<PAGE>
<PAGE>
As Filed with the Securities and Exchange Commission on September 28, 2000
Registration Nos. 33-59261, 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. 17 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 100 [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, PA 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:
[ ] 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
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PART A
EXPLANATORY NOTE
This Post-Effective Amendment No. 17 to the Registration Statement on Form N-4
does not supercede the prospectuses found in Post-Effective Amendment No. 16
filed on September 13, 2000.
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SUPPLEMENT LINKING FID BROCHURE TO
PROSPECTUS OF GOLDENSELECT DVA PLUS/R/
<PAGE>
<PAGE>
Registration Nos. 33-59261, 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 CONTRACT
issued
by Golden American Life Insurance Company
(the "GoldenSelect DVA PLUS Prospectus")
__________
Your should keep this supplement with your GoldenSelect DVA PLUS Prospectus.
A Fixed Interest Division option may be available through the
group and individual deferred variable and fixed 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 DVA PLUS
Prospectus, the Fixed Interest Division should be counted
among the various subaccounts 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.
You will find more complete information relating to the Fixed
Interest Division is in the Offering Brochure. Please read the
Offering Brochure carefully before send money.
ING VARIABLE ANNUITIES
GOLDEN AMERICAN LIFE INSURANCE COMPANY
Golden American Life Insurance Company is a stock company domiciled in Delaware
DVAP FID-{ } 01/{ }/01
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PROFILE AND PROSPECTUS SUPPLEMENT FOR
DVA PLUS PROSPECTUS 5.5% WA SUPPLEMENT
FOR USE ONLY IN THE STATE OF WASHINGTON
<PAGE>
<PAGE>
Registration Nos. 33-59261, 811-5626
ING VARIABLE ANNUITIES
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B OF GOLDEN AMERICAN LIFE INSURANCE COMPANY
PROFILE AND PROSPECTUS SUPPLEMENT
JANUARY { }, 2001
SUPPLEMENT TO THE PROSPECTUS DATED JANUARY { }, 2001 FOR
DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY CONTRACTS
(THE "GOLDENSELECT DVA PLUS/R/ PROSPECTUS")
ISSUED BY GOLDEN AMERICAN LIFE INSURANCE COMPANY
FOR USE ONLY IN THE STATE OF WASHINGTON
__________
The following information supplements and replaces certain
information contained
in the Profile and Prospectus dated January { }, 2001
for Deferred Combination Variable and Fixed Annuity Contracts (the
"Prospectus").
The capitalized terms used in this supplement have the same meaning
as
those in the Prospectus. You should keep this supplement with your
Profile and Prospectus.
GOLDENSELECT DVA PLUS contracts issued for delivery in the State of
Washington will have a "5.5% Enhanced Death Benefit" and a "Max 5.5
Enhanced Death Benefit." The "7% Solution Enhanced Death Benefit" and
the "Max 7 Enhanced Death Benefit" referred to in the Profile and
Prospectus are not available and not offered in the State of
Washington. The "5.5% Enhanced Death Benefit" and a "Max 5.5
Enhanced Death Benefit" described as follows supplements the
information in the Profile and Prospectus and is made part of those
documents.
PROFILE
5. EXPENSES
The Contract has insurance features and investment features, and
there are charges related to each. For the insurance features, the
Company deducts a mortality and expense risk charge, an asset-based
administrative charge and an annual contract administrative charge of
$30. We deduct the mortality and expense risk charge and the asset-
based administrative charges daily directly from your contract value
in the investment portfolios. The mortality and expense risk charge
(depending on the death benefit you choose) and the asset-based
administrative charge, on an annual basis, are as follows:
5.5% Solution Max 5.5
------------- -------
Mortality & Expense Risk Charge 1.30% 1.40%
Asset-Based Administrative Charge 0.15% 0.15%
----- -----
Total 1.45% 1.55%
The example table is designed to help you understand contract
charges. The examples of expenses illustrated in the Profile are the
maximum expected expenses associated with a contract which would
occur with the assumptions listed. Using the $30 administration
charge and the expenses listed above, and if all other assumptions
are the same, the fees associated with the Max 5.5 Enhanced Death
Benefit Option would not exceed those shown in the tables.
9. DEATH BENEFIT
You may choose (i) the Standard Death Benefit, (ii) the 5.5% Solution
Enhanced Death Benefit, (iii) the Annual Ratchet Enhanced Death
Benefit or (iv) the Max 5.5 Enhanced Death Benefit. The 7% Solution
Enhanced Death Benefit and the Max 7 Enhanced Death Benefit are not
available in your state. The 5.5% Solution Enhanced Death Benefit,
the Annual Ratchet Enhanced Death Benefit and the Max 5.5 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 5.5% Solution, Annual
Ratchet and Max 5.5 Enhanced Death Benefits may not be available
where a Contract is held by joint owners.
Under the 5.5% SOLUTION ENHANCED DEATH BENEFIT, if you die before the
annuity start date, your beneficiary is eligible to receive the
greatest of:
1)the contract value;
2)the total premium payments made under the Contract after pro rata
adjustments for any withdrawals;
3)the cash surrender value; or
4) the enhanced death benefit, which we determine as follows: we
credit interest each business day at the 5.5% annual effective rate
to the enhanced death benefit from the preceding day (which would be
the initial premium if the preceding day is the contract date), then
we add additional premiums since the preceding day, then we adjust
for any withdrawals (including any market value adjustment applied to
such withdrawal and any associated surrender charges) since the
preceding day. Special withdrawals are withdrawals of up to 5.5% per
year of cumulative premiums. Special withdrawals shall reduce the
5.5% Solution Death Benefit by the amount of contract value
withdrawn. For any withdrawals in excess of the amount available as
a special withdrawal, a prorata adjustment to the death benefit is
made.
Note for current Special Funds: The actual interest rate used for
calculating the 5.5% Solution Enhanced Death Benefit for the
Liquid Asset and Limited Maturity Bond investment portfolios and
the Fixed Account, will be the lesser of (1) 5.5% and (2) the
interest rate, positive or negative, providing a yield on the
Guaranteed Death Benefit equal to the net return for the current
valuation period on the contract value allocated to Special Funds.
We may, with 30 days notice to you, designate any fund as a
Special Fund on existing contracts with respect to new premiums
added to such fund and also with respect to new transfers to such
funds.
Under the MAX 5.5 ENHANCED DEATH BENEFIT, if you die before the
annuity start date, your beneficiary will receive the greater of the
5.5% Solution and the Annual Ratchet Enhanced Death Benefit.
Under this benefit option, the 5.5% Solution Enhanced Death Benefit
and the Annual Ratchet Death Benefit are calculated in the same
manner as if each were elected the benefit.
Note: In the cases described above and in the prospectus, the
amount of the death benefit could be reduced by premium taxes owed
and withdrawals not previously deducted.
PROSPECTUS
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FEES AND EXPENSES
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ANNUAL CONTRACT ADMINISTRATIVE CHARGE
Administrative Charge $30
SEPARATE ACCOUNT ANNUAL CHARGES****
5.5% Solution Max 5.5
------------- -------
Mortality & Expense Risk Charge 1.30% 1.40%
Asset-Based Administrative Charge 0.15% 0.15%
----- -----
Total 1.45% 1.55%
**** As a percentage of average daily assets in each subaccount. The
Separate Account Annual Charges are deducted daily.
EXAMPLES
The examples of expenses shown in the Prospectus are the maximum
expected expenses associated with a contract which would occur based
on the election of the Max 7 Enhanced Death Benefit Option using the
assumptions listed in the prospectus. Using the $30 administration
charge and the lower separate account annual charge, and if all other
assumptions are the same the expenses associated with an election of
the 5.5% Solution Enhanced Death Benefit Option or the Max 5.5
Enhanced Death Benefit Option would not exceed those shown in the
example tables in the prospectus.
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DEATH BENEFIT CHOICES
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You may choose from the following 4 death benefit choices: (1) the
Standard Death Benefit Option; (2) the 5.5% Solution Enhanced Death
Benefit Option; (3) the Annual Ratchet Enhanced Death Benefit Option;
and (4) the Max 5.5 Enhanced Death Benefit Option. The 7% Solution
Enhanced Death Benefit and the Max 7 Enhanced Death Benefit are not
available in your state.
ENHANCED DEATH BENEFITS. If the 5.5% Solution Enhanced Death
Benefit, the Annual Ratchet Enhanced Death Benefit or the Max 5.5
Enhanced Death Benefit is elected, the death benefit under the
Contract is the greatest of (i) the contract value; (ii) total
premium payments reduced by a pro rata adjustment for any withdrawal;
(iii) the cash surrender value; and (iv) the enhanced death benefit
as calculated below.
The Max 5.5 Enhanced Death Benefit is the greater of (1) the 5.5%
Solution Enhanced Death Benefit or (2) the Annual Ratchet Enhanced
Death Benefit. Under this benefit option, the 5.5% Solution Enhanced
Death Benefit and the Annual Ratchet Enhanced Death Benefit are
calculated in the same manner as if each were the elected benefit.
|-------------------------------------------------------------------|
| HOW THE ENHANCED DEATH BENEFIT IS CALCULATED |
| 5.5% SOLUTION ANNUAL RATCHET |
|-------------------------------------------------------------------|
| On each business day that | On each contract anniversary |
| occurs on or before the | that occurs on or before the |
| contract owner turns 80, we | contract owner turns age 80, |
| credit interest at the 5.5% | we compare the prior enhanced |
| annual effective rate* to the | death benefit to the contract |
| enhanced death benefit from the | value and select the larger |
| preceding day (which would be | amount as the new enhanced |
| the initial premium if the | death benefit. |
| preceding day is the contract | On all other days, the |
| date), then we add additional | enhanced death benefit is the |
| premiums paid since the | amount determined below. We |
| preceding day, then we adjust | first take the enhanced death |
| for any withdrawals made | benefit from the preceding |
| (including any Market Value | day (which would be the |
| Adjustment applied to such | initial premium if the |
| withdrawals and any associated | valuation date is the |
| surrender charges**) since the | contract date) and then we |
| preceding day. At age 80 the | add additional premiums paid |
| accumulation rate used will | since the preceding day, then |
|change. | reduce the enhanced death |
|There is no maximum, however, | benefit pro rata for any |
|the death benefit will be | contract value withdrawn. |
|reduced by adjustments for | That amount becomes the new |
|withdrawals.*** | enhanced death benefit. |
|-------------------------------------------------------------------|
The actual interest rate used for calculating the 5.5% Solution
Enhanced Death Benefit for the Liquid Asset and Limited Maturity Bond
investment portfolios and the Fixed Account, will be the lesser of
(1) 5.5% and (2) the interest rate, positive or negative, providing a
yield on the enhanced death benefit equal to the net return for the
current valuation period on the contract value allocated to Special
Funds. We may, with 30 days notice to you, designate any fund as a
Special Fund on existing contracts with respect to new premiums added
to such fund and also with respect to new transfers to such funds.
Thus, selecting these investments may limit the enhanced death
benefit.
**Each premium payment reduced by adjustments for any withdrawals
and any associated surrender charges incurred will continue to
grow at the 5.5% annual effective rate until maximum is reached.
*** Each withdrawal reduces the enhanced death benefit as follows:
If total withdrawals in a contract year do not exceed 5.5% of
cumulative premiums and did not exceed 5.5% of cumulative premiums
in any prior contract year, such withdrawals will reduce the
enhanced death benefit by the amount of the withdrawal (and any
associated surrender charge) including any Market Value
Adjustment. Once withdrawals in any contract year exceed 5.5% of
cumulative premiums, withdrawals will reduce the enhanced death
benefit in proportion to the reduction in contract value pro rata.
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CHARGES AND FEES
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ADMINISTRATIVE CHARGE
The administrative charge, if applicable, is $30 per contract year.
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. If you have elected the Standard Death Benefit, the charge,
on an annual basis, is equal to 1.15% of the assets you have in each
subaccount. The charge is deducted on each business day at the rate
of .003169% for each day since the previous business day. If you
have elected an enhanced death benefit, the charge, on an annual
basis, is equal to 1.30% for the Annual Ratchet Enhanced Death
Benefit, 1.30% for the 5.5% Solution Enhanced Death Benefit or 1.40%
for the Max 5.5 Enhanced Death Benefit, of the assets you have in
each subaccount. The charge is deducted each business day at the
rate of .003585%, .003585%, or .003863%, respectively, for each day
since the previous business day.
This supplement should be retained with your GOLDENSELECT DVA PLUS/R/
Prospectus.
ING VARIABLE ANNUITIES
GOLDEN AMERICAN LIFE INSURANCE COMPANY
Golden American Life Insurance Company is a stock company domiciled
in Delaware
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DVAP-New DB Special Funds-07.doc
ING VARIABLE ANNUITIES
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B OF GOLDEN AMERICAN LIFE INSURANCE COMPANY
--------------------------------------------------------------------------------
PROFILE OF
GOLDENSELECT DVA PLUS/R/
DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY CONTRACT
, 2000
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This Profile is a summary of some of the more important points that
you should know and consider before purchasing the Contract. The
Contract is more fully described in the full prospectus which
accompanies this Profile. Please read the prospectus carefully.
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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 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.
Subject to state availability, you may elect one of three optional riders
offering specified benefits featured in the prospectus for the Contract.
The three optional benefit riders are listed on page 9 below. The
optional benefit riders can provide protection under certain
circumstances, in the event that unfavorable investment performance has
lowered your contract value below certain targeted growth. These riders
do not guarantee the performance of your investment portfolios. Separate
charges are assessed for the optional riders. You should carefully
analyze and completely evaluate each rider before you purchase any. Be
aware that the benefit provided by any of the riders will be affected by
certain later actions you may take - such as
DVA PLUS PROFILE PROSPECTUS BEGINS AFTER
108201 PAGE 12 OF THIS PROFILE
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withdrawals and transfers.
The riders are not available to Contracts issued before January 1, 2000.
To find out about availability, check with our Customer Service Center.
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.
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 Payments are made for a specified
fixed period number of years to you or your
beneficiary.
--------------------------------------------------------------
Option 2 Income for Payments are made for the rest of your
life with a life or longer for a specified period
period such as 10 or 20 years or until the
certain 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 Payments are made for your life and
income 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 the 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 $10,000 or more
($1,500 for a qualified Contract) up to and including age 85. You may
make additional payments of $500 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").
108201 2 DVA PLUS PROFILE
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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.
4.THE INVESTMENT PORTFOLIOS
You can direct your money into (1) the fixed account with guaranteed
interest periods of 6 months, 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, 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 Emerging Markets Series
THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond Portfolio
PIMCO StocksPLUS Growth and Income 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. For the insurance features, the Company
deducts a mortality and expense risk charge, an asset-based
administrative charge and an annual contract administrative charge of
$40. We deduct the mortality and expense risk charge and the asset-based
administrative charges daily directly from your contract value in
108201 3 DVA PLUS PROFILE
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the investment portfolios. The mortality and expense risk charge
(depending on the death benefit you choose) and the asset-based
administrative charge, on an annual basis, are as follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
STANDARD ENHANCED DEATH BENEFITS
DEATH BENEFIT ANNUAL RATCHET 7% SOLUTION MAX 7
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mortality & Expense Risk Charge 1.15% 1.40% 1.50% 1.60%
Asset-Based Administrative Charge 0.15% 0.15% 0.15% 0.15%
----- ----- ----- -----
Total 1.30% 1.55% 1.65% 1.75%
--------------------------------------------------------------------------------------------------
</TABLE>
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 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, we 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 year is 15% of your contract value on the date of the
withdrawal less any prior withdrawals during that 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 7% | 7% | 6% | 5% | 4% | 3% | 1% | 0%
The following table is designed to help you understand the Contract
charges. The "Total Annual Insurance Charges" column is divided into
two: one part reflects the maximum mortality and expense risk charge
108201 4 DVA PLUS PROFILE
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(based on the Max 7 Enhanced Death Benefit), the asset-based
administrative charge, the annual contract administrative charge as 0.06%
(based on an average contract value of $69,000), 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 charge, but without any rider
charges. The "Total Annual Investment Portfolio Charges" column reflects
the portfolio charges for each portfolio and are based on actual expenses
as of December 31, 1999, except for (i) portfolios that commenced
operations during 2000 where the charges have been estimated, 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 Max 7 Enhanced Death Benefit). The 1 Year examples
above include a 7% 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 Max 7 Enhanced Death Benefit. For these examples,
the premium tax is assumed to be 0%.
108201 5 DVA PLUS 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
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
THE GCG TRUST
Liquid Asset 2.56% 1.81% 0.56% 3.12% 2.37% $101 $94 $343 $271
------------------------------------------------------------------------------------------------------------------------------------
Limited Maturity Bond 2.56% 1.81% 0.57% 3.13% 2.38% $102 $94 $344 $272
------------------------------------------------------------------------------------------------------------------------------------
Global Fixed Income 2.56% 1.81% 1.60% 4.16% 3.41% $112 $104 $434 $369
------------------------------------------------------------------------------------------------------------------------------------
Fully Managed 2.56% 1.81% 0.97% 3.53% 2.78% $106 $98 $380 $311
------------------------------------------------------------------------------------------------------------------------------------
Total Return 2.56% 1.81% 0.91% 3.47% 2.72% $105 $98 $375 $305
------------------------------------------------------------------------------------------------------------------------------------
Asset Allocation Growth 2.56% 1.81% 1.01% 3.57% 2.82% $106 $99 $384 $315
------------------------------------------------------------------------------------------------------------------------------------
Equity Income 2.56% 1.81% 0.96% 3.52% 2.77% $105 $98 $379 $310
------------------------------------------------------------------------------------------------------------------------------------
Investors 2.56% 1.81% 1.01% 3.57% 2.82% $106 $99 $384 $315
------------------------------------------------------------------------------------------------------------------------------------
Value Equity 2.56% 1.81% 0.96% 3.52% 2.77% $105 $98 $379 $310
------------------------------------------------------------------------------------------------------------------------------------
Rising Dividends 2.56% 1.81% 0.96% 3.52% 2.77% $105 $98 $379 $310
------------------------------------------------------------------------------------------------------------------------------------
Diversified Mid-Cap 2.56% 1.81% 1.01% 3.57% 2.82% $106 $99 $384 $315
------------------------------------------------------------------------------------------------------------------------------------
Managed Global 2.56% 1.81% 1.25% 3.81% 3.06% $108 $101 $404 $337
------------------------------------------------------------------------------------------------------------------------------------
Large Cap Value 2.56% 1.81% 1.01% 3.57% 2.82% $106 $99 $384 $315
------------------------------------------------------------------------------------------------------------------------------------
All Cap 2.56% 1.81% 1.01% 3.57% 2.82% $106 $99 $384 $315
------------------------------------------------------------------------------------------------------------------------------------
Research 2.56% 1.81% 0.91% 3.47% 2.72% $105 $98 $375 $305
------------------------------------------------------------------------------------------------------------------------------------
Capital Appreciation 2.56% 1.81% 0.96% 3.52% 2.77% $105 $98 $379 $310
------------------------------------------------------------------------------------------------------------------------------------
Growth and Income 2.56% 1.81% 1.11% 3.67% 2.92% $107 $100 $392 $324
------------------------------------------------------------------------------------------------------------------------------------
Capital Growth 2.56% 1.81% 1.05% 3.61% 2.86% $106 $99 $387 $319
------------------------------------------------------------------------------------------------------------------------------------
Strategic Equity 2.56% 1.81% 0.96% 3.52% 2.77% $105 $98 $379 $310
------------------------------------------------------------------------------------------------------------------------------------
Special Situations 2.56% 1.81% 1.11% 3.67% 2.92% $107 $100 $392 $324
------------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Growth 2.56% 1.81% 0.91% 3.47% 2.72% $105 $98 $375 $305
------------------------------------------------------------------------------------------------------------------------------------
Small Cap 2.56% 1.81% 0.96% 3.52% 2.77% $105 $98 $379 $310
------------------------------------------------------------------------------------------------------------------------------------
Growth 2.56% 1.81% 1.04% 3.60% 2.85% $106 $99 $386 $318
------------------------------------------------------------------------------------------------------------------------------------
Real Estate 2.56% 1.81% 0.96% 3.52% 2.77% $105 $98 $379 $310
------------------------------------------------------------------------------------------------------------------------------------
Hard Assets 2.56% 1.81% 0.96% 3.52% 2.77% $105 $98 $379 $310
------------------------------------------------------------------------------------------------------------------------------------
Developing World 2.56% 1.81% 1.75% 4.31% 3.56% $113 $106 $446 $383
------------------------------------------------------------------------------------------------------------------------------------
Emerging Markets 2.56% 1.81% 1.75% 4.31% 3.56% $113 $106 $446 $383
------------------------------------------------------------------------------------------------------------------------------------
THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond 2.56% 1.81% 0.75% 3.31% 2.56% $103 $96 $360 $290
------------------------------------------------------------------------------------------------------------------------------------
PIMCO StocksPLUS
Growth and Income 2.56% 1.81% 0.65% 3.21% 2.46% $102 $95 $351 $280
------------------------------------------------------------------------------------------------------------------------------------
ING VARIABLE INSURANCE TRUST
ING Global Brand
Names 2.56% 1.81% 1.23% 3.79% 3.04% $108 $101 $403 $336
------------------------------------------------------------------------------------------------------------------------------------
THE PRUDENTIAL SERIES FUND
Prudential Jennison 2.56% 1.81% 1.03% 3.59% 2.84% $106 $ 99 $385 $317
------------------------------------------------------------------------------------------------------------------------------------
SP Jennison International
Growth 2.56% 1.81% 1.64% 4.20% 3.45% $112 $105 $437 $373
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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.
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.
108201 6 DVA PLUS PROFILE
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<PAGE>
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 11. 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 Max 7 Enhanced Death
Benefit), the asset-based administrative charge and the annual contract
fee and the maximum optional death benefit rider charge on a rider base
that accumulates at 7%, but do not reflect deductions for any surrender
charges. 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.
108201 7 DVA PLUS PROFILE
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
CALENDAR YEAR
INVESTMENT PORTFOLIO 1999 1998 1997 1996
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Managed by A I M Capital Management, Inc.
Capital Appreciation(1) 21.83% 10.10% 26.01% 16.92%
Strategic Equity(2) 52.76% -1.47% 20.35% 16.09%
---------------------------------------------------------------------------------------------------------
Managed by Alliance Capital Management, L.P.
Capital Growth 22.70% 9.41% 22.29% --
---------------------------------------------------------------------------------------------------------
Managed by Baring International Investment Limited (an affiliate)
Developing World(2) 58.12% -- -- --
Emerging Markets(4) 81.32% -25.85% -11.46% 4.37%
Global Fixed Income -10.78% 9.29% -1.65% 2.50%
Hard Assets(2) 20.61% -31.21% 3.73% 28.08%
---------------------------------------------------------------------------------------------------------
Managed by Capital Guardian Trust Company
Large Cap Value -- -- -- --
Managed Global(3) 59.67% 26.37% 9.60% 9.04%
Small Cap(3) 47.27% 18.22% 7.80% 17.36%
---------------------------------------------------------------------------------------------------------
Managed by Eagle Asset Management, Inc.
Value Equity -1.82% -0.78% 24.38% 7.93%
---------------------------------------------------------------------------------------------------------
Managed by Fidelity Management & Research Company
Asset Allocation Growth -- -- -- --
Diversified Mid-Cap -- -- -- --
---------------------------------------------------------------------------------------------------------
Managed by ING Investment Management, LLC (an affiliate)
Limited Maturity Bond -1.19% 4.42% 4.23% 1.93%
Liquid Asset 2.34% 2.65% 2.65% 2.51%
---------------------------------------------------------------------------------------------------------
Managed by Janus Capital Corporation
Growth(2) 74.27% 23.93% 13.12% --
Growth and Income -- -- -- --
Special Situations -- -- -- --
---------------------------------------------------------------------------------------------------------
Managed by Kayne Anderson Investment Management, LLC
Rising Dividends 13.24% 11.52% 26.87% 17.19%
---------------------------------------------------------------------------------------------------------
Managed by Massachusetts Financial Services Company
Mid-Cap Growth 75.15% 20.01% 16.93% 15.91%
Research 21.41% 20.24% 17.38% 20.31%
Total Return 0.99% 9.03% 18.10% 10.87%
---------------------------------------------------------------------------------------------------------
Managed by The Prudential Investment Corporation
Real Estate(5) -6.05% -15.44% 19.98% 32.12%
---------------------------------------------------------------------------------------------------------
Managed by Salomon Brothers Management, Inc.
All Cap -- -- -- --
Investors -- -- -- --
---------------------------------------------------------------------------------------------------------
Managed by T. Rowe Price Associates, Inc.
Equity Income(2) -3.02% 5.78% 14.76% 5.86%
Fully Managed 4.47% 3.47% 12.72% 13.22%
---------------------------------------------------------------------------------------------------------
Managed by Pacific Investment Management Company
PIMCO High Yield Bond 0.64% -- -- --
PIMCO StocksPLUS Growth and Income 17.13% -- -- --
---------------------------------------------------------------------------------------------------------
Managed by ING Investment Management Advisors B.V. (an affiliate)
ING Global Brand Names -- -- -- --
---------------------------------------------------------------------------------------------------------
Managed by Jennison Associates LLC
Prudential Jennison -- -- -- --
SP Jennison International Growth -- -- -- --
---------------------------------------------------------------------------------------------------------
</TABLE>
----------------------
(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 March 15, 2000, a different firm managed the Portfolio.
(5) Prior to May 1, 2000, a different firm managed the Portfolio.
108201 8 DVA PLUS 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: (i) the Standard
Death Benefit, (ii) the Annual Ratchet Enhanced Death Benefit, (iii) the
7% Solution Enhanced Death Benefit, or (iv) the Max 7 Enhanced Death
Benefit. The Annual Ratchet Enhanced Death Benefit, the 7% Solution
Enhanced Death Benefit, and the Max 7 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 Annual Ratchet , 7% Solution, and Max 7 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, the 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 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 affect also 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.
108201 9 DVA PLUS PROFILE
<PAGE>
<PAGE>
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 7% 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
7% Solution Minimum Guaranteed Death Benefit for amounts allocated
to Non-Special Funds as further described in the prospectus.
The MAX 7 ENHANCED DEATH BENEFIT equals the greater of the 7% Solution
Enhanced Death Benefit and the Annual Ratchet Enhanced Death Benefit.
Under this benefit option, the 7% Solution Enhanced Death Benefit and the
Annual Ratchet Enhanced Death Benefit are calculated in the same manner
as if each were the elected benefit.
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, 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, excluding any charges,
(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 allowed. 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
108201 10 DVA PLUS PROFILE
<PAGE>
<PAGE>
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.
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,
when you pay them, and 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.
108201 11 DVA PLUS PROFILE
<PAGE>
<PAGE>
There are exceptions, conditions, eligibility requirements, and important
considerations associated with the MGWB rider. You should read the
prospectus for more complete information.
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 profile and the
prospectus, please contact us at:
Customer Service Center
P.O. Box 2700
West Chester, Pennsylvania 19380
(800) 366-0066
or your registered representative.
108201 12 DVA PLUS PROFILE
<PAGE>
<PAGE>
--------------------------------------------------------------------------------
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B OF GOLDEN AMERICAN LIFE INSURANCE COMPANY
DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY PROSPECTUS
GOLDENSELECT DVA PLUS/R/
--------------------------------------------------------------------------------
, 2000
This prospectus describes GoldenSelect DVA Plus, 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, 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, ING VARIABLE
INSURANCE TRUST AND THE PRUDENTIAL SERIES FUND.
--------------------------------------------------------------------------------
A LIST OF THE INVESTMENT PORTFOLIOS AND THE MANAGERS ARE LISTED ON THE
BACK OF THIS COVER.
--------------------------------------------------------------------------------
DVAP-108201
<PAGE>
<PAGE>
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
Emerging Markets 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
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.
DVAP-108201
<PAGE>
<PAGE>
--------------------------------------------------------------------------------
TABLE OF CONTENTS
--------------------------------------------------------------------------------
PAGE
Index of Special Terms 1
Fees and Expenses 2
Performance Information 9
Accumulation Unit 9
Net Investment Factor 10
Condensed Financial Information 10
Financial Statements 10
Performance Information 10
Golden American Life Insurance Company 11
The Trusts 11
Golden American Separate Account B 12
The Investment Portfolios 12
Investment Objectives 13
Investment Management Fees 16
Restricted Funds
The Fixed Interest Allocation 17
Selecting a Guaranteed Interest Period 17
Guaranteed Interest Rates 17
Transfers from a Fixed Interest Allocation 18
Withdrawals from a Fixed Interest Allocation 18
Market Value Adjustment 19
Special Funds 20
The Annuity Contract 20
Contract Date and Contract Year 20
Annuity Start Date 20
Contract Owner 20
Annuitant 21
Beneficiary 21
Purchase and Availability of the Contract 22
Crediting of Premium Payments 22
Administrative Procedures 23
Contract Value 23
Cash Surrender Value 24
Surrendering to Receive the Cash Surrender Value 24
The Subaccounts 24
The Fixed Account 24
Optional Riders 25
Rider Date 25
No Cancellation 25
Termination 25
Minimum Guaranteed Accumulation Benefit Rider 25
Minimum Guaranteed Income Benefit Rider 27
Minimum Guaranteed Withdrawal Benefit Rider 30
Other Contracts 32
Other Important Provisions 32
Withdrawals 32
Regular Withdrawals 32
Systematic Withdrawals 33
IRA Withdrawals 34
DVAP-108201 i
<PAGE>
<PAGE>
--------------------------------------------------------------------------------
TABLE OF CONTENTS (CONTINUED)
--------------------------------------------------------------------------------
PAGE
Transfers Among Your Investments 35
Transfers by Third Parties 36
Dollar Cost Averaging 36
Automatic Rebalancing 36
Death Benefit Choices 36
Death Benefit During the Accumulation Phase 36
Standard Death Benefit 37
Enhanced Death Benefits 37
Death Benefit During the Income Phase 38
Continuation After Death--Spouse 38
Continuation After Death--Non Spouse 38
Required Distributions upon Contract Owner's Death 38
Charges and Fees 39
Charge Deduction Subaccount 39
Charges Deducted from the Contract Value 39
Surrender Charge 39
Waiver of Surrender Charge for Extended Medical Care 40
Free Withdrawal Amount 40
Surrender Charge for Excess Withdrawals 40
Premium Taxes 40
Administrative Charge 40
Transfer Charge 41
Charges Deducted from the Subaccounts 41
Mortality and Expense Risk Charge 41
Asset-Based Administrative Charge 41
Optional Rider Charges 41
Trust Expenses 42
The Annuity Options 42
Annuitization of Your Contract 42
Selecting the Annuity Start Date 43
Frequency of Annuity Payments 43
The Annuity Options 44
Income for a Fixed Period 44
Income for Life with a Period Certain 44
Joint Life Income 44
Annuity Plan 44
Payment When Named Person Dies 44
Other Contract Provisions 44
Reports to Contract Owners 44
Suspension of Payments 45
In Case of Errors in Your Application 45
Assigning the Contract as Collateral 45
Contract Changes-Applicable Tax Law 45
Free Look 45
Group or Sponsored Arrangements 46
Selling the Contract 46
Other Information 46
Voting Rights 46
State Regulation 47
DVAP-108201 ii
<PAGE>
<PAGE>
--------------------------------------------------------------------------------
TABLE OF CONTENTS (CONTINUED)
--------------------------------------------------------------------------------
PAGE
Legal Proceedings 47
Legal Matters 47
Experts 47
Federal Tax Considerations 47
More Information About Golden American Life Insurance
Company 52
Financial Statements of Golden American Life Insurance
Company 72
Statement of Additional Information
Table of Contents 103
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
Appendix E
Optional Rider Benefits for Existing Contract Owners E1
DVAP-108201 iii
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<PAGE>
This page intentionally left blank.
<PAGE>
<PAGE>
--------------------------------------------------------------------------------
INDEX OF SPECIAL TERMS
--------------------------------------------------------------------------------
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
Annual Ratchet Enhanced Death Benefit 37
Annuitant 21
Annuity Start Date 20
Cash Surrender Value 24
Max 7 Enhanced Death Benefit 37
Contract Date 20
Contract Owner 20
Contract Value 23
Contract Year 20
Fixed Interest Allocation 17
Free Withdrawal Amount 40
Market Value Adjustment 19
Restricted Fund
Net Investment Factor 10
Rider Date 25
7% Solution Enhanced Death Benefit 37
Special Fund 20
Standard Death Benefit 37
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
DVAP-108201 1
<PAGE>
<PAGE>
--------------------------------------------------------------------------------
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 7% | 7% | 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............................... $40
(We waive this charge if the total of your premium payments is
$100,000 or more or if your contract value at the end of a contract
year is $100,000 or more.)
* We deduct this charge on each contract anniversary and on
surrender.
SEPARATE ACCOUNT ANNUAL CHARGES*
<TABLE>
<CAPTION>
STANDARD ENHANCED DEATH BENEFIT
DEATH BENEFIT ANNUAL RATCHET 7% SOLUTION MAX 7
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mortality & Expense Risk Charge.......... 1.15% 1.40% 1.50% 1.60%
Asset-Based Administrative Charge........ 0.15% 0.15% 0.15% 0.15%
----- ----- ----- -----
Total Separate Account Charges.... 1.30% 1.55% 1.65% 1.75%
</TABLE>
* As a percentage of average assets in each subaccount. The mortality
and expense risk charge and the asset-based administrative charge
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 Base Rate Quarterly Charge
-------------- ----------------
7%.................... 0.125% of the MGIB 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.
DVAP-108201 2
<PAGE>
<PAGE>
(1)The MGAB Charge Base is the total of premiums added during the
2-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 2-year period
commencing on the rider date if you purchase 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 them, 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.
THE GCG TRUST ANNUAL EXPENSES (as a percentage of the average daily net assets
of a portfolio):
--------------------------------------------------------------------------------
MANAGEMENT OTHER TOTAL
PORTFOLIO FEE(1) EXPENSES(2) EXPENSES(3)
--------------------------------------------------------------------------------
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%
--------------------------------------------------------------------------------
Emerging Markets 1.75% 0.00% 1.75%
--------------------------------------------------------------------------------
DVAP-108201 3
<PAGE>
<PAGE>
(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
portfolios that commenced operations in 2000 where the charges
have been estimated.
(3)Total Expenses are based on actual expenses for the fiscal
year ended December 31, 1999.
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.
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 1940 Act, 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.
DVAP-108201 4
<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) EXPENSE(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 the
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, 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 $1,000 investment that earns 5% annually. Each example
assumes election of the Max 7 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 0.06% of assets (based on an average
contract value of $69,000). 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,
the Annual Ratchet Enhanced Death Benefit or 7% Solution Enhanced Death
Benefit is elected instead of the Max 7 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 3 contract years, and under
certain circumstances, within the first 7 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.
DVAP-108201 5
<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:
-----------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------
THE GCG TRUST
Liquid Asset $101 $156 $203 $343
-----------------------------------------------------------------
Limited Maturity Bond $102 $157 $204 $344
-----------------------------------------------------------------
Global Fixed Income $112 $186 $252 $434
-----------------------------------------------------------------
Fully Managed $106 $168 $223 $380
-----------------------------------------------------------------
Total Return $105 $167 $220 $375
-----------------------------------------------------------------
Asset Allocation $106 $169 $225 $384
-----------------------------------------------------------------
Equity Income $105 $168 $223 $379
-----------------------------------------------------------------
Investors $106 $169 $225 $384
-----------------------------------------------------------------
Value Equity $105 $168 $223 $379
-----------------------------------------------------------------
Rising Dividends $105 $168 $223 $379
-----------------------------------------------------------------
Diversified Mid-Cap $106 $169 $225 $384
-----------------------------------------------------------------
Managed Global $108 $176 $236 $404
-----------------------------------------------------------------
Large Cap Value $106 $169 $225 $384
-----------------------------------------------------------------
All Cap $106 $169 $225 $384
-----------------------------------------------------------------
Research $105 $167 $220 $375
-----------------------------------------------------------------
Capital Appreciation $105 $168 $223 $379
-----------------------------------------------------------------
Growth and Income $107 $172 $230 $392
-----------------------------------------------------------------
Capital Growth $106 $171 $227 $387
-----------------------------------------------------------------
Strategic Equity $105 $168 $223 $379
-----------------------------------------------------------------
Special Situations $107 $172 $230 $392
-----------------------------------------------------------------
Mid-Cap Growth $105 $167 $220 $375
-----------------------------------------------------------------
Small Cap $105 $168 $223 $379
-----------------------------------------------------------------
Growth $106 $170 $226 $386
-----------------------------------------------------------------
Real Estate $105 $168 $223 $379
-----------------------------------------------------------------
Hard Assets $105 $168 $223 $379
-----------------------------------------------------------------
Developing World $113 $191 $259 $446
-----------------------------------------------------------------
Emerging Markets $113 $191 $259 $446
-----------------------------------------------------------------
THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond $103 $162 $213 $360
-----------------------------------------------------------------
PIMCO StocksPLUS
Growth and Income $102 $159 $208 $351
-----------------------------------------------------------------
ING VARIABLE INSURANCE TRUST
ING Global Brand Names $108 $176 $235 $403
-----------------------------------------------------------------
PRUDENTIAL SERIES FUND
Prudential Jennison $106 $170 $226 $385
-----------------------------------------------------------------
SP Jennison
International Growth $112 $188 $254 $437
-----------------------------------------------------------------
DVAP-108201 6
<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:
-----------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------
THE GCG TRUST
Liquid Asset $31 $ 96 $163 $343
-----------------------------------------------------------------
Limited Maturity Bond $32 $ 97 $164 $344
-----------------------------------------------------------------
Global Fixed Income $42 $126 $212 $434
-----------------------------------------------------------------
Fully Managed $36 $108 $183 $380
-----------------------------------------------------------------
Total Return $35 $107 $180 $375
-----------------------------------------------------------------
Asset Allocation $36 $109 $185 $384
-----------------------------------------------------------------
Equity Income $35 $108 $183 $379
-----------------------------------------------------------------
Investors $36 $109 $185 $384
-----------------------------------------------------------------
Value Equity $35 $108 $183 $379
-----------------------------------------------------------------
Rising Dividends $35 $108 $183 $379
-----------------------------------------------------------------
Diversified Mid-Cap $36 $109 $185 $384
-----------------------------------------------------------------
Managed Global $38 $116 $196 $404
-----------------------------------------------------------------
Large Cap Value $36 $109 $185 $384
-----------------------------------------------------------------
All Cap $36 $109 $185 $384
-----------------------------------------------------------------
Research $35 $107 $180 $375
-----------------------------------------------------------------
Capital Appreciation $35 $108 $183 $379
-----------------------------------------------------------------
Growth and Income $37 $112 $190 $392
-----------------------------------------------------------------
Capital Growth $36 $111 $187 $387
-----------------------------------------------------------------
Strategic Equity $35 $108 $183 $379
-----------------------------------------------------------------
Special Situations $37 $112 $190 $392
-----------------------------------------------------------------
Mid-Cap Growth $35 $107 $180 $375
-----------------------------------------------------------------
Small Cap $35 $108 $183 $379
-----------------------------------------------------------------
Growth $36 $110 $186 $386
-----------------------------------------------------------------
Real Estate $35 $108 $183 $379
-----------------------------------------------------------------
Hard Assets $35 $108 $183 $379
-----------------------------------------------------------------
Developing World $43 $131 $219 $446
-----------------------------------------------------------------
Emerging Markets $43 $131 $219 $446
-----------------------------------------------------------------
THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond $33 $102 $173 $360
-----------------------------------------------------------------
PIMCO StocksPLUS
Growth and Income $32 $ 99 $168 $351
-----------------------------------------------------------------
ING VARIABLE INSURANCE TRUST
ING Global Brand Names $38 $116 $195 $403
-----------------------------------------------------------------
PRUDENTIAL SERIES FUND
Prudential Jennison $36 $110 $186 $385
-----------------------------------------------------------------
SP Jennison
International Growth $42 $128 $214 $437
-----------------------------------------------------------------
DVAP-108201 7
<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:
-----------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------
THE GCG TRUST
Liquid Asset $ 94 $134 $167 $271
-----------------------------------------------------------------
Limited Maturity Bond $ 94 $134 $167 $272
-----------------------------------------------------------------
Global Fixed Income $104 $165 $217 $369
-----------------------------------------------------------------
Fully Managed $ 98 $146 $187 $311
-----------------------------------------------------------------
Total Return $ 98 $144 $184 $305
-----------------------------------------------------------------
Asset Allocation $ 99 $147 $189 $315
-----------------------------------------------------------------
Equity Income $ 98 $146 $186 $310
-----------------------------------------------------------------
Investors $ 99 $147 $189 $315
-----------------------------------------------------------------
Value Equity $ 98 $146 $186 $310
-----------------------------------------------------------------
Rising Dividends $ 98 $146 $186 $310
-----------------------------------------------------------------
Diversified Mid-Cap $ 99 $147 $189 $315
-----------------------------------------------------------------
Managed Global $101 $155 $201 $337
-----------------------------------------------------------------
Large Cap Value $ 99 $147 $189 $315
-----------------------------------------------------------------
All Cap $ 99 $147 $189 $315
-----------------------------------------------------------------
Research $ 98 $144 $184 $305
-----------------------------------------------------------------
Capital Appreciation $ 98 $146 $186 $310
-----------------------------------------------------------------
Growth and Income $100 $150 $194 $324
-----------------------------------------------------------------
Capital Growth $ 99 $149 $191 $319
-----------------------------------------------------------------
Strategic Equity $ 98 $146 $186 $310
-----------------------------------------------------------------
Special Situations $100 $150 $194 $324
-----------------------------------------------------------------
Mid-Cap Growth $ 98 $144 $184 $305
-----------------------------------------------------------------
Small Cap $ 98 $146 $186 $310
-----------------------------------------------------------------
Growth $ 99 $148 $190 $318
-----------------------------------------------------------------
Real Estate $ 98 $146 $186 $310
-----------------------------------------------------------------
Hard Assets $ 98 $146 $186 $310
-----------------------------------------------------------------
Developing World $106 $169 $225 $383
-----------------------------------------------------------------
Emerging Markets $106 $169 $225 $383
-----------------------------------------------------------------
THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond $ 96 $140 $176 $290
-----------------------------------------------------------------
PIMCO StocksPLUS
Growth and Income $ 95 $137 $171 $280
-----------------------------------------------------------------
ING VARIABLE INSURANCE TRUST
ING Global Brand Names $101 $154 $200 $336
-----------------------------------------------------------------
PRUDENTIAL SERIES FUND
Prudential Jennison $ 99 $148 $190 $317
-----------------------------------------------------------------
SP Jennison
International Growth $105 $166 $219 $373
-----------------------------------------------------------------
DVAP-108201 8
<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:
-----------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------
THE GCG TRUST
Liquid Asset $24 $ 74 $127 $271
-----------------------------------------------------------------
Limited Maturity Bond $24 $ 74 $127 $272
-----------------------------------------------------------------
Global Fixed Income $34 $105 $177 $369
-----------------------------------------------------------------
Fully Managed $28 $ 86 $147 $311
-----------------------------------------------------------------
Total Return $28 $ 84 $144 $305
-----------------------------------------------------------------
Asset Allocation $29 $ 87 $149 $315
-----------------------------------------------------------------
Equity Income $28 $ 86 $146 $310
-----------------------------------------------------------------
Investors $29 $ 87 $149 $315
-----------------------------------------------------------------
Value Equity $28 $ 86 $146 $310
-----------------------------------------------------------------
Rising Dividends $28 $ 86 $146 $310
-----------------------------------------------------------------
Diversified Mid-Cap $29 $ 87 $149 $315
-----------------------------------------------------------------
Managed Global $31 $ 95 $161 $337
-----------------------------------------------------------------
Large Cap Value $29 $ 87 $149 $315
-----------------------------------------------------------------
All Cap $29 $ 87 $149 $315
-----------------------------------------------------------------
Research $28 $ 84 $144 $305
-----------------------------------------------------------------
Capital Appreciation $28 $ 86 $146 $310
-----------------------------------------------------------------
Growth and Income $30 $ 90 $154 $324
-----------------------------------------------------------------
Capital Growth $29 $ 89 $151 $319
-----------------------------------------------------------------
Strategic Equity $28 $ 86 $146 $310
-----------------------------------------------------------------
Special Situations $30 $ 90 $154 $324
-----------------------------------------------------------------
Mid-Cap Growth $28 $ 84 $144 $305
-----------------------------------------------------------------
Small Cap $28 $ 86 $146 $310
-----------------------------------------------------------------
Growth $29 $ 88 $150 $318
-----------------------------------------------------------------
Real Estate $28 $ 86 $146 $310
-----------------------------------------------------------------
Hard Assets $28 $ 86 $146 $310
-----------------------------------------------------------------
Developing World $36 $109 $185 $383
-----------------------------------------------------------------
Emerging Markets $36 $109 $185 $383
-----------------------------------------------------------------
THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond $26 $ 80 $136 $290
-----------------------------------------------------------------
PIMCO StocksPLUS
Growth and Income $25 $ 77 $131 $280
-----------------------------------------------------------------
ING VARIABLE INSURANCE TRUST
ING Global Brand Names $31 $ 94 $160 $336
-----------------------------------------------------------------
PRUDENTIAL SERIES FUND
Prudential Jennison $29 $ 88 $150 $317
-----------------------------------------------------------------
SP Jennison
International Growth $35 $106 $179 $373
-----------------------------------------------------------------
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.
DVAP-108201 9
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--------------------------------------------------------------------------------
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 portfolios, 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
DVAP-108201 10
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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 and the selection of the Max 7 Enhanced Death Benefit and the
MGIB optional benefit rider.
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.
DVAP-108201 11
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--------------------------------------------------------------------------------
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.
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,
and the ING Variable Insurance Trust, the Board of Directors of the
Prudential Series Fund, 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, 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 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 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.
DVAP-108201 12
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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
THE INVESTMENT PORTFOLIOS, 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, 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 Seeks highest current income consistent
Bond 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.
--------------------------------------------
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.
DVAP-108201 13
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---------------------------------------------------------------------
INVESTMENT PORTFOLIO INVESTMENT OBJECTIVE
---------------------------------------------------------------------
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 Seeks to maximize total return over the
Growth 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.
--------------------------------------------
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.
--------------------------------------------
DVAP-108201 14
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---------------------------------------------------------------------
INVESTMENT PORTFOLIO INVESTMENT OBJECTIVE
---------------------------------------------------------------------
Capital Seeks long-term capital growth.
Appreciation
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.
--------------------------------------------
DVAP-108201 15
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---------------------------------------------------------------------
INVESTMENT PORTFOLIO INVESTMENT OBJECTIVE
---------------------------------------------------------------------
Emerging Markets Seeks long-term capital appreciation.
Invests primarily in equity securities of
companies in at least six different
emerging market countries.
--------------------------------------------
THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Seeks to maximize total return,
Bond 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
Growth and Income exceeds the total return performance of
the S&P 500.
Invests primarily in common stocks,
options, futures, options on futures and
swaps.
--------------------------------------------
ING VARIABLE INSURANCE TRUST
ING Global Brand Seeks to provide investors with long-term
Names Fund 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 Seeks long-term growth of capital.
International
Growth 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.
Directed Services provides or procures, at its own expense, the services
necessary for the operation of the portfolios, including retaining
portfolio managers to manage the assets of the various 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
rate 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.
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
DVAP-108201 16
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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.
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.
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.
DVAP-108201 17
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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 or equal to the
percentage of contract value in the Restricted Funds prior to the
withdrawal.
We will not permit 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 customer, 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.
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
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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.
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.
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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 program) 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+.0025)) -1
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
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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.
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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 to 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 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.
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.
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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. If no
beneficial owner of the Trust has been designated, the availability of
enhanced death benefits will be based on the age of the annuitant at the
time you purchase the Contract.
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. Also
note that if any owner's age is 86 or greater, even the standard death
benefit guarantee will also be lost. 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.
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).
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.
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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 applied to the
contract. The new owner's age, as of the date of the change, will be used
as the basis for determining which option to use. The new owner's death
will determine when a death benefit is payable.
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. Please note that 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.
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 $10,000 or more ($1,500 for qualified
Contracts). You may make additional payments of at least $500 or more
($250 for qualified Contracts) 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 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.
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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.
(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, 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
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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.
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 deduct any
surrender charge, any charge for premium taxes, the annual contract and
administrative fee (unless waived), any optional benefit riders charge,
and any other charges incurred but not yet deducted. Finally, we adjust
for any Market Value Adjustment.
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
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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 adviser 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 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 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.
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 IT COMPLETELY BEFORE YOU
SELECT ANY. THE OPTIONAL RIDERS DO NOT
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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.
SPECIAL FUNDS. We use the term Special Funds in the discussion of the
Minimum Guaranteed Accumulation Benefit rider (with the 20-year waiting
period) and the Minimum Guaranteed Income Benefit rider. The Special
Funds refer to the Liquid Asset subaccount, Limited Maturity Bond
subaccount and the Fixed Interest Allocations. The Company may designate
new and/or existing subaccounts as a Special Fund with 30 days notice at
any time, including during the life of a rider.
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
one 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 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 BASE. The MGAB Base is only a
calculation used to determine the MGAB. It does not represent a
contract value, nor does it guarantee performance of the
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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 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 Rates
reduced pro rata for any withdrawals and reduced for any
transfers made within 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.
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 to the subaccounts in which you are
invested pro rata based on the proportions of your then contract
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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 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 the then current 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;
(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
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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:
a) 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
b) 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 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.
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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; or
(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 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
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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 redeemed 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 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 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 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 of the 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." Making any withdrawals in any
year greater than 7% per year of the Eligible Payment Amount in any year
will reduce the Eligible Payment Amount for future withdrawals and
payments under the MGWB rider by the
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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 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
(v) 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 and if the following conditions
exist, your Contract is given what we refer to as Automatic Periodic
Benefit Status:
(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 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 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, and (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 periods
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 7% per year of the Eligible Payment Amount and
you elected the 7% Solution Enhanced Death Benefit in your Contract (or
you have elected the Max 7 Death Benefit resulting in the 7% Solution
Enhanced Death Benefit as the actual death benefit) the death benefit
otherwise payable under the terms of your Contract will remain in force
during any Automatic Periodic Benefit Status. 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 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. If you elected the Max 7
Enhanced Death Benefit, then the 7% Solution and the Annual Ratchet
components shall each be calculated as if each were the elected death
benefit option.
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PURCHASE. To purchase the MGWB rider, your 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
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 15% of your contract value on the date of the
withdrawal less any withdrawals during that 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. 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.
Please be aware that the benefit we pay under certain optional benefit
riders will be reduced by any withdrawals you take while the rider is in
effect. See "Optional Riders."
We offer the following three withdrawal options:
REGULAR WITHDRAWALS
After the free look period, you may make regular withdrawals. Each
withdrawal must be a minimum of $1,000. We will apply a Market Value
Adjustment to any regular withdrawal from a Fixed Interest Allocation
that is taken more than 30 days before its maturity date.
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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
is 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 day of the month, 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 your contract value. Both forms
of systematic withdrawals are subject to the following maximum, which is
calculated on each withdrawal date:
MAXIMUM PERCENTAGE
FREQUENCY OF CONTRACT VALUE
Monthly 1.25%
Quarterly 3.75%
Annually 15.00%
If your systematic withdrawal is a fixed dollar amount and the amount to
be withdrawn would exceed the applicable maximum percentage of your
contract value 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 fixed dollar systematic withdrawal program.
If your withdrawal is based on a percentage of your contract value and
the amount to be systematically 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 Section 72(q) and 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
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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)
and 72(t) distributions. You choose the amount of the fixed systematic
withdrawals, which may total up to a maximum of 15% of your contract
value 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 so. 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
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 Adjustments 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.
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 ADVISER REGARDING THE TAX CONSEQUENCES ASSOCIATED WITH
TAKING WITHDRAWALS. You are responsible for determining that withdrawals
comply with applicable law. A withdrawal made
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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 judgment 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.
Please be aware that the benefit we pay under an optional benefit rider
may be effected by certain transfers you make while the rider is in
effect. Transfers, including those involving Special Funds, may also
affect your optional rider base. See "The Annuity Contract -- Optional
Riders."
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 or
over the internet.
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 judgement and limit transfers made
by a third party.
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
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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 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 Funds and the
then current value of the amount designated to be transferred
to that Restricted Funds.
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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 the 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 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
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payment. For information on required distributions under
federal income tax laws, you should 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 7% Solution Enhanced Death Benefit, (c) the Annual
Ratchet Enhanced Death Benefit or (d) the Max 7 Enhanced Death Benefit.
The 7% Solution Enhanced Death Benefit, the Annual Ratchet Enhanced Death
Benefit and the Max 7 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
7% Solution, Annual Ratchet and Max 7 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.
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
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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 7% 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
7% Solution Minimum Guaranteed Death Benefit for Non-Special
Funds.
The 7% Solution Minimum Guaranteed Death Benefit for Special and Non-
Special Funds equals the lesser of:
1) premiums, adjusted for withdrawals and transfers, accumulated at
7% 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 7% per year of cumulative premiums are referred to
as special withdrawals. Special withdrawals reduce the 7% 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 7% 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 7% 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 7% 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 7% Solution
Minimum Guaranteed Death Benefit and the cap for Special Funds on a pro-
rata basis. The resulting increase in the 7% Solution Minimum Guaranteed
Death Benefit in the Non-Special Funds will equal the lesser of the
reduction in the 7% 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 7% Solution
Minimum Guaranteed Death Benefit and the cap in the Non-Special Funds on
a pro-rata basis. The resulting increase in the 7% Solution Minimum
Guaranteed Death Benefit and the cap for the Special Funds will equal the
reduction in the 7% Solution Minimum Guaranteed Death Benefit and the cap
for the Non-Special Funds.
The ANNUAL RATCHET ENHANCED DEATH BENEFIT equals the greater of:
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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 90 to the greater of the Annual Ratchet 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 90 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.
The MAX 7 ENHANCED DEATH BENEFIT equals the greater of the 7% Solution
Enhanced Death Benefit and the Annual Ratchet Enhanced Death Benefit.
Under this benefit option, the 7% Solution Enhanced Death Benefit and the
Annual Ratchet Enhanced Death Benefit are calculated in the same manner
as if each were the elected benefit.
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,
the Company 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
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 90),
until the surviving spouse reaches age 90. 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) 7% Solution Death Benefit: If the surviving spouse is attained
age 79 or under, the 7% 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.
4) Max 7 Death Benefit: The Annual Ratchet and 7% Solution death
benefit components will each be determined independently, as
described above.
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 contract 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)
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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 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 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.
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:
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COMPLETE YEARS ELAPSED 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7+
SINCE PREMIUM PAYMENT | | | | | | |
SURRENDER CHARGE 7% | 7% | 6% | 5% | 4% | 3% | 1% | 0%
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 15% of your contract value on the date of withdrawal less any
withdrawals during that 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 (or from the MGIB
Base, if exercised) 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 deduct an annual administrative charge 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. The amount deducted is $40 per Contract. This charge is
waived if your contract value is $100,000 or more at the end of a
contract year or the total of your premium payments is $100,000 or more
or under other conditions established by Golden American. We deduct the
charge proportionately from all subaccounts in which you are invested.
If there is no contract value in these subaccounts, we will deduct the
charge from your Fixed Interest Allocations starting with the guaranteed
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.
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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
such subaccount and Fixed Interest Allocation unless you have chosen to
have all charges deducted from a single 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 1.15% for the Standard Death Benefit, 1.40% for the
Annual Ratchet Enhanced Death Benefit, 1.50% for the 7% Solution Enhanced
Death Benefit or 1.60% for the Max 7 Enhanced Death Benefit, of the
assets you have in each subaccount. The charge is deducted each business
day at the rate of .003169% (Standard), .003863% (Annual Ratchet),
.004141% (7% Solution), or .004419% (Max 7), 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 Rate Quarterly Charge
--------- ----------------
7%......... 0.125% of the MGIB Charge Base (0.50% annually)
The MGIB Charge Base is the total of premiums paid 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
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MGIB Rate. 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 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 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 you chose. You may
change an 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. The MGIB annuity benefit may be available if
you have purchased the MGIB rider, provided the waiting period and other
specified conditions have been met.
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.
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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 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 3 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 3 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. For more information,
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 reach age 70 1/2 or, in some cases, retire.
Distributions may be made through annuitization or withdrawals. You
should consult a tax adviser for tax advice before investing.
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. Under this option,
we make payments for the life of the annuitant in equal monthly
installments and guarantee the income 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, we will continue
payments 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.
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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 living. There is no minimum number of
payments. Monthly payment amounts are available if you ask for them.
OPTION 4. ANNUITY PLAN. Under this option, your 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 or
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 3.50% for 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 gender 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
gender.
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
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have federal tax consequences. You should consult a tax adviser for tax
advice. 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.
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, 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 the 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.
Directed 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 7.0%
commission, and passes through 100% of the commission to the broker-
dealer whose registered representative sold the Contract.
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UNDERWRITER COMPENSATION
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NAME OF PRINCIPAL AMOUNT OF COMMISSION TO OTHER
UNDERWRITER BE PAID COMPENSATION
Directed Services, Inc. Maximum of 7.0% Reimbursement of any
of any initial covered expenses
or additional incurred
premium payments by registered
except when representatives
combined in connection
with some annual with the
trail commissions. distribution
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 7% of total premium
payments).
We do not pay any additional commissions on the sale or exercise of any
of the optional benefit riders offered in this prospectus.
--------------------------------------------------------------------------------
OTHER INFORMATION
--------------------------------------------------------------------------------
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 shareholder
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 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.
DVAP-108201 51
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<PAGE>
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.
EXPERTS
The audited financial statements of Golden American and Separate Account
B appearing in this prospectus or in the SAI and Registration Statement
have been audited by Ernst & Young LLP, independent auditors, as set
forth in their reports thereon appearing in this prospectus or 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.
--------------------------------------------------------------------------------
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 non-
qualified 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.
INVESTOR CONTROL. 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.
DVAP-108201 52
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<PAGE>
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 assure that they comply with the
applicable requirements when such requirements are clarified by
regulation or otherwise. See "Death Benefit Choices" for additional
information on required distributions from non-qualified contracts.
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
(including amounts paid to you under the MGWB rider), 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
DVAP-108201 53
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<PAGE>
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 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 adviser 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 non-qualified deferred 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 the later of 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
DVAP-108201 54
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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.
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.
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 for Employees (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 limits on the amount of the contribution and the persons who
may be eligible to contribute, 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 to a conversion from an IRA to a Roth
IRA if the amounts 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.
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
DVAP-108201 55
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<PAGE>
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.
DVAP-108201 56
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50
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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 10
Other Information 10
Financial Statements of Separate Account B 11
PLEASE TEAR OFF, COMPLETE AND RETURN THE FORM BELOW TO ORDER A FREE
STATEMENT OF ADDITIONAL INFORMATION FOR THE CONTRACTS OFFERED UNDER THE
PROSPECTUS. SEND THE FORM TO OUR CUSTOMER SERVICE CENTER AT THE ADDRESS
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
108201 DVA Plus-4 (10/00)
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
DVAP-108201 103
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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 had not commenced 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 indicated periods. The
date on which the subaccount became available to investors and the
starting accumulation unit value are indicated on the last row of each
table. The Managed Global subaccount commenced operations initially as a
subaccount of another separate account, the Managed Global Account of
Separate Account D of Golden American; however, at the time of conversion
the value of an accumulation unit did not change.
LIQUID ASSET
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $15.04 683,989 $10,287 $14.79 621,814 $9,199
1998 14.54 489,531 7,118 14.33 334,799 4,796
1997 14.02 227,427 3,188 13.83 116,454 1,611
1996 13.52 76,505 1,033 13.35 84,960 1,134
1995 13.03 37,887 494 12.89 62,084 801
10/2/95 12.89 -- -- 12.76 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $14.55 3,273,236 $47,632
1998 14.11 2,069.093 29,200
1997 13.65 1,070,045 14,601
1996 13.19 383,231 5,054
1995 12.76 93,239 1,190
10/2/95 12.63 -- --
------------------------------------------------------------------
</TABLE>
LIMITED MATURITY BOND
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $17.00 279,468 $4,751 $16.72 196,970 $3,294
1998 17.02 263,074 4,478 16.77 143,896 2,413
1997 16.13 139,323 2,247 15.91 78,553 1,250
1996 15.31 83,927 1,285 15.13 46,293 701
1995 14.86 26,976 401 14.71 11,834 174
10/2/95 14.49 -- -- 14.35 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $16.45 956,859 $15,738
1998 16.52 762,668 12,599
1997 15.70 452,478 7,105
1996 14.95 349,417 5,224
1995 14.56 136,553 1,988
10/2/95 14.20 -- --
------------------------------------------------------------------
</TABLE>
GLOBAL FIXED INCOME
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $11.88 35,081 $417 $11.79 10,884 $128
1998 13.17 6,337 83 13.09 6,154 81
5/1/98 12.17 -- -- 12.11 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $11.70 156,865 $1,835
1998 13.00 38,751 504
5/1/98 12.04 -- --
------------------------------------------------------------------
</TABLE>
DVAP-108201 A1
<PAGE>
<PAGE>
FULLY MANAGED
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $22.01 549,088 $12,084 $21.65 415,146 $8,987
1998 20.84 544,623 11,351 20.53 441,532 9,066
1997 19.93 418,686 8,345 19.66 441,532 6,706
1996 17.50 203,891 3,568 17.29 173,475 2,999
1995 15.23 49,153 748 15.07 13,988 211
10/2/95 14.77 -- -- 14.62 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $21.29 2,299,379 $48,961
1998 20.23 2,262,811 45,771
1997 19.40 1,737,950 33,720
1996 17.08 952,517 16,273
1995 14.91 184,364 2,750
10/2/95 14.47 -- --
------------------------------------------------------------------
</TABLE>
TOTAL RETURN
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $18.20 831,642 $15,135 $18.06 649,492 $11,730
1998 17.83 616,433 10,989 17.72 422,146 7,479
1997 16.18 224,763 3,636 16.10 140,222 2,258
1/20/97 13.76 -- -- 13.76 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $17.91 3,791,001 $67,903
1998 17.60 2,547,293 44,830
1997 16.02 720,866 11,548
1/20/97 13.76 -- --
------------------------------------------------------------------
</TABLE>
EQUITY INCOME
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $21.83 381,468 $8,327 $21.47 314,307 $6,750
1998 22.27 395,764 8,812 21.94 299,456 6,569
1997 20.83 328,740 6,847 20.55 223,101 4,585
1996 17.96 289,954 5,207 17.75 150,732 2,675
1995 16.72 104,463 1,747 16.55 21,073 348
10/2/95 16.10 -- -- 15.94 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $21.12 1,884,822 $39,813
1998 21.61 1,762,451 38,088
1997 20.28 1,472,723 29,860
1996 17.54 1,117,238 19,593
1995 16.38 370,515 6,068
10/2/95 15.78 -- --
------------------------------------------------------------------
</TABLE>
VALUE EQUITY
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $18.28 433,555 $7,924 $18.14 426,697 $7,742
1998 18.41 454,942 8,377 18.31 500,101 9,155
1997 18.36 372,681 6,843 18.28 410,757 7,509
1996 14.61 181,354 2,649 14.57 249,994 3,642
1995 13.37 34,272 458 13.36 23,394 313
10/2/95 12.43 -- -- 12.41 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $18.01 1,929,405 $34,747
1998 18.20 2,253,141 41,004
1997 18.20 1,749,956 31,853
1996 14.53 1,052,064 15,282
1995 13.34 179,453 2,394
10/2/95 12.40 -- --
------------------------------------------------------------------
</TABLE>
DVAP-108201 A2
<PAGE>
<PAGE>
RISING DIVIDENDS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $26.07 1,251,144 $32,623 $25.83 1,054,275 $27,235
1998 22.79 1,199,087 $27,323 22.61 1,050,285 23,747
1997 20.22 795,321 16,079 20.09 739,017 14,847
1996 15.77 297,973 4,699 15.69 355,191 5,575
1995 13.24 22,934 304 13.19 36,100 476
10/2/95 12.16 -- -- 12.12 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $25.59 6,721,737 $172,024
1998 22.43 5,893,538 132,211
1997 19.96 3,670,022 73,267
1996 15.62 1,663,079 25,976
1995 13.15 300,820 3,956
10/2/95 12.09 -- --
------------------------------------------------------------------
</TABLE>
MANAGED GLOBAL
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $24.23 605,044 $14,658 $23.97 545,896 $13,083
1998 15.02 649,216 9,753 14.88 512,728 7,631
1997 11.76 525,356 6,180 11.67 438,611 5,120
1996 10.62 226,224 2,402 10.55 231,774 2,446
1995 9.58 26,722 256 9.53 27,492 262
10/2/95 9.32 -- -- 9.28 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $23.71 3,259,862 $77,287
1998 14.75 3,338,928 49,237
1997 11.58 2,719,073 31,494
1996 10.49 1,375,023 14,422
1995 9.49 208,957 1,983
10/2/95 9.24 -- --
------------------------------------------------------------------
</TABLE>
RESEARCH
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $28.25 565,925 $15,988 $28.04 458,015 $12,842
1998 23.03 437,189 10,068 22.89 335,512 7,680
1997 18.95 223,067 4,227 18.87 142,676 2,692
1/20/97 16.43 -- -- 16.43 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $27.80 3,126,054 $86,919
1998 22.73 2,179,744 49,553
1997 18.77 786,122 14,752
1/20/97 16.43 -- --
------------------------------------------------------------------
</TABLE>
CAPITAL APPRECIATION
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $30.46 431,150 $13,132 $30.11 391,380 $11,785
1998 24.75 413,115 10,233 24.50 370,619 9,080
1997 22.24 353,774 7,868 22.05 286,892 6,326
1996 17.46 162,558 2,839 17.34 174,592 3,028
1995 14.71 24,117 355 14.63 16,369 239
10/2/95 14.31 -- -- 14.23 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $29.77 2,494,266 $74,243
1998 24.26 2,345,157 56,884
1997 21.87 1,751,491 38,297
1996 17.22 1,106,359 19,054
1995 14.55 326,610 4,752
10/2/95 14.16 -- --
------------------------------------------------------------------
</TABLE>
DVAP-108201 A3
<PAGE>
<PAGE>
CAPITAL GROWTH
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $21.18 598,663 $12,678 $21.06 524,742 $11,051
1998 17.08 537,480 9,180 17.01 444,973 7,569
1997 15.45 325,440 5,027 15.41 226,587 3,491
1996 12.50 50,199 627 12.49 38,037 475
9/3/96 10.94 -- -- 10.94 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $20.94 3,125,440 $65,439
1998 16.94 2,202,441 37,304
1997 15.36 1,127,105 17,318
1996 12.47 173,758 2,167
9/3/96 10.94 -- --
------------------------------------------------------------------
</TABLE>
STRATEGIC EQUITY
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $22.06 455,696 $10,053 $21.92 365,555 $8,013
1998 14.30 508,588 7,272 14.23 589,815 8,393
1997 14.36 406,747 5,840 14.31 534,105 7,643
1996 11.81 370,536 4,374 11.78 231,567 2,729
1995 10.01 76,095 762 10.01 47,478 475
10/2/95 10.00 -- -- 10.00 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $21.78 1,611,499 $35,103
1998 14.16 1,566,193 22,178
1997 14.26 1,345,085 19,186
1996 11.76 968,694 11,396
1995 10.01 152,633 1,528
10/2/95 10.00 -- --
------------------------------------------------------------------
</TABLE>
MID-CAP GROWTH
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $39.97 287,598 $11,494 $39.59 294,064 $11,643
1998 22.60 173,070 3,912 22.43 183,243 4,109
1997 18.64 85,870 1,600 18.52 112,382 2,081
1996 15.77 29,878 471 15.70 28,223 443
9/3/96 14.64 -- -- 14.64 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $39.34 1,649,358 $64,879
1998 22.31 992,373 22,143
1997 18.45 503,083 9,284
1996 15.66 56,163 880
9/3/96 14.64 -- --
------------------------------------------------------------------
</TABLE>
SMALL CAP
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $22.96 453,438 $10,411 $22.82 580,175 $13,240
1998 15.44 446,934 6,900 15.37 525,379 8,074
1997 12.92 401,090 5,183 12.88 445,138 5,735
1996 11.86 198,338 2,352 11.84 227,347 2,692
1/2/96 10.00 -- -- 10.00 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $22.68 2,653,814 $60,197
1998 15.30 2,474,802 37,859
1997 12.84 2,029,658 26,068
1996 11.82 1,316,663 15,569
1/2/96 10.00 -- --
------------------------------------------------------------------
</TABLE>
DVAP-108201 A4
<PAGE>
<PAGE>
GROWTH
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $28.78 758,379 $21,827 $28.62 737,375 $21,104
1998 16.36 362,210 5,926 16.29 284,480 4,636
1997 13.06 161,235 2,106 13.03 132,596 1,728
1/20/97 11.99 -- -- 11.99 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $28.46 4,445,942 $126,509
1998 16.22 1,635,638 26,538
1997 12.99 718,807 9,340
1/20/97 11.99 -- --
------------------------------------------------------------------
</TABLE>
REAL ESTATE
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $20.96 136,122 $2,854 $20.62 92,387 $1,905
1998 22.07 170,494 3,763 21.74 125,630 2,731
1997 25.82 173,241 4,473 25.48 113,110 2,882
1996 21.30 54,229 1,155 21.04 42,710 899
1995 15.94 2,716 43 15.78 2,910 46
10/2/95 15.06 -- -- 14.91 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $20.28 583,100 $11,828
1998 21.42 797,901 17,090
1997 25.14 888,507 22,334
1996 20.79 384,928 8,004
1995 15.61 61,143 955
10/2/95 14.76 -- --
------------------------------------------------------------------
</TABLE>
HARD ASSETS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $17.66 112,564 $1,988 $17.37 62,935 $1,093
1998 14.50 146,678 2,126 14.28 74,676 1,067
1997 20.85 154,417 3,219 20.57 81,681 1,680
1996 19.89 94,213 1,873 19.65 43,232 850
1995 15.11 24,828 375 14.96 2,847 42
10/2/95 14.86 -- -- 14.71 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $17.09 518,280 $8,856
1998 14.07 574,275 8,080
1997 20.29 632,371 12,834
1996 19.42 341,711 6,635
1995 14.80 26,605 394
10/2/95 14.57 -- --
------------------------------------------------------------------
</TABLE>
DEVELOPING WORLD
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $11.62 683 $8 $11.61 33,523 $389
1998 7.29 617 5 7.28 12,180 89
5/1/98 10.42 -- -- 10.42 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $11.58 292,097 $3,382
1998 7.27 49,393 359
5/1/98 10.42 -- --
------------------------------------------------------------------
</TABLE>
DVAP-108201 A5
<PAGE>
<PAGE>
EMERGING MARKETS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $12.01 359,966 $4,323 $11.90 244,574 $2,910
1998 6.56 266,800 1,751 6.51 249,607 1,625
1997 8.75 249,197 2,182 8.70 215,512 1,875
1996 9.78 97,857 957 9.74 102,267 995
1995 9.23 15,670 145 9.20 12,465 115
10/2/95 9.50 -- -- 9.47 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $11.79 1,046,228 $12,331
1998 6.46 1,170,656 7,563
1997 8.64 1,131,253 9,779
1996 9.69 679,247 6,581
1995 9.17 160,820 1,475
10/2/95 9.44 -- --
------------------------------------------------------------------
</TABLE>
PIMCO HIGH YIELD BOND
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $10.27 400,821 $4,115 $10.24 229,047 $2,345
1998 10.09 213,774 2,157 10.08 118,295 1,192
5/1/98 10.00 -- -- 10.00 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $10.21 1,634,648 $16,695
1998 10.07 630,858 6,353
5/1/98 10.00 -- --
------------------------------------------------------------------
</TABLE>
PIMCO STOCKSPLUS GROWTH AND INCOME
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $13.16 284,260 $3,742 $13.13 187,840 $2,467
1998 11.12 112,706 1,253 11.11 53,016 589
5/1/98 10.00 -- -- 10.00 -- --
----------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------
7% SOLUTION ENHANCED 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)
------------------------------------------------------------------
<S> <C> <C> <C>
1999 $13.10 1,952,379 $25,572
1998 11.10 474,542 5,268
5/1/98 10.00 -- --
------------------------------------------------------------------
</TABLE>
DVAP-108201 A6
<PAGE>
<PAGE>
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
surrender is 3
$124,230 ($100,000 x 1.075 )
2. N = 2,555 ( 365 x 7 )
2,555/365
3. Market Value Adjustment = $124,230 x [((1.07/1.0825) -1] = $9,700
Therefore, the amount paid to you on full surrender ignoring any surrender
charge is $114,530 ($124,230 - $9,700 ).
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
surrender is 3
$124,230 ($100,000 x 1.075 )
2. N = 2,555 ( 365 x 7 )
2,555/365
3. Market Value Adjustment = $124,230 x [((1.07/1.0625) -1] = $6,270
Therefore, the amount paid to you on full surrender ignoring any surrender
charge is $130,500 ($124,230 + $6,270 ).
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 $114,530 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.
DVAP-108201 B1
<PAGE>
<PAGE>
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
withdrawal 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
[ $114,530 / ((1.07/1.0825) ) ] = $124,230
Then calculate the Market Value Adjustment on that amount.
4. Market Value Adjustment = 2,555/365
$124,230 x [((1.07/1.0825) ) -1] = $9,700
Therefore, the amount of the withdrawal paid to you ignoring any surrender
charge is $114,530, as requested. The Fixed Interest Allocation will be reduced
by the amount of the withdrawal, $114,530, and also reduced by the Market Value
Adjustment of $9,700, 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 $130,500 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
[$130,500 /((1.07/1.0625) )] = $124,230
Then calculate the Market Value Adjustment on that amount.
2,555/365
4. Market Value Adjustment = $124,230 x [((1.07/1.0625) ) -1] = $6,270
Therefore, the amount of the withdrawal paid to you ignoring any surrender
charge is $130,500, as requested. The Fixed Interest Allocation will be reduced
by the amount of the withdrawal, $130,500, but increased by the Market Value
Adjustment of $6,270, for a total reduction in the Fixed Interest Allocation of
$124,230.
DVAP-108201 B1
<PAGE>
<PAGE>
--------------------------------------------------------------------------------
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, $13,500 (15% of $90,000) 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, $13,500 ($27,000 - $13,500) is considered an excess withdrawal
and would be subject to a 4% surrender charge of $540 ($13,500 x .04).
This example does not take into account any Market Value Adjustment or
deduction of any premium taxes.
PP4-108199 C1
<PAGE>
<PAGE>
--------------------------------------------------------------------------------
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 STANDARD 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 reduced by a
pro rata adjustment for any withdrawal; or
3) the cash surrender value.
Under the 7% SOLUTION ENHANCED 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 reduced by a
pro rata adjustment for any withdrawals;
3) the cash surrender value; or
DVAP-108201 D1
<PAGE>
<PAGE>
4) the enhanced death benefit, which we determine as follows: we
credit interest each business day at the 7% annual effective rate
to the enhanced death benefit from the preceding day (which would
be the initial premium if the preceding day is the contract date),
then we add additional premiums paid since the preceding day, then
we adjust for any withdrawals (including any market value
adjustment applied to such withdrawal and any associated surrender
charges) since the preceding day. Special withdrawals are
withdrawals of up to 7% per year of cumulative premiums. Special
withdrawals shall reduce the 7% Solution Enhanced 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 death benefit is made. The maximum enhanced
death benefit is 3 times all premium payments, adjusted to reflect
withdrawals. Each accumulated initial or additional premium
payment will continue to grow at the 7% annual effective rate
until the maximum enhanced death is reached or the contract owner
attains age 80, if earlier.
Note for current Special Funds: Certain investment portfolios and
the Fixed Account are designated as "Special Funds" for purposes
of calculating the 7% Solution Enhanced Death Benefit. 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. The actual
interest rate used for calculating the 7% Solution Enhanced Death
Benefit for Special Funds will be the lesser of (1) 7% and (2) the
interest rate, positive or negative, providing a yield on the
enhanced death benefit for Special Funds equal to the net return
for the current valuation period on the contract value allocated
to Special Funds. 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. Thus selecting these investment portfolios and/or the
Fixed Account may limit or reduce the enhanced death benefit.
Under the ANNUAL RATCHET ENHANCED 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 reduced by a
pro rata adjustment for any withdrawal;
3) the cash surrender value; or
4) the enhanced death benefit, which is determined as follows: On
each contract anniversary that occurs on or before the contract
owner turns age 80, we compare the prior enhanced death benefit to
the contract value and select the larger amount as the new
enhanced death benefit. On all other days, the enhanced death
benefit is the following amount: On a daily basis we first take
the enhanced death benefit from the preceding day (which would be
the initial premium added if the preceding day is the contract
date), then we add additional premiums paid since the preceding
day, and then we adjust for any withdrawals on a pro rata basis
(including any market value adjustment applied to such withdrawal
and any associated surrender charges) since the preceding day.
That amount becomes the new enhanced death benefit.
Under the MAX 7 ENHANCED DEATH BENEFIT, if you die before the annuity
start date, your beneficiary will receive the greater of the 7% Solution
Enhanced Death Benefit and the Annual Ratchet Enhanced Death Benefit.
Under this benefit option, the 7% Solution Enhanced Death Benefit and the
Annual Ratchet Enhanced Death Benefit are calculated in the same manner
as if each were the elected benefit.
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.
DVAP-108201 D2
<PAGE>
<PAGE>
--------------------------------------------------------------------------------
APPENDIX E
--------------------------------------------------------------------------------
OPTIONAL RIDER BENEFITS FOR EXISTING CONTRACT OWNERS
The following is a description of the optional rider benefits 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 the
benefit under any optional rider that you have elected. IF YOU NEVER
INVEST IN EXCLUDED FUNDS, YOUR RIDER BENEFITS WILL BE UNAFFECTED. OTHER
THAN AS SPECIFIED BELOW, PLEASE SEE THE PROSPECTUS FOR A COMPLETE
DESCRIPTION OF YOUR OPTIONAL RIDER BENEFITS.
OPTIONAL RIDER BENEFITS FOR EXCLUDED FUNDS
For the period of time, and to the extent, that you allocate premium or
contract value to Excluded Funds, any guarantee of an optional rider
benefit does not apply to those amounts. The optional rider benefit
provided under the Contract may be reduced to the extent that you
allocate premium or contract value to Excluded Funds.
For each rider benefit component contained in your rider, a corresponding
component will be created for allocations to Excluded Funds. Transfers
from Excluded Funds to Non-Excluded funds will reduce all rider benefit
components for Excluded Funds on a pro-rata basis. Except with respect
to any maximum guaranteed rider benefit, the resulting increase in the
Non-Excluded Funds rider benefit component will equal the lesser of the
reduction in the rider benefit component for Excluded Funds and the
contract value transferred. With respect to the maximum guaranteed
benefit, where applicable, the resulting increase in the Non-Excluded
Funds maximum guaranteed benefit will equal the reduction in the maximum
guaranteed benefit for Excluded Funds.
Transfers from Non-Excluded Funds to Excluded Funds will reduce the Non-
Excluded Funds rider benefit component on a pro-rata basis. The
resulting increase in the rider benefit components of Excluded Funds will
equal the reduction in the Non-Excluded Funds benefit.
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.
OPTIONAL RIDER BENEFIT FOR NON-EXCLUDED FUNDS
A. MINIMUM GUARANTEED ACCUMULATION BENEFIT ("MGAB"). We calculate your
MGAB as follows:
1. WE FIRST DETERMINE YOUR MGAB BASE. The 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.
If you purchased the MGAB rider on the contract date, and
(i)elected the ten-year option, your MGAB Base is equal to your
initial premium and credit, plus any additional premium and
credit 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, except for the Special Funds
which require special calculations, your MGAB Base is equal to
your initial premium and credit, plus any additional premium
and credit added to your Contract during the 2-year period
after your
DVAP-108201 E1
<PAGE>
<PAGE>
contract date, accumulated at the MGAB Base 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 Base Rate for allocations other than
allocations to the Special Funds is the annual effective rate
of 3.5265%. Accumulation of eligible additional premiums
starts on the date the premium was received.
ONLY PREMIUMS AND CREDITS 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.
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 and credits 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.
For any Special Fund under the twenty-year option, if the
actual interest credited to and/or the investment earnings of
the contract value allocated to the Special Fund over the
calculation period is less than the amount calculated under the
formula above, that lesser amount becomes the increase in your
MGAB Base for the Special Fund for that period. THE MGAB BASE
RATE FOR EACH SPECIAL FUND MAY BE POSITIVE OR NEGATIVE. Thus,
investing in the Special Funds may limit the MGAB benefit.
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 Base
from doubling over the waiting period.
2. WE THEN SUBTRACT YOUR CONTRACT VALUE ON THE MGAB BENEFIT DATE FROM
YOUR 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.
B. MINIMUM GUARANTEED INCOME BENEFIT ("MGIB"). On the MGIB Benefit Date,
we calculate your MGIB annuity income as follows:
1. WE FIRST DETERMINE YOUR MGIB BASE. The MGIB Base is only a
calculation used to determine the MGIB. The MGIB 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 Base or MGIB
Base Maximum.
(i)If you purchased the MGIB rider on the contract date, except
for the Special Funds which require special calculations, the
MGIB Base is equal to your initial premium and credit, plus any
additional premiums and credits added to your Contract during
the 5-year period after
DVAP-108201 E1
<PAGE>
<PAGE>
your contract date, accumulated at the
MGIB Base Rate (7% for all portfolios except the Special
Funds), reduced pro rata by all withdrawals taken while the
MGIB rider is in effect. Premiums and credits paid less than 5
years prior to the earliest MGIB Benefit Date are excluded from
the MGIB Base.
(ii)If you purchased the MGIB rider after the contract date,
except for the Special Funds which require special
calculations, your MGIB Base is equal to your contract value on
the rider date plus any eligible premiums and credits added to
your Contract during the 5-year period after your rider date,
accumulated at the MGIB Base Rate (7% for all portfolios except
the Special Funds), reduced pro rata by all withdrawals taken
while the MGIB rider is in effect. Eligible additional premium
payments and credits are those added more than 5 years before
the earliest MGIB Benefit Date and are included in the MGIB
Base. Premiums and credits paid after the 5th rider
anniversary are excluded from the MGIB Base.
(iii)For any Special Fund, if the actual earnings and/or the
interest credited to the contract value allocated to the
Special Fund over the calculation period is less than the
amount determined under the formula above, that lesser amount
becomes the change in your MGIB Base for the Special Fund. THE
MGIB BASE RATE FOR EACH SPECIAL FUND MAY BE POSITIVE OR
NEGATIVE. Thus, investing in the Special Funds may limit the
MGIB benefit.
Of course, regardless of when purchased or how you invest,
withdrawals will reduce the value of your MGIB Base pro rata to
the percentage of the contract value withdrawn.
We offer a 7% MGIB Base Rate, except for the Special Funds.
The Company may at its discretion discontinue offering this
rate. The MGIB Base Rate is an annual effective rate.
The MGIB Base is subject to the MGIB Base Maximum. The MGIB
Base Maximum is the amount calculated above until the earlier
of: (i) the date the oldest contract owner reaches age 80, or
(ii) the date the MGIB Base reaches two times the MGIB Eligible
Premiums and credits, adjusted for any withdrawals. MGIB
Eligible Premiums is the total of premiums paid more than 5
years before the earliest MGIB Benefit Date.
2. Then we determine the MGIB annuity income by multiplying your MGIB
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 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.
C. MINIMUM GUARANTEED WITHDRAWAL BENEFIT (MGWB) RIDER. 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 adjusted for any withdrawals.
Withdrawals of
DVAP-108201 E3
<PAGE>
<PAGE>
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. Any withdrawals greater than 7% per year of the Eligible
Payment Amount will cause a reduction in both the MGWB Withdrawal Account
and 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.
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
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
(v) 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.
WITHDRAWAL ADJUSTMENTS. We will reduce the MGWB Withdrawal Account by
the dollar amount of any withdrawal taken up to 7% per year of the
Eligible Payment Amount. Any withdrawal taken in excess of 7% per year
of the Eligible Payment Amount will reduce both the MGWB Withdrawal
Account and the Eligible Payment Amount pro rata in proportion to the
percentage of contract value withdrawn. If a withdrawal reduces the MGWB
Withdrawal Account to zero, the MGWB rider terminates and no further
benefits are payable under the 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
DVAP-108201 E4
<PAGE>
<PAGE>
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.
DVAP-108201 E5
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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.
-------------------------------------------------------------------------
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108201 DVA Plus-4 [00/00/0000]
<PAGE>
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ING VARIABLE ANNUITIES |
GOLDEN AMERICAN LIFE INSURANCE COMPANY |
Golden American Life Insurance Company is a stock company domiciled |
in Delaware |
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108201 DVA Plus-4 [00/00/0000] |
<PAGE>
<PAGE>
PART B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
<PAGE>
Statement of Additional Information
GOLDENSELECT DVA PLUS DB
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:
October 2, 2000
<PAGE>
<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 10
Other Information 10
Financial Statements of Separate Account B 11
<PAGE>
<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>
<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 Max 7 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 3.79% and 3.86%,
respectively.
2
<PAGE>
<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>
<PAGE>
Except for the Asset Allocation Growth, Diversified Mid-Cap, Growth and Income,
Special Situations, All Cap, Investors, Large Cap Value, ING Global Brand Names,
Prudential Jennison and SP Jennison International Growth subaccounts which had
not commenced operations 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 for the Max 7
Solution Enhanced Death Benefit of 1.60%, administrative charges of 0.15%,
contract administration charge annualized at 0.06%, an optional rider charge
annualized at 0.75% for all portfolios except Liquid Asset and Limited Maturity
Bond which are annualized at 0.50%, and applicable surrender charge of 7% 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 with Rider Charge
------------------------------
<TABLE>
<CAPTION>
From Inception
1 Year 5 Year 10 Year Inception Date
THE GCG TRUST
<S> <C> <C> <C> <C> <C>
Liquid Asset -4.66% 1.91% 2.38%* 2.68%* 1/25/89
Limited Maturity Bond -8.19% 2.96% 3.47%* 3.85%* 1/25/89
Global Fixed Income -17.78% 1.52%* n/a 1.71%* 10/7/94
Fully Managed -2.53% 9.86% 6.75%* 6.30%* 1/25/89
Total Return -6.01% 11.53%* n/a 10.65%* 10/7/94
Asset Allocation Growth n/a n/a n/a n/a 10/2/00
Equity Income -10.02% 7.23% 6.17%* 6.26%* 1/25/89
Investors n/a n/a n/a n/a 2/1/00
Value Equity -8.81% n/a n/a 11.23% 1/1/95
Rising Dividends 6.24% 19.09% n/a 15.38% 10/4/93
Diversified Mid-Cap n/a n/a n/a n/a 10/2/00
Managed Global 52.68% 20.18%* n/a 11.76%* 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 14.41% 22.30%* n/a 20.58%* 10/7/94
Capital Appreciation 14.83% 20.14% n/a 14.50%* 5/4/92
Growth and Income n/a n/a n/a n/a 10/2/00
Capital Growth 15.70% n/a n/a 20.21% 4/1/96
Strategic Equity 45.76% n/a n/a 18.71% 10/2/95
Special Situations n/a n/a n/a n/a 10/2/00
Mid-Cap Growth 68.14% 29.53%* n/a 28.93%* 10/7/94
Small Cap 40.27% n/a n/a 21.22% 1/2/96
Growth 67.27% n/a n/a 30.66%* 4/1/96
Real Estate -13.05% 6.99% 6.80%* 5.82%* 1/25/89
Hard Assets 13.61% 3.22% 2.90%* 4.15%* 1/25/89
Developing World 51.12% n/a n/a 3.58% 2/18/98
Emerging Markets 74.32% 0.81% n/a 1.49% 10/4/93
THE PIMCO TRUST
High Yield Bond -6.36%* n/a n/a -3.76%* 5/1/98
StocksPLUS Growth and Income 10.13%* n/a n/a 12.84%* 5/1/98
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
SP Jennison International Growth n/a n/a n/a n/a 10/2/00
</TABLE>
--------------------
* Total return calculation reflects certain waivers of portfolio fees and
expenses.
The same Subaccounts presented on a standardized basis, which includes
deductions for the maximum mortality and expense risk charge for the Max 7
Solution Enhanced Death Benefit of 1.60%, administrative charges of 0.15%,
contract administration charge annualized at 0.06%, and
4
<PAGE>
<PAGE>
applicable surrender charge, but without the rider charge, for the year ending
December 31, 1999 were as follows, respectively:
Average Annual Total Return for Periods Ending 12/31/99 -
---------------------------------------------------------
Standardized without Rider Charge
---------------------------------
<TABLE>
<CAPTION>
From Inception
1 Year 5 Year 10 Year Inception Date
THE GCG TRUST
<S> <C> <C> <C> <C> <C>
Liquid Asset -4.15% 2.44% 2.90%* 3.19%* 1/25/89
Limited Maturity Bond -7.70% 3.48% 3.99%* 4.37%* 1/25/89
Global Fixed Income -17.27% 2.08%* n/a 2.27%* 10/7/94
Fully Managed -2.00% 10.34% 7.31%* 6.88%* 1/25/89
Total Return -5.49% 12.00%* n/a 11.14%* 10/7/94
Asset Allocation Growth n/a n/a n/a n/a 10/2/00
Equity Income -9.51% 7.73% 6.72%* 6.81%* 1/25/89
Investors n/a n/a n/a n/a 2/1/00
Value Equity -8.30% n/a n/a 11.68% 1/1/95
Rising Dividends 6.79% 19.52% n/a 15.86% 10/4/93
Diversified Mid-Cap n/a n/a n/a n/a 10/2/00
Managed Global 53.39% 20.74%* n/a 12.43%* 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 15.00% 22.73%* n/a 21.03%* 10/7/94
Capital Appreciation 15.41% 20.58% n/a 15.00%* 5/4/92
Growth and Income n/a n/a n/a n/a 10/2/00
Capital Growth 16.30% n/a n/a 20.69% 4/1/96
Strategic Equity 46.46% n/a n/a 19.25% 10/2/95
Special Situations n/a n/a n/a n/a 10/2/00
Mid-Cap Growth 68.87% 29.99%* n/a 29.40%* 10/7/94
Small Cap 40.92% n/a n/a 21.76% 1/2/96
Growth 67.96% n/a n/a 31.19%* 4/1/96
Real Estate -12.54% 7.46% 7.33%* 6.41%* 1/25/89
Hard Assets 14.15% 3.75% 3.56%* 4.75%* 1/25/89
Developing World 51.78% n/a n/a 4.33% 2/18/98
Emerging Markets 75.02% 1.58% n/a 2.23% 10/4/93
THE PIMCO TRUST
High Yield Bond -5.84%* n/a n/a -3.19%* 5/1/98
StocksPLUS Growth and Income 10.70%* n/a n/a 13.44%* 5/1/98
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
SP Jennison International Growth n/a n/a n/a n/a 10/2/00
</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:
P(1+T)^(n)]=ERV
5
<PAGE>
<PAGE>
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 Max 7 Enhanced Death Benefit, the administrative charges and the
optional benefit rider charge 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 operations as of
December 31, 1999, Average Annual Total Return for the Subaccounts presented on
a non-standardized basis, which includes deductions for the maximum mortality
and expense risk charge for the Max 7 Solution Enhanced Death Benefit of 1.60%,
administrative charges of 0.15%, and rider charge annualized at 0.75% for all
portfolios except Liquid Asset and Limited Maturity Bond which are annualized at
0.50%, for the year ending December 31, 1999 were as follows, respectively:
6
<PAGE>
<PAGE>
Average Annual Total Return for Periods Ending 12/31/99 -
---------------------------------------------------------
Non-Standardized with Rider Charge
----------------------------------
<TABLE>
<CAPTION>
From Inception
1 Year 5 Year 10 Year Inception Date
THE GCG TRUST
<S> <C> <C> <C> <C> <C>
Liquid Asset 2.40% 2.70% 2.44%* 2.72%* 1/25/89
Limited Maturity Bond -1.13% 3.71% 3.52%* 3.89%* 1/25/89
Global Fixed Income -10.72% 2.32%* n/a 2.29%* 10/7/94
Fully Managed 4.53% 10.44% 6.80%* 6.35%* 1/25/89
Total Return 1.05% 12.09%* n/a 11.07%* 10/7/94
Asset Allocation Growth n/a n/a n/a n/a 10/2/00
Equity Income -2.96% 7.87% 6.22%* 6.30%* 1/25/89
Investors n/a n/a n/a n/a 2/1/00
Value Equity -1.76% n/a n/a 11.79% 1/1/95
Rising Dividends 13.30% 19.53% n/a 15.50% 10/4/93
Diversified Mid-Cap n/a n/a n/a n/a 10/2/00
Managed Global 59.73% 20.61%* n/a 11.82%* 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 21.47% 22.70%* n/a 20.88%* 10/7/94
Capital Appreciation 21.89% 20.56% n/a 14.55%* 5/4/92
Growth and Income n/a n/a n/a n/a 10/2/00
Capital Growth 22.76% n/a n/a 21.04% 4/1/96
Strategic Equity 52.82% n/a n/a 19.29% 10/2/95
Special Situations n/a n/a n/a n/a 10/2/00
Mid-Cap Growth 75.20% 29.85%* n/a 29.17%* 10/7/94
Small Cap 47.33% n/a n/a 21.97% 1/2/96
Growth 74.33% n/a n/a 31.34%* 4/1/96
Real Estate -5.99% 7.63% 6.84%* 5.87%* 1/25/89
Hard Assets 20.67% 3.97% 2.95%* 4.19%* 1/25/89
Developing World 58.18% n/a n/a 7.20% 2/18/98
Emerging Markets 81.37% 1.65% n/a 1.71% 10/4/93
THE PIMCO TRUST
High Yield Bond 0.70%* n/a n/a 0.51%* 5/1/98
StocksPLUS Growth and Income 17.19%* n/a n/a 16.70%* 5/1/98
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
SP Jennison International Growth n/a n/a n/a n/a 10/2/00
</TABLE>
--------------------
* Total return calculation reflects certain waivers of portfolio fees and
expenses.
The same Subaccounts presented on a non-standardized basis, which includes
deductions for the maximum mortality and expense risk charge for the Max 7
Solution Enhanced Death Benefit of 1.60%, administrative charges of 0.15%, but
without the rider charge, for the year ending December 31, 1999 were as follows:
7
<PAGE>
<PAGE>
Average Annual Total Return for Periods Ending 12/31/99 -
---------------------------------------------------------
Non-Standardized without Rider Charge
-------------------------------------
<TABLE>
<CAPTION>
From Inception
1 Year 5 Year 10 Year Inception Date
THE GCG TRUST
<S> <C> <C> <C> <C> <C>
Liquid Asset 2.91% 3.21% 2.95%* 3.24%* 1/25/89
Limited Maturity Bond -0.64% 4.22% 4.03%* 4.41%* 1/25/89
Global Fixed Income -10.22% 2.85%* n/a 2.83%* 10/7/94
Fully Managed 5.05% 10.92% 7.35%* 6.93%* 1/25/89
Total Return 1.57% 12.55%* n/a 11.55%* 10/7/94
Asset Allocation Growth n/a n/a n/a n/a 10/2/00
Equity Income -2.46% 8.36% 6.76%* 6.85%* 1/25/89
Investors n/a n/a n/a n/a 2/1/00
Value Equity -1.24% n/a n/a 12.23% 1/1/95
Rising Dividends 13.85% 19.95% n/a 15.98% 10/4/93
Diversified Mid-Cap n/a n/a n/a n/a 10/2/00
Managed Global 60.45% 21.16%* n/a 12.49%* 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 22.06% 23.12%* n/a 21.32%* 10/7/94
Capital Appreciation 22.47% 20.99% n/a 15.04%* 5/4/92
Growth and Income n/a n/a n/a n/a 10/2/00
Capital Growth 23.36% n/a n/a 21.51% 4/1/96
Strategic Equity 53.51% n/a n/a 19.83% 10/2/95
Special Situations n/a n/a n/a n/a 10/2/00
Mid-Cap Growth 75.93% 30.31%* n/a 29.64%* 10/7/94
Small Cap 47.98% n/a n/a 22.49% 1/2/96
Growth 75.02% n/a n/a 31.86%* 4/1/96
Real Estate -5.49% 8.09% 7.38%* 6.45%* 1/25/89
Hard Assets 21.21% 4.48% 3.61%* 4.80%* 1/25/89
Developing World 58.84% n/a n/a 7.94% 2/18/98
Emerging Markets 82.07% 2.39% n/a 2.43% 10/4/93
THE PIMCO TRUST
High Yield Bond 1.22%* n/a n/a 1.07%* 5/1/98
StocksPLUS Growth and Income 17.76%* n/a n/a 17.29%* 5/1/98
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
SP Jennison International Growth n/a n/a n/a n/a 10/2/00
</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.
8
<PAGE>
<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 Max 7 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%
SolutionEnhanced 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 0.00004419
6. Less asset based administrative charge 0.00000411
7. Net investment return (4) minus (5) minus (6) 0.00995170
8. Net investment factor (1.000000) plus (7) 1.00995170
9. AUV, end of period (1) multiplied by (8) $ 10.09951700
9
<PAGE>
<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) $ 10.09951700
5. Contract Value in account for valuation date
following purchase (3) multiplied by (4) $ 1,009.95
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.
10
<PAGE>
<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
11
<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 Depositor authorizing the
establishment of the Registrant (4)
(2) Not Applicable
(3) (a) Distribution Agreement between the Depositor and
Directed Services, Inc. (4)
(b) Dealers Agreement (4)
(c) Organizational Agreement (4)
(d) Assignment Agreement for Organizational Agreement (4)
(4) (a) Individual Deferred Combination Variable and Fixed Annuity
Contract (4)
(b) Group Deferred Combination Variable and Fixed
Annuity Contract (4)
(c) Individual Deferred Variable Annuity Contract (4)
(d) External Exchange Program Endorsement (1)
(e) DVA Update Program Schedule Page (1)
(f) Individual Retirement Annuity Rider Page (1)
(g) ROTH Individual Retirement Annuity Rider (4)
(h) Minimum Guaranteed Accumulation Benefit Rider (REV)
(i) Minimum Guaranteed Income Benefit Rider (REV)
(j) Minimum Guaranteed Withdrawal Benefit Rider (REV)
(k) Living Benefit Rider Endorsement (Inforce Riders)
(l) Death Benefit Endorsement No.1 (REV)(7% Solution Enhanced)
(m) Death Benefit Endorsement No.2 (REV)(Ratchet Enhanced)
(n) Death Benefit Endorsement No.3 (REV)(Standard)
(o) Death Benefit Endorsement No.4 (REV)(Max 7 Enhanced)
(p) Death Benefit Endorsement No.5 (Base Death Benefit)
(q) Death Benefit Endorsement No.6 (Inforce Contracts)
(5) (a) Individual Deferred Combination Variable and Fixed Annuity
Application (5)
(b) Group Deferred Combination Variable and Fixed Annuity
Enrollment Form (5)
(c) Individual Deferred Variable Annuity Application (5)
(6) (a) Certificate of Amendment of the Restated Articles of
Incorporation of Golden American, dated (03/01/95) (4)
(b) By-Laws of Golden American, dated (01/07/94) (4)
(c) Resolution of the board of directors for
Powers of Attorney, dated 04/23/99 (4)
(7) Not applicable
(8) (a) Participation Agreement between Golden American
and PIMCO Variable Insurance Trust (4)
(b) Administrative Services Agreement between Golden American
and Equitable of Iowa companies (3)
(c) Service Agreement between Golden American and Directed
Services, Inc. (3)
(d) Asset Management Agreement between Golden American and
ING Investment Management LLC (4)
(e) Reciprocal Loan Agreement between Golden American and
ING America Insurance Holdings, Inc. (4)
(f) Revolving Note Payable between Golden American and
SunTrust Bank (4)
(g) Surplus Note, dated 12/17/96, between Golden American
and Equitable of Iowa Companies (7)
(h) Surplus Note, dated 12/30/98, between Golden American
and Equitable Life Insurance Company of Iowa (7)
(i) Surplus Note, dated 09/30/99, between Golden American
and ING AIH (7)
(j) Surplus Note, dated 12/08/99, between Golden American and
First Columbine Life Insurance Company (6)
(k) Surplus Note, dated 12/30/99, between Golden American and
Equitable of Iowa Companies (6)
(l) Participation Agreement between Golden American and
Prudential Series Fund, Inc. (7)
(m) Participation Agreement between Golden American and
ING Variable Insurance Trust (7)
(n) Form of Amended Schedule Page to the Participation Agreement
between Golden American and Prudential Series Fund, Inc. (8)
(o) Reinsurance Agreement, dated 06/30/00, between Golden
American and Equitable Life Insurance Company of Iowa (8)
(p) Renewal of Revolving Note Payable between Golden American
and SunTrust Bank as of July 31, 2000 and
expiring July 31, 2001 (8)
(9) Opinion and Consent of Myles R. Tashman *
(10) (a) Consent of Sutherland Asbill & Brennan LLP *
(b) Consent of Ernst & Young LLP, 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 (7)
(14) Not applicable
(15) Power of Attorney
(16) Subsidiaries of ING Groep N.V. (7)
--------------------------------
* To be Filed by Amendment
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(1) Incorporated herein by reference to pre-effective amendment No. 1 to the
registration statement for Separate Account B filed with the Securities
and Exchange Commission on September 7, 1995 (File Nos. 33-59261, 811-5626).
(2) Incorporated herein by reference to post-effective amendment No. 8 to the
registration statement for Separate Account B filed with the Securities
and Exchange Commission on May 1, 1997 (File Nos. 33-59261, 811-5626).
(3) Incorporated herein by reference to post-effective amendment No. 9 to the
registration statement for Separate Account B filed with the Securities
and Exchange Commission on April 30, 1998 (File Nos. 33-59261, 811-5626).
(4) Incorporated herein by reference to post-effective amendment No. 12 to the
registration statement for Separate Account B filed with the Securities
and Exchange Commission on April 23, 1999 (File Nos. 33-59261, 811-5626).
(5) Incorporated herein by reference to post-effective amendment No. 13 to the
registration statement for Separate Account B filed with the Securities
and Exchange Commission on December 2, 1999 (File Nos. 33-59261, 811-5626).
(6) Incorporated herein by reference to post-effective amendment No. 14 to the
registration statement for Separate Account B filed with the Securities
and Exchange Commission on January 27, 2000 (File Nos. 33-59261, 811-5626).
(7) Incorporated herein by reference to post-effective amendment No. 15 to the
registration statement for Separate Account B filed with the Securities
and Exchange Commission on April 26, 2000 (File Nos. 33-59261, 811-5626).
(8) Incorporated herein by reference to post-effective amendment No. 16 to the
registration statement for Separate Account B filed with the Securities
and Exchange Commission on September 13, 2000 (File Nos. 33-59261,
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 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 UNDERWRITERS
(a) At present, Directed Services, Inc. ("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, Separate
Account B, Equitable Life Insurance Company of Iowa Separate Account A, First
Golden American Life Insurance Company of New York Separate Account NY-B,
Alger Separate Account A of Golden American 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
----------- ------------ ---------- ----------- ------------
DSI $180,838,913 $0 $0 $0
ITEM 30: LOCATION OF ACCOUNTS AND RECORDS
Accounts and records are maintained by Golden American Life Insurance Company
at 1475 Dunwoody Drive, West Chester, Pennsylvania 19380-1478 and by
Equitable Life Insurance Company, an affiliate, 909 Locust Street,
Des Moines, Iowa 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 28th day of September, 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 by the following persons in the capacities indicated on
September 28, 2000.
Signature Title
President and Director
-------------------- of Depositor
Barnett Chernow*
Senior Vice President,
-------------------- and Chief Financial Officer
E. Robert Koster*
DIRECTORS OF DEPOSITOR
----------------------
Myles R. Tashman*
----------------------
Michael W. Cunningham*
----------------------
Mark A. Tullis*
----------------------
Phillip R. Lowery*
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>
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EXHIBIT INDEX
ITEM EXHIBIT PAGE #
---- ------- ------
4(h) Minimum Guaranteed Accumulation Benefit Rider (REV) EX-99.B4H
4(i) Minimum Guaranteed Income Benefit Rider (REV) EX-99.B4I
4(j) Minimum Guaranteed Withdrawal Benefit Rider (REV) EX-99.B4J
4(k) Living Benefit Rider Endorsement (Inforce Riders) EX-99.B4K
4(l) Death Benefit Endorsement No.1 (REV)
(7% Solution Enhanced) EX-99.B4L
4(m) Death Benefit Endorsement No.2 (REV)(Ratchet Enhanced) EX-99.B4M
4(n) Death Benefit Endorsement No.3 (REV)(Standard) EX-99.B4N
4(o) Death Benefit Endorsement No.4 (REV)(Max 7 Enhanced) EX-99.B4O
4(p) Death Benefit Endorsement No.5 (Base Death Benefit) EX-99.B4P
4(q) Death Benefit Endorsement No.6 (Inforce Contracts) EX-99.B4Q
15 Power of Attorney EX-99.B15
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