024
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 742,363 20.28 15,059
Access - 7% Solution, Premium Plus - 7% Solution....................... 554,454 19.92 11,045
-------------------
55,677
FULLY MANAGED
Currently payable annuity products:
DVA 80................................................................. 1,025 23.10 24
DVA 100................................................................ 42,440 22.59 959
Contracts in accumulation period:
DVA 80................................................................. 55,124 23.10 1,273
DVA 100................................................................ 2,723,900 22.59 61,541
DVA Series 100......................................................... 28,071 21.73 610
DVA Plus - Standard.................................................... 549,088 22.01 12,084
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 2,546,588 21.65 55,126
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 3,304,306 21.29 70,358
Access - 7% Solution, Premium Plus - 7% Solution....................... 3,118,319 20.91 65,207
Value.................................................................. 1,564 22.85 36
-------------------
267,218
25
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE 7 - UNIT VALUES (CONTINUED)
UNIT EXTENDED
DIVISION/CONTRACT UNITS VALUE VALUE
--------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)
<S> <C> <C> <C>
EQUITY INCOME
Currently payable annuity products:
DVA 80................................................................. 10,512 $22.91 $241
DVA 100................................................................ 54,038 22.41 1,211
Contracts in accumulation period:
DVA 80................................................................. 217,136 22.91 4,975
DVA 100................................................................ 4,960,030 22.41 111,166
DVA Series 100......................................................... 52,427 21.56 1,130
DVA Plus - Standard.................................................... 381,468 21.83 8,327
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 2,014,453 21.47 43,259
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 2,523,887 21.12 53,311
Access - 7% Solution, Premium Plus - 7% Solution....................... 2,294,950 20.74 47,606
Value.................................................................. 2,555 22.66 58
-------------------
271,284
CAPITAL APPRECIATION
Currently payable annuity products:
DVA 100................................................................ 34,146 31.01 1,059
Contracts in accumulation period:
DVA 80................................................................. 54,304 31.50 1,710
DVA 100................................................................ 3,000,104 31.01 93,047
DVA Series 100......................................................... 29,781 30.18 899
DVA Plus - Standard.................................................... 431,150 30.46 13,132
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 2,412,721 30.11 72,649
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 3,839,680 29.77 114,290
Access - 7% Solution, Premium Plus - 7% Solution....................... 3,574,164 29.38 104,999
Value.................................................................. 5,832 31.26 182
-------------------
401,967
RISING DIVIDENDS
Currently payable annuity products:
DVA 80................................................................. 2,751 26.79 74
DVA 100................................................................ 11,516 26.46 305
Contracts in accumulation period:
DVA 80................................................................. 45,744 26.79 1,225
DVA 100................................................................ 3,156,396 26.46 83,505
DVA Series 100......................................................... 62,149 25.88 1,608
DVA Plus - Standard.................................................... 1,251,144 26.07 32,623
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 7,496,161 25.83 193,646
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 10,160,317 25.59 260,024
Access - 7% Solution, Premium Plus - 7% Solution....................... 9,473,482 25.31 239,807
Value.................................................................. 10,416 26.62 277
-------------------
813,094
26
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE 7 - UNIT VALUES (CONTINUED)
UNIT EXTENDED
DIVISION/CONTRACT UNITS VALUE VALUE
--------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)
<S> <C> <C> <C>
EMERGING MARKETS
Currently payable annuity products:
DVA 100................................................................ 20,476 $12.18 $249
Contracts in accumulation period:
DVA 80................................................................. 66,912 12.34 826
DVA 100................................................................ 1,114,771 12.18 13,583
DVA Series 100......................................................... 19,565 11.92 233
DVA Plus - Standard.................................................... 359,966 12.01 4,323
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 272,783 11.90 3,246
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 1,053,099 11.79 12,412
Access - 7% Solution, Premium Plus - 7% Solution....................... 51,466 11.66 600
-------------------
35,472
MARKET MANAGER
Contracts in accumulation period:
DVA 100................................................................ 265,157 27.61 7,320
-------------------
7,320
VALUE EQUITY
Currently payable annuity products:
DVA 80................................................................. 353 18.67 7
DVA 100................................................................ 8,027 18.49 148
Contracts in accumulation period:
DVA 80................................................................. 16,820 18.67 314
DVA 100................................................................ 642,103 18.49 11,870
DVA Series 100......................................................... 13,030 18.16 237
DVA Plus - Standard.................................................... 433,555 18.28 7,924
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 1,825,971 18.14 33,129
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 2,709,066 18.01 48,787
Access - 7% Solution, Premium Plus - 7% Solution....................... 1,956,244 17.84 34,902
Value.................................................................. 3,333 18.58 62
-------------------
137,380
STRATEGIC EQUITY
Currently payable annuity products:
DVA 100................................................................ 31,558 22.27 703
Contracts in accumulation period:
DVA 80................................................................. 18,395 22.46 413
DVA 100................................................................ 387,984 22.27 8,642
DVA Series 100......................................................... 6,159 21.94 135
DVA Plus - Standard.................................................... 455,696 22.06 10,053
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 2,450,796 21.92 53,725
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 2,655,079 21.78 57,835
Access - 7% Solution, Premium Plus - 7% Solution....................... 3,050,564 21.61 65,934
Value.................................................................. 3,862 22.37 86
-------------------
197,526
27
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE 7 - UNIT VALUES (CONTINUED)
UNIT EXTENDED
DIVISION/CONTRACT UNITS VALUE VALUE
--------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)
<S> <C> <C> <C>
SMALL CAP
Currently payable annuity products:
DVA 100................................................................ 3,735 $23.19 $87
Contracts in accumulation period:
DVA 80................................................................. 21,044 23.38 492
DVA 100................................................................ 502,932 23.19 11,664
DVA Series 100......................................................... 14,018 22.87 320
DVA Plus - Standard.................................................... 453,438 22.96 10,411
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 5,053,919 22.82 115,340
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 4,514,345 22.68 102,399
Access - 7% Solution, Premium Plus - 7% Solution....................... 3,698,983 22.55 83,400
Value.................................................................. 13,606 23.28 316
-------------------
324,429
MANAGED GLOBAL
Currently payable annuity products:
DVA 100................................................................ 11,683 24.68 288
Contracts in accumulation period:
DVA 80................................................................. 33,553 25.04 840
DVA 100................................................................ 2,703,999 24.68 66,747
DVA Series 100......................................................... 38,870 24.08 936
DVA Plus - Standard.................................................... 605,044 24.23 14,658
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 676,401 23.97 16,211
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 3,306,922 23.71 78,402
Access - 7% Solution, Premium Plus - 7% Solution....................... 139,357 23.42 3,263
-------------------
181,345
MID-CAP GROWTH
Contracts in accumulation period:
DVA 80................................................................. 5,425 40.92 222
DVA 100................................................................ 328,684 40.50 13,310
DVA Series 100......................................................... 9,549 39.75 380
DVA Plus - Standard.................................................... 287,598 39.97 11,494
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 4,873,150 39.59 192,951
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 3,717,260 39.34 146,221
Granite PrimElite - Standard........................................... 3,692 39.97 148
Granite PrimElite - Annual Ratchet..................................... 27,138 39.59 1,075
Access - 7% Solution, Premium Plus - 7% Solution....................... 4,433,019 39.02 172,992
Value.................................................................. 10,373 40.71 422
-------------------
539,215
28
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE 7 - UNIT VALUES (CONTINUED)
UNIT EXTENDED
DIVISION/CONTRACT UNITS VALUE VALUE
--------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)
<S> <C> <C> <C>
CAPITAL GROWTH
Contracts in accumulation period:
DVA 80................................................................. 3,348 $21.54 $72
DVA 100................................................................ 390,759 21.38 8,354
DVA Series 100......................................................... 11,902 21.10 251
DVA Plus - Standard.................................................... 598,663 21.18 12,678
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 5,870,532 21.06 123,629
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 6,210,698 20.94 130,038
Access - 7% Solution, Premium Plus - 7% Solution....................... 7,450,249 20.82 155,103
Value.................................................................. 5,650 21.46 121
-------------------
430,246
RESEARCH
Contracts in accumulation period:
DVA 80................................................................. 6,633 28.93 192
DVA 100................................................................ 431,562 28.62 12,353
DVA Series 100......................................................... 18,345 28.10 515
DVA Plus - Standard.................................................... 565,925 28.25 15,988
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 6,431,948 28.04 180,345
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 7,240,463 27.80 201,318
Granite PrimElite - Standard........................................... 2,544 28.25 72
Granite PrimElite - Annual Ratchet..................................... 37,387 28.04 1,048
Access - 7% Solution, Premium Plus - 7% Solution....................... 8,143,207 27.58 224,622
Value.................................................................. 10,661 28.78 307
-------------------
636,760
TOTAL RETURN
Contracts in accumulation period:
DVA 80................................................................. 9,043 18.64 168
DVA 100................................................................ 399,197 18.44 7,361
DVA Series 100......................................................... 5,119 18.10 93
DVA Plus - Standard.................................................... 831,642 18.20 15,135
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 8,274,089 18.06 149,429
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 6,739,205 17.91 120,710
Granite PrimElite - Standard........................................... 4,770 18.20 87
Granite PrimElite - Annual Ratchet..................................... 33,383 18.06 603
Access - 7% Solution, Premium Plus - 7% Solution....................... 9,101,947 17.77 161,738
Value.................................................................. 3,045 18.54 56
-------------------
455,380
29
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE 7 - UNIT VALUES (CONTINUED)
UNIT EXTENDED
DIVISION/CONTRACT UNITS VALUE VALUE
--------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)
<S> <C> <C> <C>
GROWTH
Contracts in accumulation period:
DVA 80................................................................. 47,480 $29.27 $1,390
DVA 100................................................................ 818,663 29.05 23,785
DVA Series 100......................................................... 28,942 28.67 830
DVA Plus - Standard.................................................... 758,379 28.78 21,827
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 14,289,972 28.62 408,990
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 11,168,535 28.46 317,801
Access - 7% Solution, Premium Plus - 7% Solution....................... 15,200,894 28.29 430,081
Value.................................................................. 27,642 29.16 806
-------------------
1,205,510
GLOBAL FIXED INCOME
Contracts in accumulation period:
DVA 100................................................................ 24,119 12.04 291
DVA Plus - Standard.................................................... 35,081 11.88 417
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 753,003 11.79 8,880
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 382,609 11.70 4,475
Access - 7% Solution, Premium Plus - 7% Solution....................... 619,047 11.60 7,183
Value.................................................................. 982 12.11 12
-------------------
21,258
DEVELOPING WORLD
Contracts in accumulation period:
DVA 80................................................................. 390 11.74 5
DVA 100................................................................ 21,139 11.70 247
DVA Series 100......................................................... 27,991 11.64 326
DVA Plus - Standard.................................................... 683 11.62 8
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 2,133,907 11.61 24,775
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 926,115 11.58 10,722
Access - 7% Solution, Premium Plus - 7% Solution....................... 1,344,878 11.54 15,526
Value.................................................................. 5,500 11.72 64
-------------------
51,673
GROWTH OPPORTUNITIES
Contracts in accumulation period:
DVA 100................................................................ 12,750 11.52 147
DVA Plus - Standard.................................................... 9,739 11.47 112
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 215,681 11.44 2,466
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 142,128 11.40 1,621
Access - 7% Solution, Premium Plus - 7% Solution....................... 203,804 11.37 2,317
-------------------
6,663
30
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE 7 - UNIT VALUES (CONTINUED)
UNIT EXTENDED
DIVISION/CONTRACT UNITS VALUE VALUE
--------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)
<S> <C> <C> <C>
PIMCO HIGH YIELD BOND
Contracts in accumulation period:
DVA 80................................................................. 1,147 $10.34 $12
DVA 100................................................................ 151,044 10.31 1,557
DVA Series 100......................................................... 951 10.25 10
DVA Plus - Standard.................................................... 400,821 10.27 4,115
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 5,053,973 10.24 51,749
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 3,194,935 10.21 32,631
Access - 7% Solution, Premium Plus - 7% Solution....................... 5,486,600 10.19 55,895
Value.................................................................. 8,722 10.33 90
-------------------
146,059
PIMCO STOCKSPLUS GROWTH AND INCOME
Contracts in accumulation period:
DVA 80................................................................. 651 13.26 9
DVA 100................................................................ 116,144 13.22 1,535
DVA Series 100......................................................... 292 13.14 4
DVA Plus - Standard.................................................... 284,260 13.16 3,742
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 4,797,771 13.13 62,999
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 4,371,570 13.10 57,257
Access - 7% Solution, Premium Plus - 7% Solution....................... 7,320,301 13.06 95,636
Value.................................................................. 3,634 13.24 48
-------------------
221,230
APPRECIATION
Contracts in accumulation period:
Granite PrimElite - Standard........................................... 711 18.47 13
Granite PrimElite - Annual Ratchet..................................... 52,802 18.36 970
-------------------
983
SMITH BARNEY HIGH INCOME
Contracts in accumulation period:
Granite PrimElite - Standard........................................... 5,981 13.84 83
Granite PrimElite - Annual Ratchet..................................... 33,782 13.74 464
-------------------
547
SMITH BARNEY LARGE CAP VALUE
Contracts in accumulation period:
Granite PrimElite - Standard........................................... 4,123 19.11 79
Granite PrimElite - Annual Ratchet..................................... 29,721 18.98 564
-------------------
643
SMITH BARNEY INTERNATIONAL EQUITY
Contracts in accumulation period:
Granite PrimElite - Standard........................................... 2,572 23.78 61
Granite PrimElite - Annual Ratchet..................................... 20,133 23.61 476
-------------------
537
SMITH BARNEY MONEY MARKET
Contracts in accumulation period:
Granite PrimElite - Standard........................................... 10,885 11.82 129
Granite PrimElite - Annual Ratchet..................................... 38,389 11.74 450
-------------------
579
31
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE 7 - UNIT VALUES (CONTINUED)
UNIT EXTENDED
DIVISION/CONTRACT UNITS VALUE VALUE
------------------------------------------------------------------------------- ------------------------------------------------
(IN THOUSANDS)
<S> <C> <C> <C>
INTERNATIONAL EQUITY
Contracts in accumulation period:
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 4,666,041 $15.57 $72,629
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 1,959,322 15.59 30,538
Access - 7% Solution, Premium Plus - 7% Solution....................... 4,663,701 15.50 72,274
Value.................................................................. 8,033 15.97 128
-------------------
175,569
ASSET ALLOCATION
Contracts in accumulation period:
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 4,460 10.70 48
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 832 10.70 9
Access - 7% Solution, Premium Plus - 7% Solution....................... 7,153 10.70 76
-------------------
133
EQUITY
Contracts in accumulation period:
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 8,936 11.79 105
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 11,848 11.79 140
Access - 7% Solution, Premium Plus - 7% Solution....................... 4,420 11.78 52
-------------------
297
GROWTH & INCOME
Contracts in accumulation period:
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 8,512 10.55 90
DVA Plus - 7% Solution, Access - Annual Ratchet &
5.5% Solution, Premium Plus - Annual Ratchet & 5.5% Solution......... 1,122 10.55 12
Access - 7% Solution, Premium Plus - 7% Solution....................... 493 10.54 5
-------------------
107
HIGH QUALITY BOND
Contracts in accumulation period:
DVA Plus - Annual Ratchet & 5.5% Solution, Access -
Standard, Premium Plus - Standard, ES II............................. 2,756 9.93 27
-------------------
27
--------------- -------------------
COMBINED.................................................................. 340,258,685 $7,443,647
=============== ===================
32
</TABLE>
<PAGE>
<PAGE>
PART C -- OTHER INFORMATION
ITEM 24: FINANCIAL STATEMENTS AND EXHIBITS
FINANCIAL STATEMENTS
(a) (1) All financial statements are included in the Prospectus
as indicated therein
(2) Schedules I, III and IV follow. All other schedules to the consolidated
financial statements required by Article 7 of Regulation S-X are
omitted because they are not applicable or because the information
is included elsewhere in the consolidated financial statements or
notes thereto.
<TABLE>
<CAPTION>
SCHEDULE I
SUMMARY OF INVESTMENTS
OTHER THAN INVESTMENTS IN RELATED PARTIES
(DOLLARS IN THOUSANDS)
BALANCE
SHEET
DECEMBER 31, 1999 COST 1 VALUE AMOUNT
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
TYPE OF INVESTMENT
Fixed maturities, available for sale:
Bonds:
United States government and governmental
agencies and authorities........................ $21,363 $21,103 $21,103
Public utilities................................. 53,754 51,315 51,315
Corporate securities............................. 396,494 384,272 384,272
Other asset-backed securities.................... 207,044 203,577 203,577
Mortgage-backed securities....................... 179,397 175,054 175,054
------------------------------------
Total fixed maturities, available for sale....... 858,052 835,321 835,321
Equity securities:
Common stocks: industrial,
miscellaneous, and all other..................... 14,952 17,330 17,330
Mortgage loans on real estate....................... 100,087 100,087
Policy loans........................................ 14,157 14,157
Short-term investments.............................. 80,191 80,191
--------------- ----------
Total investments................................... $1,067,439 $1,047,086
=============== ==========
</TABLE>
Note 1: Cost is defined as original cost for common stocks, amortized cost for
bonds and short-term investments, and unpaid principal for policy loans and
mortgage loans on real estate, adjusted for amortization of premiums and accrual
of discounts.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE III
SUPPLEMENTARY INSURANCE INFORMATION
(DOLLARS IN THOUSANDS)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
---------------------------------------------------------------------------
FUTURE
POLICY
BENEFITS, OTHER
LOSSES, POLICY
DEFERRED CLAIMS CLAIMS INSURANCE
POLICY AND UNEARNED AND PREMIUMS
ACQUISITION LOSS REVENUE BENEFITS AND
SEGMENT COSTS EXPENSES RESERVE PAYABLE CHARGES
---------------------------------------------------------------------------
POST-MERGER
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED
DECEMBER 31, 1999:
Life insurance $528,957 $1,033,701 $6,300 $8 $82,935
YEAR ENDED
DECEMBER 31, 1998:
Life insurance 204,979 881,112 3,840 -- 39,119
PERIOD
OCTOBER 25, 1997
THROUGH
DECEMBER 31, 1997:
Life insurance 12,752 505,304 1,189 10 3,834
POST-ACQUISITION
---------------------------------------------------------------------------
PERIOD
JANUARY 1, 1997
THROUGH
OCTOBER 24, 1997:
Life insurance N/A N/A N/A N/A 18,288
</TABLE>
<TABLE>
<CAPTION>
COLUMN A COLUMN G COLUMN H COLUMN I COLUMN J COLUMN K
---------------------------------------------------------------------------
AMORTIZA-
BENEFITS TION OF
CLAIMS, DEFERRED
LOSSES POLICY
NET AND ACQUI- OTHER
INVESTMENT SETTLEMENT SITION OPERATING PREMIUMS
SEGMENT INCOME EXPENSES COSTS EXPENSES* WRITTEN
---------------------------------------------------------------------------
POST-MERGER
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED
DECEMBER 31, 1999:
Life insurance $59,169 $182,221 $33,119 $(83,827) --
YEAR ENDED
DECEMBER 31, 1998:
Life insurance 42,485 96,968 5,148 (26,406) --
PERIOD
OCTOBER 25, 1997
THROUGH
DECEMBER 31, 1997:
Life insurance 5,127 7,413 892 1,137 --
POST-ACQUISITION
---------------------------------------------------------------------------
PERIOD
JANUARY 1, 1997
THROUGH
OCTOBER 24, 1997:
Life insurance 21,656 19,401 1,674 20,234 --
</TABLE>
* This includes policy acquisition costs deferred for first year commissions
and interest bonuses, premium credit, and other expenses related to the
production of new business. The costs related to first year interest
bonuses and the premium credit are included in benefits claims, losses, and
settlement expenses.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE IV
REINSURANCE
COLUMN A COLUMN B COLUMN C
----------------------------------------------------------------------------
CEDED TO
GROSS OTHER
AMOUNT COMPANIES
----------------------------------------------------------------------------
<S> <C> <C>
AT DECEMBER 31, 1999:
Life insurance in force................. $225,000,000 $119,575,000
===============================
AT DECEMBER 31, 1998:
Life insurance in force................. $181,456,000 $111,552,000
===============================
AT DECEMBER 31, 1997:
Life insurance in force................. $149,842,000 $96,686,000
===============================
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE IV
REINSURANCE
COLUMN A COLUMN D COLUMN E COLUMN F
------------------------------------------------------------------------------------
PERCENTAGE
ASSUMED OF AMOUNT
FROM OTHER NET ASSUMED
COMPANIES AMOUNT TO NET
------------------------------------------------------------------------------------
<S> <C> <C> <C>
AT DECEMBER 31, 1999:
Life insurance in force................. -- $105,425,000 --
========================================
AT DECEMBER 31, 1998:
Life insurance in force................. -- $69,904,000 --
========================================
AT DECEMBER 31, 1997:
Life insurance in force................. -- $53,156,000 --
========================================
</TABLE>
<PAGE>
<PAGE>
EXHIBITS
(b) (1) Resolution of the board of directors of the Depositor
authorizing the establishment of the Registrant. (1)
(2) Not applicable.
(3) (a) Distribution Agreement between the Depositor and
Directed Services, Inc. (1)
(b) Dealers Agreement. (1)
(c) Organizational Agreement. (1)
(d) Assignment Agreement for Organizational Agreement. (1)
(4) (a) Individual Deferred Combination Variable and Fixed Annuity
Contract. (2)
(b) Group Deferred Combination Variable and Fixed
Annuity Contract. (2)
(c) Individual Deferred Variable Annuity Contract. (2)
(d) Individual Retirement Annuity Rider Page. (1)
(e) ROTH Individual Retirement Annuity Rider. (1)
(f) Minimum Guaranteed Accumulation Benefit Rider (REV)
(g) Minimum Guaranteed Income Benefit Rider (REV)
(h) Minimum Guaranteed Withdrawal Benefit Rider (REV)
(i) Living Benefit Rider Endorsement (Inforce Riders)
(j) Death Benefit Endorsement No.1 (REV)(7% Solution Enhanced)
(k) Death Benefit Endorsement No.2 (REV)(Ratchet Enhanced)
(l) Death Benefit Endorsement No.3 (REV)(Standard)
(m) Death Benefit Endorsement No.5 (Base Death Benefit)
(n) Death Benefit Endorsement No.6 (Inforce Contracts)
(5) (a) Individual Deferred Combination Variable and Fixed Annuity
Application. (3)
(b) Group Deferred Combination Variable and Fixed Annuity
Enrollment Form. (3)
(c) Individual Deferred Variable Annuity Application. (3)
(6) (a) Certificate of Amendment of the Restated Articles of
Incorporation of Golden American, dated (03/01/95). (2)
(b) By-Laws of Golden American, dated (01/07/94). (1)
(c) Resolution of the board of directors for
Power of Attorney, dated (04/23/99). (2)
(7) Not applicable.
(8) (a) Participation Agreement between Golden American and PIMCO
Variable Insurance Trust. (1)
(b) Administrative Services Agreement between Golden American
and Equitable Life Insurance Company of Iowa. (1)
(c) Service Agreement between Golden American and Directed
Services, Inc. (1)
(d) Asset Management Agreement between Golden American and
ING Investment Management LLC. (2)
(e) Reciprocal Loan Agreement between Golden American and
ING America Insurance Holdings, Inc. (2)
(f) Revolving Note Payable between Golden American and
SunTrust Bank. (2)
(g) Participation Agreement between Golden American and Warburg
Pincus Asset Management, Inc. (2)
(h) Surplus Note, dated 12/17/96, between Golden American
and Equitable of Iowa Companies. (4)
(i) Surplus Note, dated 12/30/98, between Golden American
and Equitable Life Insurance Company of Iowa. (4)
(j) Surplus Note, dated 09/30/99, between Golden American
and ING AIH. (4)
(k) Surplus Note, dated 12/08/99, between Golden American and
First Columbine Life Insurance Company. (3)
(l) Surplus Note, dated 12/30/99, between Golden American and
Equitable of Iowa Companies. (3)
(m) Participation Agreement between Golden American and
Prudential Series Fund, Inc. (4)
(n) Participation Agreement between Golden American and
ING Variable Insurance Trust. (4)
(o) Form of Amended Schedule Page to the Participation Agreement
between Golden American and Prudential Series Fund, Inc. (5)
(p) Reinsurance Agreement, dated 06/30/00, between Golden
American and Equitable Life Insurance Company of Iowa. (5)
(q) Renewal of Revolving Note Payable between Golden American
and SunTrust Bank as of July 31, 2000 and expiring
July 31, 2001. (5)
(9) Opinion and Consent of Myles R. Tashman. *
(10) (a) Consent of Sutherland Asbill & Brennan LLP. *
(b) Consent of Independent Auditors. *
(c) Consent of Myles R. Tashman, incorporated in Item 9 of this
Part C, together with the Opinion of Myles R. Tashman. *
(11) Not applicable.
(12) Not applicable.
(13) Schedule of Performance Data. (4)
(14) Not applicable.
(15) Powers of Attorney.
(16) Subsidiaries of ING Groep N.V. (4)
--------------------------------
* To be Filed by Amendment
<PAGE>
<PAGE>
(1) Incorporated herein by reference to Pre-Effective Amendment No. 1 to a
registration statement for Separate Account B on Form N-4 filed with the
Securities and Exchange Commission on about December 18, 1998 (File Nos.
333-66757, 811-5626).
(2) Incorporated herein by reference to Post-Effective Amendment No. 1 to a
registration statement for Separate Account B on Form N-4 filed with the
Securities and Exchange Commission on about April 23, 1999 (File Nos.
333-66757, 811-5626).
(3) Incorporated herein by reference to Post-Effective Amendment No. 2 to a
registration statement for Separate Account B on Form N-4 filed with the
Securities and Exchange Commission on about January 27, 2000 (File Nos.
333-66757, 811-5626).
(4) Incorporated herein by reference to Post-Effective Amendment No. 3 to a
registration statement for Separate Account B on Form N-4 filed with the
Securities and Exchange Commission on about April 26, 2000 (File Nos.
333-66757, 811-5626).
(5) Incorporated herein by reference to Post-Effective Amendment No. 4 to a
Registration Statement on Form N-4 for Separate Account B filed with the
Securities and Exchange Commission on September 13, 2000 (File Nos.
333-66757, 811-5626).
<PAGE>
<PAGE>
ITEM 25: DIRECTORS AND OFFICERS OF THE DEPOSITOR
Principal Positions and Offices
Name Business Address with Depositor
---- ---------------- ---------------------
Barnett Chernow Golden American Life Ins. Co. President and
1475 Dunwoody Drive Director
West Chester, PA 19380
Michael W. Cunningham ING Insurance Operations Director
5780 Powers Ferry Road
Atlanta, GA 30327-4390
Mark A. Tullis ING Insurance Operations Director
5780 Powers Ferry Road
Atlanta, GA 30327-4390
Phillip R. Lowery ING Insurance Operations Director
5780 Powers Ferry Road
Atlanta, GA 30327-4390
Myles R. Tashman Golden American Life Ins. Co. Director, Executive
1475 Dunwoody Drive Vice President, General
West Chester, PA 19380 Counsel and Secretary
James R. McInnis Golden American Life Ins. Co. Executive Vice President
1475 Dunwoody Drive and Chief Marketing
West Chester, PA 19380 Officer
Stephen J. Preston Golden American Life Ins. Co. Executive Vice President
1475 Dunwoody Drive and Chief Actuary
West Chester, PA 19380
Steven G. Mandel Golden American Life Ins. Co. Senior Vice President and
1475 Dunwoody Drive Chief Information Officer
West Chester, PA 19380
Ronald R. Blasdell Golden American Life Ins. Co. Senior Vice President
1475 Dunwoody Drive
West Chester, PA 19380
E. Robert Koster Golden American Life Ins. Co. Senior Vice President
1475 Dunwoody Drive and Chief Financial
West Chester, PA 19380 Officer
David L. Jacobson Golden American Life Ins. Co. Senior Vice President
1475 Dunwoody Drive and Assistant Secretary
West Chester, PA 19380
William L. Lowe Equitable of Iowa Companies Senior Vice President,
909 Locust Street Sales & Marketing
Des Moines, IA 50309
Gary F. Haynes Golden American Life Ins. Co. Senior Vice President
1475 Dunwoody Drive Operations
West Chester, PA 19380
David S. Pendergrass ING Insurance Operations Vice President and
5780 Powers Ferry Road Treasurer
Atlanta, GA 30327-4390
Lawrence W. Porter, M.D. Equitable of Iowa Companies Medical Director
909 Locust Street
Des Moines, IA 50309
<PAGE>
<PAGE>
ITEM 26: PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
The Depositor owns 100% of the stock of a newly formed New York company, First
Golden American Life Insurance Company of New York ("First Golden"). The
primary purpose for the formation of First Golden is to offer variable products
in the state of New York.
The following persons control or are under common control with the Depositor:
DIRECTED SERVICES, INC. ("DSI") - This corporation is a general business
corporation organized under the laws of the State of New York, and is
wholly owned by ING Groep N.V. ("ING"). The primary purpose of Directed
Services, Inc. is to act as a broker-dealer in securities. It acts as the
principal underwriter and distributor of variable insurance products including
variable annuities as required by the SEC. The contracts are issued by the
Depositor. DSI also has the power to carry on a general financial, securities,
distribution, advisory or investment advisory business; to act as a general
agent or broker for insurance companies and to render advisory, managerial,
research and consulting services for maintaining and improving managerial
efficiency and operation. DSI is also registered with the SEC as an investment
adviser.
The registrant is a segregated asset account of the Company and is
therefore owned and controlled by the Company. All of the Company's
outstanding stock is owned and controlled by ING. Various companies
and other entities controlled by ING may therefore be considered to be
under common control with the registrant or the Company. Such other
companies and entities, together with the identity of their controlling
persons (where applicable), are set forth on the following organizational
chart.
The subsidiaries of ING, as of December 31, 1999 are incorporated by
reference to the April 26, 2000 filing.
Item 27: Number of Contractowners
As of August 31, 2000, there are 48,547 qualified contract owners and
71,436 non-qualified contract owners in Golden American's Separate
Account B.
ITEM 28: INDEMNIFICATION
Golden American shall indemnify (including therein the prepayment of expenses)
any person who is or was a director, officer or employee, or who is or was
serving at the request of Golden American as a director, officer or employee
of another corporation, partnership, joint venture, trust or other enterprise
for expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him with respect to any
threatened, pending or completed action, suit or proceedings against him by
reason of the fact that he is or was such a director, officer or employee to
the extent and in the manner permitted by law.
Golden American may also, to the extent permitted by law, indemnify any other
person who is or was serving Golden American in any capacity. The Board of
Directors shall have the power and authority to determine who may be
indemnified under this paragraph and to what extent (not to exceed the extent
provided in the above paragraph) any such person may be indemnified.
Golden American or its parents may purchase and maintain insurance on behalf
of any such person or persons to be indemnified under the provision in the
above paragraphs, against any such liability to the extent permitted by law.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended, may be permitted to directors, officers and controlling
persons of the Registrant, as provided above or otherwise, the Registrant has
been advised that in the opinion of the SEC such indemnification by the
Depositor is against public policy, as expressed in the Securities Act of 1933,
and therefore may be unenforceable. In the event that a claim of such
indemnification (except insofar as it provides for the payment by the Depositor
of expenses incurred or paid by a director, officer or controlling person in
the successful defense of any action, suit or proceeding) is asserted against
the Depositor by such director, officer or controlling person and the SEC is
still of the same opinion, the Depositor or Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by the Depositor is against public policy as expressed by the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
<PAGE>
<PAGE>
ITEM 29: PRINCIPAL UNDERWRITER
(a) At present, DSI, the Registrant's Distributor, also serves as principal
underwriter for all contracts issued by Golden American. DSI is the
principal underwriter for Separate Account A of Golden American,
Separate Account B of Golden American, Alger Separate Account A of Golden
American, Separate Account NY-B of First Golden, Separate Account A for
Equitable Life Insurance Company of Iowa and The GCG Trust.
(b) The following information is furnished with respect to the principal
officers and directors of Directed Services, Inc., the Registrant's
Distributor. The principal business address for each officer and director
following is 1475 Dunwoody Drive, West Chester, PA 19380-1478, unless
otherwise noted.
Name and Principal Positions and Offices
Business Address with Underwriter
------------------- ---------------------
James R. McInnis President
Barnett Chernow Director and Executive Vice President
Myles R. Tashman Director, Executive Vice President,
Secretary and General Counsel
R. Lawrence Roth Director
VESTAX Capital Corporation
1931 Georgetown Road
Hudson, OH 44236
Stephen J. Preston Senior Vice President
David S. Pendergrass Vice President and Treasurer
ING Insurance Operations
5780 Powers Ferry Road
Atlanta, GA 30327-4390
David L. Jacobson Senior Vice President
(c)
1999 Net
Name of Underwriting Compensation
Principal Discounts and on Brokerage
Underwriter Commissions Redemption Commissions Compensation
----------- ----------- ---------- ----------- ------------
Directed $180,838,913 $0 $0 $0
Services, Inc.
ITEM 30: LOCATION OF ACCOUNTS AND RECORDS
Accounts and records are maintained by Golden American Life Insurance Company
at 1475 Dunwoody Drive, West Chester, PA 19380 and by Equitable
Life Insurance Company of Iowa, an affiliate, at 909 Locust Street,
Des Moines, IA 50309.
ITEM 31: MANAGEMENT SERVICES
None.
ITEM 32: UNDERTAKINGS
(a) Registrant hereby undertakes to file a post-effective amendment to this
registration statement as frequently as it is necessary to ensure that the
audited financial statements in the registration statement are never
more that 16 months old so long as payments under the variable annuity
contracts may be accepted.
(b) Registrant hereby undertakes to include either (1) as part of any
application to purchase a contract offered by the prospectus, a space that an
applicant can check to request a Statement of Additional Information, or (2) a
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; and,
(c) Registrant hereby undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available under
this Form promptly upon written or oral request.
<PAGE>
<PAGE>
REPRESENTATIONS
1. The account meets definition of a "separate account" under federal
securities laws.
2. Golden American Life Insurance Company hereby represents that the fees
and charges deducted under the Contract described in the Prospectus, in
the aggregate, are reasonable in relation to the services rendered, the
expenses to be incurred and the risks assumed by the Company.
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act
of 1940, the Registrant has caused this Registration Statement to be
signed on its behalf in the City of West Chester, and Commonwealth of
Pennsylvania, on the 6th day of October, 2000.
SEPARATE ACCOUNT B
(Registrant)
By: GOLDEN AMERICAN LIFE
INSURANCE COMPANY
(Depositor)
By:
--------------------
Barnett Chernow*
President
Attest: /s/ Myles R. Tashman
--------------------
Myles R. Tashman
Executive Vice President, General Counsel
and Secretary of Depositor
As required by the Securities Act of 1933, this Registration Statement has
been signed below by the following person in the capacities indicated on
October 6, 2000.
Signature Title
President and Director
-------------------- of Depositor
Barnett Chernow*
-------------------- Senior Vice President
E. Robert Koster* and Chief Financial Officer
DIRECTORS OF DEPOSITOR
----------------------
Myles R. Tashman*
----------------------
Michael W. Cunningham*
----------------------
Phillip R. Lowery*
----------------------
Mark A. Tullis*
By: /s/ Myles R. Tashman, Attorney-in-Fact
-----------------------
Myles R. Tashman
_______________________
*Executed by Myles R. Tashman on behalf of those indicated pursuant
to Power of Attorney.
<PAGE>
<PAGE>
EXHIBIT INDEX
ITEM EXHIBIT PAGE #
---- ------- ------
4(f) Minimum Guaranteed Accumulation Benefit Rider (REV) EX-99.B4F
4(g) Minimum Guaranteed Income Benefit Rider (REV) EX-99.B4G
4(h) Minimum Guaranteed Withdrawal Benefit Rider (REV) EX-99.B4H
4(i) Living Benefit Rider Endorsement (Inforce Riders) EX-99.B4I
4(j) Death Benefit Endorsement No.1 (REV)
(7% Solution Enhanced) EX-99.B4J
4(k) Death Benefit Endorsement No.2 (REV)(Ratchet Enhanced) EX-99.B4K
4(l) Death Benefit Endorsement No.3 (REV)(Standard) EX-99.B4L
4(m) Death Benefit Endorsement No.5 (Base Death Benefit) EX-99.B4M
4(n) Death Benefit Endorsement No.6 (Inforce Contracts) EX-99.B4N
15 Power of Attorney EX-99.B15
<PAGE>
<PAGE>
