<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON January 27, 2000
Registration Nos. 333-66757, 811-5626
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ___ [ ]
Post-Effective Amendment No. 2 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 84 [X]
(Check appropriate box or boxes)
SEPARATE ACCOUNT B
(Exact Name of Registrant)
GOLDEN AMERICAN LIFE INSURANCE COMPANY
(Name of Depositor)
1475 Dunwoody Drive
West Chester, Pennsylvania 19380-1478
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (610) 425-3400
Marilyn Talman, 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.
(Name and Address of Agent for Service) Washington, D.C. 20004-2404
Approximate Date of Proposed Public Offering:
As soon as practical after the effective date of the Registration Statement
It is proposed that this filing will become effective (check approporate box:
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[x] on February 1, 2000 pursuant to paragraph (b) of Rule 485
[ ] 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
There are two versions of the prospectus and Statement of Additional
Information included in this Registration Statement ("Version 1" and
"Version 2").
Version 1 offers the contract with the standard death benefit and four
enhanced death benefit options.
Version 2 offers the contract only with a standard death benefit and is
a subset of Version 1.
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SUPPLEMENT FOR VERSIONS ONE AND TWO
LINKING FID BROCHURE TO
PROSPECTUS OF GOLDENSELECT PREMIUM PLUS/R/
<PAGE>
ING VARIABLE ANNUITIES
GOLDEN AMERICAN LIFE INSURANCE COMPANY
PROFILE AND PROSPECTUS SUPPLEMENT
DATED FEBRUARY 1, 2000
Supplement to the Profile and
Prospectus dated February 1, 2000 for
DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY CONTRACTS
issued
by Golden American Life Insurance Company
(the "GoldenSelect VALUE Prospectuses")
__________
You should keep this supplement with your Prospectus.
A Fixed Interest Division option is available through the
group and individual deferred variable annuity contracts
offered by Golden American Life Insurance Company. The
Fixed Interest Division is part of the Golden American
General Account. Interests in the Fixed Interest Division
have not been registered under the Securities Act of 1933,
and neither the Fixed Interest Division nor the General
Account are registered under the Investment Company Act of
1940.
Interests in the Fixed Interest Division are offered through
an Offering Brochure, dated May 1, 1999. The Fixed
Interest Division is different from the Fixed Account which
is described in the prospectus but which is not available
in your state. When reading through the GoldenSelect
VALUE Prospectus, the Fixed Interest Division should
be counted among the various divisions available for the
allocation of your premiums, in lieu of the Fixed Account.
The Fixed Interest Division may not be available in some
states. Some restrictions may apply.
More complete information relating to the Fixed Interest
Division is found in the Offering Brochure. Please read the
Offering Brochure carefully before you invest in the Fixed
Interest Division.
Golden American Life Insurance Company
Golden American Life Insurance Company is a stock company domiciled
in Delaware
106548 VALUE 02/01/00
<PAGE>
VERSION 1
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PROFILE AND PROSPECTUS FOR VALUE
<PAGE>
ING VARIABLE ANNUITIES
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B OF GOLDEN AMERICAN LIFE INSURANCE COMPANY
[begin shaded block]
PROFILE OF
GOLDENSELECT VALUE
FIXED AND VARIABLE ANNUITY CONTRACT
FEBRUARY 1, 2000
[inset within shaded block]
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.
[end inset within shaded block]
[end shaded block]
1. THE ANNUITY CONTRACT
The Contract offered in this prospectus is a deferred combination
variable and fixed annuity contract between you and Golden American
Life Insurance Company. The Contract provides a means for you to
invest on a tax-deferred basis in (i) one or more of the 25 mutual
fund investment portfolios through our Separate Account B and/or
(ii) in a fixed account of Golden American with guaranteed interest
periods. The 25 mutual fund portfolios are listed on page [3] below.
We currently offer guaranteed interest periods of 6 months, 1, 3, 5, 7
and 10 years in the fixed account. We set the interest rates in the fixed
account (which will never be less than 3%) periodically. We may credit a
different interest rate for each interest period. The interest you earn
in the fixed account as well as your principal is guaranteed by Golden
American as long as you do not take your money out before the maturity
date for the applicable interest period. If you withdraw your money
from the fixed account more than 30 days before the applicable
maturity date, we will apply a market value adjustment. A market value
adjustment could increase or decrease your contract value and/or the
amount you take out. Generally, the investment portfolios are designed
to offer a better return than the fixed account. However, this is NOT
guaranteed. You may not make any money, and you can even lose the
money you invest.
The Contract, like all deferred variable annuity contracts, has two
phases: the accumulation phase and the income phase. The
accumulation phase is the period between the contract date and the
date on which you start receiving the annuity payments under your
Contract. The amounts you accumulate during the accumulation phase
will determine the amount of annuity payments you will receive. The
income phase begins on the annuity start date, which is the date you
start receiving regular annuity payments from your Contract.
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, and (6) 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:
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PROSPECTUS BEGINS AFTER
PAGE [ ] OF THIS PROFILE
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[Table with Shaded Heading]
Annuity Options
|------------------------------------------------------------------------|
| 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 |
| life with a your life or longer for a specified |
| period certain period such as 10 or 20 years or |
| until the total amount used to buy |
| this option has been repaid. This |
| option comes with an added guarantee|
| that payments will continue to your |
| beneficiary for the remainder of |
| period if you should die during the |
| period. |
|------------------------------------------------------------------------|
| Option 3 Joint life income Payments are made for your life |
| and the life of another person |
| (usually your spouse). |
|------------------------------------------------------------------------|
| Option 4 Annuity plan Any other annuitization plan that we|
| choose to offer on the annuity |
| start date. |
|------------------------------------------------------------------------|
Annuity payments under Options 1, 2 and 3 are fixed. Annuity payments
under Option 4 may be fixed or variable. If variable and subject to the
Investment Company Act of 1940, it will comply with requirements of such
Act. Once you elect an annuity option and begin to receive payments, it
cannot be changed.
3. PURCHASE (BEGINNING OF THE ACCUMULATION PHASE)
You may purchase the Contract with an initial payment of $25,000 or
more up to and including age 85. You may make additional payments of
$1,000 or more ($250 for a qualified Contract) at any time before you
turn age 85 during the accumulation phase. Under certain
circumstances, we may waive the minimum initial and additional
premium payment requirement. Any initial or additional premium
payment that would cause the contract value of all annuities that you
maintain with us to exceed $1,000,000 requires our prior approval.
Who may purchase this Contract? The Contract may be purchased by
individuals as part of a personal retirement plan (a "non-qualified
Contract"), or as a Contract that qualifies for special tax treatment
when purchased as either an Individual Retirement Annuity (IRA) or in
connection with a qualified retirement plan (each a "qualified
Contract").
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, and 1, 3, 5, 7 and 10 years, and/or (2)
into any one or more of the following 25 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 and the Warburg Pincus Trust. 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>
<S> <C> <C>
THE GCG TRUST
Liquid Asset Series Capital Growth Series Small Cap Series
Limited Maturity Bond Series Growth Series Real Estate Series
Global Fixed Income Series Value Equity Series Hard Assets Series
Total Return Series Research Series Developing World Series
Fully Managed Series Managed Global Series
Equity Income Series All Cap Series
Investors Series Capital Appreciation Series
Large Cap Value Series Mid-Cap Growth Series
Rising Dividends Series Strategic Equity Series
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2
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THE PIMCO TRUST
PIMCO High Yield Bond Portfolio
PIMCO StocksPLUS Growth and Income Portfolio
THE WARBURG PINCUS TRUST
International Equity Portfolio
</TABLE>
5. EXPENSES
The Contract has insurance features and investment features, and
there are charges related to each. The Company currently does not
deduct an annual contract administrative charge but may in the future
charge an annual contract administrative fee of $30 or 2% of the
contract value, whichever is less. We also collect a mortality and
expense risk charge and an asset-based administrative charge. These
2 charges are deducted daily directly from the amounts in the
investment portfolios. The asset-based administrative charge is
0.15% annually. The annual rate of the mortality and expense risk
charge is:
Mortality & Expense Risk Charge 0.75%
Asset-Based Administrative Charge 0.15%
-----
Total 0.90%
Each investment portfolio has charges for investment management fees
and other expenses. These charges, which vary by investment
portfolio, currently range from 0.59% to 1.83% annually (see
following table) of the portfolio's average daily net asset balance.
If you withdraw money from your Contract, or if you begin receiving
annuity payments, the Company may deduct a premium tax of 0%-3.5% to
pay to your state.
We deduct a surrender charge if you surrender your Contract or
withdraw an amount exceeding the free withdrawal amount. The free
withdrawal amount in any contract year is the greater of (i) any
earnings less previous withdrawals; or (ii) 10% of premium payments
paid within the last 7 years and not previously withdrawn, less any
previous withdrawals taken in the same contract year. The following
table shows the schedule of the surrender charge that will apply.
The surrender charge is a percent of each premium payment.
COMPLETE YEARS ELAPSED 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7+
SINCE PREMIUM PAYMENT | | | | | | |
SURRENDER CHARGE 6% | 6% | 6% | 5% | 4% | 3% | 1% | 0%
The following table is designed to help you understand the Contract
charges. The "Total Annual Insurance Charges" column includes the
mortality and expense risk charge, the asset-based administrative
charge, and reflects the annual contract administrative charge as
0.04% (based on an average contract value of $75,000). The "Total
Annual Investment Portfolio Charges" column reflects the portfolio
charges for each portfolio and are based on actual expenses as of
December 31, 1998, except for (i) portfolios that commenced operations
during 1998 where the charges have been estimated, and (ii) the newly
formed portfolios where 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. For Years 1 and 10, the examples show the total annual
charges assessed during that time. For these examples, the premium
tax is assumed to be 0%.
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3
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[Table with Shaded Heading]
Total Annual Examples:
Total Annual Examples:
Total Annual Investment Total Total Charges at
Insurance Portfolio Annual the End of:
Investment Portfolio Charges Charges Charges 1 Year 10 Years
The GCG Trust
Liquid Asset 0.94% 0.59% 1.53% $76.00 $182.00
Limited Maturity Bond 0.94% 0.60% 1.54% $76.00 $183.00
Global Fixed Income 0.94% 1.60% 2.54% $86.00 $288.00
Total Return 0.94% 0.97% 1.91% $79.00 $223.00
Fully Managed 0.94% 0.98% 1.92% $79.00 $224.00
Equity Income 0.94% 0.98% 1.92% $79.00 $224.00
Investors 0.94% 1.01% 1.95% $80.00 $227.00
Large Cap Value 0.94% 1.01% 1.95% $80.00 $227.00
Rising Dividends 0.94% 0.98% 1.92% $79.00 $224.00
Capital Growth 0.94% 1.08% 2.02% $81.00 $235.00
Growth 0.94% 1.09% 2.03% $81.00 $236.00
Value Equity 0.94% 0.98% 1.92% $79.00 $224.00
Research 0.94% 0.94% 1.88% $79.00 $220.00
Managed Global 0.94% 1.26% 2.20% $82.00 $253.00
All Cap 0.94% 1.01% 1.95% $80.00 $227.00
Capital Appreciation 0.94% 0.98% 1.92% $79.00 $224.00
Mid-Cap Growth 0.94% 0.95% 1.89% $79.00 $221.00
Strategic Equity 0.94% 0.99% 1.93% $80.00 $225.00
Small Cap 0.94% 0.99% 1.93% $80.00 $225.00
Real Estate 0.94% 0.99% 1.93% $80.00 $225.00
Hard Assets 0.94% 1.00% 1.94% $80.00 $226.00
Developing World 0.94% 1.83% 2.77% $88.00 $310.00
The PIMCO Trust
PIMCO High Yield Bond 0.94% 0.75% 1.69% $77.00 $200.00
PIMCO StocksPLUS
Growth and Income 0.94% 0.65% 1.59% $76.00 $189.00
The Warburg Pincus Trust
International Equity 0.94% 1.33% 2.27% $83.00 $261.00
For the newly formed portfolios, the charges have been estimated.
The "Total Annual Investment Portfolio Charges" column above reflects
current expense reimbursements for applicable investment portfolios.
The 1 Year examples above include a 6% surrender charge. 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.
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 will 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
described on page [6]. Withdrawals above the free withdrawal amount
may be subject
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4
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<PAGE>
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. Since this is a new
Contract, there is no actual performance history to illustrate.
Actual performance information will be shown in an updated
prospectus. Please keep in mind that past or hypothetical
performance is not a guarantee of future results.
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 due
proof of death 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 under
the annuity option then in effect.
The death benefit may be subject to certain mandatory distribution
rules required by federal tax law.
Under the Death Benefit, if you die before the annuity start date,
your beneficiary will receive the greatest of:
1) the contract value;
2) the total premium payments made under the Contract after
subtracting any withdrawals; or
3) the cash surrender value.
Note: The amount of the death benefit above could be reduced by premium
taxes owed and withdrawals not previously deducted.
10. OTHER INFORMATION
FREE LOOK. If you cancel the Contract within 10 days after you
receive it, you will receive a refund of the adjusted contract value.
We determine your contract value at the close of business on the day
we receive your written refund request. For purposes of the refund
during the free look period, (i) we adjust your contract value for
any market value adjustment (if you have invested in the fixed
account), and (ii) then we include a refund of any charges deducted
from your contract value. Because of the market risks associated with
investing in the portfolios and the potential positive or negative
effect of the market value adjustment, the contract value returned may
be greater or less than the premium payment you paid. Some states
require us to return to you the amount of the paid premium (rather
than the contract value in which case you will not be subject to
investment risk during the free look period. Also, in some states,
you may be entitled to a longer free look period.
TRANSFERS AMONG INVESTMENT PORTFOLIOS AND THE FIXED ACCOUNT. You
can make transfers among your investment portfolios and your
investment in the fixed account as frequently as you wish without any
current tax implications. The minimum amount for a transfer is $100.
There is currently no charge for transfers, and we do not limit the
number of transfers. The Company may, in the future, charge a $25
fee for any transfer after the twelfth transfer in a contract year or
limit the number of transfers allowed. Keep in mind that if you
transfer or otherwise withdraw your money from the fixed account more
than 30 days before the applicable maturity date, we will apply a
market value adjustment. A market value adjustment could increase or
decrease your contract value and/or the amount you transfer or
withdraw.
VALUE PROFILE
5
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<PAGE>
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.
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.
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.
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.
11. INQUIRIES
If you need more information after reading this prospectus, please
contact us at:
CUSTOMER SERVICE CENTER
P.O. BOX 2700
WEST CHESTER, PA 19380
(800) 366-0066
or your registered representative.
VALUE PROFILE
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[begin shaded block]
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B OF GOLDEN AMERICAN LIFE INSURANCE COMPANY
FEBRUARY 1, 2000
DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY PROSPECTUS
GOLDENSELECT VALUE
[end shaded block]
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This prospectus describes GoldenSelect Value, a group and individual
deferred variable annuity contract (the "Contract") offered by Golden
American Life Insurance Company (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 25 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:
<TABLE>
<C> <C>
T. ROWE PRICE ASSOCIATES, INC. CAPITAL GUARDIAN TRUST COMPANY
Equity Income Series Large Cap Value Series
Fully Managed Series Managed Global Series
A I M CAPITAL MANAGEMENT, INC. Small Cap Series
Capital Appreciation Series ALLIANCE CAPITAL MANAGEMENT L. P.
Strategic Equity Series Capital Growth Series
KAYNE ANDERSON INVESTMENT MANAGEMENT, LLC JANUS CAPITAL CORPORATION
Rising Dividends Series Growth Series
EII REALTY SECURITIES, INC. MASSACHUSETTS FINANCIAL SERVICES COMPANY
Real Estate Series Mid-Cap Growth Series
BARING INTERNATIONAL INVESTMENT LIMITED (AN AFFILIATE) Research Series
Developing World Series Total Return Series
Global Fixed Income Series ING INVESTMENT MANAGEMENT, LLC (AN AFFILIATE)
Hard Assets Series Limited Maturity Bond Series
SALOMON BROTHERS ASSET MANAGEMENT, INC. Liquid Asset Series
All Cap Series PACIFIC INVESTMENT MANAGEMENT COMPANY
Investor Series PIMCO High Yield Bond Portfolio
EAGLE ASSET MANAGEMENT, INC. PIMCO StocksPLUS Growth and Income Portfolio
Value Equity Series CREDIT SUISSE ASSET MANAGEMENT, LLC
International Equity Portfolio
</TABLE>
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.
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 theadjusted 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, dated May 1, 1999, has been filed with the
Securities and Exchange Commission. 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 Statement of
Additional Information ("SAI") is on the last page of this prospectus
and the SAI is made part of this prospectus by reference.
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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 TRUST
OR THE WARBURG PINCUS TRUST 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 TRUST AND THE WARBURG PINCUS TRUST.
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[Shaded Section Header]
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TABLE OF CONTENTS
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PAGE
Index of Special Terms................................. 1
Fees and Expenses...................................... 2
Performance Information................................ 5
Accumulation Unit................................... 5
Net Investment Factor............................... 5
Financial Statements................................ 6
Performance Information............................. 6
Golden American Life Insurance Company................. 7
The Trusts............................................. 7
Golden American Separate Account B..................... 8
The Investment Portfolios.............................. 8
Investment Objectives............................... 8
Investment Management Fees.......................... 10
The Fixed Interest Allocation.......................... 11
Selecting a Guaranteed Interest Period.............. 11
Guaranteed Interest Rates........................... 11
Transfers from a Fixed Interest Allocation.......... 12
Withdrawals from a Fixed Interest Allocation........ 13
Market Value Adjustment............................. 13
The Annuity Contract................................... 13
Contract Date and Contract Year..................... 14
Annuity Start Date.................................. 14
Contract Owner...................................... 14
Annuitant........................................... 14
Beneficiary......................................... 15
Purchase and Availability of the Contract........... 15
Crediting of Premium Payments....................... 15
Contract Value...................................... 16
Cash Surrender Value................................ 17
Surrendering to Receive the Cash Surrender Value.... 17
Addition, Deletion or Substitution of Subaccounts
and Other Changes................................. 17
The Fixed Account................................... 17
Other Contracts..................................... 17
Other Important Provisions.......................... 18
Withdrawals............................................ 18
Regular Withdrawals................................. 18
Systematic Withdrawals.............................. 18
IRA Withdrawals..................................... 19
Transfers Among Your Investments....................... 20
Dollar Cost Averaging............................... 20
Automatic Rebalancing............................... 21
Death Benefit.......................................... 22
Death Benefit During the Accumulation Phase......... 22
Death Benefit During the Income Phase............... 22
Charges and Fees....................................... 22
Charge Deduction Subaccount......................... 22
Charges Deducted from the Contract Value............ 22
Surrender Charge.................................. 22
Free Withdrawal Amount............................ 23
i
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[Shaded Section Header]
- ----------------------------------------------------------------------
TABLE OF CONTENTS (CONTINUED)
- ----------------------------------------------------------------------
PAGE
Surrender Charge for Excess Withdrawals........... 23
Premium Taxes..................................... 23
Administrative Charge............................. 23
Transfer Charge................................... 23
Charges Deducted from the Subaccounts............... 24
Mortality and Expense Risk Charge................. 24
Asset-Based Administrative Charge................. 24
Trust Expenses...................................... 24
The Annuity Options.................................... 24
Annuitization of Your Contract...................... 24
Selecting the Annuity Start Date.................... 25
Frequency of Annuity Payments....................... 25
The Annuity Options................................. 25
Income for a Fixed Period......................... 25
Income for Life with a Period Certain............. 25
Payment When Named Person Dies...................... 26
Other Contract Provisions.............................. 26
Reports to Contract Owners.......................... 26
Suspension of Payments.............................. 26
In Case of Errors in Your Application............... 26
Assigning the Contract as Collateral................ 26
Contract Changes-Applicable Tax Law................. 26
Free Look........................................... 27
Group or Sponsored Arrangements..................... 27
Selling the Contract................................ 27
Other Information...................................... 28
Voting Rights....................................... 28
Year 2000 Problem................................... 28
State Regulation.................................... 28
Legal Proceedings................................... 28
Legal Matters....................................... 28
Experts............................................. 28
Federal Tax Considerations............................. 29
More Information About Golden American................ {xx}
Financial Statements of Golden American Life
Insurance Company.................................. {xx}
Statement of Additional Information
Table of Contents.................................. {89}
Appendix A
Market Value Adjustment Examples................... A1
Appendix B
Surrender Charge for Excess Withdrawals Example.... B1
ii
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[Shaded Section Header]
- ----------------------------------------------------------------------
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 5
Annuitant 14
Annuity Start Date 14
Cash Surrender Value 17
Contract Date 14
Contract Owner 14
Contract Value 16
Contract Year 14
Fixed Interest Allocation 11
Free Withdrawal Amount 23
Market Value Adjustment 13
Net Investment Factor 5
Death Benefit 22
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
1
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[Shaded Section Header]
- ----------------------------------------------------------------------
FEES AND EXPENSES
- ----------------------------------------------------------------------
CONTRACT OWNER TRANSACTION EXPENSES*
Surrender Charge:
COMPLETE YEARS ELAPSED 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7+
SINCE PREMIUM PAYMENT | | | | | | |
| | | | | | |
SURRENDER CHARGE 6% | 6% | 6% | 5% | 4% | 3% | 1% | 0%
Transfer Charge None**
*If you invested in a Fixed Interest Allocation, a
Market Value Adjustment may apply to certain
transactions. This may increase or decrease your
contract value and/or your transfer or surrender
amount.
**We may in the future charge $25 per transfer if you
make more than 12 transfers in a contract year.
ANNUAL CONTRACT ADMINISTRATIVE CHARGE
Administrative Charge................................. $0
(We may in the future charge an annual contract
administrative charge of $30 or 2% of your contract
value, whichever is less.)
SEPARATE ACCOUNT ANNUAL CHARGES***
DEATH BENEFIT
Mortality and Expense Risk Charge........ 0.75%
Asset-Based Administrative Charge........ 0.15%
-----
Total Separate Account Expenses.......... 0.90%
***As a percentage of average daily assets in each subaccount. The
Separate Account Annual Charges are deducted daily.
THE GCG TRUST ANNUAL EXPENSES (as a percentage of the average daily
net assets of portfolio):
[Table with Shaded Heading and Shaded lines for readability]
|---------------------------------------------------------------------------|
| OTHER TOTAL |
| EXPENSES(2) EXPENSES |
| MANAGEMENT AFTER EXPENSE AFTER EXPENSE |
| PORTFOLIO FEES(1) REIMBURSEMENT REIMBURSEMENT(3) |
|---------------------------------------------------------------------------|
| Liquid Asset 0.59% 0.00% 0.59% |
| Limited Maturity Bond 0.60% 0.00% 0.60% |
| Global Fixed Income 1.60% 0.00% 1.60%(3) |
| Total Return 0.94% 0.03% 0.97%(3) |
| Fully Managed 0.98% 0.00% 0.98% |
| Equity Income 0.98% 0.00% 0.98% |
| Investors 1.00% 0.01% 1.01% |
| Large Cap Value 1.00% 0.01% 1.01% |
| Rising Dividends 0.98% 0.00% 0.98% |
| Capital Growth 1.08% 0.00% 1.08% |
| Growth 1.08% 0.01% 1.09% |
| Value Equity 0.98% 0.00% 0.98% |
| Research 0.94% 0.00% 0.94% |
| Managed Global 1.25% 0.01% 1.26% |
| All Cap 1.00% 0.01% 1.01% |
| Capital Appreciation 0.98% 0.00% 0.98% |
| Mid-Cap Growth 0.94% 0.01% 0.95% |
| Strategic Equity 0.98% 0.01% 0.99% |
| Small Cap 0.98% 0.01% 0.99% |
| Real Estate 0.98% 0.01% 0.99% |
| Hard Assets 0.98% 0.02% 1.00% |
| Developing World 1.75% 0.08% 1.83% |
|---------------------------------------------------------------------------|
2
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(1) Fees decline as the total assets of one or more 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, 1998, except for portfolios that
commenced operations in 1998 where the charges have been
estimated.
(3) Total expenses are based on actual expenses for the fiscal year ended
December 21, 1998. Directed Services, Inc. is currently reimbursing
expenses to maintain total expenses at 0.97% for the Total Return
portfolio and 1.60% for the Global Fixed Income portfolio as shown.
Without this reimbursement, and based on current estimates, total
expenses would be 0.98% for the Total Return portfolio and 1.74% for
the Global Fixed Income portfolio. This reimbursement agreement
will remain in place through August 14, 2000 after which it may be
terminated at any time.
THE PIMCO TRUST ANNUAL EXPENSES (as a percentage of the average daily
net assets of a portfolio):
[Table with Shaded Heading]
|---------------------------------------------------------------------------|
| OTHER TOTAL |
| EXPENSES EXPENSES |
| MANAGEMENT AFTER EXPENSE AFTER EXPENSE |
| PORTFOLIO FEES(1) REIMBURSEMENT(1) REIMBURSEMENT(1) |
|---------------------------------------------------------------------------|
| PIMCO High Yield Bond 0.50% 0.25%(2) 0.75% |
| PIMCO StocksPLUS Growth |
| and Income 0.40% 0.25% 0.65% |
|---------------------------------------------------------------------------|
(1) PIMCO has agreed to waive some or all of its other expenses,
subject to potential future reimbursement, to the extent that
total expenses for the PIMCO High Yield Bond portfolio and PIMCO
StocksPLUS Growth and Income portfolio would exceed 0.75% and
0.65%, respectively, due to payment by the portfolios of their
pro rata portion of Trustees' fees. Without this agreement, and
based on current estimates, total expenses would be 0.81% for the
PIMCO High Yield Bond Portfolio and 0.72% for the PIMCO
StocksPLUS Growth and Income portfolio.
(2) Since the PIMCO High Yield Bond portfolio commenced operations on
April 30, 1998, other expenses as shown has been annualized for
the year ended December 31, 1998.
THE WARBURG PINCUS TRUST ANNUAL EXPENSES (as a percentage of the
average daily net assets of the portfolio):
[Table with Shaded Heading]
|---------------------------------------------------------------------------|
| ADVISORY OTHER TOTAL |
| PORTFOLIO FEES EXPENSES EXPENSES(1) |
|---------------------------------------------------------------------------|
| International Equity 1.00% 0.33% 1.33% |
|---------------------------------------------------------------------------|
(1) Total expenses are based on actual expenses for the fiscal year
ended December 31, 1998.
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 Trust
and the Warburg Pincus Trust for additional information on 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.
3
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EXAMPLES:
The following two examples are designed to show you the expenses you
would pay on a $1,000 investment that earns 5% annually. The examples
reflect the deduction of a mortality and expense risk charge, an
asset-based administrative charge, and in columns one and two of the
examples, the annual contract administrative charge of 0.04% of assets
(based on an average contract value of $75,000). Columns three and
four of the examples show the expenses without the annual contract
administrative charge of 0.04%. We currently waive the 0.04% annual
contract administrative charge. Note that surrender charges may apply
if you choose to annuitize your Contract within the first 5 contract years,
and under certain circumstances, within the first 7 contract years. Thus,
in the event you annuitize your Contract under circumstances which require
a surrender charge, you should refer to Example 1 below which assumes
applicable surrender charges.
Example 1:
If you surrender your Contract at the end of the applicable time pe-
riod, you would pay the following expenses for each $1,000 invested:
The GCG Trust 1 Year 3 Years 5 Years 10 Years
Liquid Asset $76 $108 $75 $107
Limited Maturity Bond $76 $109 $75 $107
Global Fixed Income $86 $139 $85 $138
Total Return $79 $120 $79 $119
Fully Managed $79 $120 $79 $119
Equity Income $79 $120 $79 $119
Investors $80 $121 $79 $120
Large Cap Value $80 $121 $79 $120
Rising Dividends $79 $120 $79 $119
Capital Growth $81 $123 $80 $122
Growth $81 $124 $80 $122
Value Equity $79 $120 $79 $119
Research $79 $119 $79 $118
Managed Global $82 $129 $82 $128
All Cap $80 $121 $79 $120
Capital Appreciation $79 $120 $79 $119
Mid-Cap Growth $79 $119 $79 $118
Strategic Equity $80 $121 $79 $119
Small Cap $80 $121 $79 $119
Real Estate $80 $121 $79 $119
Hard Assets $80 $121 $79 $120
Developing World $88 $146 $88 $145
The PIMCO Trust
PIMCO High Yield Bond $77 $113 $77 $112
PIMCO StocksPLUS Growth
and Income $76 $110 $76 $109
The Warburg Pincus Trust
International Equity $83 $131 $83 $130
4
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Example 2:
If you do not surrender your Contract or if you annuitize on the
annuity start date, you would pay the following expenses for each
$1,000 invested:
The GCG Trust 1 Year 3 Years 5 Years 10 Years
Liquid Asset $16 $48 $15 $47
Limited Maturity Bond $16 $49 $15 $47
Global Fixed Income $26 $79 $25 $78
Total Return $19 $60 $19 $59
Fully Managed $19 $60 $19 $59
Equity Income $19 $60 $19 $59
Investors $20 $61 $19 $60
Large Cap Value $20 $61 $19 $60
Rising Dividends $19 $60 $19 $59
Capital Growth $21 $63 $20 $62
Growth $21 $64 $20 $62
Value Equity $19 $60 $19 $59
Research $19 $59 $19 $58
Managed Global $22 $69 $22 $68
All Cap $20 $61 $19 $60
Capital Appreciation $19 $60 $19 $59
Mid-Cap Growth $19 $59 $19 $58
Strategic Equity $20 $61 $19 $59
Small Cap $20 $61 $19 $59
Real Estate $20 $61 $19 $59
Hard Assets $20 $61 $19 $60
Developing World $28 $86 $28 $85
The PIMCO Trust
PIMCO High Yield Bond $17 $53 $17 $52
PIMCO StocksPLUS Growth
and Income $16 $50 $16 $49
The Warburg Pincus Trust
International Equity $23 $71 $23 $70
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.
[Shaded Section Header]
- ----------------------------------------------------------------------
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.
5
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(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.
FINANCIAL STATEMENTS
The unaudited and audited financial statements of Separate Account B for
the six months ended June 30, 1999 and the years ended December 31, 1998
and 1997 are included in the Statement of Additional Information. The
audited consolidated financial statements of Golden American for the
years ended December 31, 1998, 1997, and 1996 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 accumulative 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
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. 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 surrenders.
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.
6
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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.
[Shaded Section Header]
- ----------------------------------------------------------------------
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. 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.
Our principal office is located 1475 Dunwoody Drive, West Chester,
Pennsylvania 19380.
[Shaded Section Header]
- ----------------------------------------------------------------------
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 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 Trust is 840 Newport Center Drive, Suite 300, Newport
Center, CA 92660.
The Warburg Pincus Trust is also a mutual fund whose shares are
available to separate accounts of life insurance companies, including
Golden American and Equitable Life Insurance Company of Iowa, and to
certain qualified and retirement plans. The address of the
Warburg Pincus Trust is 466 Lexington Avenue, New York, NY 10017.
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 Trust, the Warburg Pincus Trust,
Directed Services, Inc., Pacific Investment Management Company
("PIMCO"), Warburg Pincus Asset Management, Inc. 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
TRUST AND THE WARBURG PINCUS TRUST IN THE ACCOMPANYING PROSPECTUS
FOR EACH TRUST. YOU SHOULD READ THEM CAREFULLY BEFORE INVESTING.
7
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[Shaded Section Header]
- ----------------------------------------------------------------------
GOLDEN AMERICAN SEPARATE ACCOUNT B
- ----------------------------------------------------------------------
Golden American Separate Account B ("Account B") was established as a
separate account of the Company on July 14, 1988. It is registered
with the Securities and Exchange Commission as a unit investment
trust under the Investment Company Act of 1940. Account B is a
separate investment account used for our variable annuity contracts.
We own all the assets in Account B but such assets are kept separate
from our other accounts.
Account B is divided into subaccounts. Each subaccount invests
exclusively in shares of one investment portfolio of the GCG Trust,
PIMCO Trust or the Warburg Pincus Trust. 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 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 the subaccounts whose assets we attribute to
other variable annuity contracts supported by Account B. If the
assets in Account B exceed the required reserves and other
liabilities, we may transfer the excess to our general account. We
are obligated to pay all benefits and make all payments provided
under the Contracts.
We currently offer other variable annuity contracts that invest in
Account B but are not discussed in this prospectus. Account B may
also invest in other investment portfolios which are not available
under your Contract.
[Shaded Section Header]
- ----------------------------------------------------------------------
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.
YOU CAN FIND MORE DETAILED INFORMATION ABOUT THE INVESTMENT PORTFOLIOS
IN THE PROSPECTUSES FOR THE GCG TRUST, THE PIMCO TRUST AND THE WARBURG
PINCUS TRUST. YOU SHOULD READ THESE PROSPECTUSES BEFORE INVESTING.
8
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[Shaded Table Header]
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 with
Bond 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 Seeks high total return.
Income Invests primarily in high-grade fixed income
securities, both foreign and domestic.
----------------------------------------------------
Total Return Seeks above-average income (compared to a portfolio
entirely invested in equity securities)
consistent with the prudent employment of
capital.
Invests primarily in a combination of equity
and fixed income securities.
----------------------------------------------------
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.
----------------------------------------------------
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.
----------------------------------------------------
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.
----------------------------------------------------
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".
----------------------------------------------------
Capital Growth Seeks long-term total return.
Invests primarily in common stocks of
companies where the potential for change
(earnings acceleration) is significant.
----------------------------------------------------
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.
----------------------------------------------------
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.
----------------------------------------------------
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.
----------------------------------------------------
Managed Global Seeks capital appreciation. Current income is only
an incidental consideration.
Invests primarily in common stocks traded in
securities markets throughout the world.
----------------------------------------------------
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.
----------------------------------------------------
Capital Seeks long-term capital growth.
Appreciation Invests primarily in equity securities
believed by the portfolio manager to be
undervalued.
----------------------------------------------------
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.
----------------------------------------------------
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Strategic Equity Seeks capital appreciation.
Invests primarily in common stocks of medium-
and small-sized companies.
----------------------------------------------------
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.
----------------------------------------------------
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.
---------------------------------------------------
THE PIMCO TRUST
PIMCO High Yield Seeks to maximize total return, consistent with
Bond preservation of capital and prudent investment
management.
Invests in at least 65% of its assets in a
diversified portfolio of junk bonds rated at least
B by Moody's Investor Services, Inc. or Standard &
Poor's or, if unrated, determined by the portfolio
manager to be of comparable quality.
----------------------------------------------------
PIMCO StocksPLUS Seeks to achieve a total return which exceeds
Growth and the total return performance of the S&P 500.
Income Invests primarily in common stocks, options,
futures, options on futures and swaps.
----------------------------------------------------
THE WARBURG PINCUS TRUST
International Seeks long-term appreciation.
Equity Invests primarily in a broadly diversified
portfolio of equity securities of companies
that have their principal business activities
outside of the United States.
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INVESTMENT MANAGEMENT FEES
Directed Services, Inc. serves as the overall manager 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. Directed Services
(and not the GCG Trust) pays each portfolio manager a monthly fee for
managing the assets of a portfolio. For a list of the portfolio
managers, see the front cover of this prospectus. Directed Services
does not bear the expenses 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 the PIMCO Trust. The PIMCO Trust pays PIMCO a monthly
advisory fee and a monthly administrative fee of 0.25% 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
Trust.
Credit Suisse Asset Management, LLC serves as the investment advisor
of the Warburg Pincus Trust. The Warburg Trust pays Credit Suisse
Asset Management a monthly advisory fee based on the average daily
net assets of the investment portfolio and also procures the services
necessary for the operation of its portfolios. The Warburg Trust pays
monthly administrative fees to two co-administrators for administrative
services, one of which is an affiliate of Credit Suisse Asset Management.
The month administrative fee is based on the portfolio's average daily
net assets. Credit Suisse Asset Management does not bear any portfolio
expenses.
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YOU CAN FIND MORE DETAILED INFORMATION ABOUT EACH PORTFOLIO'S MANAGEMENT
FEES IN THE PROSPECTUSES FOR EACH TRUST. YOU SHOULD READ THESE
PROSPECTUSES BEFORE INVESTING.
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THE FIXED INTEREST ALLOCATION
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You may allocate premium payments and transfer your contract value to
the guaranteed interest periods of our Fixed Account at any time
during the accumulation period. Every time you allocate money to the
Fixed Account, we set up a Fixed Interest Allocation for the
guaranteed interest period you select. We currently offer guaranteed
interest periods of 6 months, 1, 3, 5, 7, and 10 years, although we
may not offer all these periods in the future. You may select one or
more guaranteed interest periods at any one time. We will credit
your Fixed Interest Allocation with a guaranteed interest rate for
the interest period you select, so long as you do not withdraw money
from that Fixed Interest Allocation before the end of the guaranteed
interest period. Each guaranteed interest period ends on its
maturity date which is the last day of the month in which the
interest period is scheduled to expire.
If you surrender, withdraw, transfer or annuitize your investment in
a Fixed Interest Allocation more than 30 days before the end of the
guaranteed interest period, we will apply a Market Value Adjustment
to the transaction. A market value adjustment could increase or
decrease the amount you surrender, withdraw, transfer or annuitize,
depending on current interest rates at the time of the transaction.
YOU BEAR THE RISK THAT YOU MAY RECEIVE LESS THAN YOUR PRINCIPAL IF WE
APPLY A MARKET VALUE ADJUSTMENT.
Assets supporting amounts allocated to the Fixed Account are
available to fund the claims of all classes of our customers,
contract owners and other creditors. Interests under your Contract
relating to the Fixed Account are registered under the Securities Act
of 1933 but the Fixed Account is not registered under the 1940 Act.
SELECTING A GUARANTEED INTEREST PERIOD
You may select one or more Fixed Interest Allocations with specified
guaranteed interest periods. A guaranteed interest period is the
period that a rate of interest is guaranteed to be credited to your
Fixed Interest Allocation. We may at any time decrease or increase
the number of guaranteed interest periods offered. In addition, we
may offer DCA Fixed Interest Allocations, which are 6-month and 1-
year Fixed Interest Allocations available exclusively in connection
with our dollar cost averaging program. For more information on DCA
Fixed Interest Allocations, see "Transfers Among Your Investments - Dollar
Cost Averaging."
Your contract value in the Fixed Account is the sum of your Fixed
Interest Allocations and the interest credited, as adjusted for any
withdrawals (including any Market Value Adjustment applied to such
withdrawal), transfers or other charges we may impose. Your Fixed
Interest Allocation will be credited with the guaranteed interest
rate in effect for the guaranteed interest period you selected when
we receive and accept your premium or reallocation of contract value.
We will credit interest daily at a rate which yields the quoted
guaranteed interest rate.
GUARANTEED INTEREST RATES
Each Fixed Interest Allocation will have an interest rate that is
guaranteed as long as you do not take your money out until its
maturity date. We do not have a specific formula for establishing
the guaranteed interest rates for the different guaranteed interest
periods. We determine guaranteed interest rates at our sole
discretion. To find out the current guaranteed interest rate for a
guaranteed interest period you are interested in, please contact our
Customer Service Center or your registered representative. The
determination may be influenced by the interest rates on fixed income
investments in which we may invest with the amounts we receive under
the Contracts. We will invest these amounts primarily in investment-
grade fixed income securities (i.e., rated by Standard & Poor's
rating system to be suitable for prudent investors) although we are
not obligated to invest according to any particular strategy, except
as may be required by applicable law. You will have no direct or
indirect interest in these investments. We will also consider other
factors in determining the guaranteed interest rates, including
regulatory and tax requirements, sales commissions and administrative
expenses borne by us, general economic trends and
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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 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.
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.
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MARKET VALUE ADJUSTMENT
A Market Value Adjustment may decrease, increase or have no effect on
your contract value.
We will apply a Market Value Adjustment (i) whenever you withdraw or
transfer money from a Fixed Interest Allocation (unless made within
30 days before the maturity date of the applicable guaranteed
interest period, or under the systematic withdrawal or dollar cost
averaging programs) and (ii) if on the annuity start date a
guaranteed interest period for any Fixed Interest Allocation does not
end on or within 30 days of the annuity start date.
We determine the Market Value Adjustment by multiplying the amount
you withdraw, transfer or apply to an income plan by the following
factor:
( 1+I )N/365
(---------) -1
(1+J+.0050)
Where,
o "I" is the Index Rate for the affected Fixed Interest Allocation
as of the first day of its guaranteed interest period;
o "J" is equal to the following:
(1) If calculated for a Fixed Interest Allocation of 1 year or
more, then "J" is the Index Rate for a new Fixed Interest
Allocation with a guaranteed interest period equal to the
time remaining (rounded up to the next full year except in
Pennsylvania) in the guaranteed interest period;
(2) If calculated for a Fixed Interest Allocation of 6 months,
then "J" is the lesser of the Index Rate for a new Fixed
Interest Allocation with (i) a 6 month guaranteed interest
period, or (ii) a 1 year guaranteed interest period at the
time of calculation; and
o "N" is the remaining number of days in the guaranteed interest
period at the time of calculation.
The Index Rate is the average of the Ask Yields for U.S. Treasury
Strips as quoted by a national quoting service for a period equal to
the applicable guaranteed interest period. The average currently is
based on the period starting from the 22nd day of the calendar month
two months prior to the month of the Index Rate determination and
ending the 21st day of the calendar month immediately before the
month of determination. We currently calculate the Index Rate once
each calendar month but have the right to calculate it more
frequently. The Index Rate will always be based on a period of at
least 28 days. If the Ask Yields are no longer available, we will
determine the Index Rate by using a suitable and approved, if
required, replacement method.
A Market Value Adjustment may be positive, negative or result in no
change. In general, if interest rates are rising, you bear the risk
that any Market Value Adjustment will likely be negative and reduce
your contract value. On the other hand, if interest rates are
falling, it is more likely that you will receive a positive Market
Value Adjustment that increases your contract value. In the event of
a full surrender, transfer or annuitization from a Fixed Interest
Allocation, we will add or subtract any Market Value Adjustment from
the amount surrendered, transferred or annuitized. In the event of a
partial withdrawal, transfer or annuitization, we will add or
subtract any Market Value Adjustment from the total amount withdrawn,
transferred or annuitized in order to provide the amount requested.
If a negative Market Value Adjustment exceeds your contract value in
the Fixed Interest Allocation, we will consider your request to be a
full surrender, transfer or annuitization of the Fixed Interest
Allocation.
Several examples which illustrate how the Market Value Adjustment
works are included in Appendix A.
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THE ANNUITY CONTRACT
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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
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Trust, the PIMCO Trust and the Warburg Pincus
Trust through Golden American 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.
The death benefit becomes payable when you die. In the case of a
sole contract owner who dies before the income phase begins, we will
pay the beneficiary the death benefit then due. The sole contract
owner's estate will be the beneficiary if no beneficiary has been
designated or the beneficiary has predeceased the contract owner. In
the case of a joint owner of the Contract dying before the income
phase begins, we will designate the surviving contract owner as the
beneficiary. This will override any previous beneficiary
designation.
If the contract owner is a trust and a beneficial owner of the trust
has been designated, the beneficial owner will be treated as the
contract owner for determining the death benefit. If a beneficial
owner is changed or added after the contract date, this will be
treated as a change of contract owner for determining the death
benefit.
JOINT OWNER. For non-qualified Contracts only, joint owners may
be named in a written request before the Contract is in effect.
Joint owners may independently exercise transfers and other
transactions allowed under the Contract. All other rights of
ownership must be exercised by both owners. Joint owners own equal
shares of any benefits accruing or payments made to them. All rights
of a joint owner end at death of that owner if the other joint owner
survives. The entire interest of the deceased joint owner in the
Contract will pass to the surviving joint owner. The age of the
older owner will determine the applicable death benefit if Enhanced
Death Benefits are available for multiple owners.
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
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the
beneficiary. If the annuitant was the sole contract owner and there
is no beneficiary designation, the annuitant's estate will be the
beneficiary.
Regardless of whether a death benefit is payable, if the annuitant
dies and any contract owner is not an individual, distribution rules
under federal tax law will apply. You should consult your tax
advisor for more information if you are not an individual.
BENEFICIARY
The beneficiary is named by you in a written request. The
beneficiary is the person who receives any death benefit proceeds and
who becomes the successor contract owner if the contract owner (or
the annuitant if the contract owner is other than an individual) dies
before the annuity start date. We pay death benefits to the primary
beneficiary (unless there are joint owners, in which case death
proceeds are payable to the surviving owner(s)).
If the beneficiary dies before the annuitant or the contract owner,
the death benefit proceeds are paid to the contingent beneficiary, if
any. If there is no surviving beneficiary, we pay the death benefit
proceeds to the contract owner's estate.
One or more persons may be a beneficiary or contingent beneficiary.
In the case of more than one beneficiary, we will assume any death
benefit proceeds are to be paid in equal shares to the surviving
beneficiaries.
You have the right to change beneficiaries during the annuitant's
lifetime unless you have designated an irrevocable beneficiary. When
an irrevocable beneficiary has been designated, you and the
irrevocable beneficiary may have to act together to exercise some of
the rights and options under the Contract.
CHANGE OF CONTRACT OWNER OR BENEFICIARY. During the annuitant's
lifetime, you may transfer ownership of a non-qualified Contract. A
change in ownership may affect the amount of the death benefit and
the guaranteed death benefit. 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 $25,000 or more. You may make
additional payments of at least $1,000 or more at any time after the
free look period before you turn age 85. Under certain
circumstances, we may waive the minimum premium payment requirement.
We may also change the minimum initial or additional premium
requirements for certain group or sponsored arrangements. Any
initial or additional premium payment that would cause the contract
value of all annuities that you maintain with us to exceed $1,000,000
requires our prior approval.
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 all information necessary
is received. In certain states we also accept initial and
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. For initial premium payments, the payment
will be credited at the accumulation unit value next determined after
receipt of your premium payment and the completed application. Once the
completed application is received, we will allocate the payment to the
subaccount 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. 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.
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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 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 Account B or the Fixed Account be allocated to a
subaccount specially designated by the Company (currently, the Liquid
Asset subaccount) during the free look period. After the free look
period, we will convert your contract value (your initial premium
plus any earnings less any expenses) into accumulation units of the
subaccounts you previously selected. The accumulation units will be
allocated based on the accumulation unit value next computed for each
subaccount. Initial premiums designated for Fixed Interest
Allocations will be allocated to a Fixed Interest Allocation with the
guaranteed interest period you have chosen; however, in the future we
may allocate those premiums to the specially designated subaccount
during the free look period.
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, 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.
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(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 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 adjust for any Market Value Adjustment, then we deduct any
surrender charge, any charge for premium taxes, and any other charges
incurred but not yet deducted.
SURRENDERING TO RECEIVE THE CASH SURRENDER VALUE
You may surrender the Contract at any time while the annuitant is
living and before the annuity start date. A surrender will be
effective on the date your written request and the Contract are
received at our Customer Service Center. We will determine and pay
the cash surrender value at the price next determined after receipt
of all paperwork required in order for us to process your surrender.
Once paid, all benefits under the Contract will be terminated. For
administrative purposes, we will transfer your money to a specially
designated subaccount (currently the Liquid Asset subaccount) prior
to processing the surrender. This transfer will have no effect on
your cash surrender value. You may receive the cash surrender value
in a single sum payment or apply it under one or more annuity options.
We will usually pay the cash surrender value within 7 days.
Consult your tax advisor regarding the tax consequences associated
with surrendering your Contract. A surrender made before you reach
age 59 1/2 may result in a 10% tax penalty. See "Federal Tax
Considerations" for more details.
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 a portfolio
subject to those instructions, we will execute your instructions
using the substituted portfolio.
We also reserve the right to: (i) deregister Account B under the 1940
Act; (ii) operate Account B as a management company under the 1940
Act if it is operating as a unit investment trust; (iii) operate
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 Account B; and (v) combine 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.
OTHER CONTRACTS
We offer other variable annuity contracts that also invest in the
same investment portfolios of the Trusts. These contracts have different
charges that could effect their performance, and may offer different
benefits more
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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
annuitant, you may withdraw all or part of your money. Keep in mind
that if you request a withdrawal for more than 90% of the cash
surrender value, we will treat it as a request to surrender the
Contract. If any single withdrawal or the sum of withdrawals exceeds
the Free Withdrawal Amount, you will incur a surrender charge. The
Free Withdrawal Amount in any contract year is the greater of (i) any
earnings less previous free withdrawals, or (ii) 10% of premium
payments paid within the past 7 years not previously withdrawn, less
any previous free withdrawals taken in the same contract year.
You need to submit to us a written request specifying the Fixed
Interest Allocations or subaccounts from which amounts are to be
withdrawn, otherwise the withdrawal will be made on a pro rata basis
from all of the subaccounts in which you are invested. If there is
not enough contract value in the subaccounts, we will deduct the
balance of the withdrawal from your Fixed Interest Allocations
starting with the guaranteed interest periods nearest their maturity
dates until we have honored your request. We will apply a Market
Value Adjustment to any withdrawal from your Fixed Interest
Allocation taken more than 30 days before its maturity date. Definitive
guidance on the proper federal tax treatment of the Market Value Adjustment
has not been issued. You may want to discuss the potential tax consequences
of a Market Value Adjustment with your tax adviser. We will determine the
contract value as of the close of business on the day we receive your
withdrawal request at our Customer Service Center. The contract value may be
more or less than the premium payments made.
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 effect the withdrawal amount you receive.
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 $100. We will apply a Market Value
Adjustment to any regular withdrawals from a Fixed Interest
Allocation taken more than 30 days before its maturity date.
SYSTEMATIC WITHDRAWALS
You may choose to receive automatic systematic withdrawal
payments (1) from the contract value in the subaccounts in which
you are invested, or (2) from the interest earned in your Fixed
Interest Allocations. Systematic withdrawals may be taken
monthly, quarterly or annually. You decide when you would like
systematic payments to start as long as it starts at least 28
days after your contract date. You also select the date on
which the systematic withdrawals will be made, but this date
cannot be later than the 28th day of the month. If you have
elected to receive systematic withdrawals but have not chosen a
date, we will make the withdrawals on the same calendar day of
each month as your contract date. If your contract date is
after the 28th, your systematic withdrawal will be made on the
28th day of each month.
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Each systematic withdrawal amount must be a minimum of $100.
The amount of your systematic withdrawal can either be (1) a
fixed dollar amount, or (2) an amount based on a percentage of
the premiums not previously withdrawn from the subaccounts in
which you are invested. Both forms of systematic withdrawals
are subject to the following maximum, which is calculated on
each withdrawal date:
MAXIMUM PERCENTAGE
FREQUENCY OF CONTRACT VALUE
Monthly 0.833%
Quarterly 2.50%
Annually 10.00%
If your systematic withdrawal is a fixed dollar amount and the
amount to be withdrawn would exceed the
applicable maximum percentage of your 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
systematic withdrawal program.
If your systematic withdrawal is based on a percentage of the
premiums not previously withdrawn from the subaccounts in which
you are invested and the amount to be withdrawn based on that
percentage would be less than $100, we will automatically increase
the amount to $100 as long as it does not exceed the maximum
percentage. If the systematic withdrawal would exceed the maximum
percentage, we will send the amount, and then automatically cancel
your systematic withdrawal option. Systematic withdrawals from Fixed
Interest Allocations are limited to interest earnings during the prior
month, quarter, or year, depending on the frequency you chose.
Systematic withdrawals are not subject to a Market Value Adjustment,
unless you have added the Fixed Dollar Systematic Withdrawal Feature
discussed below and the payments exceed interest earnings.
Systematic withdrawals from Fixed Interest Allocations under the
Fixed Dollar Systematic Withdrawal Feature are available only in
connection with Section 72(q) or 72(t) distributions. A Fixed
Interest Allocation may not participate in both the systematic
withdrawal option and the dollar cost averaging program at the
same time.
You may change the amount or percentage of your systematic
withdrawal once each contract year or cancel this option at any
time by sending satisfactory notice to our Customer Service
Center at least 7 days before the next scheduled withdrawal
date. The systematic withdrawal option may commence in a
contract year where a regular withdrawal has been taken but you
may not change the amount or percentage of your withdrawals in
any contract year during which you have previously taken a
regular withdrawal. You may not elect the systematic withdrawal
option if you are taking IRA withdrawals.
FIXED DOLLAR SYSTEMATIC WITHDRAWAL FEATURE. You may add the
Fixed Dollar Systematic Withdrawal Feature to your regular fixed
dollar systematic withdrawal program. This feature allows you
to receive a systematic withdrawal in a fixed dollar amount
regardless of any surrender charges or Market Value Adjustments.
Systematic withdrawals from Fixed Interest Allocations under the
Fixed Dollar Systematic Withdrawal Feature are available only in
connection with Section 72(q) or 72(t) distributions. You
choose the amount of the fixed systematic withdrawals, which may
total up to an annual maximum of 10% of your premium payments
not previously withdrawn as determined on the day we receive
your election of this feature. The maximum limit will not be
recalculated when you make additional premium payments, unless
you instruct us to do us. We will assess a surrender charge on
the withdrawal date if the withdrawal exceeds the maximum limit
as calculated on the withdrawal date. We will assess a Market
Value Adjustment on the withdrawal date if the withdrawal from a
Fixed Interest Allocation exceeds your interest earnings on the
withdrawal date. We will apply the surrender charge and any Market
Value Adjustment directly to your contract value (rather than to
the systematic withdrawal) so that the amount of each systematic
withdrawal remains fixed.
Flat dollar systematic withdrawals which are intended to satisfy
the requirements of Section 72(q) or 72(t) of the Tax Code may
exceed the maximum. Such withdrawals are subject to surrender
charges and Market Value Adjustment when they exceed the
applicable free withdrawal amount.
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 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.
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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 Statement of
Additional Information. 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 us
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 before the
taxpayer reaches age 59 1/2 may result in a 10% penalty tax. See
"Federal Tax Considerations" for more details.
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TRANSFERS AMONG YOUR INVESTMENTS
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You may transfer your contract value among the subaccounts in which
you are invested and your Fixed Interest Allocations at the end of
the free look period until the annuity start date. We currently do
not charge you for transfers made during a contract year, but reserve
the right to charge $25 for each transfer after the twelfth transfer
in a contract year. We also reserve the right to limit the number of
transfers you may make and may otherwise modify or terminate transfer
privileges if required by our business judgement or in accordance
with applicable law. We will apply a Market Value Adjustment to
transfers from a Fixed Interest Allocation taken more than 30 days
before its maturity date, unless the transfer is made under the
dollar cost averaging program.
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.
Account B and the Company will not be liable for following
instructions communicated by telephone or over the internet 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.
DOLLAR COST AVERAGING
You may elect to participate in our dollar cost averaging program if
you have at least $1,200 of contract value in the (i) Limited
Maturity Bond subaccount or the Liquid Asset subaccount, or (ii) a
Fixed Interest Allocation with either a 6-month or a 1-year
guaranteed interest period. These subaccounts or Fixed Interest
Allocations serve as the source accounts from which we will, on a
monthly basis, automatically transfer a set dollar amount of money to
other subaccounts selected by you. We also may offer DCA Fixed
Interest Allocations, which are 6-month and 1-year Fixed Interest
Allocations available exclusively for use with the dollar cost
averaging program. The DCA Fixed Interest Allocations require a
minimum premium payment of $1,200 directed into a DCA Fixed Interest
Allocation.
The dollar cost averaging program is designed to lessen the impact of
market fluctuation on your investment. Since we transfer the same
dollar amount to other subaccounts each month, more units of a
subaccount are
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purchased if the value of its unit is low and less
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 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.
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 Account B, you may elect to have your investments in
the subaccounts automatically rebalanced. 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
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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 payment.
The Death Benefit under the Contract is the greatest of (i) your
contract value; (ii) total premium payments less any withdrawals; and
(iii) the cash surrender value.
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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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 portfolio 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 6% | 6% | 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 the greater of (i) any earnings less previous free
withdrawals or (ii) 10% of premium payments paid within the past 7
years and not previously withdrawn, less any previous free
withdrawals taken in the same contract year.
SURRENDER CHARGE FOR EXCESS WITHDRAWALS. We will deduct a
surrender charge for excess withdrawals. We consider a withdrawal to
be an "excess withdrawal" when the amount you withdraw in any
contract year exceeds the Free Withdrawal Amount. Where you are
receiving systematic withdrawals, any combination of regular
withdrawals taken and any systematic withdrawals expected to be
received in a contract year will be included in determining the
amount of the excess withdrawal. Such a withdrawal will be considered
a partial surrender of the Contract and we will impose a surrender
charge and any associated premium tax. We will deduct such charges
from the contract value in proportion to the contract value in each
subaccount or Fixed Interest Allocation from which the excess
withdrawal was taken. In instances where the excess withdrawal
equals the entire contract value in such subaccounts or Fixed
Interest Allocations, we will deduct charges proportionately from all
other subaccounts and Fixed Interest Allocations in which you are
invested. ANY WITHDRAWAL FROM A FIXED INTEREST ALLOCATION MORE THAN
30 DAYS BEFORE ITS MATURITY DATE WILL TRIGGER A MARKET VALUE
ADJUSTMENT.
For the purpose of calculating the surrender charge for an excess
withdrawal: a) we treat premiums as being withdrawn on a first-in,
first-out basis; and b) amounts withdrawn which are not considered an
excess withdrawal are not considered a withdrawal of any premium
payments. We have included an example of how this works in Appendix
B. Although we treat premium payments as being withdrawn before
earnings for purpose of calculating the surrender charge for excess
withdrawals, the federal tax law treats earnings as withdrawn first.
PREMIUM TAXES. We may make a charge for state and local premium
taxes depending on your state of residence. The tax can range from 0%
to 3.5% of the premium payment. We have the right to change
this amount to conform with changes in the law or if you change
your state of residence.
We deduct the premium tax from your contract value on the annuity
start date. However, some jurisdictions impose a premium tax at the
time that initial and additional premiums are paid, regardless of
when the annuity payments begin. In those states we may defer
collection of the premium taxes from your contract value and deduct
it when you surrender the Contract, when you take an excess
withdrawal, or on the annuity start date.
ADMINISTRATIVE CHARGE. We currently do not charge an annual
administrative charge but may in the future deduct an annual
administrative charge of $30 or 2% of the contract value, whichever
is smaller. Such charge, if any, will be made on each Contract
anniversary, or if you surrender your Contract prior to a Contract
anniversary, at the time we determine the cash surrender value
payable to you. We deduct the charge proportionately from all
subaccounts in which you are invested. If there is no contract value
in those subaccounts, we will deduct the charge from your Fixed
Interest Allocations starting with the guarantee interest periods
nearest their maturity dates until the charge has been paid.
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TRANSFER CHARGE. We currently do not deduct any charges for
transfers made during a contract year. We have the right, however,
to assess up to $25 for each transfer after the twelfth transfer in a
contract year. If such a charge is assessed, we would deduct the
charge from the subaccounts and the Fixed Interest Allocations from
which each such transfer is made in proportion to the amount being
transferred from each subaccount and Fixed Interest Allocation,
unless you have chosen to have all charges deducted from a single
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, on an annual basis, is equal to 0.75% of the
assets you have in each subaccount. The charge is deducted on each
business day at the rate of .002063% 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.
TRUST EXPENSES
There are fees and charges deducted from each investment portfolio of
the Trusts. Please read the respective Trust prospectus for details.
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THE ANNUITY OPTIONS
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ANNUITIZATION OF YOUR CONTRACT
If the annuitant and contract owner are living on the annuity start
date, we will begin making payments to the contract owner under an
income plan. We will make these payments under the annuity option
chosen. You may change annuity option by making a written request to
us at least 30 days before the annuity start date. The amount of the
payments will be determined by applying your contract value adjusted
for any applicable Market Value Adjustment on the annuity start date
in accordance with the annuity option you chose.
You may also elect an annuity option on surrender of the Contract for
its cash surrender value or you may choose one or more annuity
options for the payment of death benefit proceeds while it is in
effect and before the annuity start date. If, at the time of the
contract owner's death or the annuitant's death (if the contract
owner is not an individual), no option has been chosen for paying
death benefit proceeds, the beneficiary may choose an annuity option
within 60 days. In all events, payments of death benefit proceeds
must comply with the distribution requirements of applicable federal
tax law.
The minimum monthly annuity income payment that we will make is $20.
We may require that a single sum payment be made if the contract
value is less than $2,000 or if the calculated monthly annuity income
payment is less than $20.
For each annuity option we will issue a separate written agreement
putting the annuity option into effect. Before we pay any annuity
benefits, we require the return of your Contract. If your Contract
has been lost, we will require that you complete and return the
applicable lost Contract form. Various factors will affect the level
of annuity benefits, such as the annuity option chosen, the
applicable payment rate used and the investment performance of the
portfolios and interest credited to the Fixed Interest Allocations.
Our current annuity options provide only for fixed payments. Fixed
annuity payments are regular payments, the amount of which is fixed
and guaranteed by us. Some fixed annuity options provide fixed
payments either for a specified period of time or for the life of the
annuitant. The amount of life income payments will depend on the
form and duration of payments you chose, the age of the annuitant or
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beneficiary (and gender, where appropriate) under applicable law, the
total contract value applied to purchase a Fixed Interest Allocation,
and the applicable payment rate.
Our approval is needed for any option where:
(1) The person named to receive payment is other than the contract
owner or beneficiary;
(2) The person named is not a natural person, such as a
corporation; or
(3) Any income payment would be less than the minimum annuity
income payment allowed.
SELECTING THE ANNUITY START DATE
You select the annuity start date, which is the date on which the
annuity payments commence. The annuity start date must be at least
5 years from the contract date but before the month immediately
following the annuitant's 90th birthday, or 10 years from the contract
date, if later. If, on the annuity start date, a surrender charge
remains, the elected annuity option must include a period certain of
at least 5 years.
If you do not select an annuity start date, it will automatically
begin in the month following the annuitant's 90th birthday, or 10
years from the contract date, if later.
If the annuity start date occurs when the annuitant is at an advanced
age, such as over age 85, it is possible that the Contract will not
be considered an annuity for federal tax purposes. See "Federal Tax
Considerations" and the Statement of Additional Information. For a
Contract purchased in connection with a qualified plan, other than a
Roth IRA, distributions must commence not later than April 1st of the
calendar year following the calendar year in which you attain age 70
1/2 or, in some cases, retire. Distributions may be made through
annuitization or withdrawals. You should consult your tax adviser for
tax advice.
FREQUENCY OF ANNUITY PAYMENTS
You choose the frequency of the annuity payments. They may be
monthly, quarterly, semi-annually or annually. If we do not receive
written notice from you, we will make the payments monthly. There
may be certain restrictions on minimum payments that we will allow.
THE ANNUITY OPTIONS
We offer the 4 annuity options shown below. Payments under Options
1, 2 and 3 are fixed. Payments under Option 4 may be fixed or
variable. For a fixed annuity option, the contract value in the
subaccounts is transferred to the Company's general account.
OPTION 1. INCOME FOR A FIXED PERIOD. Under this option, we make
monthly payments in equal installments for a fixed number of years
based on the contract value on the annuity start date. We guarantee
that each monthly payment will be at least the amount stated in your
Contract. If you prefer, you may request that payments be made in
annual, semi-annual or quarterly installments. We will provide you
with illustrations if you ask for them. If the cash surrender value
or contract value is applied under this option, a 10% penalty tax may
apply to the taxable portion of each income payment until the
contract owner reaches age 59 1/2.
OPTION 2. INCOME FOR LIFE WITH A PERIOD CERTAIN. Payment is made
for the life of the annuitant in equal monthly installments and
guaranteed for at least a period certain such as 10 or 20 years.
Other periods certain may be available to you on request. You may
choose a refund period instead. Under this arrangement, income is
guaranteed until payments equal the amount applied. If the person
named lives beyond the guaranteed period, payments continue until his
or her death. We guarantee that each payment will be at least the
amount specified in the Contract corresponding to the person's age on
his or her last birthday before the annuity start date. Amounts for
ages not shown in the Contract are available if you ask for them.
OPTION 3. JOINT LIFE INCOME. This option is available when there
are 2 persons named to determine annuity payments. At least one of
the persons named must be either the contract owner or beneficiary of
the Contract. We guarantee monthly payments will be made as long as
at least one of the named persons is
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living. There is no minimum
number of payments. Monthly payment amounts are available if you ask
for them.
OPTION 4. ANNUITY PLAN. The contract value can be applied to any
other annuitization plan that we choose to offer on the annuity start
date. Annuity payments under Option 4 may be fixed and variable. If
variable and subject to the Investment Company Act of 1940 it will
comply with the requirements of such Act.
PAYMENT WHEN NAMED PERSON DIES
When the person named to receive payment dies, we will pay any
amounts still due as provided in the annuity agreement between you
and Golden American. The amounts we will pay are determined as
follows:
(1) For Option 1, or any remaining guaranteed payments under
Option 2, we will continue payments. Under Options 1 and 2,
the discounted values of the remaining guaranteed payments may
be paid in a single sum. This means we deduct the amount of
the interest each remaining guaranteed payment would have
earned had it not been paid out early. The discount interest
rate is never less than 3% for Option 1 and Option 2 per year.
We will, however, base the discount interest rate on the
interest rate used to calculate the payments for Options 1 and
2 if such payments were not based on the tables in the
Contract.
(2) For Option 3, no amounts are payable after both named persons
have died.
(3) For Option 4, the annuity option agreement will state the
amount we will pay, if any.
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OTHER CONTRACT PROVISIONS
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REPORTS TO CONTRACT OWNERS
We will send you a quarterly report within 31 days after the end of
each calendar quarter. The report will show the contract value, cash
surrender value, and the death benefit as of the end of the calendar
quarter. The report will also show the allocation of your contract
value and reflects the amounts deducted from or added to the contract
value since the last report. You have 30 days to notify our Customer
Service Center of any errors or discrepancies contained in the report
or in any confirmation notices. We will also send you copies of any
shareholder reports of the investment portfolios in which 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 Securities and Exchange Commission so that the sale
of securities held in Account B may not reasonably occur or so that
the Company may not reasonably determine the value of Account B's net
assets; or (4) during any other period when the SEC so permits for the
protection of security holders. We have the right to delay payment of
amounts from a Fixed Interest Allocation for up to 6 months.
IN CASE OF ERRORS IN YOUR APPLICATION
If an age or sex given in the application or enrollment form is
misstated, the amounts payable or benefits provided by the Contract
shall be those that the premium payment would have bought at the
correct age or sex.
ASSIGNING THE CONTRACT AS COLLATERAL
You may assign a non-qualified Contract as collateral security for a
loan but you should understand that your rights and any beneficiary's
rights may be subject to the terms of the assignment. An assignment
may have federal tax consequences. You must give us satisfactory
written notice at our Customer Service Center in order to make or
release an assignment. We are not responsible for the validity of
any assignment.
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CONTRACT CHANGES APPLICABLE TAX LAW
We have the right to make changes in the Contract to continue to
qualify the Contract as an annuity under applicable federal tax law.
You will be given advance notice of such changes.
FREE LOOK
You may cancel your Contract within your 10-day free look period. We
deem the free look period to expire 15 days after we mail the
Contract to you. Some states may require a longer free look period.
To cancel, you need to send your Contract to our Customer Service
Center or to the agent from whom you purchased it. We will refund
the contract value. For purposes of the refund during the free look
period, (i) we adjust your contract value for any market value adjustment
(if you have invested in the fixed account), and (ii) then we include a
refund of any charges deducted from your contract value. Because of the
market risks associated with investing in the portfolios, the
contract value returned may be greater or less than the premium
payment you paid. Some states require us to return to you the amount
of the paid premium (rather than the contract value) in which case you
will not be subject to investment risk during the free look period.
In these states, your premiums designated for investment in the
subaccounts will 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, 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 Account B
and other separate accounts of Golden American. We pay Directed
Services for acting as principal underwriter under a distribution
agreement which in turn pays the writing agent. The principal
address of Directed Services is 1475 Dunwoody Drive, West Chester,
Pennsylvania 19380-1478.
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 6.5% commission, and passes through 100% of
the commission to the broker-dealer whose registered representative
sold the contract:
[Shaded Table Header]
Underwriter Compensation
|----------------------------------------------------------------------------|
| NAME OF PRINCIPAL | AMOUNT OF | OTHER |
| UNDERWRITER | COMMISSION TO BE PAID | COMPENSATION |
| | | |
| Directed Services, Inc. | Maximum of 6.5% | Reimbursement of any |
| | of any initial | covered expenses incurred|
| | or additional | by registered |
| | premium payments | representatives in |
| | except when combined | connection with |
| | with some annual | the distribution |
| | trail commissions. | of the Contracts. |
|----------------------------------------------------------------------------|
Certain sales agreements may provide for a combination of a certain
percentage of commission at the time of sale and an annual trail
commission (which when combined could exceed 6.5% of total premium
payments).
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[Shaded Section Header]
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OTHER INFORMATION
- ----------------------------------------------------------------------
VOTING RIGHTS
We will vote the shares of a Trust owned by Account B according to
your instructions. However, if the Investment Company Act of 1940 or
any related regulations should change, or if interpretations of it or
related regulations should change, and we decide that we are
permitted to vote the shares of a Trust in our own right, we may
decide to do so.
We determine the number of shares that you have in a subaccount by
dividing the Contract's contract value in that subaccount by the net
asset value of one share of the portfolio in which a subaccount
invests. We count fractional votes. We will determine the number of
shares you can instruct us to vote 180 days or less before a Trust's
meeting. We will ask you for voting instructions by mail at least 10
days before the meeting. If we do not receive your instructions in
time, we will vote the shares in the same proportion as the
instructions received from all contracts in that subaccount. We will
also vote shares we hold in Account B which are not attributable to
contract owners in the same proportion.
STATE REGULATION
We are regulated by the Insurance Department of the State of
Delaware. We are also subject to the insurance laws and regulations
of all jurisdictions where we do business. The variable Contract
offered by this prospectus has been approved where required by those
jurisdictions. We are required to submit annual statements of our
operations, including financial statements, to the Insurance
Departments of the various jurisdictions in which we do business to
determine solvency and compliance with state insurance laws and
regulations.
LEGAL PROCEEDINGS
The Company, like other insurance companies, may be involved in
lawsuits, including class action lawsuits. In some class action and
other lawsuits involving insurers, substantial damages have been
sought and/or material settlement payments have been made. We
believe that currently there are no pending or threatened lawsuits
that are reasonably likely to have a materially adverse impact on the
Company or Account B.
LEGAL MATTERS
The legal validity of the Contracts was passed on by Myles R.
Tashman, Esquire, Executive Vice President, General Counsel and
Secretary of Golden American. Sutherland Asbill & Brennan LLP of
Washington, D.C. has provided advice on certain matters relating to
federal securities laws.
EXPERTS
The audited financial statements of Golden American Life Insurance
Company and Account B appearing or incorporated by reference in the
Statement of Additional Information and Registration Statement have
been audited by Ernst & Young LLP, independent auditors, as set forth
in their reports thereon appearing or incorporated by reference in
the Statement of Additional Information and in the Registration
Statement and
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are included or incorporated by reference in reliance
upon such reports given upon the authority of such firm as experts in
accounting and auditing.
[Shaded Section Header]
- ----------------------------------------------------------------------
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 Account B, through
the subaccounts, will satisfy these diversification requirements.
In certain circumstances, owners of variable annuity contracts have
been considered for federal income tax purposes to be the owners of
the assets of the separate account supporting their contracts due to
their ability to exercise investment control over those assets. When
this is the case, the contract owners have been currently taxed on
income and gains attributable to the separate account assets. There
is little guidance in this area, and some features of the Contracts,
such as the flexibility of a contract owner to allocate premium
payments and transfer contract values, have not been explicitly
addressed in published rulings. While we believe that the Contracts
do not give contract owners investment control over 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 Account B
assets supporting the Contract.
REQUIRED DISTRIBUTIONS. In order to be treated as an annuity
contract for federal income tax purposes, the Code requires any non-
qualified Contract to contain certain provisions specifying how your
interest in the Contract will be distributed in the event of your
death. The non-qualified Contracts contain provisions that are
intended to comply with these Code requirements, although no
regulations interpreting these requirements have yet been issued. We
intend to review such provisions and modify them if necessary to
assure that they comply with the applicable requirements when such
requirements are clarified by regulation or otherwise.
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Other rules may apply to Qualified Contracts.
The following discussion assumes that the Contracts will qualify as
annuity contracts for federal income tax purposes.
TAX TREATMENT OF ANNUITIES
IN GENERAL. We believe that if you are a natural person you will
generally not be taxed on increases in the value of a Contract until
a distribution occurs or until annuity payments begin. (For these
purposes, the agreement to assign or pledge any portion of the
contract value, and, in the case of a qualified Contract, any portion
of an interest in the qualified plan, generally will be treated as a
distribution.)
TAXATION OF NON-QUALIFIED CONTRACTS
NON-NATURAL PERSON. The owner of any annuity contract who is not
a natural person generally must include in income any increase in the
excess of the contract value over the "investment in the contract"
(generally, the premiums or other consideration you paid for the
contract less any nontaxable withdrawals) during the taxable year.
There are some exceptions to this rule and a prospective contract
owner that is not a natural person may wish to discuss these with a
tax adviser. The following discussion generally applies to Contracts
owned by natural persons.
WITHDRAWALS. When a withdrawal from a non-qualified Contract
occurs, the amount received will be treated as ordinary income
subject to tax up to an amount equal to the excess (if any) of the
contract value (unreduced by the amount of any surrender charge)
immediately before the distribution over the contract owner's
investment in the Contract at that time. The tax treatment of market
value adjustments is uncertain. You should consult a tax adviser if
you are considering taking a withdrawal from your Contract in
circumstances where a market value adjustment would apply.
In the case of a surrender under a non-qualified Contract, the amount
received generally will be taxable only to the extent it exceeds the
contract owner's investment in the Contract.
PENALTY TAX ON CERTAIN WITHDRAWALS. In the case of a distribution
from a non-qualified Contract, there may be imposed a federal tax
penalty equal to 10% of the amount treated as income. In general,
however, there is no penalty on distributions:
O made on or after the taxpayer reaches age 59 1/2;
O made on or after the death of a contract owner;
O attributable to the taxpayer's becoming disabled; or
O made as part of a series of substantially equal periodic
payments for the life (or life expectancy) of the taxpayer.
Other exceptions may be applicable under certain circumstances and
special rules may be applicable in connection with the exceptions
enumerated above. A tax adviser should be consulted with regard to
exceptions from the penalty tax.
ANNUITY PAYMENTS. Although tax consequences may vary depending on
the payment option elected under an annuity contract, a portion of
each annuity payment is generally not taxed and the remainder is
taxed as ordinary income. The non-taxable portion of an annuity
payment is generally determined in a manner that is designed to allow
you to recover your investment in the Contract ratably on a tax-free
basis over the expected stream of annuity payments, as determined
when annuity payments start. Once your investment in the Contract
has been fully recovered, however, the full amount of each annuity
payment is subject to tax as ordinary income.
TAXATION OF DEATH BENEFIT PROCEEDS. Amounts may be distributed
from a Contract because of your death or the death of the annuitant.
Generally, such amounts are includible in the income of recipient as
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.
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TRANSFERS, ASSIGNMENTS, EXCHANGES AND ANNUITY DATES OF A CONTRACT.
A transfer or assignment of ownership of a Contract, the designation
of an annuitant, the selection of certain dates for commencement of
the annuity phase, or the exchange of a Contract may result in
certain tax consequences to you that are not discussed herein. A
contract owner contemplating any such transfer, assignment or
exchange, should consult a tax advisor as to the tax consequences.
WITHHOLDING. Annuity distributions are generally subject to
withholding for the recipient's federal income tax liability.
Recipients can generally elect, however, not to have tax withheld
from distributions.
MULTIPLE CONTRACTS. All non-qualified deferred annuity contracts
that are issued by us (or our affiliates) to the same contract owner
during any calendar year are treated as one annuity contract for
purposes of determining the amount includible in such contract
owner's income when a taxable distribution occurs.
TAXATION OF QUALIFIED CONTRACTS
The Contracts are designed for use with several types of qualified
plans. The tax rules applicable to participants in these qualified
plans vary according to the type of plan and the terms and
contributions of the plan itself. Special favorable tax treatment
may be available for certain types of contributions and
distributions. Adverse tax consequences may result from:
contributions in excess of specified limits; distributions before age
59 1/2 (subject to certain exceptions); distributions that do not
conform to specified commencement and minimum distribution rules; and
in other specified circumstances. Therefore, no attempt is made to
provide more than general information about the use of the Contracts
with the various types of qualified retirement plans. Contract
owners, annuitants, and beneficiaries are cautioned that the rights
of any person to any benefits under these qualified retirement plans
may be subject to the terms and conditions of the plans themselves,
regardless of the terms and conditions of the Contract, but we shall
not be bound by the terms and conditions of such plans to the extent
such terms contradict the Contract, unless the Company consents.
DISTRIBUTIONS. Annuity payments are generally taxed in the same
manner as under a non-qualified Contract. When a withdrawal from a
qualified Contract occurs, a pro rata portion of the amount received
is taxable, generally based on the ratio of the contract owner's
investment in the Contract (generally, the premiums or other
consideration paid for the Contract) to the participant's total
accrued benefit balance under the retirement plan. For qualified
Contracts, the investment in the Contract can be zero. For Roth
IRAs, distributions are generally not taxed, except as described
below.
For qualified plans under Section 401(a) and 403(b), the Code
requires that distributions generally must commence no later than the
later of April 1 of the calendar year following the calendar year in
which the contract owner (or plan participant) (i) reaches age 70 1/2
or (ii) retires, and must be made in a specified form or manner. If
the plan participant is a "5 percent owner" (as defined in the Code),
distributions generally must begin no later than April 1 of the
calendar year following the calendar year in which the contract owner
(or plan participant) reaches age 70 1/2. For IRAs described in
Section 408, distributions generally must commence no later than
April 1 of the calendar year following the calendar year in which the
contract owner (or plan participant) reaches age 70 1/2. Roth IRAs
under Section 408A do not require distributions at any time before
the contract owner's death.
WITHHOLDING. Distributions from certain qualified plans generally
are subject to withholding for the contract owner's federal income
tax liability. The withholding rates vary according to the type of
distribution and the contract owner's tax status. The contract owner
may be provided the opportunity to elect not to have tax withheld
from distributions. "Eligible rollover distributions" from section
401(a) plans and section 403(b) tax-sheltered annuities are subject
to a mandatory federal income tax withholding of 20%. An eligible
rollover distribution is the taxable portion of any distribution from
such a plan, except certain distributions that are required by the
Code or distributions in a specified annuity form. The 20%
withholding does not apply, however, if the contract owner chooses a
"direct rollover" from the plan to another tax-qualified plan or IRA.
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Brief descriptions of the various types of qualified retirement plans
in connection with a Contract follow. We will endorse the Contract
as necessary to conform it to the requirements of such plan.
REQUIRED DISTRIBUTIONS UPON CONTRACT OWNER'S DEATH
We will not allow any payment of benefits provided under a non-qualified
Contract which do not satisfy the requirements of Section 72(s) of the Code.
If any owner of a non-qualified Contract dies before the annuity
start date, the death benefit payable to the beneficiary will be
distributed as follows: (a) the death benefit must be completely
distributed within 5 years of the contract owner's date of death; or
(b) the beneficiary may elect, within the 1-year period after the
contract owner's date of death, to receive the death benefit in the
form of an annuity from us, provided that (i) such annuity is
distributed in substantially equal installments over the life of such
beneficiary or over a period not extending beyond the life expectancy
of such beneficiary; and (ii) such distributions begin not later than
1 year after the contract owner's date of death.
Notwithstanding (a) and (b) above, if the sole contract owner's
beneficiary is the deceased owner's surviving spouse, then such
spouse may elect to continue the Contract under the same terms as
before the contract owner's death. Upon receipt of such election
from the spouse at our Customer Service Center: (1) all rights of
the spouse as contract owner's beneficiary under the Contract in
effect prior to such election will cease; (2) the spouse will become
the owner of the Contract and will also be treated as the contingent
annuitant, if none has been named and only if the deceased owner was
the annuitant; and (3) all rights and privileges granted by the
Contract or allowed by Golden American will belong to the spouse as
contract owner of the 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.
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
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"rolled over" or transferred on a tax-
deferred basis into an IRA. There are significant restrictions on
rollover or transfer contributions from Savings Incentive Match Plans
(SIMPLE), under which certain employers may provide contributions to
IRAs on behalf of their employees, subject to special restrictions.
Employers may establish Simplified Employee Pension (SEP) Plans to
provide IRA contributions on behalf of their employees. Sales of the
Contract for use with IRAs may be subject to special requirements of
the IRS.
ROTH IRAS
Section 408A of the Code permits certain eligible individuals to
contribute to a Roth IRA. Contributions to a Roth IRA, which are
subject to certain limitations, are not deductible, and must be made
in cash or as a rollover or transfer from another Roth IRA or other
IRA. A rollover from or conversion of an IRA to a Roth IRA may be
subject to tax, and other special rules may apply. Distributions
from a Roth IRA generally are not taxed, except that, once aggregate
distributions exceed contributions to the Roth IRA, income tax and a
10% penalty tax may apply to distributions made (1) before age 59 1/2
(subject to certain exceptions) or (2) during the five taxable years
starting with the year in which the first contribution is made to any
Roth IRA.
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.
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). A tax adviser should be consulted with respect to
legislative developments and their effect on the Contract.
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[Shaded Section Header]
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MORE INFORMATION ABOUT GOLDEN AMERICAN LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------
SELECTED FINANCIAL DATA
The following selected financial data prepared in accordance with
generally accepted accounting principles ("GAAP") for Golden
American should be read in conjunction with the financial
statements and notes thereto included in this prospectus.
On October 24, 1997, PFHI Holdings, Inc. ("PFHI"), a Delaware
corporation, acquired all of the outstanding capital stock of
Equitable of Iowa Companies ("Equitable of Iowa"), according to a
merger agreement among Equitable of Iowa, PFHI, and ING Groep N.V.
(the "ING acquisition"). On August 13, 1996, Equitable of Iowa
acquired all of the outstanding capital stock of BT Variable,
Inc., then the parent of Golden American (the "Equitable
acquisition"). For financial statement purposes, the ING
acquisition was accounted for as a purchase effective October 25,
1997 and the Equitable acquisition was accounted for as a purchase
effective August 14, 1996. As a result, the financial data
presented below for periods after October 24, 1997, are presented
on the Post-Merger new basis of accounting, for the period August
14, 1996 through October 24, 1997, are presented on the Post-
Acquisition basis of accounting, and for August 13, 1996 and prior
periods are presented on the Pre-Acquisition basis of accounting.
<TABLE>
SELECTED GAAP BASIS FINANCIAL DATA
(IN THOUSANDS)
Post-Merger | Post-Acquisition
--------------------------------------------|---------------------------------
For the Period For For the Period | For the Period For the Period
January 1, 1999 the Year October 25, | January 1, August 14, 1996
through Ended 1997 through | 1997 through 1996 through
September 30, December 31, December 31, | October 24, December 31,
1999 1998 1997 | 1997 1996
------------ ------------ -------------- | -------------- ---------------
<S> <C> <C> <C> | <C> <C>
Annuity and Interest |
Sensitive Life |
Product Charges....... $ 55,195 $ 39,119 $ 3,834 | $18,288 $ 8,768
Net Income before |
Federal Income Tax.... $ 7,269 $ 10,353 $ (279) | $ (608) $ 570
Net Income (Loss)....... $ 3,551 $ 5,074 $ (425) | $ 729 $ 350
Total Assets............ $7,312,027 $4,752,533 $2,446,395 | N/A $1,677,899
Total Liabilities....... $6,858,151 $4,398,639 $2,219,082 | N/A $1,537,415
Total Stockholder's |
Equity................ $ 453,876 $ 353,894 $ 227,313 | N/A $ 140,484
</TABLE>
<TABLE>
(IN THOUSANDS)
Pre-Acquisition
---------------------------------------
For the Period
January 1, For the Years
1996 through Ended December 31,
August 13, ----------------------
1996 1995 1994
-------------- ---------- ----------
<S> <C> <C> <C>
Annuity and Interest
Sensitive Life
Product Charges....... $12,259 $ 18,388 $ 17,519
Net Income before
Federal Income Tax.... $ 1,736 $ 3,364 $ 2,222
Net Income (Loss)....... $ 3,199 $ 3,364 $ 2,222
Total Assets............ N/A $1,203,057 $1,044,760
Total Liabilities....... N/A $1,104,932 $ 955,254
Total Stockholder's
Equity................ N/A $ 98,125 $ 89,506
</TABLE>
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BUSINESS ENVIRONMENT
The current business and regulatory environment remains
challenging for the insurance industry. The variable annuity
competitive environment is intense and is dominated by a number of
large variable product companies with strong distribution, name
recognition and wholesaling capabilities. Increasing competition
from traditional insurance carriers as well as banks and mutual
fund companies offer consumers many choices. However, overall
demand for variable products remains strong for several reasons
including: strong stock market performance over the last five
years; relatively low interest rates; an aging U. S. population
that is increasingly concerned about retirement and estate
planning, as well as maintaining their standard of living in
retirement; and potential reductions in government and employer-
provided benefits at retirement as well as lower public confidence
in the adequacy of those benefits.
In October of 1997, Golden American introduced three new variable
annuity products (GoldenSelect Access, GoldenSelect ES II and
GoldenSelect Premium Plus) which have contributed significantly to
sales.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
The purpose of this section is to discuss and analyze Golden
American Life Insurance Company's ("Golden American") consolidated
results of operations. In addition, some analysis and information
regarding financial condition and liquidity and capital resources
has also been provided. This analysis should be read jointly with
the consolidated financial statements, related notes and the
Cautionary Statement Regarding Forward-Looking Statements, which
appear elsewhere in the financial report. Golden American reports
financial results on a consolidated basis. The consolidated financial
statements include the accounts of Golden American and its wholly
owned subsidiary, First Golden American Life Insurance Company of
New York ("First Golden," and collectively with Golden American,
the "Companies").
RESULTS OF OPERATIONS
MERGER. On October 23, 1997, Equitable of Iowa Companies'
("Equitable") shareholders approved an Agreement and Plan of
Merger ("Merger Agreement") dated July 7, 1997 among Equitable,
PFHI Holdings, Inc. ("PFHI") and ING Groep N.V. ("ING"). On
October 24, 1997, PFHI, a Delaware corporation, acquired all of
the outstanding capital stock of Equitable according to the Merger
Agreement. PFHI is a wholly owned subsidiary of ING, a global
financial services holding company based in The Netherlands.
Equitable, an Iowa corporation, in turn owned all the outstanding
capital stock of Equitable Life Insurance Company of Iowa
("Equitable Life") and Golden American and their wholly owned
subsidiaries. In addition, Equitable owned all the outstanding
capital stock of Locust Street Securities, Inc., Equitable
Investment Services, Inc. (subsequently dissolved), Directed
Services, Inc. ("DSI"), Equitable of Iowa Companies Capital Trust,
Equitable of Iowa Companies Capital Trust II and Equitable of Iowa
Securities Network, Inc. (subsequently renamed ING Funds
Distributor, Inc.). In exchange for the outstanding capital stock
of Equitable, ING paid total consideration of approximately $2.1
billion in cash and stock and assumed approximately $400 million
in debt. As a result of this transaction, Equitable of Iowa
Companies was merged into PFHI, which was simultaneously renamed
Equitable of Iowa Companies, Inc. ("EIC" or "Parent"), a Delaware
corporation.
For financial statement purposes, the change in control of the
Companies through the ING merger was accounted for as a purchase
effective October 25, 1997. This merger resulted in a new basis of
accounting reflecting estimated fair values of assets and
liabilities at the merger date. As a result, the Companies'
financial statements for periods after October 24, 1997 are
presented on the Post-Merger new basis of accounting.
The purchase price was allocated to EIC and its subsidiaries with
$227.6 million allocated to the Companies. Goodwill of $1.4
billion was established for the excess of the merger cost over the
fair value of the assets and liabilities of EIC with $151.1
million attributed to the Companies. Goodwill resulting
40
<PAGE>
<PAGE>
from the merger is being amortized over 40 years on a straight-line
basis. The carrying value will be reviewed periodically for any
indication of impairment in value.
CHANGE IN CONTROL--ACQUISITION. On August 13, 1996, Equitable
acquired all of the outstanding capital stock of BT Variable, Inc.
("BT Variable") and its wholly owned subsidiaries, Golden American
and DSI. After the acquisition, the BT Variable, Inc. name was
changed to EIC Variable, Inc. On April 30, 1997, EIC Variable,
Inc. was liquidated and its investments in Golden American and DSI
were transferred to Equitable, while the remainder of its net
assets were contributed to Golden American. On December 30, 1997,
EIC Variable, Inc. was dissolved.
For financial statement purposes, the change in control of Golden
American through the acquisition of BT Variable was accounted for
as a purchase effective August 14, 1996. This acquisition resulted
in a new basis of accounting reflecting estimated fair values of
assets and liabilities at the acquisition date. As a result, the
Companies' financial statements for the period August 14, 1996
through October 24, 1997 are presented on the Post-Acquisition
basis of accounting and for August 13, 1996 and prior periods are
presented on the Pre-Acquisition basis of accounting.
The purchase price was allocated to the three companies purchased
- - BT Variable, DSI, and Golden American. The allocation of the
purchase price to Golden American was approximately $139.9
million. Goodwill of $41.1 million was established for the excess
of the acquisition cost over the fair value of the assets and
liabilities and attributed to Golden American. At June 30, 1997,
goodwill was increased by $1.8 million due to the adjustment of
the value of a receivable existing at the acquisition date. Before
the ING merger, goodwill resulting from the acquisition was being
amortized over 25 years on a straight-line basis.
<TABLE>
THE FIRST NINE MONTHS OF 1999 COMPARED TO THE SAME PERIOD OF 1998
PREMIUMS.
PERCENTAGE DOLLAR
NINE MONTHS ENDED SEPTEMBER 30 1999 CHANGE CHANGE 1998
---- ---------- ------ ----
(Dollars in millions)
<S> <C> <C> <C> <C>
Variable annuity premiums:
Separate account................ $1,783.5 64.9% $702.1 $1,081.4
Fixed account................... 539.4 55.6 192.8 346.6
-------- ---- ------ --------
Total variable annuity premiums... 2,322.9 62.7 894.9 1,428.0
Variable life premiums............ 7.0 (38.9) (4.4) 11.4
-------- ---- ------ --------
Total premiums.................... $2,329.9 61.9% $890.5 $1,439.4
======== ==== ====== ========
</TABLE>
For the Companies' variable contracts, premiums collected are not reported as
revenues, but as deposits to insurance liabilities. Revenues for these
products are recognized over time in the form of investment income and
product charges.
Variable annuity separate account premiums increased 64.9% during the
first nine months of 1999. The fixed account portion of the Companies'
variable annuity premiums increased 55.6% during the first nine months
of 1999. These increases resulted from increased sales of the Premium
Plus variable annuity product.
Premiums, net of reinsurance, for variable products from two
significant broker/dealers each having at least ten percent of total
sales for the nine months ended September 30, 1999 totaled $664.2
million, or 29% of total premiums ($142.6 million, or 10%, from the
one significant broker/dealer for the nine months ended September 30,
1998).
41
<PAGE>
<PAGE>
<TABLE>
REVENUES.
PERCENTAGE DOLLAR
NINE MONTHS ENDED JUNE 30 1999 CHANGE CHANGE 1998
---- ---------- ------ ----
(Dollars in millions)
<S> <C> <C> <C> <C>
Annuity and interest sensitive
life product charges............ $ 55.2 104.5% $ 28.2 $ 27.0
Management fee revenue............ 6.8 107.4 3.5 3.3
Net investment income............. 42.7 45.7 13.4 29.3
Realized gains(losses) on
investments..................... (2.2) (607.5) (2.6) 0.4
Other income...................... 7.4 55.0 2.6 4.8
------- ------ ------ ------
Total premiums.................... $ 109.9 69.6% $ 45.1 $ 64.8
======= ====== ====== ======
</TABLE>
Total revenues increased 69.6% in the first nine months of 1999 from
the same period in 1998. Annuity and interest sensitive life product
charges increased 104.5% in the first nine months of 1999 due to
additional fees earned from the increasing block of business
in the separate accounts.
Golden American provides certain managerial and supervisory services
to Directed Services, Inc. ("DSI"). The fee paid to Golden American
for these services, which is calculated as a percentage of average
assets in the variable separate accounts, was $6.8 million and $3.3
million for the first nine months of 1999 and 1998, respectively.
Net investment income increased 45.7% in the first nine months of 1999
due to growth in invested assets from September 30, 1998. The
Companies had $2.2 million of realized losses resulting from the
writedown of two fixed maturities in the second quarter of 1999 and
from the sale of investments in the first nine months of 1999,
compared to gains of $0.4 million in the same period of 1998. Other
income increased $2.6 million to $7.4 million in the first nine months
of 1999 due primarily to income received due to a modified coinsurance
agreement with an unaffiliated reinsurer, which was offset by a
reduction in the Companies' deferred policy acquisition costs.
EXPENSES. Total insurance benefits and expenses increased $44.5
million, or 84.6%, to $97.0 million in the first nine months of 1999.
Interest credited to account balances increased $61.3 million, or
95.6%, to $125.4 million in the first nine months of 1999. The extra
credit bonus on the Premium Plus variable annuity product increased
$49.9 million to $85.7 million at September 30, 1999 resulting in an
increase in interest credited during the first nine months of 1999
compared to the same period in 1998. The bonus interest on the fixed
account increased $2.6 million to $7.6 million at September 30, 1999
resulting in an increase in interest credited during the first nine
months of 1999 compared to the same period in 1998. The remaining
increase in interest credited relates to higher account balances
associated with the Companies' fixed account option within the
variable products.
Commissions increased $49.6 million, or 58.4%, to $134.6 million in
the first nine months of 1999. Insurance taxes, state licenses, and
fees increased $0.9 million, or 32.3%, to $3.5 million in the first
nine months of 1999. Changes in commissions and insurance taxes, state
licenses, and fees are generally related to changes in the level and
composition of variable product sales. Insurance taxes, state
licenses, and fees are impacted by several other factors, which
include an increase in FICA taxes primarily due to bonuses and
expenses for the triennial insurance department examination of Golden
American. Most costs incurred as the result of sales have been deferred,
thus having very little impact on current earnings.
General expenses increased $24.1 million, or 102.5%, to $47.6 million
in the first nine months of 1999. Management expects general expenses
to continue to increase in 1999 as a result of the emphasis on
expanding the salaried wholesaler distribution network and the growth
in sales. The Companies use a network of wholesalers to distribute
products and the salaries and sales bonuses of these wholesalers are
included in
42
<PAGE>
<PAGE>
general expenses. The portion of these salaries and
related expenses that varies directly with production levels is
deferred thus having little impact on current earnings. The increase
in general expenses was partially offset by reimbursements received
from DSI and Equitable Life, an affiliate, for certain advisory,
computer, and other resources and services provided by Golden
American.
The Companies' previous balances of deferred policy acquisition costs
("DPAC"), value of purchased insurance in force ("VPIF"), and unearned
revenue reserve were eliminated and an asset of $44.3 million
representing VPIF was established for all policies in force at the
merger date. During the first nine months of 1999, VPIF was adjusted
to increase amortization by $0.7 million to reflect changes in the
assumptions related to the timing of estimated gross profits. During
the first nine months of 1998, VPIF decreased $2.7 million to adjust
the value of other receivables and increased $0.2 million as a result
of an adjustment to the merger costs. Amortization of DPAC increased
$15.7 million, or 390.7%, in the first nine months of 1999. This
increase resulted from growth in policy acquisition costs deferred
from $133.6 million at September 30, 1998 to $244.8 million at
September 30, 1999, which was generated by expenses associated with
the large sales volume experienced since September 30, 1998. Based on
current conditions and assumptions as to the impact of future events
on acquired policies in force, the expected approximate net
amortization relating to VPIF as of September 30, 1999 is $1.1 million
for the remainder of 1999, $4.3 million in 2000, $4.0 million in 2001,
$3.6 million in 2002, $3.2 million in 2003, and $2.4 million in 2004.
Actual amortization may vary based upon changes in assumptions and
experience.
Amortization of goodwill during the first nine months of 1999 totaled
$2.8 million, unchanged from the first nine months of 1998. Goodwill
resulting from the merger is being amortized on a straight-line basis
over 40 years.
Interest expense on the $25 million surplus note issued in December
1996 and expiring December 2026 was $1.5 million in the first nine
months of 1999, unchanged from the same period of 1998. Interest
expense on the $60 million surplus note issued in December 1998 and
expiring December 2028 was $3.3 million in the first nine months of
1999. Golden American also paid $0.7 million in the first nine months
of 1999 compared to $1.3 million in the same period of 1998 to ING
America Insurance Holdings, Inc. ("ING AIH") for interest on the
reciprocal loan agreement. Interest expense on the revolving note
payable with SunTrust Bank, Atlanta was $0.1 million for the first
nine months of 1999. In addition, Golden American paid interest of
$0.2 million during the first quarter of 1998 on the line of
credit with Equitable, which was repaid with a capital contribution
from the Parent and with funds borrowed from ING AIH.
INCOME. Net income for the first nine months of 1999 was $3.6
million, a decrease of $1.3 million from net income of $4.9 million in
the same period of 1998.
Comprehensive loss for the first nine months of 1999 was $18,000, a
decrease of $5.5 million from comprehensive income of $5.5 million in
the same period of 1998.
43
<PAGE>
<PAGE>
1998 COMPARED TO 1997
The following analysis combines Post-Merger and Post-Acquisition
activity for 1997.
PREMIUMS.
<TABLE>
POST-MERGER COMBINED POST-MERGER | POST-ACQUISITION
For the Period | For the Period
For the Year For the Year October 25, 1997 | January 1, 1997
ended ended through | through
December 31, 1998 December 31, 1997 December 31, 1997 | October 24, 1997
----------------- ----------------- ----------------- | ----------------
(Dollars in millions) |
<S> <C> <C> <C> | <C>
Variable annuity |
premiums: |
Separate account.... $1,513.3 $291.2 $111.0 | $180.2
Fixed account....... 588.7 318.0 60.9 | 257.1
-------- ------ ------ | ------
2,102.0 609.2 171.9 | 437.3
Variable life |
premiums............ 13.8 15.6 1.2 | 14.4
-------- ------ ------ | ------
Total premiums........ $2,115.8 $624.8 $173.1 | $451.7
======== ====== ====== | ======
</TABLE>
For the Companies' variable contracts, premiums collected are not
reported as revenues, but are reported as deposits to insurance
liabilities. Revenues for these products are recognized over time in
the form of investment income and product charges.
Variable annuity separate account premiums increased 419.7% in 1998
primarily due to increased sales of the Premium Plus product
introduced in October of 1997 and the increased sales levels of the
Companies' other products. The fixed account portion of the Companies'
variable annuity premiums increased 85.1% in 1998. Variable life
premiums decreased 11.4% in 1998. Total premiums increased 238.7% in
1998.
During 1998, the Companies' sales were further diversified among
broker/dealers. Premiums, net of reinsurance, for variable products
from two significant broker/dealers having at least ten percent of
total sales for the year ended December 31, 1998 totaled $580.7
million, or 27% of premiums ($328.2 million, or 53% from two
significant broker/dealers for the year ended December 31, 1997).
REVENUES.
<TABLE>
POST-MERGER COMBINED POST-MERGER | POST-ACQUISITION
For the Period | For the Period
For the Year For the Year October 25, 1997 | January 1, 1997
ended ended through | through
December 31, 1998 December 31, 1997 December 31, 1997 | October 24, 1997
----------------- ----------------- ----------------- | ----------------
(Dollars in millions) |
<S> <C> <C> <C> | <C>
Annuity and interest |
sensitive life |
product charges...... $39.1 $22.1 $3.8 | $18.3
Management fee |
revenue.............. 4.8 2.8 0.5 | 2.3
Net investment |
income............... 42.5 26.8 5.1 | 21.7
Realized gains (losses) |
on investments....... (1.5) 0.1 -- | 0.1
Other income........... 5.6 0.7 0.3 | 0.4
----- ----- ---- | -----
$90.5 $52.5 $9.7 | $42.8
===== ===== ==== | =====
</TABLE>
44
<PAGE>
<PAGE>
Total revenues increased 72.3%, or $38.0 million, to $90.5 million in
1998. Annuity and interest sensitive life product charges increased
76.8%, or $17.0 million, to $39.1 million in 1998 due to additional
fees earned from the increasing block of business under management in
the separate accounts and an increase in surrender charge revenues.
This increase was partially offset by the elimination of the unearned
revenue reserve related to in force acquired business at the merger
date, which resulted in lower annuity and interest sensitive life
product charges compared to Post-Acquisition levels.
Golden American provides certain managerial and supervisory services
to DSI. The fee paid to Golden American for these services, which is
calculated as a percentage of average assets in the variable separate
accounts, was $4.8 million for 1998 and $2.8 million for 1997.
Net investment income increased 58.6%, or $15.7 million, to $42.5
million in 1998 from $26.8 million in 1997 due to growth in invested
assets. During 1998, the Company had net realized losses on
investments of $1.5 million, which included a $1.0 million write down
of two impaired bonds, compared to gains of $0.1 million in 1997.
Other income increased $4.9 million to $5.6 million in 1998 due
primarily to income received under a modified coinsurance agreement
with an unaffiliated reinsurer as a result of increased sales.
EXPENSES.
<TABLE>
POST-MERGER COMBINED POST-MERGER | POST-ACQUISITION
For the Period | For the Period
For the Year For the Year October 25, 1997 | January 1, 1997
ended ended through | through
December 31, 1998 December 31, 1997 December 31, 1997 | October 24, 1997
----------------- ----------------- ----------------- | ----------------
(Dollars in millions) |
<S> <C> <C> <C> | <C>
Insurance benefits |
and expenses: |
Annuity and interest |
sensitive life |
benefits: |
Interest credited to |
account balances.. $94.9 $26.7 $7.4 | $19.3
Benefit claims |
incurred in excess |
of account |
balances.......... 2.1 0.1 -- | 0.1
Underwriting, |
acquisition, and |
insurance expense: |
Commission.......... 121.2 36.3 9.4 | 26.9
General Expenses.... 37.6 17.3 3.4 | 13.9
Insurance taxes..... 4.1 2.3 0.5 | 1.8
Policy acquisition |
costs deferred (197.8) (42.7) (13.7) | (29.0)
Amortization: |
Deferred policy |
acquisition |
costs........... 5.1 2.6 0.9 | 1.7
Value of purchased |
insurance in |
force........... 4.7 6.1 0.9 | 5.2
Goodwill............ 3.8 2.0 0.6 | 1.4
------ ----- ----- | -----
$ 75.7 $50.7 $ 9.4 | $41.3
====== ===== ===== | =====
</TABLE>
Total insurance benefits and expenses increased 49.2%, or $25.0
million, in 1998 from $50.7 million in 1997. Interest credited to
account balances increased 255.4%, or $68.2 million, in 1998 from
$26.7 in 1997. The extra credit bonus on the Premium Plus product
introduced in October of 1997 generated a $51.6 million increase in
interest credited during 1998 compared to 1997. The remaining increase
in interest credited related to higher account balances associated
with the Companies' fixed account option within its variable products.
45
<PAGE>
<PAGE>
Commissions increased 234.2%, or $84.9 million, in 1998 from $36.3
million in 1997. Insurance taxes increased 77.0%, or $1.8 million, in
1998 from $2.3 million in 1997. Changes in commissions and insurance
taxes are generally related to changes in the level of variable
product sales. Insurance taxes are impacted by several other factors,
which include an increase in FICA taxes primarily due to bonuses. Most
costs incurred as the result of new sales including the extra credit
bonus were deferred, thus having very little impact on current
earnings.
General expenses increased 117.7%, or $20.3 million, in 1998 from
$17.3 million in 1997. Management expects general expenses to continue
to increase in 1999 as a result of the emphasis on expanding the
salaried wholesaler distribution network. The Companies use a network
of wholesalers to distribute products and the salaries of these
wholesalers are included in general expenses. The portion of these
salaries and related expenses that varies with production levels is
deferred thus having little impact on current earnings. The increase
in general expenses was partially offset by reimbursements received
from Equitable Life, an affiliate, for certain advisory, computer and
other resources and services provided by Golden American.
At the merger date, the Companies' deferred policy acquisition costs
("DPAC"), previous balance of value of purchased insurance in force
("VPIF") and unearned revenue reserve were eliminated and a new asset
of $44.3 million representing VPIF was established for all policies in
force at the merger date. During 1998, VPIF was adjusted to reduce
amortization by $0.2 million to reflect changes in the assumptions
related to the timing of future gross profits. VPIF decreased $2.6
million in the second quarter of 1998 to adjust the value of other
receivables recorded at the time of merger and increased $0.2 million
in the first quarter of 1998 as the result of an adjustment to the
merger costs. The amortization of VPIF and DPAC increased $1.1
million, or 13.0%, in 1998. During the second quarter of 1997, VPIF
was adjusted by $2.3 million to reflect narrower spreads than the
gross profit model assumed.
Amortization of goodwill for the year ended December 31, 1998 totaled
$3.8 million compared to $2.0 million for the year ended December 31,
1997.
Interest expense on the $25 million surplus note issued December 1996
and expiring December 2026 was $2.1 million for the year ended
December 31, 1998, unchanged from the same period of 1997. In
addition, Golden American incurred interest expense of $0.2 million in
1998 compared to $0.5 million in 1997 on the line of credit with
Equitable which was repaid with a capital contribution. Golden
American also paid $1.8 million in 1998 to ING America Insurance
Holdings, Inc. ("ING AIH") for interest on the reciprocal loan
agreement. Interest expense on the revolving note payable with
SunTrust Bank, Atlanta was $0.3 million for the year ended December
31, 1998.
INCOME. Net income for 1998 was $5.1 million, an increase of $4.8
million from $0.3 million in 1997.
Comprehensive income for 1998 was $3.9 million, an increase of $1.8
million from $2.1 million in 1997.
1997 COMPARED TO 1996
The following analysis combines Post-Merger and Post-Acquisition
activity for 1997 and Post-Acquisition and Pre-Acquisition activity
for 1996 for comparison purposes. Such a comparison does not
recognize the impact of the purchase accounting and goodwill
amortization except for the periods after August 13, 1996.
46
<PAGE>
<PAGE>
PREMIUMS.
<TABLE>
POST-MERGER | COMBINED | POST-ACQUISITION
-------------------|-------------------|-----------------
For the Period | | For the Period
October 25, 1997 | For the Year | January 1, 1997
through | ended | through
December 31, 1997 | December 31, 1997 | October 24, 1997
-------------------|-------------------|-----------------
(Dollars in millions)
<S> <C> | <C> | <C>
Variable annuity | |
premiums: | |
Separate account............. $111.0 | $291.2 | $180.2
Fixed account................ 60.9 | 318.0 | 257.1
------ | ------ | ------
171.9 | 609.2 | 437.3
Variable life premiums......... 1.2 | 15.6 | 14.4
------ | ------ | ------
Total premiums................. $173.1 | $624.8 | $451.7
====== | ====== | ======
</TABLE>
<TABLE>
POST-ACQUISITION | COMBINED | PRE-ACQUISITION
-------------------|-------------------|-----------------
For the Period | | For the Period
August 14, 1996 | For the Year | January 1, 1996
through | ended | through
December 31, 1996 | December 31, 1996 | August 13, 1996
-------------------|-------------------|-----------------
(Dollars in millions)
<S> <C> | <C> | <C>
Variable annuity | |
premiums: | |
Separate account............. $ 51.0 | $182.4 | $131.4
Fixed account................ 118.3 | 245.3 | 127.0
------ | ------ | ------
169.3 | 427.7 | 258.4
Variable life premiums......... 3.6 | 14.1 | 10.5
------ | ------ | ------
Total premiums................. $172.9 | $441.8 | $268.9
====== | ====== | ======
</TABLE>
Variable annuity separate account and variable life premiums increased
59.6% and 10.1%, respectively in 1997. During 1997, stock market
returns, a relatively low interest rate environment and flat yield
curve have made returns provided by variable annuities and mutual funds
more attractive than fixed rate products such as certificates of
deposits and fixed annuities. The fixed account portion of the
Companies' variable annuity premiums increased 29.7% in 1997 due to
the Companies' marketing emphasis on fixed rates during the second
and third quarters. Premiums, net of reinsurance, for variable
products from two significant broker/dealers having at least ten
percent of total sales for the year ended December 31, 1997, totaled
$328.2 million, or 53% of premiums ($298.0 million or 67% from two
significant broker/dealers for the year ended December 31, 1996).
47
<PAGE>
<PAGE>
REVENUES.
<TABLE>
POST-MERGER | COMBINED | POST-ACQUISITION
-------------------|-------------------|-----------------
For the Period | | For the Period
October 25, 1997 | For the Year | January 1, 1997
through | ended | through
December 31, 1997 | December 31, 1997 | October 24, 1997
-------------------|-------------------|-----------------
(Dollars in millions)
<S> <C> | <C> | <C>
Annuity and interest sensitive | |
life product charges......... $3.8 | $22.1 | $18.3
Management fee revenue......... 0.5 | 2.8 | 2.3
Net investment income.......... 5.1 | 26.8 | 21.7
Realized gains (losses) on | |
investments.................. -- | 0.1 | 0.1
Other Income................... 0.3 | 0.7 | 0.4
---- | ----- | -----
$9.7 | $52.5 | $42.8
==== | ===== | =====
</TABLE>
<TABLE>
POST-ACQUISITION | COMBINED | PRE-ACQUISITION
-------------------|-------------------|-----------------
For the Period | | For the Period
August 14, 1996 | For the Year | January 1, 1996
through | ended | through
December 31, 1996 | December 31, 1996 | August 13, 1996
-------------------|-------------------|-----------------
(Dollars in millions)
<S> <C> | <C> | <C>
Annuity and interest sensitive | |
life product charges......... $ 8.8 | $21.0 | $12.2
Management fee revenue......... 0.9 | 2.3 | 1.4
Net investment income.......... 5.8 | 10.8 | 5.0
Realized gains (losses) on | |
investments.................. -- | (0.4) | (0.4)
Other income 0.5 | 0.6 | 0.1
----- | ----- | -----
$16.0 | $34.3 | $18.3
===== | ===== | =====
</TABLE>
Total revenues increased 53.3%, or $18.2 million, to $52.5 million in
1997. Annuity and interest sensitive life product charges increased
5.2%, or $1.1 million in 1997 due to additional fees earned from the
increasing block of business under management in the Separate Accounts
and an increase in the collection of surrender charges.
Golden American provides certain managerial and supervisory services
to DSI. This fee, calculated as a percentage of average assets in the
variable separate accounts, was $2.8 million for 1997 and $2.3 million
for 1996.
Net investment income increased 148.3%, or $16.0 million, to $26.8
million in 1997 from $10.8 million in 1996 due to growth in invested
assets. During 1997, the Company had net realized gains on the
disposal of investments, which were the result of voluntary sales, of
$0.1 million compared to net realized losses of $0.4 million in 1996.
48
<PAGE>
<PAGE>
EXPENSES.
<TABLE>
POST-MERGER | COMBINED | POST-ACQUISITION
-------------------|-------------------|-----------------
For the Period | | For the Period
October 25, 1997 | For the Year | January 1, 1997
through | ended | through
December 31, 1997 | December 31, 1997 | October 24, 1997
-------------------|-------------------|-----------------
(Dollars in millions)
<S> <C> | <C> | <C>
Insurance benefits and | |
expenses: | |
Annuity and interest | |
sensitive life benefits: | |
Interest credited to account | |
balances................... $ 7.4 | $ 26.7 | $ 19.3
Benefit claims incurred in | |
excess of account balances. -- | 0.1 | 0.1
Underwriting, acquisition and | |
insurance expenses: | |
Commissions.................. 9.4 | 36.3 | 26.9
General expenses............. 3.4 | 17.3 | 13.9
Insurance taxes.............. 0.5 | 2.3 | 1.8
Policy acquisition costs | |
deferred................... (13.7) | (42.7) | (29.0)
Amortization: | |
Deferred policy acquisition | |
costs...................... 0.9 | 2.6 | 1.7
Present value of in force | |
acquired................... 0.9 | 6.1 | 5.2
Goodwill..................... 0.6 | 2.0 | 1.4
------ | ------ | ------
$ 9.4 | $ 50.7 | $ 41.3
====== | ====== | ======
</TABLE>
<TABLE>
POST-ACQUISITION | COMBINED | PRE-ACQUISITION
-------------------|-------------------|-----------------
For the Period | | For the Period
August 14, 1996 | For the Year | January 1, 1996
through | ended | through
December 31, 1996 | December 31, 1996 | August 13, 1996
-------------------|-------------------|-----------------
(Dollars in millions)
<S> <C> | <C> | <C>
Insurance benefits and | |
expenses: | |
Annuity and interest sensitive | |
life benefits: | |
Interest credited to account | |
balances.................. $ 5.7 | $ 10.1 | $ 4.4
Benefit claims incurred in | |
excess of account | |
balances.................. 1.3 | 2.2 | 0.9
Underwriting, acquisition and | |
insurance expenses: | |
Commissions................. 9.9 | 26.5 | 16.6
General expenses............ 5.9 | 15.3 | 9.4
Insurance taxes............. 0.7 | 1.9 | 1.2
Policy acquisition costs.... | |
deferred (11.7) | (31.0) | (19.3)
Amortization: | |
Deferred policy acquisition | |
costs..................... 0.2 | 2.6 | 2.4
Present value of in force | |
acquired.................. 2.7 | 3.7 | 1.0
Goodwill.................... 0.6 | 0.6 | --
------ | ------ | ------
$ 15.3 | $ 31.9 | $ 16.6
====== | ====== | ======
</TABLE>
Total insurance benefits and expenses increased 59.3%, or $18.8
million, in 1997 from $31.9 million in 1996. Interest credited to
account balances increased 164.4%, or $16.6 million, in 1997 as a
result of higher account balances associated with the Company's fixed
account option within its variable products.
Commissions increased 37.3%, or $9.8 million, in 1997 from $26.5
million in 1996. Insurance taxes increased 23.3%, or $0.4 million, in
1997 from $1.9 million in 1996. Increases and decreases in
commissions and insurance taxes are generally related to changes in
the level of variable product sales.
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Insurance taxes are also impacted by several other factors which include
an increase in FICA taxes primarily due to bonuses and an increase in
state licenses and fees. Most costs incurred as the result of new sales
were deferred, thus having very little impact on earnings.
General expenses increased 12.6%, or $2.0 million, in 1997 from $15.3
million in 1996 due in part to certain expenses associated with the
merger occurring on October 24, 1997. In addition, the Company uses a
network of wholesalers to distribute its products and the salaries of
these wholesalers are included in general expenses. The portion of
these salaries and related expenses which vary with sales production
levels are deferred, thus having little impact on earnings. This
increase in general expenses was partially offset by reimbursements
received from Equitable Life, an affiliate, for certain advisory,
computer and other resources and services provided by Golden American.
During the second quarter of 1997, present value of in force acquired
("PVIF") was unlocked by $2.3 million to reflect narrower current
spreads than the gross profit model assumed. The Company's deferred
policy acquisition costs ("DPAC"), previous balance of PVIF and
unearned revenue reserve, as of the merger date, were eliminated and
an asset of $44.3 million representing PVIF was established for all
policies in force at the merger date. The amortization of PVIF and
DPAC increased $2.4 million, or 37.1%, in 1997. Based on current
conditions and assumptions as to the impact of future events on
acquired policies in force, the expected approximate net amortization
for the next five years, relating to the PVIF as of December 31, 1997,
is $6.2 million in 1998, $6.0 million in 1999, $5.6 million in 2000,
$5.0 million in 2001 and $4.2 million in 2002.
Amortization of goodwill for the year ended December 31, 1997 totaled
$2.0 million compared to $0.6 million for the year ended December 31,
1996.
Interest expense on the $25 million surplus note issued December 1996
was $2.0 million for the year ended December 31, 1997. Interest on
any line of credit borrowings was charged at the rate of Equitable's
monthly average aggregate cost of short-term funds plus 1.00%. During
1997, the Company paid $0.6 million to Equitable for interest on the
line of credit.
INCOME. Net income on a combined basis for 1997 was $0.3 million, a
decrease of $3.2 million, or 91.4%, from 1996.
FINANCIAL CONDITION
RATINGS. During 1998, the Companies' ratings were upgraded by
Standard & Poor's Rating Services ("Standard & Poor's") from AA to
AA+. During the first quarter of 1999, the Companies' ratings were
upgraded by Duff & Phelps Credit Rating Company from AA+ to AAA.
INVESTMENTS. The financial statement carrying value and amortized
cost basis of the Companies' total investment portfolio grew 8.7% and
10.5%, respectively, during the first nine months of 1999. All of the
Companies' investments, other than mortgage loans on real estate, are
carried at fair value in the Companies' financial statements. As such,
growth in the carrying value of the Companies' investment portfolio
included changes in unrealized appreciation and depreciation of fixed
maturities as well as growth in the cost basis of these securities.
Growth in the cost basis of the Companies' investment portfolio
resulted from the investment of premiums from the sale of the
Companies' fixed account options. The Companies manage the growth of
insurance operations in order to maintain adequate capital ratios. To
support the fixed account options of the Companies' variable insurance
products, cash flow was invested primarily in fixed maturities and
short-term investments.
At September 30, 1999 and December 31, 1998, the Companies had no
investments in default. At September 30, 1999 and December 31, 1998,
the Companies' investment portfolio had a yield of 6.6% and 6.4%,
respectively.
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The Companies estimate the total investment portfolio, excluding
policy loans, had a fair value approximately equal to 98.0%
of amortized cost value at September 30, 1999 (100.2% at December
31, 1998).
Fixed Maturities: At September 30, 1999, the Companies had fixed
maturities with an amortized cost of $815.0 million and an estimated
fair value of $798.7 million. At December 31, 1998, the Companies had
fixed maturities with an amortized cost of $739.8 million and an
estimated fair value of $742.0 million.
The Companies classify 100% of securities as available for sale. At
September 30, 1999, net unrealized depreciation on fixed maturities of
$16.3 million was comprised of gross appreciation of $0.8 million and
gross depreciation of $17.1 million. Net unrealized holding losses on
these securities, net of adjustments to VPIF, DPAC, and deferred
income taxes of $4.0 million, was included in stockholder's equity at
September 30, 1999. At December 31, 1998 net unrealized appreciation
of fixed maturities of $2.2 million was comprised of gross
appreciation of $6.7 million and gross depreciation of $4.5 million.
Net unrealized holding gains on these securities, net of adjustments
to VPIF, DPAC, and deferred income taxes of $1.0 million was included
in stockholder's equity at December 31, 1998.
The individual securities in the Companies' fixed maturities portfolio
(at amortized cost) include investment grade securities, which include
securities issued by the U.S. government, its agencies, and
corporations, that are rated at least A- by Standard & Poor's ($528.0
million or 64.8% at September 30, 1999 and $477.4 million or 64.5% at
December 31, 1998), that are rated BBB+ to BBB- by Standard & Poor's
($138.0 million or 16.9% at September 30, 1999 and $124.0 million or
16.8% at December 31, 1998) and below investment grade securities
which are securities issued by corporations that are rated BB+ to CCC-
by Standard & Poor's ($72.3 million or 8.9% at September 30, 1999 and
$51.6 million or 7.0% at December 31, 1998). Securities not rated by
Standard & Poor's had a National Association of Insurance
Commissioners ("NAIC") rating of 1, 2, 3 or 4 ($76.7 million or 9.4%
at September 30, 1999 and $86.8 million or 11.7% at December 31,
1998). The Companies' fixed maturity investment portfolio had a
combined yield at amortized cost of 6.6% at September 30, 1999 and
6.5% at December 31, 1998.
Fixed maturities rated BBB+ to BBB- may have speculative
characteristics and changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity of the
issuer to make principal and interest payments than is the case with
higher rated fixed maturities.
At September 30, 1999, the amortized cost value of the Companies'
total investment in below investment grade securities, excluding
mortgage-backed securities, was $73.7 million, or 7.4%, of the
Companies' investment portfolio ($52.7 million, or 5.9%, at December
31, 1998). The Companies intend to purchase additional below
investment grade securities but do not expect the percentage of the
portfolio invested in such securities to exceed 10% of the investment
portfolio. At September 30, 1999, the yield at amortized cost on the
Companies' below investment grade portfolio was 7.8% compared to 6.6%
for the Companies' investment grade corporate bond portfolio. AAt
December 31, 1998, the yield at amortized cost on the Companies' below
investment grade portfolio was 7.9% compared to 6.4% for the
Companies' investment grade corporate bond portfolio. The Companies
estimate the fair value of the below investment grade portfolio was
$70.5 million, or 95.6% of amortized cost value, at September 30, 1999
($51.7 million, or 98.1% of amortized cost value, at December 31,
1998).
Below investment grade securities have different characteristics than
investment grade corporate debt securities. Risk of loss upon default
by the borrower is significantly greater with respect to below
investment grade securities than with other corporate debt securities.
Below investment grade securities are generally unsecured and are
often subordinated to other creditors of the issuer. Also, issuers of
below investment grade securities usually have higher levels of debt
and are more sensitive to adverse economic conditions, such as a
recession or increasing interest rates, than are investment grade
issuers. The Companies attempt to reduce the overall risk in the below
investment grade portfolio, as in all investments, through careful
credit analysis, strict investment policy guidelines, and
diversification by company and by industry.
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The Companies analyze the investment portfolio, including below
investment grade securities, at least quarterly in order to determine
if the Companies' ability to realize the carrying value on any
investment has been impaired. For debt and equity securities, if
impairment in value is determined to be other than temporary (i.e. if
it is probable the Companies will be unable to collect all amounts due
according to the contractual terms of the security), the cost basis of
the impaired security is written down to fair value, which becomes the
new cost basis. The amount of the write-down is included in earnings
as a realized loss. Future events may occur, or additional or updated
information may be received, which may necessitate future write-downs
of securities in the Companies' portfolio. Significant write-downs in
the carrying value of investments could materially adversely affect
the Companies' net income in future periods.
During the nine months ended September 30, 1999 and Ifor the year
ended December 31, 1998, fixed maturities designated as available for
sale with a combined amortized cost of $170.6 million and $145.3
million, respectively, were called or repaid by their issuers. In
total, net pre-tax losses from sales, calls, and repayments of fixed
maturities amounted to $2.2 million and $0.5 million, for the first
nine months of 1999 and for the year ended December 31, 1998,
respectively.
During the fourth quarter of 1998, Golden American determined that the
carrying value of two bonds exceeded their estimated net realizable
value. As a result, at December 31, 1998, Golden American
recognized a total pre-tax loss of approximately $1.0 million to
reduce the carrying value of the bonds to their combined net
realizable value of $2.9 million. During the second quarter of 1999,
further information was received regarding these bonds and Golden
American determined that the carrying value of the two bonds exceeded
their estimated net realizeable value. As a result, at June 30, 1999
Golden American recognized a total pre-tax loss of approximately $1.6
million to further reduce the carrying value of the bonds to their
combined net realizeable value of $1.1 million.
Equity Securities: At September 30, 1999 and December 31, 1998,
Eequity securities represented 1.5% and 1.6%, respectively, of the
Companies' investment portfolio. At September 30, 1999 and December
31, 1998, the Companies owned equity securities with a cost of $14.4
million and an estimated fair value of $13.7 million and $11.5
million, respectively. At September 30, 1999, net unrealized
depreciation of equity securities of $0.7 million was comprised of
gross appreciation of $0.3 million and gross depreciation of
$1.0 million at December 31, 1998 net unrealized depreciation of
equity securities was comprised entirely of gross depreciation of
$2.9 million . Equity securities are primarily comprised of
investments in shares of the mutual funds underlying the Companies'
registered separate accounts.
Mortgage Loans on Real Estate: Mortgage loans on real estate
represented 9.5% and 10.9% of the Companies' investment portfolio at
September 30, 1999 and at December 31, 1998, respectively. Mortgages
outstanding at amortized cost were $93.9 million September 30, 1999
with an estimated fair value of $91.2 million. Mortgages outstanding
were $97.3 million at December 31, 1998 with an estimated fair value
of $99.8 million. At September 30, 1999, the Companies' mortgage loan
portfolio included 57 loans with an average size of $1.6 million and
average seasoning of 0.8 years if weighted by the number of loans. At
December 31, 1998, Tthe Companies' mortgage loan portfolio includeds
57 loans with an average size of $1.7 million and average seasoning of
0.9 years if weighted by the number of loans. The Companies' mortgage
loans on real estate are typically secured by occupied buildings in
major metropolitan locations and not speculative developments and are
diversified by type of property and geographic location.
Mortgage loans on real estate have been analyzed by geographical
location with concentrations by state identified as California (12% in
1998 and 1997), Utah (11% in 1998, 13% in 1997) and Georgia (10% in
1998, 11% in 1997). There are no other concentrations of mortgage
loans in any state exceeding ten percent at December 31, 1998 and
1997. Mortgage loans on real estate have also been analyzed by
collateral type with significant concentrations identified in office
buildings (36% in 1998, 43% in 1997), industrial buildings (32% in
1998, 33% in 1997) and retail facilities (20% in 1998, 15% in 1997).
As of September 30, 1999, there have been no significant changes to
the concentrations of mortgage loans on real estate compared to December
31, 1998. At September 30, 1999 and December 31, 1998, the yield on
the Companies' mortgage loan portfolio was 7.3%.
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At September 30, 1999 and December 31, 1998, no mortgage loan on real
estate was delinquent by 90 days or more. The Companies' loan
investment strategy is consistent with other life insurance
subsidiaries of ING in the U.S. The insurance subsidiaries of EIC have
experienced a historically low default rate in their mortgage loan
portfolios.
OTHER ASSETS. Accrued investment income increased $2.3 million during
the first nine months of 1999 due to an increase in the overall size
of the portfolio resulting from the investment of premiums allocated
to the fixed account options of the Companies' variable products.
DPAC represents certain deferred costs of acquiring insurance
business, principally first year commissions and interest bonuses,
extra credit bonuses and other expenses related to the production of
new business after the merger. The Companies' previous balances of
DPAC and VPIF were eliminated as of the merger date, and an asset
representing VPIF was established for all policies in force at the
merger date. VPIF is amortized into income in proportion to the
expected gross profits of in force acquired business in a manner
similar to DPAC amortization. Any expenses which vary directly with
the sales of the Companies' products are deferred and amortized. At
September 30, 1999, the Companies had DPAC and VPIF balances of $439.2
million and $33.0 million ($205.0 million and $36.0 million,
respectively at December 31, 1998). During the first nine months of
1998, VPIF decreased $2.7 million to adjust the value of other
receivables and increased $0.2 million as a result of an adjustment to
the merger costs.
Property and equipment increased $5.7 million, or 77.1%, during the
first nine months of 1999, due to the purchase of furniture and other
equipment for Golden American's new offices in West Chester,
Pennsylvania. Property and equipment increased $5.8 million during
1998, due to installation of a new policy administration system,
introduction of an imaging system as well as the growth in the
business.
Goodwill totaling $151.1 million, representing the excess of the
acquisition cost over the fair value of net assets acquired, was
established at the merger date. Accumulated amortization of goodwill
as of September 30, 1999 and December 31, 1998 was $7.2 million and
$4.4 million, respectively.
Other assets increased $35.8 million during the first nine months of
1999 due mainly to an increase in a receivable from the separate
account. Other assets increased $5.5 million during 1998 due mainly
to an increase in amounts due from an unaffiliated reinsurer under a
modified coinsurance agreement.
At September 30, 1999, the Companies had $5.6 billion of separate
account assets compared to $3.4 billion at December 31, 1998. The
increase in separate account assets resulted from market appreciation,
increased transfer activity, and sales of the Companies' variable
annuity products, net of redemptions. At December 31, 1998, the
Companies had $3.4 billion of separate account assets compared to $1.6
billion at December 31, 1997. The increase in separate account assets
resulted from market appreciation and growth in sales of the
Companies' variable annuity products, net of redemptions.
At September 30, 1999, the Companies had total assets of $7.3 billion,
a 53.9% increase from December 31, 1998. At December 31, 1998,
the Companies had total assets of $4.8 billion, an increase of 94.3%
from December 31, 1997.
LIABILITIES. In conjunction with the volume of variable annuity
sales, the Companies' total liabilities increased $2.5 billion, or
55.9%, during the first nine months of 1999 and totaled $6.9 billion
at September 30, 1999. At September 30, 1999, future policy benefits
for annuity and interest sensitive life products increased $128.3
million, or 14.6%, to $1.0 billion reflecting premium growth in the
Companies' fixed account options of its variable products, net of
transfers to the separate accounts. Market appreciation, increased
transfer activity, and premiums, net of redemptions, accounted for the
$2.2 billion, or 64.9%, increase in separate account liabilities to
$5.6 billion at September 30, 1999.
In conjunction with the volume of variable annuity sales, the
Companies' total liabilities increased $2.2 billion, or 98.2%, during
1998 and totaled $4.4 billion at December 31, 1998. Future policy
benefits for annuity and interest sensitive life products increased
$375.8 million, or 74.4%, to $881.1 million reflecting premium growth
in the Companies' fixed account option of its variable products.
Market appreciation and premium growth, net of redemptions, accounted
for the $1.7 billion, or 106.3%, increase in separate account
liabilities to $3.4 billion at December 31, 1998.
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On September 30, 1999, Golden American issued a $75 million, 7.75%
surplus note to ING AIH, which matures on September 29, 2029.
On December 30, 1998, Golden American issued a $60 million, 7.25%
surplus note to Equitable Life, which matures on December 29, 2028.
On December 17, 1996, Golden American issued a $25 million, 8.25%
surplus note to Equitable which matures on December 17, 2026. As a
result of the merger, the surplus note is now payable to EIC.
At September 30, 1999, other liabilities increased $47.5 million from
$32.6 million at December 31, 1998, due primarily to increases in
securities payables and remittances to be applied.
At December 31, 1998, other liabilities increased $15.3 million from
$17.3 million at December 31, 1997, due primarily to increases in
accounts payable, outstanding checks, guaranty fund assessment
liability, and pension liability.
The effects of inflation and changing prices on the Companies'
financial position are not material since insurance assets and
liabilities are both primarily monetary and remain in balance. An
effect of inflation, which has been low in recent years, is a decline
in stockholder's equity when monetary assets exceed monetary
liabilities.
STOCKHOLDER'S EQUITY. Additional paid-in capital increased $100.0
million, or 28.8%, from December 31, 1998 to $447.6 million at
September 30, 1999 due to capital contributions from the Parent.
Additional paid-in capital increased $122.6 million, or 54.5%, from
December 31, 1997 to $347.6 million at December 31, 1998 primarily due
to capital contributions from the Parent.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity is the ability of the Companies to generate sufficient cash
flows to meet the cash requirements of operating, investing, and
financing activities. The Companies' principal sources of cash are
variable annuity premiums and product charges, investment income,
maturing investments, proceeds from debt issuance, and capital
contributions made by the Parent. Primary uses of these funds are
payments of commissions and operating expenses, interest and extra
premium credits, investment purchases, repayment of debt, as well as
withdrawals and surrenders.
Net cash used in operating activities was $60.0 million in the first
nine months of 1999 compared to $22.7 million in the same period of
1998. Net cash used in operating activities was $63.9 million in 1998
compared to $4.8 million in 1997. The Companies have predominantly had
negative cash flows from operating activities since Golden American
started issuing variable insurance products in 1989. These negative
operating cash flows result primarily from the funding of commissions
and other deferrable expenses related to the continued growth in the
variable annuity products. The 1998 increase in net cash used in
operating activities resulted principally from the introduction of
Golden American's extra premium credit product in October 1997. In
1998, $54.4 million in extra premium credits was added to contract
holders' account values versus $2.8 million in 1997.
Net cash used in investing activities was $111.3 million during the
first nine months of 1999 as compared to $224.5 million in the same
period of 1998. This decrease is primarily due to greater net
purchases of fixed maturities, equity securities, and mortgage loans
on real estate during the first nine months of 1998 than in the same
period of 1999. Net purchases of fixed maturities reached $79.7
million during the first nine months of 1999 versus $199.0 million in
the same period of 1998. Net sales of mortgage loans on real estate
were $3.2 million during the first nine months of 1999 compared to net
purchases of $13.2 million during the first nine months of 1998.
Net cash used in investing activities was $390.0 million during 1998
as compared to $198.5 million in 1997. This increase is primarily due
to greater net purchases of fixed maturities resulting from an
increase in funds available from net fixed account deposits. Net
purchases of fixed maturities reached
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$331.3 million in 1998 versus $135.3 million in 1997. Net purchases
of mortgage loans on real estate, on the other hand, declined to $12.6
million from $51.2 at December 31, 1997in the prior year. In 1998,
net purchases of short-term investments were unusually high due to
the investment of the remaining proceeds of Golden American's $60.0
million surplus note issued on December 30, 1998.
Net cash provided by financing activities was $177.5 million during
the first nine months of 1999 compared to $245.1 million during the
same period of 1998. In the first nine months of 1999, net cash
provided by financing activities was positively impacted by net fixed
account deposits of $441.7 million compared to $300.0 million in the
same period of 1998. This increase was offset by net reallocations to
the Companies' separate accounts, which increased to $439.2 million
from $163.5 million during the prior year, and by a decrease in net
borrowings of $54.8 million in the first nine months of 1999 compared
to the first nine months of 1998. In the first nine months of 1999,
another important source of cash provided by financing activities was
$100.0 million in capital contributions from the Parent compared to
$53.8 million in the first nine months of 1998. In addition, another
source of cash provided by financing activities during the third
quarter of 1999 was $75.0 million in proceeds from a surplus note
with ING AIH.
Net cash provided by financing activities was $439.5 million during
1998 as compared to $218.6 million during the prior year. In 1998, net
cash provided by financing activities was positively impacted by net
fixed account deposits of $520.8 million compared to $303.6 million in
1997. This increase was partially offset by net reallocations to the
Companies' separate accounts, which increased to $239.7 million from
$110.1 million during the prior year. In 1998, other important sources
of cash provided by financing activities were $98.4 million of capital
contributions from the Parent and $60.0 million of proceeds from the
issuance of a surplus note on December 30, 1998. The Companies have
used part of the proceeds of the surplus note to repay outstanding
short-term debt.
The Companies' liquidity position is managed by maintaining adequate
levels of liquid assets, such as cash or cash equivalents and short-
term investments. Additional sources of liquidity include borrowing
facilities to meet short-term cash requirements. Golden American
maintains a $65.0 million reciprocal loan agreement with ING AIH,
which expires on December 31, 2007. In addition, the Companies
have an $85.0 million revolving note facility with SunTrust Bank,
Atlanta, which expires on July 31, 2000. Management believes that
these sources of liquidity are adequate to meet the Companies'
short-term cash obligations.
Based on current trends, the Companies expect to continue to use net
cash in operating activities, given the continued growth of the
variable annuity products. It is anticipated that a continuation of
capital contributions from the Parent and the issuance of additional
surplus notes will cover these net cash outflows. ING is committed to
the sustained growth of Golden American. During 1999, ING will
maintain Golden American's statutory capital and surplus at the end of
each quarter at a level such that: 1) the ratio of Total Adjusted
Capital divided by Company Action Level Risk Based Capital exceeds
300%; 2) the ratio of Total Adjusted Capital (excluding surplus notes)
divided by Company Action Level Risk Based Capital exceeds 200%; and
3) Golden American's statutory capital and surplus exceeds the
"Amounts Accrued for Expense Allowances Recognized in Reserves" as
disclosed on page 3, Line 13A of Golden American's Statutory
Statement.
During the first quarter of 1999, Golden American's operations were
moved to a new site in West Chester, Pennsylvania. During the third
quarter of 1999, Golden American occupied an additional 20,000 square
feet and currently occupies 85,000 square feet of leased space, its
affiliate occupies 20,000 square feet, and it has made commitments for
an additional 20,000 square feet to be occupied by itself or its
affiliates during the fourth quarter of 1999. Previously, Golden
American's home office operations were housed in leased locations in
Wilmington, Delaware and various locations in Pennsylvania, which were
leased on a short-term basis for use in the transition to the new
office building. Golden American's New York subsidiary is housed in
leased space in New York, New York. The Companies intend to spend
approximately $1.0 million on capital needs during the remainder of
1999.
The ability of Golden American to pay dividends to its Parent is
restricted. Prior approval of insurance regulatory authorities is
required for payment of dividends to the stockholder which exceed an
annual
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limit. During 1999, Golden American cannot pay dividends to its
Parent without prior approval of statutory authorities.
Under the provisions of the insurance laws of the State of New York,
First Golden cannot distribute any dividends to its stockholder,
Golden American, unless a notice of its intent to declare a dividend
and the amount of the dividend has been filed with the New York
Insurance Department at least thirty days in advance of the proposed
declaration. If the Superintendent of the New York Insurance Department
finds the financial condition of First Golden does not warrant the
distribution, the Superintendent may disapprove the distribution by
giving written notice to First Golden within thirty days after the
filing. The management of First Golden does not anticipate paying
any dividends to Golden American during 1999.
The NAIC's risk-based capital requirements require insurance companies
to calculate and report information under a risk-based capital
formula. These requirements are intended to allow insurance regulators
to monitor the capitalization of insurance companies based upon the
type and mixture of risks inherent in a company's operations. The
formula includes components for asset risk, liability risk, interest
rate exposure and other factors. The Companies have complied with the
NAIC's risk-based capital reporting requirements. Amounts reported
indicate the Companies have total adjusted capital well above all
required capital levels.
Reinsurance: At September 30, 1999 and at December 31, 1998, Golden
American had reinsurance treaties with four unaffiliated reinsurers
and one affiliated reinsurer covering a significant portion of the
mortality risks under its variable contracts. Golden American remains
liable to the extent its reinsurers do not meet their obligations
under the reinsurance agreements.
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MARKET RISK AND RISK MANAGEMENT
Asset/liability management is integrated into many aspects of the
Companies' operations, including investment decisions, product
development and crediting rates determination. As part of the risk
management process, different economic scenarios are modeled,
including cash flow testing required for insurance regulatory
purposes, to determine that existing assets are adequate to meet
projected liability cash flows. Key variables include
contractholder behavior and the variable separate accounts'
performance.
Contractholders bear the majority of the investment risks related
to the variable products. Therefore, the risks associated with the
investments supporting the variable separate accounts are assumed
by contractholders, not by the Companies (subject to, among other
things, certain minimum guarantees). The Companies' products also
provide certain minimum death benefits that depend on the
performance of the variable separate accounts. Currently the
majority of death benefit risks are reinsured, which protects the
Companies from adverse mortality experience and prolonged capital
market decline.
A surrender, partial withdrawal, transfer or annuitization made
prior to the end of a guarantee period from the fixed account may
be subject to a market value adjustment. As the majority of the
liabilities in the fixed account are subject to market value
adjustment, the Companies do not face a material amount of market
risk volatility. The fixed account liabilities are supported by a
portfolio principally composed of fixed rate investments that can
generate predictable, steady rates of return. The portfolio
management strategy for the fixed account considers the assets
available for sale. This enables the Companies to respond to
changes in market interest rates, changes in prepayment risk,
changes in relative values of asset sectors and individual
securities and loans, changes in credit quality outlook and other
relevant factors. The objective of portfolio management is to
maximize returns, taking into account interest rate and credit
risks as well as other risks. The Companies' asset/liability
management discipline includes strategies to minimize exposure to
loss as interest rates and economic and market conditions change.
57
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On the basis of these analyses, management believes there is no
material solvency risk to the Companies. With respect to a 10%
drop in equity values from year-end 1998 levels, variable separate
account funds, which represent 85% of the in force as of
September 30, 1999, pass the risk in underlying fund performance
to the contract holder (except for certain minimum guarantees that
are mostly reinsured). With respect to interest rate movements
up or down 100 basis points from year-end 1998 levels, the
remaining 15% of the in force as of September 30, 1999 are fixed
account funds and almost all of these have market value adjustments
which provide significant protection against changes in interest
rates.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Any forward-looking statement contained herein or in any other
oral or written statement by the Companies or any of their
officers, directors or employees is qualified by the fact that
actual results of the Companies may differ materially from such
statement, among other risks and uncertainties inherent in the
Companies' business, due to the following important factors:
1. Prevailing interest rate levels and stock market performance,
which may affect the ability of the Companies to sell their
products, the market value and liquidity of the Companies'
investments and the lapse rate of the Companies' policies,
notwithstanding product design features intended to enhance
persistency of the Companies' products.
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<PAGE>
2. Changes in the federal income tax laws and regulations which
may affect the tax status of the Companies'products.
3. Changes in the regulation of financial services, including
bank sales and underwriting of insurance products, which
may affect the competitive environment for the Companies'
products.
4. Increasing competition in the sale of the Companies' products.
5. Other factors that could affect the performance of the
Companies, including, but not limited to, market conduct
claims, litigation, insurance industry insolvencies,
availability of competitive reinsurance on new business,
investment performance of the underlying portfolios of the
variable products, variable product design and sales volume by
significant sellers of the Companies' variable products.
6. To the extent third parties are unable to transact business in
the Year 2000 and thereafter, the Companies' operations could
be adversely affected.
OTHER INFORMATION
SEGMENT INFORMATION. During the period since the acquisition by
Bankers Trust, September 30, 1992 to date of this Prospectus,
Golden American's operations consisted of one business segment,
the sale of annuity and life insurance products. Golden American
and its affiliate DSI are party to in excess of 140 sales
agreements with broker-dealers, three of whom, Locust Street
Securities, Inc., Vestax Securities Corporation, and Multi-
Financial Securities Corporation, are affiliates of Golden
American. As of September 30, 1999, two broker-dealers produce
10% or more of Golden American's product sales.
REINSURANCE. Golden American reinsures its mortality risk
associated with the Contract's guaranteed death benefit with one
or more appropriately licensed insurance companies. Golden
American also, effective June 1, 1994, entered into a reinsurance
agreement on a modified coinsurance basis with an affiliate of a
broker-dealer which distributes Golden American's products with
respect to 25% of the business produced by that broker-dealer.
RESERVES. In accordance with the life insurance laws and
regulations under which Golden American operates, it is obligated
to carry on its books, as liabilities, actuarially determined
reserves to meet its obligations on outstanding Contracts.
Reserves, based on valuation mortality tables in general use in
the United States, where applicable, are computed to equal amounts
which, together with interest on such reserves computed annually
at certain assumed rates, make adequate provision according to
presently accepted actuarial standards of practice, for the
anticipated cash flows required by the contractual obligations and
related expenses of Golden American.
COMPETITION. Golden American is engaged in a business that is
highly competitive because of the large number of stock and mutual
life insurance companies and other entities marketing insurance
products comparable to those of Golden American. There are
approximately 2,350 stock, mutual and other types of insurers in
the life insurance business in the United States, a substantial
number of which are significantly larger than Golden American.
SERVICE AGREEMENTS. Beginning in 1994 and continuing until August
13, 1996, Bankers Trust (Delaware), a subsidiary of Bankers Trust
New York Corporation, and Golden American became parties to a service
agreement pursuant to which Bankers Trust (Delaware) agreed to provide
certain accounting, actuarial, tax, underwriting, sales, management and
other services to Golden American. Expenses incurred by Bankers Trust
(Delaware)in relation to this service agreement were reimbursed by Golden
American on an allocated cost basis. Charges billed to Golden American by
Bankers Trust (Delaware) pursuant to the service agreement for 1996 through
its termination as of August 13, 1996 were $0.5 million.
Pursuant to a service agreement between Golden American and Equitable
Life, Equitable Life provides certain administrative, financial and
other services to Golden American. Equitable Life billed Golden
59
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American and its subsidiary First Golden American Life Insurance
Company of New York ("First Golden"), $0.9 million, $1.1 million,
and $29,000 for the first nine months of 1999 and the years ended
December 31, 1998 and 1997, respectively, under this service
agreement.
Golden American provides to DSI certain of its personnel to perform
management, administrative and clerical services and the use of
certain facilities. Golden American charges DSI 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 DSI. In the opinion of management, this method of cost
allocation is reasonable. In 1995, the service agreement between DSI
and Golden American was amended to provide for a management fee from
DSI to Golden American for managerial and supervisory services
provided by Golden American. This fee, calculated as a percentage of
average assets in the variable separate accounts, was $6.8 million,
$4.8 million, $2.8 million and $2.3 million for the first nine months
of 1999, and the years of 1998, 1997 and 1996, respectively.
Since January 1, 1998, Golden American and First Golden have had an
asset management agreement with ING Investment Management LLC ("ING
IM"), an affiliate, in which ING IM provides asset management and
accounting services for a fee, payable quarterly. For the first nine
months of 1999 and for the year ended December 31, 1998, Golden
American and First Golden incurred fees of $1.6 million and $1.5 million,
respectively, under this agreement. Prior to 1998, Golden American and
First Golden had a service agreement with Equitable Investment Services,
Inc. ("EISI"), an affiliate, in which EISI provided investment
management services. Golden American and First Golden paid fees of
$1.0 million for 1997 and $72,000 for the period from August 14,
1996 through December 31, 1996, respectively.
Since 1997, Golden American has provided certain advisory, computer
and other resources and services to Equitable Life. Revenues for these
services totaled $0.9 million for the first nine months of 1999,
$5.8 million for 1998 and $4.3 million for 1997.
The Companies provide resources and services to DSI. Revenues for
these services totaled $0.8 million for the first nine months of 1999.
Golden American provides resources and services to ING Mutual Funds
Management Co., LLC, an affiliate. Revenues for these services
totaled $0.4 million for the first nine months of 1999 and $2.1
million for 1998.
DISTRIBUTION AGREEMENT. Under a distribution agreement, DSI 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 issued by Golden American which as of September 30,
1999 and December 31, 1998, are sold primarily through two
broker/dealer institutions. For the nine months ended September 30,
1999 and the years 1998, 1997 and 1996, commissions paid by Golden
American to DSI (including commissions paid by First Golden)
aggregated $130.4 million, $117.5 million, $36.4 million and $27.1
million, respectively.
EMPLOYEES. Golden American, as a result of its Service Agreement
with Bankers Trust (Delaware) and EIC Variable, had very few
direct employees. Instead, various management services were
provided by Bankers Trust (Delaware), EIC Variable and Bankers
Trust New York Corporation, as described above under "Service
Agreement." The cost of these services were allocated to Golden
American. Since August 14, 1996, Golden American has hired
individuals to perform various management services and has looked
to Equitable of Iowa and its affiliates for certain other
management services.
Certain officers of Golden American are also officers of DSI, and
their salaries are allocated among both companies. Certain
officers of Golden American are also officers of other Equitable
of Iowa subsidiaries. See "Directors and Executive Officers."
PROPERTIES. Golden American's principal office is located at 1475
Dunwoody Drive, West Chester, Pennsylvania 19380, where all of
Golden American's records are maintained. This office space is
leased.
STATE REGULATION. Golden American is subject to the laws of the
State of Delaware governing insurance companies and to the
regulations of the Delaware Insurance Department (the "Insurance
Department"). A detailed financial statement in the prescribed
form (the "Annual Statement") is filed with the Insurance
Department each year covering Golden American's operations for the
preceding year and its financial condition as of the end of that
year. Regulation by the Insurance Department includes periodic
examination to determine contract liabilities and reserves so that
the Insurance Department may certify
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that these items are correct. Golden American's books and accounts are
subject to review by the Insurance Department at all times. A full
examination of Golden American's operations is conducted periodically
by the Insurance Department and under the auspices of the NAIC.
In addition, Golden American is subject to regulation under the
insurance laws of all jurisdictions in which it operates. The
laws of the various jurisdictions establish supervisory agencies
with broad administrative powers with respect to various matters,
including licensing to transact business, overseeing trade
practices, licensing agents, approving contract forms,
establishing reserve requirements, fixing maximum interest rates
on life insurance contract loans and minimum rates for
accumulation of surrender values, prescribing the form and content
of required financial statements and regulating the type and
amounts of investments permitted. Golden American is required to
file the Annual Statement with supervisory agencies in each of the
jurisdictions in which it does business, and its operations and
accounts are subject to examination by these agencies at regular
intervals.
The NAIC has adopted several regulatory initiatives designed to
improve the surveillance and financial analysis regarding the
solvency of insurance companies in general. These initiatives
include the development and implementation of a risk-based capital
formula for determining adequate levels of capital and surplus.
Insurance companies are required to calculate their risk-based
capital in accordance with this formula and to include the results
in their Annual Statement. It is anticipated that these standards
will have no significant effect upon Golden American. For
additional information about the Risk-Based Capital adequacy
monitoring system and Golden American, see "Management's
Discussion and Analysis Results of Operations"
In addition, many states regulate affiliated groups of insurers,
such as Golden American, and its affiliates, under insurance
holding company legislation. Under such laws, inter-company
transfers of assets and dividend payments from insurance
subsidiaries may be subject to prior notice or approval, depending
on the size of the transfers and payments in relation to the
financial positions of the companies involved.
Under insurance guaranty fund laws in most states, insurers doing
business therein can be assessed (up to prescribed limits) for
contract owner losses incurred by other insurance companies which
have become insolvent. Most of these laws provide that an
assessment may be excused or deferred if it would threaten an
insurer's own financial strength. For information regarding
Golden American's estimated liability for future guaranty fund
assessments, see Note 11 of Notes to Financial Statements.
Although the federal government generally does not directly
regulate the business of insurance, federal initiatives often have
an impact on the business in a variety of ways. Certain insurance
products of Golden American are subject to various federal
securities laws and regulations. In addition, current and
proposed federal measures which may significantly affect the
insurance business include regulation of insurance company
solvency, employee benefit regulation, removal of barriers
preventing banks from engaging in the insurance business, tax law
changes affecting the taxation of insurance companies and the tax
treatment of insurance products and its impact on the relative
desirability of various personal investment vehicles.
61
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DIRECTORS AND OFFICERS
NAME (AGE) POSITION(S) WITH THE COMPANY
- ---------- ----------------------------
Barnett Chernow (50) President and Director
Myles R. Tashman (57) Director, Executive Vice President,
General Counsel and Secretary
Michael W. Cunningham (50) Director
Mark A. Tullis (44) Director
Phillip R. Lowery (46) Director
James R. McInnis (51) Executive Vice President and
Chief Marketing Officer
Stephen J. Preston (42) Executive Vice President and Chief
Actuary
E. Robert Koster (41) Senior Vice President and Chief Financial
Officer
Patricia M. Corbett (34) Treasurer and Assistant V.P.
David L. Jacobson (50) Senior Vice President and Assistant
Secretary
William L. Lowe (35) Senior Vice President, Sales and Marketing
Ronald R. Blasdell (46) Senior Vice President, Project Implementation
Steven G. Mandel (40) Senior Vice President and
Chief Information Officer
Gary F. Haynes (54) Senior Vice President, Operations
Each director is elected to serve for one year or until the next
annual meeting of shareholders or until his or her successor is
elected. Some directors are directors of insurance company
subsidiaries of Golden American's parent, Equitable of Iowa. The
principal positions of Golden American's directors and senior
executive officers for the past five years are listed below:
Mr. Barnett Chernow became President and Director of Golden American
and President of First Golden in April 1998. From 1993 to 1998, Mr.
Chernow served as Executive Vice President of Golden American. He was
elected to serve as Executive Vice President and Director of First
Golden in September 1996.
Mr. Myles R. Tashman joined Golden American in August 1994 as
Senior Vice President and was named Executive Vice President,
General Counsel and Secretary effective January 1, 1996. He was
elected to serve as a Director of Golden American in January 1998.
He also serves as a Director, Executive Vice President, General
Counsel and Secretary of First Golden.
Mr. Michael W. Cunningham became a Director of Golden American and
First Golden in April 1999. Also, he has served as a Director of
Life of Georgia and Security Life of Denver since 1995.
Currently, he serves as Executive Vice President and Chief
Financial Officer of ING North America Insurance Corporation, and
has worked for them since 1991.
Mr. Mark A. Tullis became a Director of Golden American in January
2000. He has served as Executive Vice President, Strategy and
Operations for ING Americas Region since September 1999.
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Mr. Phillip R. Lowery became a Director of Golden American in
April 1999. He has served as Executive Vice President and Chief
Actuary for ING Americas Region since 1990.
Mr. James R. McInnis joined Golden American in December, 1997 as
Executive Vice President. From 1982 through November 1997, he held
several positions with the Endeavor Group and was President upon
his departure.
Mr. E. Robert Koster was elected Senior Vice President and Chief
Financial Officer of Golden American in September 1998. From
August, 1984 to September, 1998 he has held various positions with
ING companies in The Netherlands.
Ms. Patricia M. Corbett was elected Treasurer of Golden American
in December 1998. She joined Equitable Life Insurance Company of
Iowa in 1987 and is currently Treasurer and Assistant Vice
President of Equitable Life and USG Annuity & Life Company.
Mr. David L. Jacobson joined Golden American in November 1993 as
Senior Vice President and Assistant Secretary.
Mr. Stephen J. Preston joined Golden American in December, 1993 as
Senior Vice President, Chief Actuary and Controller. He became an
Executive Vice President and Chief Actuary in June 1998.
Mr. William L. Lowe joined Equitable Life as Vice President, Sales
& Marketing in January 1994. He became a Senior Vice President,
Sales & Marketing, of Golden American in August 1997. He was also
President of Equitable of Iowa Securities Network, Inc. until
October 1998.
Mr. Steven G. Mandel joined Golden American in October 1988 and
became Senior Vice President and Chief Information Officer in
June 1998.
Mr. Ronald R. Blasdell joined Golden American in February 1994 and
became Senior Vice President, Project Implementation in June 1998.
Mr. Gary Haynes joined Golden American in April 1999 and became
Senior Vice President, Operations in April 1999.
COMPENSATION TABLES AND OTHER INFORMATION
The following sets forth information with respect to the Chief
Executive Officer of Golden American as well as the annual salary
and bonus for the next five highly compensated executive officers
for the fiscal year ended December 31, 1998. Certain executive
officers of Golden American are also officers of DSI. The salaries
of such individuals are allocated between Golden American and DSI.
Executive officers of Golden American are also officers of DSI.
The salaries of such individuals are allocated between Golden
American and DSI pursuant to an arrangement among these companies.
Throughout 1995 and until August 13, 1996, Terry L. Kendall served
as a Managing Director at Bankers Trust New York Corporation.
Compensation amounts for Terry L. Kendall which are reflected
throughout these tables prior to August 14, 1996 were not charged
to Golden American, but were instead absorbed by Bankers Trust New
York Corporation.
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EXECUTIVE COMPENSATION TABLE
The following table sets forth information with respect to the
annual salary and bonus for Golden American's Chief Executive
Officers and the five other most highly compensated executive
officers for the fiscal year ended December 31, 1998. As of
the date of this prospectus 1999 data was not yet available.
<TABLE>
LONG-TERM ALL OTHER
ANNUAL COMPENSATION COMPENSATION COMPENSATION
------------------- ------------------------ ------------
RESTRICTED SECURITIES
NAME AND STOCK AWARDS UNDERLYING
PRINCIPAL POSITION YEAR SALARY BONUS(1) OPTIONS(2) OPTIONS(3)
- ------------------ ---- ------ -------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Barnett Chernow, 1998 $284,171 $105,375 8,000
President 1997 $234,167 $ 31,859 $277,576 4,000
1996 $207,526 $150,000 $ 7,755(4)
James R. McInnis, 1998 $250,004 $626,245 2,000
Executive Vice
President
Keith Glover, 1998 $250,000 $145,120 3,900
Executive Vice
President
Myles R. Tashman, 1998 $189,337 $ 54,425 3,500
Executive Vice 1997 $181,417 $ 25,000 $165,512 5,000
President, 1996 $176,138 $ 90,000 $ 5,127(4)
General Counsel
and Secretary
Stephen J. Preston, 1998 $173,870 $ 32,152 3,500
Executive Vice 1997 $160,758 $ 16,470
President 1996 $156,937 $ 58,326
and Chief Actuary
Paul R. Schlaack, 1998 $406,730 $210,600
Former Chairman 1997 $351,000 $249,185 $1,274,518 19,000 $15,000
and Vice President 1996 $327,875 $249,185 $ 245,875 19,000 $15,000
Terry L. Kendall, 1998 $145,237 $181,417
Former President 1997 $362,833 $ 80,365 $ 644,844 16,000
and CEO 1996 $288,298 $400,000 $11,535(4)
</TABLE>
(1) The amount shown relates to bonuses paid in 1998, 1997
and 1996.
(2) Restricted stock awards granted to executive officers
vested on October 24, 1997 with the change in control of
Equitable of Iowa.
(3) Awards comprised of qualified and non-qualified stock
options. All options were granted with an exercise price equal
to the then fair market value of the underlying stock. All
options vested with the change in control of Equitable of Iowa
and were cashed out for the difference between $68.00 and the
exercise price.
(4) In 1996, Contributions were made by the Company on behalf
of the employee to PartnerShare, the deferred compensation
plan sponsored by Bankers Trust New York Corporation and its
affiliates for the benefit of all Bankers Trust employees, in
February of 1996 to employees on record as of December 31,
1996, after an employee completed one year of service with the
company. This contribution could be in the form of deferred
compensation and/or a cash payment. In 1996, Mr. Kendall
received $9,000 of deferred compensation and $2,535 of cash
payment from the plan; Mr. Chernow received $6,000 of
deferred compensation and $1,755 of cash payment from the
plan; Mr. Tashman received $4,000 of deferred compensation and
$1,127 of cash payment from the plan.
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OPTION GRANTS IN LAST FISCAL YEAR (1998)
<TABLE> POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
% OF TOTAL RATES OF STOCK
NUMBER OF OPTIONS PRICE APPRECIATION
SECURITIES GRANTED TO FOR OPTION
UNDERLYING EMPLOYEES EXERCISE TERM (3)
OPTIONS IN FISCAL OR BASE EXPIRATION ------------------
NAME GRANTED(1) YEAR PRICE (2) DATE 5% 10%
- ---- ---------- ----- --------- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Barnett Chernow 8,000 11.99 $60.518 5/26/2003 $164,016 $362,433
James R. McInnis 2,000 3.00 $60.518 5/26/2003 $ 41,004 $ 90,608
Keith Glover 3,900 5.85 $60.518 5/26/2003 $ 79,958 $176,686
Myles R. Tashman 3,500 5.25 $60.518 5/26/2003 $ 71,758 $158,564
Stephen J. Preston 3,500 5.25 $60.518 5/26/2003 $ 71,758 $158,564
</TABLE>
(1) Stock appreciation rights granted on May 26, 1998 to the
officers of Golden American have a three-year vesting period
and an expiration date as shown.
(2) The base price was equal to the fair market value of
ING's stock on on the date of grant.
(3) Total dollar gains based on indicated rates of
appreciation of share price over a the five year term of the
rights.
Directors of Golden American receive no additional compensation
for serving as a director.
65
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[Shaded Section Header]
- --------------------------------------------------------------------------
UNAUDITED FINANCIAL STATEMENTS OF GOLDEN AMERICAN LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------
For the Nine Months Ended September 30, 1999
66
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<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
September 30, 1999 December 31, 1998
------------------ -----------------
<S> <C> <C>
ASSETS
Investments:
Fixed maturities, available for sale, at
fair value (cost: 1999 -- $815,027;
1998 -- $739,772) $ 798,708 $ 741,985
Equity securities, at fair value (cost: 13,679 11,514
1999 -- $14,437; 1998 -- $14,437)
Mortgage loans on real estate 93,884 97,322
Policy loans 13,454 11,772
Short-term investments 66,519 41,152
---------- ----------
Total investments 986,244 903,745
Cash and cash equivalents 12,908 6,679
Due from affiliates 1,460 2,983
Accrued investment income 11,896 9,645
Deferred policy acquisition costs 439,176 204,979
Value of purchased insurance in force 32,984 35,977
Current income taxes recoverable 204 628
Deferred income tax asset 29,690 31,477
Property and equipment, less allowances
for depreciation of $2,807 in 1999
and $801 in 1998 13,017 7,348
Goodwill, less accumulated amortization
of $7,242 in 1999 and $4,408 in 1998 143,886 146,719
Other assets 42,072 6,239
Separate account assets 5,598,490 3,396,114
---------- ----------
Total assets $7,312,027 $4,752,533
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Policy liabilities and accruals:
Future policy benefits:
Annuity and interest sensitive life
products $1,009,382 $881,112
Unearned revenue reserve 5,855 3,840
Other policy claims and benefits 15 --
---------- ----------
1,015,252 884,952
Surplus notes 160,000 85,000
Due to affiliates 4,328 --
Other liabilities 80,081 32,573
Separate account liabilities 5,598,490 3,396,114
---------- ----------
6,858,151 4,398,639
Commitments and contingencies
Stockholder's equity:
Common stock, par value $10 per share,
authorized, issued, 2,500 2,500
and outstanding 250,000 shares
Additional paid-in capital 447,640 347,640
Accumulated other comprehensive loss (4,464) (895)
Retained earnings 8,200 4,649
---------- ----------
Total stockholder's equity 453,876 353,894
---------- ----------
Total liabilities and stockholder's
equity $7,312,027 $4,752,533
========== ==========
See accompanying notes.
</TABLE> 67
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<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
For the Nine For the Nine
Months ended Months ended
September 30, 1999 September 30, 1998
------------------ ------------------
<S> <C> <C>
Revenues:
Annuity and interest sensitive
life product charges $ 55,195 $ 26,984
Management fee revenue 6,755 3,257
Net investment income 42,671 29,296
Realized gains (losses) on
investments (2,215) 436
Other income 7,448 4,805
--------- --------
109,854 64,778
Insurance benefits and expenses:
Annuity and interest sensitive
life benefits:
Interest credited to account 125,404 64,110
balances
Benefit claims incurred in 3,452 862
excess of account balances
Underwriting, acquisition, and
insurance expenses:
Commissions 134,585 84,958
General expenses 47,551 23,480
Insurance taxes, state 3,545 2,680
licenses, and fees
Policy acquisition costs (244,840) (133,616)
deferred
Amortization:
Deferred policy acquisition 19,699 4,014
costs
Value of purchased insurance 4,803 3,252
in force
Goodwill 2,834 2,834
--------- --------
97,033 52,574
Interest expense 5,552 3,033
--------- --------
102,585 55,607
--------- --------
Income before income taxes 7,269 9,171
Income taxes 3,718 4,294
--------- --------
Net income $ 3,551 $ 4,877
========= ========
See accompanying notes.
</TABLE> 68
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
For the Nine For the Nine
Months ended Months ended
September 30, 1999 September 30, 1998
------------------ ------------------
<S> <C> <C>
NET CASH USED IN OPERATING ACTIVITIES $ (60,026) $ (22,666)
INVESTING ACTIVITIES
Sale, maturity, or repayment of investments:
Fixed maturities -- available for sale 170,548 92,707
Mortgage loans on real estate 4,241 3,145
Short-term investments -- net -- 2,575
---------- ----------
174,789 98,427
Acquisition of investments:
Fixed maturities -- available for sale (250,277) (291,687)
Equity securities -- (10,000)
Mortgage loans on real estate (1,034) (16,390)
Policy loans -- net (1,682) (1,385)
Short term investments -- net (25,367) --
---------- ----------
(278,360) (319,462)
Net purchase of property and equipment (7,700) (3,470)
---------- ----------
Net cash used in investing activities (111,271) (224,505)
FINANCING ACTIVITIES
Proceeds from reciprocal loan agreement 488,950 242,847
borrowings
Repayment of reciprocal loan agreement (488,950) (202,847)
borrowings
Proceeds from revolving note payable 131,595 20,082
Repayment of revolving note payable (131,595) --
Proceeds from surplus note 75,000 --
Repayment of line of credit borrowings -- (5,309)
Receipts from annuity and interest
sensitive life policies credited
to account balances 540,464 350,385
Return of account balances on annuity
and interest sensitive life policies (98,715) (50,370)
Net reallocations to Separate Accounts (439,223) (163,455)
Contributions from parent 100,000 53,750
---------- ----------
Net cash provided by financing 177,526 245,083
activities
---------- ----------
Increase (decrease) in cash and cash
equivalents 6,229 (2,088)
Cash and cash equivalents at beginning
of period 6,679 21,039
---------- ----------
Cash and cash equivalents at end of
period $ 12,908 $ 18,951
========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid during the period for:
Interest $ 5,078 $ 3,493
Taxes 10 80
Non-cash financing activities:
Non-cash adjustment to additional paid
in capital for adjusted merger costs -- 143
Non-cash contribution of capital from
parent to repay line of credit
borrowings -- 18,750
See accompanying notes.
</TABLE> 69
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1999
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, the financial
statements do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments considered
necessary for a fair presentation have been included. All adjustments
were of a normal recurring nature, unless otherwise noted in Management's
Discussion and Analysis and the Notes to Financial Statements. Operating
results for the nine months ended September 30, 1999 are not necessarily
indicative of the results that may be expected for the year ending
December 31, 1999. These financial statements should be read in
conjunction with the financial statements and related notes included in
the Golden American Life Insurance Company's annual report on Form 10-K
for the year ended December 31, 1998.
CONSOLIDATION
The condensed consolidated financial statements include Golden American
Life Insurance Company ("Golden American") and its wholly owned
subsidiary, First Golden American Life Insurance Company of New York
("First Golden," and with Golden American, collectively, the
"Companies"). All significant intercompany accounts and transactions
have been eliminated.
ORGANIZATION
Golden American is a wholly owned subsidiary of Equitable of Iowa
Companies, Inc. ("EIC" or the "Parent"). On October 24, 1997, PFHI
Holdings, Inc. ("PFHI"), a Delaware corporation, acquired all of the
outstanding capital stock of Equitable of Iowa Companies ("Equitable")
according to the terms of an Agreement and Plan of Merger dated July 7,
1997 among Equitable, PFHI, and ING Groep N.V. ("ING"). PFHI is a wholly
owned subsidiary of ING, a global financial services holding company
based in The Netherlands. As a result of this transaction, Equitable was
merged into PFHI, which was simultaneously renamed Equitable of Iowa
Companies, Inc., a Delaware corporation.
FAIR VALUES
Estimated fair values of publicly traded fixed maturities for 1999 are as
reported by an independent pricing service.
STATUTORY
Net loss for Golden American as determined in accordance with statutory
accounting practices was $75,508,000 and $32,198,000 for the nine months
ended September 30, 1999 and 1998, respectively. Total statutory capital
and surplus was $285,674,000 at September 30, 1999 and $183,045,000 at
December 31, 1998.
RECLASSIFICATIONS
Certain amounts in the September 30, 1998 and December 31, 1998 financial
statements have been reclassified to conform to the September 30, 1999
financial statement presentation.
2. COMPREHENSIVE INCOME
As of January 1, 1998, the Companies adopted the Statement of Financial
Accounting Standard ("SFAS") No. 130, "Reporting Comprehensive Income."
SFAS No. 130 establishes new rules for the reporting and display of
comprehensive income and its components; however, the adoption of this
statement had no impact on the Companies' net income or stockholder's
equity. SFAS No. 130 requires unrealized gains or losses on the
70
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<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1999
2. COMPREHENSIVE INCOME (continued)
Companies' available for sale securities (net of adjustments for value of
purchased insurance in force ("VPIF"), deferred policy acquisition costs
("DPAC"), and deferred income taxes) to be included in other
comprehensive income.
During the third quarter and first nine months of 1999, other
comprehensive income (loss) for the Companies amounted to $2,059,000 and
$(18,000), respectively ($2,426,000 and $5,478,000, respectively, for the
same periods of 1998). Included in these amounts are other comprehensive
income (loss) for First Golden of $(14,000) and $(258,000) for the third
quarter and first nine months of 1999, respectively ($601,000 and
$1,174,000, respectively, for the same periods of 1998). Other
comprehensive income (loss) excludes net investment gains (losses)
included in net income which merely represent transfers from unrealized
to realized gains and losses. These amounts totaled $(460,000) and
$(2,512,000) during the third quarter and first nine months of 1999,
respectively ($263,000 and $388,000, respectively, for the same periods
of 1998). Such amounts, which have been measured through the date of
sale, are net of income taxes and adjustments for VPIF and DPAC totaling
$(38,000) and $297,000 for the third quarter and first nine months of
1999, respectively ($40,000 and $48,000, respectively, for the same
periods of 1998).
3. INVESTMENTS
INVESTMENT VALUATION ANALYSIS: The Companies analyze the investment
portfolio at least quarterly in order to determine if the carrying value
of any investment has been impaired. The carrying value of debt and
equity securities is written down to fair value by a charge to realized
losses when an impairment in value appears to be other than temporary.
During the fourth quarter of 1998, Golden American determined that the
carrying value of two bonds exceeded their estimated net realizable
value. As a result, at December 31, 1998, Golden American recognized a
total pre-tax loss of $973,000 to reduce the carrying value of the bonds
to their combined net realizable value of $2,919,000. During the second
quarter of 1999, further information was received regarding these bonds
and Golden American determined that the carrying value of the two bonds
exceeded their estimated net realizable value. As a result, at June 30,
1999, Golden American recognized a total pre-tax loss of $1,639,000 to
further reduce the carrying value of the bonds to their combined net
realizable value of $1,137,000.
4. RELATED PARTY TRANSACTIONS
OPERATING AGREEMENTS: Directed Services, Inc. ("DSI"), an affiliate,
acts as the principal underwriter (as defined in the Securities Act of
1933 and the Investment Company Act of 1940, as amended) and distributor
of the variable insurance products issued by the Companies. DSI is
authorized to enter into agreements with broker/dealers to distribute the
Companies' variable insurance products and appoint representatives of the
broker/dealers as agents. The Companies paid commissions and expenses to
DSI totaling $50,131,000 in the third quarter and $130,419,000 for the
first nine months of 1999 ($32,104,000 and $82,548,000, respectively, for
the same periods of 1998).
Golden American provides certain managerial and supervisory services to
DSI. The fee paid by DSI for these services is calculated as a
percentage of average assets in the variable separate accounts. For the
third quarter and first nine months of 1999, the fee was $2,659,000 and
$6,755,000, respectively ($1,234,000 and $3,257,000, respectively, for
the same periods of 1998).
The Companies have an asset management agreement with ING Investment
Management LLC ("ING IM"), an affiliate, in which ING IM provides asset
management and accounting services. Under the agreement, the Companies
record a fee based on the value of the assets under management. The fee
is payable quarterly. For the third quarter and first nine months of
1999, the Companies incurred fees of $523,000 and
71
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<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1999
4. RELATED PARTY TRANSACTIONS (continued)
$1,637,000, respectively, under this agreement ($341,000 and $1,013,000,
respectively, for the same periods of 1998).
Golden American has a guaranty agreement with Equitable Life Insurance
Company of Iowa ("Equitable Life"), an affiliate. In consideration of an
annual fee, payable June 30, Equitable Life guarantees to Golden American
that it will make funds available, if needed, to Golden American to pay
the contractual claims made under the provisions of Golden American's
life insurance and annuity contracts. The agreement is not, and nothing
contained therein or done pursuant thereto by Equitable Life shall be
deemed to constitute, a direct or indirect guaranty by Equitable Life of
the payment of any debt or other obligation, indebtedness or liability,
of any kind or character whatsoever, of Golden American. The agreement
does not guarantee the value of the underlying assets held in separate
accounts in which funds of variable life insurance and variable annuity
policies have been invested. The calculation of the annual fee is based
on risk based capital. As Golden American's risk based capital level was
above required amounts, no annual fee was payable at June 30, 1999 or
1998.
Golden American provides certain advisory, computer and other resources
and services to Equitable Life. Revenues for these services, which
reduce general expenses incurred by Golden American, totaled $237,000 in
the third quarter of 1999 and $898,000 for the first nine months of 1999
($1,524,000 and $5,091,000, respectively, for the same periods of 1998).
The Companies have a service agreement with Equitable Life in which
Equitable Life provides administrative and financial related services.
Under this agreement, the Companies incurred expenses of $50,000 in the
third quarter of 1999 and $855,000 for the first nine months of 1999
($261,000 and $575,000, respectively, for the same periods of 1998).
The Companies provide resources and services to DSI. Revenues for these
services, which reduce general expenses incurred by the Companies,
totaled $276,000 in the third quarter of 1999 and $759,000 for the first
nine months of 1999 ($19,000 and $57,000, respectively, for the same
periods of 1998).
Golden American provides resources and services to ING Mutual Funds
Management Co., LLC, an affiliate. Revenues for these services, which
reduce general expenses incurred by Golden American, totaled $159,000 in
the third quarter of 1999 and $376,000 for the first nine months of
1999.
For the third quarter of 1999, the Companies received 7.8% of total
premiums (9.7% in the same period of 1998), net of reinsurance, for
variable products sold through four affiliates, Locust Street Securities,
Inc. ("LSSI"), Vestax Securities Corporation ("Vestax"), DSI, and Multi-
Financial Securities Corporation ("Multi-Financial") of $46,600,000,
$12,900,000, $0, and $11,000,000, respectively ($34,600,000, $14,200,000,
$1,800,000, and $4,100,000, respectively, for the same period of 1998).
For the first nine months of 1999, the Companies received 9.5% of total
premiums (10.0% in the same period of 1998), net of reinsurance, from
LSSI, Vestax, DSI, and Multi-Financial of $121,900,000, $72,000,000,
$2,300,000, and $24,400,000, respectively ($92,700,000, $30,000,000,
$10,700,000, and $10,000,000, respectively, for the same period of 1998).
RECIPROCAL LOAN AGREEMENT: Golden American maintains a reciprocal loan
agreement with ING America Insurance Holdings, Inc. ("ING AIH"), a
Delaware corporation and affiliate, to facilitate the handling of unusual
and/or unanticipated short-term cash requirements. Under this agreement,
which became effective January 1, 1998 and expires December 31, 2007,
Golden American and ING AIH can borrow up to $65,000,000 from one
another. Prior to lending funds to ING AIH, Golden American must obtain
approval from the Department of Insurance of the State of Delaware.
Interest on any Golden American borrowings is charged at the rate of ING
AIH's cost of funds for the interest period plus 0.15%. Interest on any
ING AIH borrowings is charged at a rate based on the prevailing interest
rate of U.S. commercial paper available for purchase with a similar
duration. Under this agreement, Golden American incurred interest
expense of
72
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<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1999
4. RELATED PARTY TRANSACTIONS (continued)
$397,000 in the third quarter of 1999 and $633,000 for the
first nine months of 1999 ($505,000 and $1,269,000, respectively, for the
same periods of 1998). At September 30, 1999, Golden American did not
have any borrowings or receivables from ING AIH under this agreement.
LINE OF CREDIT: Golden American maintained a line of credit agreement
with Equitable to facilitate the handling of unusual and/or unanticipated
short-term cash requirements. Under this agreement, which became
effective December 1, 1996 and expired December 31, 1997, Golden American
could borrow up to $25,000,000. Interest on any borrowings was charged
at the rate of Equitable's monthly average aggregate cost of short-term
funds plus 1.00%. Under this agreement, Golden American incurred
interest expense of $211,000 for the first quarter of 1998. The
outstanding balance was paid by a capital contribution from the Parent
and with funds borrowed from ING AIH.
SURPLUS NOTES: On September 30, 1999, Golden American issued a 7.75%
surplus note in the amount of $75,000,000 to ING AIH. The note matures on
September 29, 2029. Payment of the note and related accrued interest is
subordinate to payments due to policyholders, claimant and beneficiary
claims, as well as debts owed to all other classes of debtors, other than
surplus note holders, of Golden American. Any payment of principal and/or
interest made is subject to the prior approval of the Delaware Insurance
Commissioner. Under this agreement, Golden American incurred no interest
expense in the third quarter of 1999.
On December 30, 1998, Golden American issued a 7.25% surplus note in the
amount of $60,000,000 to Equitable Life. The note matures on December
29, 2028. Payment of the note and related accrued interest is
subordinate to payments due to policyholders, claimant and beneficiary
claims, as well as debts owed to all other classes of debtors, other than
surplus note holders, of Golden American. Any payment of principal
and/or interest made is subject to the prior approval of the Delaware
Insurance Commissioner. Under this agreement, Golden American incurred
interest expense of $1,088,000 in the third quarter of 1999 and
$3,263,000 for the first nine months of 1999.
On December 17, 1996, Golden American issued an 8.25% surplus note in the
amount of $25,000,000 to Equitable. The note matures on December 17,
2026. Payment of the note and related accrued interest is subordinate to
payments due to policyholders, claimant and beneficiary claims, as well
as debts owed to all other classes of debtors of Golden American. Any
payment of principal made is subject to the prior approval of the
Delaware Insurance Commissioner. Golden American incurred interest
totaling $516,000 in the third quarter of 1999 and $1,547,000 for the
first nine months of 1999, unchanged from the same periods of 1998. As a
result of the merger, the surplus note is now payable to EIC.
STOCKHOLDER'S EQUITY: During the third quarter of 1999 and the first
nine months of 1999, Golden American received capital contributions from
its Parent of $20,000,000 and $100,000,000, respectively ($0 and
$72,500,000, respectively, for the same periods of 1998).
5. COMMITMENTS AND CONTINGENCIES
REINSURANCE: At September 30, 1999, Golden American had reinsurance
treaties with four unaffiliated reinsurers and one affiliated reinsurer
covering a significant portion of the mortality risks under its variable
contracts. Golden American remains liable to the extent its reinsurers do
not meet their obligations under the reinsurance agreements. At September
30, 1999 and 1998, the Companies had a net receivable of $14,041,000 and
$6,539,000, respectively, for reserve credits, reinsurance claims, or
other receivables from these reinsurers comprised of $2,268,000 and
$257,000, respectively, for claims recoverable from reinsurers, $918,000
and $451,000, respectively, for a payable for reinsurance premiums and
$12,691,000 and $6,733,000, respectively, for a receivable from an
unaffiliated reinsurer. Included in the accompanying financial
statements are net considerations to reinsurers of $2,638,000 in the
third quarter of 1999 and $6,656,000 for the first nine months of 1999
compared to $1,293,000 and $3,259,000, respectively, for the same periods
in 1998. Also included in the accompanying financial statements are net
policy benefits of
73
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<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1999
5. COMMITMENTS AND CONTINGENCIES (continued)
$2,569,000 in the third quarter of 1999 and $4,008,000 for the first
nine months of 1999 compared to $1,272,000 and $2,096,000, respectively,
for the same periods in 1998.
Effective June 1, 1994, Golden American entered into a modified
coinsurance agreement with an unaffiliated reinsurer. The accompanying
financial statements are presented net of the effects of the treaty.
GUARANTY FUND ASSESSMENTS: Assessments are levied on the Companies by
life and health guaranty associations in most states in which the
Companies are licensed to cover losses of policyholders of insolvent or
rehabilitated insurers. In some states, these assessments can be
partially recovered through a reduction in future premium taxes. The
Companies cannot predict whether and to what extent legislative
initiatives may affect the right to offset. The associated cost for a
particular insurance company can vary significantly based upon its fixed
account premium volume by line of business and state premiums as well as
its potential for premium tax offset. The Companies have established an
undiscounted reserve to cover such assessments, review information
regarding known failures, and revise estimates of future guaranty fund
assessments. Accordingly, the Companies accrued and charged to expense
an additional $208,000 and $598,000 in the third quarter and first nine
months of 1998, respectively. At September 30, 1999, the Companies have
an undiscounted reserve of $2,444,000 to cover estimated future
assessments (net of related anticipated premium tax credits) and have
established an asset totaling $586,000 for assessments paid which may be
recoverable through future premium tax offsets. The Companies believe
this reserve is sufficient to cover expected future guaranty fund
assessments based upon previous premiums and known insolvencies at this
time.
LITIGATION: The Companies, like other insurance companies, may be named
or otherwise involved in lawsuits, including class action lawsuits and
arbitrations. In some class action and other actions involving insurers,
substantial damages have been sought and/or material settlement or award
payments have been made. The Companies currently believe no pending or
threatened lawsuits or actions exist that are reasonably likely to have a
material adverse impact on the Companies.
VULNERABILITY FROM CONCENTRATIONS: The Companies have various
concentrations in the investment portfolio. The Companies' asset growth,
net investment income, and cash flow are primarily generated from the
sale of variable products and associated future policy benefits and
separate account liabilities. Substantial changes in tax laws that would
make these products less attractive to consumers and extreme fluctuations
in interest rates or stock market returns, which may result in higher
lapse experience than assumed, could cause a severe impact on the
Companies' financial condition. Two broker/dealers, each having at least
ten percent of total sales, generated 29% of the Companies' sales during
the first nine months of 1999 (10% by one broker/dealer in the same
period of 1998). The Premium Plus variable annuity product generated 78%
of the Companies' sales during the first nine months of 1999 (59% in the
same period of 1998).
REVOLVING NOTE PAYABLE: To enhance short-term liquidity, the Companies
established a revolving note payable effective July 27, 1998 and expiring
July 31, 1999 with SunTrust Bank, Atlanta (the "Bank"). The note was
approved by the Boards of Directors of Golden American and First Golden
on August 5, 1998 and September 29, 1998, respectively. As of July 31,
1999, the SunTrust Bank, Atlanta revolving note facility was extended to
July 31, 2000. The total amount the Companies may have outstanding is
$85,000,000, of which Golden American and First Golden have individual
credit sublimits of $75,000,000 and $10,000,000, respectively. The note
accrues interest at an annual rate equal to: (1) the cost of funds for
the Bank for the period applicable for the advance plus 0.25% or (2) a
rate quoted by the Bank to the Companies for the advance. The terms of
the agreement require the Companies to maintain the minimum level of
Company Action Level Risk Based Capital as established by applicable
state law or regulation. During the quarter and nine months ended
September 30, 1999, the Companies paid interest expense of $55,000 and
$109,000, respectively ($6,000 for the same periods of 1998). At
September 30, 1999, the Companies did not have any borrowings under this
agreement.
74
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[Shaded Section Header]
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FINANCIAL STATEMENTS OF GOLDEN AMERICAN LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholder
Golden American Life Insurance Company
We have audited the accompanying consolidated balance sheets of
Golden American Life Insurance Company as of December 31, 1998 and
1997, and the related consolidated statements of operations,
changes in stockholder's equity, and cash flows for the year ended
December 31, 1998 and for the periods from October 25, 1997
through December 31, 1997, January 1, 1997 through October 24,
1997, August 14, 1996 through December 31, 1996 and January 1,
1996 through August 13, 1996. These financials are the
responsibility of the Companies' management. Our responsibility
is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. 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. 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 consolidated financial
position of Golden American Life Insurance Company at December 31,
1998 and 1997, and the consolidated results of its operations and
its cash flows for the year ended December 31, 1998 and for the
periods from October 25, 1997 through December 31, 1997, January
1, 1997 through October 24, 1997, August 14, 1996 through December
31, 1996 and January 1, 1996 through August 13, 1996 in conformity
with generally accepted accounting principles.
/s/Ernst & Young LLP
Des Moines, Iowa
February 12, 1999
75
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
<TABLE>
POST-MERGER
------------------------------------
December 31, 1998 December 31, 1997
----------------- -----------------
<S> <C> <C>
ASSETS
Investments:
Fixed maturities, available for
sale, at fair value (cost:
1998 - $739,772; 1997 -
$413,288)...................... $ 741,985 $ 414,401
Equity securities, at fair value
(cost: 1998 - $14,437; 1997 -
$4,437)........................ 11,514 3,904
Mortgage loans on real estate.... 97,322 85,093
Policy loans..................... 11,772 8,832
Short-term investments........... 41,152 14,460
---------- ----------
Total investments.................. 903,745 526,690
Cash and cash equivalents.......... 6,679 21,039
Due from affiliates................ 2,983 827
Accrued investment income.......... 9,645 6,423
Deferred policy acquisition costs.. 204,979 12,752
Value of purchased insurance in
force............................ 35,977 43,174
Current income taxes recoverable... 628 272
Deferred income tax asset.......... 31,477 36,230
Property and equipment, less
allowances for depreciation
of $801 in 1998 and $97 in 1997.. 7,348 1,567
Goodwill, less accumulated
amortization of $4,408 in 1998
and $630 in 1997................. 146,719 150,497
Other assets....................... 6,239 755
Separate account assets............ 3,396,114 1,646,169
---------- ----------
Total assets....................... $4,752,533 $2,446,395
========== ==========
</TABLE>
See accompanying notes.
76
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GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(Dollars in thousands, except per share data)
<TABLE>
POST-MERGER
------------------------------------
December 31, 1998 December 31, 1997
----------------- -----------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDER'S EQUITY
Policy liabilities and accruals:
Future policy benefits:
Annuity and interest sensitive life
products......................... $ 881,112 $ 505,304
Unearned revenue reserve........... 3,840 1,189
Other policy claims and benefits... -- 10
---------- ----------
884,952 506,503
Line of credit with affiliate....... -- 24,059
Surplus notes....................... 85,000 25,000
Due to affiliates................... -- 80
Other liabilities................... 32,573 17,271
Separate account liabilities........ 3,396,114 1,646,169
---------- ----------
4,398,639 2,219,082
Commitments and contingencies
Stockholder's equity:
Common stock, par value $10 per share,
authorized,issued and outstanding
250,000 shares................... 2,500 2,500
Additional paid-in capital......... 347,640 224,997
Accumulated other comprehensive
income (loss).................... (895) 241
Retained earnings (deficit)........ 4,649 (425)
---------- ----------
Total stockholder's equity.......... 353,894 227,313
---------- ----------
Total liabilities and stockholder's
equity............................ $4,752,533 $2,446,395
========== ==========
</TABLE>
See accompanying notes.
77
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<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
<TABLE>
POST-MERGER | POST-ACQUISITION | PRE-ACQUISITION
------------------------------------ | ----------------------------------- | ---------------
For the period | For the period For the period | For the period
For the year October 25,1997 | January 1,1997 August 14, 1996 | January 1, 1996
ended through | through through | through
December 31, 1998 December 31, 1997 | October 24, 1997 December 31, 1996 | August 13, 1996
----------------- ----------------- | ---------------- ----------------- | ---------------
<S> <C> <C> | <C> <C> | <C>
REVENUES: | |
Annuity and interest sensitive | |
life product charges........ $ 39,119 $ 3,834 | $ 18,288 $ 8,768 | $12,259
Management fee revenue....... 4,771 508 | 2,262 877 | 1,390
Net investment income........ 42,485 5,127 | 21,656 5,795 | 4,990
Realized gains (losses) on | |
investments................. (1,491) 15 | 151 42 | (420)
Other income................. 5,569 236 | 426 486 | 70
--------- -------- | -------- ------- | -------
90,453 9,720 | 42,783 15,968 | 18,289
| |
| |
INSURANCE BENEFITS AND EXPENSES: | |
Annuity and interest sensitive | |
life benefits: | |
Interest credited to account | |
balances..................... 94,845 7,413 | 19,276 5,741 | 4,355
Benefit claims incurred in | |
excess of account balances... 2,123 -- | 125 1,262 | 915
Underwriting, acquisition | |
and insurance expenses: | |
Commissions.................. 121,171 9,437 | 26,818 9,866 | 16,549
General expenses............. 37,577 3,350 | 13,907 5,906 | 9,422
Insurance taxes.............. 4,140 450 | 1,889 672 | 1,225
Policy acquisition costs | |
deferred................... (197,796) (13,678) | (29,003) (11,712) | (19,300)
Amortization: | |
Deferred policy acquisition | |
costs..................... 5,148 892 | 1,674 244 | 2,436
Value of purchased insurance | |
in force.................. 4,724 948 | 5,225 2,745 | 951
Goodwill.................... 3,778 630 | 1,398 589 | --
--------- --------- | -------- ------ | -------
75,710 9,442 | 41,309 15,313 | 16,553
| |
Interest expense............... 4,390 557 | 2,082 85 | --
--------- --------- | -------- ------ | -------
80,100 9,999 | 43,391 15,398 | 16,553
--------- --------- | -------- ------ | -------
Income (loss) before income | |
taxes........................ 10,353 (279) | (608) 570 | 1,736
| |
Income taxes................... 5,279 146 | (1,337) 220 | (1,463)
--------- --------- | -------- ------ | -------
Net income (loss).............. $ 5,074 $ (425) | $ 729 $ 350 | $ 3,199
========= ========= | ======== ======= | ========
</TABLE>
See accompanying notes.
78
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
(Dollars in thousands)
<TABLE>
Accumulated
Redeemable Additional Other Retained Total
Common Preferred Paid-in Comprehensive Earnings Stockholder's
Stock Stock Capital Income (Loss) (Deficit) Equity
------------------------------------------------------------------------------
PRE-ACQUISITION
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1996........ $2,500 $50,000 $ 45,030 $ 658 $ (63) $ 98,125
Comprehensive income:
Net income...................... -- -- -- -- 3,199 3,199
Change in net unrealized
investment gains (losses)..... -- -- -- (1,175) -- (1,175)
---------
Comprehensive income............. 2,024
Preferred stock dividends........ -- -- -- -- (719) (719)
------ ------- -------- ------- ------ ---------
Balance at August 13, 1996........ $2,500 $50,000 $ 45,030 $ (517) $2,417 $ 99,430
====== ======= ======== ======== ====== =========
</TABLE>
<TABLE>
------------------------------------------------------------------------------
POST-ACQUISITION
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at August 14, 1996........ $2,500 $50,000 $ 87,372 -- -- $139,872
Comprehensive income:
Net income...................... -- -- -- -- $ 350 350
Change in net unrealized
investment gains (losses)...... -- -- -- $ 262 -- 262
--------
Comprehensive income............. 612
Contribution of preferred stock
to additional paid-in capital... -- (50,000) 50,000 -- -- --
------ ------- -------- ------- ------ --------
Balance at December 31, 1996...... 2,500 -- 137,372 262 350 140,484
Comprehensive income:
Net income...................... -- -- -- -- 729 729
Change in net unrealized
investment gains (losses)...... -- -- -- 1,543 -- 1,543
--------
Comprehensive income............. 2,272
Contribution of capital.......... -- -- 1,121 -- -- 1,121
------ ------- -------- ------- ------ --------
Balance at October 24, 1997 $2,500 -- $138,493 $1,805 $1,079 $143,877
====== ======= ======== ====== ====== ========
</TABLE>
<TABLE>
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POST-MERGER
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at October 25, 1997....... $2,500 -- $224,997 -- -- $227,497
Comprehensive loss:
Net loss....................... -- -- -- -- $ (425) (425)
Change in net unrealized
investment gains (losses)...... -- -- -- $ 241 -- 241
--------
Comprehensive loss............... (184)
------ ------- -------- ------- ------ --------
Balance at December 31, 1997...... 2,500 -- 224,997 241 (425) 227,313
Comprehensive income:
Net income...................... -- -- -- -- 5,074 5,074
Change in net unrealized
investment gains (losses)...... -- -- -- (1,136) -- (1,136)
--------
Comprehensive income............. 3,938
Contribution of capital.......... -- -- 122,500 -- -- 122,500
Other............................ -- -- 143 -- -- 143
------ ------- -------- ------- ------ --------
Balance at December 31, 1998...... $2,500 -- $347,640 $ (895) $4,649 $353,894
====== ======= ======== ======= ====== ========
</TABLE>
See accompanying notes.
79
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
POST-MERGER | POST-ACQUISITION | PRE-ACQUISITION
------------------------------------ | ----------------------------------- | ---------------
For the period | For the period For the period | For the period
For the year October 25,1997 | January 1,1997 August 14, 1996 | January 1, 1996
ended through | through through | through
December 31, 1998 December 31, 1997 | October 24, 1997 December 31, 1996 | August 13, 1996
----------------- ----------------- | ---------------- ----------------- | ---------------
<S> <C> <C> | <C> <C> | <C>
OPERATING ACTIVITIES | |
Net income (loss)............ $ 5,074 $ (425) | $ 729 $ 350 | $ 3,199
Adjustments to reconcile net | |
income (loss) to net cash | |
provided by (used in) | |
operations: | |
Adjustments related to annuity | |
and interest sensitive life | |
products: | |
Interest credited and other | |
charges on interest | |
sensitive products........ 94,690 7,361 | 19,177 5,106 | 4,472
Change in unearned | |
revenues.................. 2,651 1,189 | 3,292 2,063 | 2,084
Decrease (increase) in | |
accrued investment income.. (3,222) 1,205 | (3,489) (877) | (2,494)
Policy acquisition costs | |
deferred................... (197,796) (13,678) | (29,003) (11,712) | (19,300)
Amortization of deferred | |
policy acquisition costs... 5,148 892 | 1,674 244 | 2,436
Amortization of value of | |
purchased insurance in | |
force...................... 4,724 948 | 5,225 2,745 | 951
Change in other assets, | |
other liabilities and | |
accrued income taxes....... 9,891 4,205 | (8,944) (96) | 4,672
Provision for depreciation | |
and amortization........... 8,147 1,299 | 3,203 1,242 | 703
Provision for deferred | |
income taxes............... 5,279 146 | 316 220 | (1,463)
Realized (gains) losses on | |
investments................ 1,491 (15) | (151) (42) | 420
--------- -------- | -------- -------- | ---------
Net cash provided by (used | |
in)operating activities..... (63,923) 3,127 | (7,971) (757) | (4,320)
| |
INVESTING ACTIVITIES | |
Sale, maturity or repayment | |
of investments: | |
Fixed maturities - available | |
for sale 145,253 9,871 | 39,622 47,453 | 55,091
Mortgage loans on real | |
estate..................... 3,791 1,644 | 5,828 40 | --
Short-term investments-net.. -- -- | 11,415 2,629 | 354
--------- -------- | -------- -------- | ---------
149,044 11,515 | 56,865 50,122 | 55,445
Acquisition of investments: | |
Fixed maturities - available | |
for sale................... (476,523) (29,596) | (155,173) (147,170) | (184,589)
Equity securities........... (10,000) (1) | (4,865) (5) | --
Mortgage loans on real | |
estate..................... (16,390) (14,209) | (44,481) (31,499) | --
Policy loans - net.......... (2,940) (328) | (3,870) (637) | (1,977)
Short-term investments-net.. (26,692) (13,244) | -- -- | --
--------- -------- | -------- -------- | ---------
(532,545) (57,378) | (208,389) (179,311) | (186,566)
Purchase of property and | |
equipment................... (6,485) (252) | (875) (137) | --
--------- -------- | -------- -------- | ---------
Net cash used in investing | |
activities.................. (389,986) (46,115) | (152,399) (129,326) | (131,121)
</TABLE>
See accompanying notes.
80
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Dollars in thousands)
<TABLE>
POST-MERGER | POST-ACQUISITION | PRE-ACQUISITION
------------------------------------ | ----------------------------------- | ---------------
For the period | For the period For the period | For the period
For the year October 25,1997 | January 1,1997 August 14, 1996 | January 1, 1996
ended through | through through | through
December 31, 1998 December 31, 1997 | October 24, 1997 December 31, 1996 | August 13, 1996
----------------- ----------------- | ---------------- ----------------- | ---------------
<S> <C> <C> | <C> <C> | <C>
FINANCING ACTIVITIES | |
Proceeds from issuance of | |
surplus note................ $ 60,000 -- | -- $ 25,000 | --
Proceeds from reciprocal loan | |
agreement borrowings........ 500,722 -- | -- -- | --
Repayment of reciprocal loan | |
agreement borrowings........ (500,722) -- | -- -- | --
Proceeds from revolving | |
note payable................ 108,495 -- | -- -- | --
Repayment of revolving note | |
payable..................... (108,495) -- | -- -- | --
Proceeds from line of credit | |
borrowings.................. -- $10,119 | $ 97,124 -- | --
Repayment of line of credit | |
borrowings................... -- (2,207) | (80,977) -- | --
Receipts from annuity and | |
interest sensitive life | |
policies credited to | |
account balances............ 593,428 62,306 | 261,549 116,819 | $149,750
Return of account balances | |
on annuity and interest | |
sensitive life policies..... (72,649) (6,350) | (13,931) (3,315) | (2,695)
Net reallocations to Separate | |
Accounts (239,671) (17,017) | (93,069) (10,237) | (8,286)
Contributions of capital by | |
parent...................... 98,441 -- | 1,011 -- | --
Dividends paid on preferred | |
stock....................... -- -- | -- -- | (719)
Net cash provided by | |
financing activities........ 439,549 46,851 | 171,707 128,267 | 138,050
| |
Increase (decrease) in cash | |
and cash equivalents........ (14,360) 3,863 | 11,337 (1,816) | 2,609
Cash and cash equivalents at | |
beginning of period......... 21,039 17,176 | 5,839 7,655 | 5,046
Cash and cash equivalents at | |
end of period............... $ 6,679 $21,039 | $ 17,176 $ 5,839 | $ 7,655
| |
SUPPLEMENTAL DISCLOSURE | |
OF CASH FLOW INFORMATION | |
Cash paid during the period | |
for: | |
Interest.................... $ 4,305 $ 295 | $ 1,912 -- | --
Income taxes................ 99 -- | 283 -- | --
Non-cash financing activities: | |
Non-cash adjustment to | |
additional paid-in capital | |
for adjusted merger costs.. 143 -- | -- -- | --
Contribution of property and | |
equipment from EIC Variable, | |
Inc. net of $353 of | |
accumulated depreciation... -- -- | 110 -- | --
Contribution of capital from | |
parent to repay line of | |
credit borrowings.......... 24,059 -- | -- -- | --
</TABLE>
See accompanying notes.
81
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES
CONSOLIDATION
The consolidated financial statements include Golden American Life
Insurance Company ("Golden American") and its wholly owned
subsidiary, First Golden American Life Insurance Company of New
York ("First Golden," and with Golden American, collectively, the
"Companies"). All significant intercompany accounts and
transactions have been eliminated.
ORGANIZATION
Golden American, a wholly owned subsidiary of Equitable of Iowa
Companies, Inc., offers variable insurance products and is
licensed as a life insurance company in the District of Columbia
and all states except New York. On January 2, 1997 and December
23, 1997, First Golden became licensed to sell insurance products
in New York and Delaware, respectively. The Companies' products
are marketed by broker/dealers, financial institutions and
insurance agents. The Companies' primary customers are consumers
and corporations.
On October 24, 1997, PFHI Holding, Inc. ("PFHI"), a Delaware
corporation, acquired all of the outstanding capital stock of
Equitable of Iowa Companies ("Equitable") according to the terms
of an Agreement and Plan of Merger ("Merger Agreement") dated July
7, 1997 among Equitable, PFHI and ING Groep N.V. ("ING"). PFHI is
a wholly owned subsidiary of ING, a global financial services
holding company based in The Netherlands. As a result of this
transaction, Equitable was merged into PFHI, which was
simultaneously renamed Equitable of Iowa Companies, Inc. ("EIC" or
the "Parent"), a Delaware corporation. See Note 6 for additional
information regarding the merger.
On August 13, 1996, Equitable acquired all of the outstanding
capital stock of BT Variable, Inc. (subsequently known as EIC
Variable, Inc.) and its wholly owned subsidiaries, Golden American
and Directed Services, Inc. ("DSI") from Whitewood Properties
Corporation ("Whitewood"). See Note 7 for additional information
regarding the acquisition.
For financial statement purposes, the ING merger was accounted for
as a purchase effective October 25, 1997 and the change in control
of Golden American through the acquisition of BT Variable, Inc.
was accounted for as a purchase effective August 14, 1996. The
merger and acquisition resulted in new bases of accounting
reflecting estimated fair values of assets and liabilities at
their respective dates. As a result, the Companies' financial
statements for the periods after October 24, 1997 are presented on
the Post-Merger new basis of accounting, for the period August 14,
1996 through October 24, 1997 are presented on the Post-
Acquisition basis of accounting, and for August 13, 1996 and prior
periods are presented on the Pre-Acquisition basis of accounting.
INVESTMENTS
Fixed Maturities: The Companies account for their investments
under the Statement of Financial Accounting Standards ("SFAS") No.
115, "Accounting for Certain Investments in Debt and Equity
Securities," which requires fixed maturities to be designated as
either "available for sale," "held for investment" or "trading."
Sales of fixed maturities designated as "available for sale" are
not restricted by SFAS No. 115. Available for sale securities are
reported at fair value and unrealized gains and losses on these
securities are included directly in stockholder's equity, after
adjustment for related changes in value
82
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
of purchased insurance in force ("VPIF"), deferred policy acquisition
costs ("DPAC") and deferred income taxes. At December 31, 1998 and 1997,
all of the Companies' fixed maturities are designated as available
for sale, although the Companies are not precluded from designating
fixed maturities as held for investment or trading at some future date.
Securities determined to have a decline in value that is other
than temporary are written down to estimated fair value, which
becomes the new cost basis by a charge to realized losses in the
Companies' Statements of Operations. Premiums and discounts are
amortized/accrued utilizing a method which results in a constant
yield over the securities' expected lives. Amortization/accrual of
premiums and discounts on mortgage and other asset-backed
securities incorporates a prepayment assumption to estimate the
securities' expected lives.
Equity Securities: Equity securities are reported at estimated
fair value if readily marketable. The change in unrealized
appreciation and depreciation of marketable equity securities (net
of related deferred income taxes, if any) is included directly in
stockholder's equity. Equity securities determined to have a
decline in value that is other than temporary are written down to
estimated fair value, which then becomes the new cost basis by a
charge to realized losses in the Companies' Statements of
Operations.
Mortgage Loans: Mortgage loans on real estate are reported at cost
adjusted for amortization of premiums and accrual of discounts. If
the value of any mortgage loan is determined to be impaired (i.e.,
when it is probable the Companies will be unable to collect all
amounts due according to the contractual terms of the loan
agreement), the carrying value of the mortgage loan is reduced to
the present value of expected future cash flows from the loan
discounted at the loan's effective interest rate, or to the loan's
observable market price, or the fair value of the underlying
collateral. The carrying value of impaired loans is reduced by the
establishment of a valuation allowance which is adjusted at each
reporting date for significant changes in the calculated value of
the loan. Changes in this valuation allowance are charged or
credited to income.
Other Investments: Policy loans are reported at unpaid principal.
Short-term investments are reported at cost, adjusted for
amortization of premiums and accrual of discounts.
Realized Gains and Losses: Realized gains and losses are
determined on the basis of specific identification and average
cost methods for manager initiated and issuer initiated disposals,
respectively.
Fair Values: Estimated fair values, as reported herein, of
conventional mortgage-backed securities not actively traded in a
liquid market and publicly traded fixed maturities are estimated
using a third party pricing system. This pricing system uses a
matrix calculation assuming a spread over U.S. Treasury bonds
based upon the expected average lives of the securities. Fair
values of private placement bonds are estimated using a matrix
that assumes a spread (based on interest rates and a risk
assessment of the bonds) over U.S. Treasury bonds. Estimated fair
values of equity securities which consist of the Companies'
investment in its registered separate accounts are based upon the
quoted fair value of the securities comprising the individual
portfolios underlying the separate accounts.
83
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
CASH AND CASH EQUIVALENTS
For purposes of the accompanying Statements of Cash Flows, the
Companies consider all demand deposits and interest-bearing
accounts not related to the investment function to be cash
equivalents. All interest-bearing accounts classified as cash
equivalents have original maturities of three months or less.
DEFERRED POLICY ACQUISITION COSTS
Certain costs of acquiring new insurance business, principally
first year commissions and interest bonuses, extra credit bonuses
and other expenses related to the production of new business, have
been deferred. Acquisition costs for variable annuity and variable
life products are being amortized generally in proportion to the
present value (using the assumed crediting rate) of expected
future gross profits. This amortization is adjusted
retrospectively when the Companies revise their estimate of
current or future gross profits to be realized from a group of
products. DPAC is adjusted to reflect the pro forma impact of
unrealized gains and losses on fixed maturities the Companies have
designated as "available for sale" under SFAS No. 115.
VALUE OF PURCHASED INSURANCE IN FORCE
As a result of the merger and the acquisition, a portion of the
purchase price related to each transaction was allocated to the
right to receive future cash flows from existing insurance
contracts. This allocated cost represents VPIF which reflects the
value of those purchased policies calculated by discounting
actuarially determined expected future cash flows at the discount
rate determined by the purchaser. Amortization of VPIF is charged
to expense in proportion to expected gross profits of the
underlying business. This amortization is adjusted retrospectively
when the Companies revise the estimate of current or future gross
profits to be realized from the insurance contracts acquired. VPIF
is adjusted to reflect the pro forma impact of unrealized gains
and losses on available for sale fixed maturities. See Notes 6 and
7 for additional information on VPIF resulting from the merger and
acquisition.
PROPERTY AND EQUIPMENT
Property and equipment primarily represent leasehold improvements,
office furniture, certain other equipment and capitalized computer
software and are not considered to be significant to the
Companies' overall operations. Property and equipment are reported
at cost less allowances for depreciation. Depreciation expense is
computed primarily on the basis of the straight-line method over
the estimated useful lives of the assets.
GOODWILL
Goodwill was established as a result of the merger and is being
amortized over 40 years on a straight-line basis. Goodwill
established as a result of the acquisition was being amortized
over 25 years on a straight-line basis. See Notes 6 and 7 for
additional information on the merger and acquisition.
FUTURE POLICY BENEFITS
Future policy benefits for divisions with fixed interest
guarantees of the variable products are established utilizing the
retrospective deposit accounting method. Policy reserves represent
the premiums received plus accumulated interest, less mortality
and administration charges. Interest credited to these policies
ranged from 3.00% to 10.00% during 1998, 3.30% to 8.25% during
1997 and 4.00% to 7.25% during 1996. The unearned revenue reserve
represents unearned distribution fees. These distribution fees
have been deferred and are amortized over the life of the
contracts in proportion to expected gross profits.
84
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
SEPARATE ACCOUNTS
Assets and liabilities of the separate accounts reported in the
accompanying Balance Sheets represent funds separately
administered principally for variable annuity and variable life
contracts. Contractholders, rather than the Companies, bear the
investment risk for the variable products. At the direction of the
contractholders, the separate accounts invest the premiums from
the sale of variable products in shares of specified mutual funds.
The assets and liabilities of the separate accounts are clearly
identified and segregated from other assets and liabilities of the
Companies. The portion of the separate account assets equal to the
reserves and other liabilities of variable annuity and variable
life contracts cannot be charged with liabilities arising out of
any other business the Companies may conduct.
Variable separate account assets are carried at fair value of the
underlying investments and generally represent contractholder
investment values maintained in the accounts. Variable separate
account liabilities represent account balances for the variable
annuity and variable life contracts invested in the separate
accounts; the fair value of these liabilities is equal to their
carrying amount. Net investment income and realized and unrealized
capital gains and losses related to separate account assets are
not reflected in the accompanying Statements of Operations.
Product charges recorded by the Companies from variable products
consist of charges applicable to each contract for mortality and
expense risk, cost of insurance, contract administration and
surrender charges. In addition, some variable annuity and all
variable life contracts provide for a distribution fee collected
for a limited number of years after each premium deposit. Revenue
recognition of collected distribution fees is amortized over the
life of the contract in proportion to its expected gross profits.
The balance of unrecognized revenue related to the distribution
fees is reported as an unearned revenue reserve.
DEFERRED INCOME TAXES
Deferred tax assets or liabilities are computed based on the
difference between the financial statement and income tax bases of
assets and liabilities using the enacted marginal tax rate.
Deferred tax assets or liabilities are adjusted to reflect the pro
forma impact of unrealized gains and losses on equity securities
and fixed maturities the Companies have designated as available
for sale under SFAS No. 115. Changes in deferred tax assets or
liabilities resulting from this SFAS No. 115 adjustment are
charged or credited directly to stockholder's equity. Deferred
income tax expenses or credits reflected in the Companies'
Statements of Operations are based on the changes in the deferred
tax asset or liability from period to period (excluding the SFAS
No. 115 adjustment).
DIVIDEND RESTRICTIONS
Golden American's ability to pay dividends to its Parent is
restricted. Prior approval of insurance regulatory authorities is
required for payment of dividends to the stockholder which exceed
an annual limit. During 1999, Golden American cannot pay dividends
to its Parent without prior approval of statutory authorities.
Under the provisions of the insurance laws of the State of New
York, First Golden cannot distribute any dividends to its
stockholder unless a notice of its intent to declare a dividend
and the amount of the dividend has been filed at least thirty days
in advance of the proposed declaration. If the Superintendent
finds the financial condition of First Golden does not warrant the
distribution, the Superintendent may disapprove the distribution
by giving written notice to First Golden within thirty days after
the filing.
85
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
SEGMENT REPORTING
As of December 31, 1998, the Companies adopted the SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related
Information." SFAS No. 131 superseded SFAS No. 14, "Financial
Reporting for Segments of a Business Enterprise." SFAS No. 131
establishes standards for the way public business enterprises
report information about operating segments in annual financial
statements and requires enterprises to report selected information
about operating segments in interim financial reports. SFAS No.
131 also establishes standards for related disclosures about
products and services, geographic areas and major customers.
The Companies manage their business as one segment, the sale of
variable products designed to meet customer needs for tax-
advantaged methods of saving for retirement and protection from
unexpected death. Variable products are sold to consumers and
corporations throughout the United States. The adoption of SFAS
No. 131 did not affect the results of operations or financial
position of the Companies.
USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions affecting the amounts reported in
the financial statements and accompanying notes. Actual results
could differ from those estimates.
Management is required to utilize historical experience and
assumptions about future events and circumstances in order to
develop estimates of material reported amounts and disclosures.
Included among the material (or potentially material) reported
amounts and disclosures that require extensive use of estimates
and assumptions are (1) estimates of fair values of investments in
securities and other financial instruments, as well as fair values
of policyholder liabilities, (2) policyholder liabilities, (3)
deferred policy acquisition costs and value of purchased insurance
in force, (4) fair values of assets and liabilities recorded as a
result of merger and acquisition transactions, (5) asset valuation
allowances, (6) guaranty fund assessment accruals, (7) deferred
tax benefits (liabilities) and (8) estimates for commitments and
contingencies including legal matters, if a liability is
anticipated and can be reasonably estimated. Estimates and
assumptions regarding all of the proceeding are inherently subject
to change and are reassessed periodically. Changes in estimates
and assumptions could materially impact the financial statements.
RECLASSIFICATIONS
Certain amounts in the financial statements for the periods ended
within the years ended December 31, 1997 and 1996 have been
reclassified to conform to the December 31, 1998 financial
statement presentation.
2. BASIS OF FINANCIAL REPORTING
The financial statements of the Companies differ from related
statutory-basis financial statements principally as follows: (1)
acquisition costs of acquiring new business are deferred and
amortized over the life of the policies rather than charged to
operations as incurred; (2) an asset representing the present
value of future cash flows from insurance contracts acquired was
established as a result of the merger/acquisition and is amortized
and charged to expense; (3) future policy benefit reserves for
divisions with fixed interest guarantees of the variable products
are based on full account values, rather than the greater of cash
surrender value or amounts derived from discounting methodologies
utilizing statutory interest rates; (4) reserves are reported
before reduction for reserve credits related to
86
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
2. BASIS OF FINANCIAL REPORTING (continued)
reinsurance ceded and a receivable is established, net of an allowance
for uncollectible amounts, for these credits rather than presented net
of these credits; (5) fixed maturity investments are designated as
"available for sale" and valued at fair value with unrealized
appreciation/depreciation, net of adjustments to value of
purchased insurance in force, deferred policy acquisition costs
and deferred income taxes (if applicable), credited/charged
directly to stockholder's equity rather than valued at amortized
cost; (6) the carrying value of fixed maturities is reduced to
fair value by a charge to realized losses in the Statements of
Operations when declines in carrying value are judged to be other
than temporary, rather than through the establishment of a formula-
determined statutory investment reserve (carried as a liability),
changes in which are charged directly to surplus; (7) deferred
income taxes are provided for the difference between the financial
statement and income tax bases of assets and liabilities; (8) net
realized gains or losses attributed to changes in the level of
interest rates in the market are recognized when the sale is
completed rather than deferred and amortized over the remaining
life of the fixed maturity security; (9) a liability is
established for anticipated guaranty fund assessments, net of
related anticipated premium tax credits, rather than capitalized
when assessed and amortized in accordance with procedures
permitted by insurance regulatory authorities; (10) revenues for
variable products consist of policy charges applicable to each
contract for the cost of insurance, policy administration charges,
amortization of policy initiation fees and surrender charges
assessed rather than premiums received; (11) the financial
statements of Golden American's wholly owned subsidiary are
consolidated rather than recorded at the equity in net assets;
(12) surplus notes are reported as liabilities rather than as
surplus; and (13) assets and liabilities are restated to fair
values when a change in ownership occurs, with provisions for
goodwill and other intangible assets, rather than continuing to be
presented at historical cost.
The net loss for Golden American as determined in accordance with
statutory accounting practices was $68,002,000 in 1998, $428,000
in 1997 and $9,188,000 in 1996. Total statutory capital and
surplus was $183,045,000 at December 31, 1998 and $76,914,000 at
December 31, 1997.
87
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
3. INVESTMENT OPERATIONS
INVESTMENT RESULTS
Major categories of net investment income are summarized below:
<TABLE>
POST-MERGER | POST-ACQUISITION | PRE-ACQUISITION
------------------------------------ | ----------------------------------- | ---------------
For the period | For the period For the period | For the period
For the year October 25,1997 | January 1,1997 August 14, 1996 | January 1, 1996
ended through | through through | through
December 31, 1998 December 31, 1997 | October 24, 1997 December 31, 1996 | August 13, 1996
----------------- ----------------- | ---------------- ----------------- | ---------------
| (Dollars in thousands) |
<S> <C> <C> | <C> <C> | <C>
Fixed maturities............. $35,224 $4,443 | $18,488 $5,083 | $4,507
Equity securities............ -- 3 | -- 103 | --
Mortgage loans on | |
real estate................. 6,616 879 | 3,070 203 | --
Policy loans................. 619 59 | 482 78 | 73
Short-term | |
investments................. 1,311 129 | 443 441 | 341
Other, net................... 246 (154) | 24 2 | 22
Funds held in | |
escrow...................... -- -- | -- -- | 145
------- ------ | ------- ------ | ------
Gross investment | |
income...................... 44,016 5,359 | 22,507 5,910 | 5,088
Less investment | |
expenses.................... (1,531) (232) | (851) (115) | (98)
------- ------ | ------- ------ | ------
Net investment | |
income...................... $42,485 $5,127 | $21,656 $5,795 | $4,990
======= ====== | ======= ====== | ======
</TABLE>
Realized gains (losses) on investments are as follows:
<TABLE>
POST-MERGER | POST-ACQUISITION | PRE-ACQUISITION
------------------------------------ | ----------------------------------- | ---------------
For the period | For the period For the period | For the period
For the year October 25,1997 | January 1,1997 August 14, 1996 | January 1, 1996
ended through | through through | through
December 31, 1998 December 31, 1997 | October 24, 1997 December 31, 1996 | August 13, 1996
----------------- ----------------- | ---------------- ----------------- | ---------------
| (Dollars in thousands) |
<S> <C> <C> | <C> <C> | <C>
Fixed maturities: | |
available for sale.......... $(1,428) $25 | $151 $42 | $(420)
Mortgage loans............... (63) (10) | -- -- | --
------- --- | ---- --- | -----
Realized gains (losses) | |
on investments.............. $(1,491) $15 | $151 $42 | $(420)
======= === | ==== === | =====
</TABLE>
88
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
3. INVESTMENT OPERATIONS (continued)
The change in unrealized appreciation (depreciation) of securities
at fair value is as follows:
<TABLE>
POST-MERGER | POST-ACQUISITION | PRE-ACQUISITION
------------------------------------ | ----------------------------------- | ---------------
For the period | For the period For the period | For the period
For the year October 25,1997 | January 1,1997 August 14, 1996 | January 1, 1996
ended through | through through | through
December 31, 1998 December 31, 1997 | October 24, 1997 December 31, 1996 | August 13, 1996
----------------- ----------------- | ---------------- ----------------- | ---------------
| (Dollars in thousands) |
<S> <C> <C> | <C> <C> | <C>
Fixed maturities: | |
Available for sale.......... $1,100 $(3,494) | $4,197 $2,497 | $(3,045)
Held for investment......... -- -- | -- -- | (90)
Equity securities............ (2,390) (68) | (462) (4) | (2)
------ ------- | ------ ------ | -------
Unrealized appreciation | |
(depreciation) of | |
securities.................. $(1,290) $(3,562) | $3,735 $2,493 | $(3,137)
======= ======= | ====== ====== | =======
</TABLE>
At December 31, 1998 and December 31, 1997, amortized cost, gross
unrealized gains and losses and estimated fair values of fixed
maturities, all of which are designated as available for sale, are
as follows:
<TABLE>
POST-MERGER
---------------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- ---------
(Dollars in thousands)
<S> <C> <C> <C> <C>
DECEMBER 31, 1998
U.S. government and governmental
agencies and authorities............. $ 13,568 $ 182 $ (8) $ 13,742
Foreign governments................... 2,028 8 -- 2,036
Public utilities...................... 67,710 546 (447) 67,809
Corporate securities.................. 365,569 4,578 (2,658) 367,489
Other asset-backed securities......... 99,877 281 (1,046) 99,112
Mortgage-backed securities............ 191,020 1,147 (370) 191,797
-------- ------ ------- --------
Total................................. $739,772 $6,742 $(4,529) $741,985
======== ====== ======= ========
DECEMBER 31, 1997
U.S. government and governmental
agencies and authorities............ $ 5,705 $ 5 $ (1) $ 5,709
Foreign governments................... 2,062 -- (9) 2,053
Public utilities...................... 26,983 55 (4) 27,034
Corporate securities.................. 259,798 1,105 (242) 260,661
Other asset-backed securities......... 3,155 32 -- 3,187
Mortgage-backed securities............ 115,585 202 (30) 115,757
-------- ------ ------- --------
Total................................. $413,288 $1,399 $ (286) $414,401
======== ====== ======= ========
</TABLE>
89
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
3. INVESTMENT OPERATIONS (continued)
At December 31, 1998, net unrealized investment gains on fixed
maturities designated as available for sale totaled $2,213,000.
Appreciation of $1,005,000 was included in stockholder's equity at
December 31, 1998 (net of an adjustment of $203,000 to VPIF, an
adjustment of $455,000 to DPAC and deferred income taxes of
$550,000). Short-term investments with maturities of 30 days or
less have been excluded from the above schedules. Amortized cost
approximates fair value for these securities.
Amortized cost and estimated fair value of fixed maturities
designated as available for sale, by contractual maturity, at
December 31, 1998 are shown below. Expected maturities will differ
from contractual maturities because borrowers may have the right
to call or prepay obligations with or without call or prepayment
penalties.
POST-MERGER
---------------------------
Amortized Estimated
December 31, 1998 Cost Fair Value
- ----------------------------------------------------------------------
(Dollars in thousands)
Due within one year...................... $ 50,208 $ 50,361
Due after one year through five years.... 310,291 311,943
Due after five years through ten years... 78,264 78,541
Due after ten years...................... 10,112 10,231
448,875 451,076
Other asset-backed securities............ 99,877 99,112
Mortgage-backed securities............... 191,020 191,797
-------- --------
Total.................................... $739,772 $741,985
======== ========
An analysis of sales, maturities and principal repayments of the
Companies' fixed maturities portfolio is as follows:
<TABLE>
Gross Gross Proceeds
Amortized Realized Realized from
Cost Gains Losses Sale
--------- -------- -------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C>
POST-MERGER
For the year ended December 31, 1998:
Scheduled principal repayments,
calls and tenders...................... $102,504 $ 60 $ (3) $102,561
Sales................................... 43,204 518 (1,030) 42,692
-------- ---- ------- --------
Total................................... $145,708 $578 $(1,033) $145,253
======== ==== ======= ========
For the period October 25, 1997 through
December 31, 1997:
Scheduled principal repayments,
calls and tenders..................... $ 6,708 $ 2 -- $ 6,710
Sales.................................. 3,138 23 -- 3,161
-------- ---- ------- --------
Total.................................. $ 9,846 $ 25 -- $ 9,871
======== ==== ======= ========
</TABLE>
90
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
3. INVESTMENT OPERATIONS (continued)
<TABLE>
Gross Gross Proceeds
Amortized Realized Realized from
Cost Gains Losses Sale
--------- -------- -------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C>
POST- ACQUISITION
For the period January 1, 1997 through
October 24, 1997:
Scheduled principal repayments,
calls and tenders..................... $25,419 -- -- $25,419
Sales.................................. 14,052 $153 $ (2) 14,203
------- ---- ---- -------
Total.................................. $39,471 $153 $ (2) $39,622
======= ==== ==== =======
For the period August 14, 1996 through
December 31, 1996:
Scheduled principal repayments,
calls and tenders.................... $ 1,612 -- -- $ 1,612
Sales................................. 45,799 $115 $(73) 45,841
------- ---- ---- -------
Total................................. $47,411 $115 $(73) $47,453
======= ==== ==== =======
PRE-ACQUISITION
For the period January 1, 1996 through
August 13, 1996:
Scheduled principal repayments,
calls and tenders.................... $ 1,801 -- -- $ 1,801
Sales................................. 53,710 $152 $(572) 53,290
------- ---- ----- -------
Total................................. $55,511 $152 $(572) $55,091
======= ==== ===== =======
</TABLE>
Investment Valuation Analysis: The Companies analyze the
investment portfolio at least quarterly in order to determine if
the carrying value of any investment has been impaired. The
carrying value of debt and equity securities is written down to
fair value by a charge to realized losses when an impairment in
value appears to be other than temporary. During the year ended
December 31, 1998, Golden American recognized a loss on two fixed
maturity investments of $973,000. During 1997 and 1996, no
investments were identified as having an other than temporary
impairment.
Investments on Deposit: At December 31, 1998 and 1997, affidavits
of deposits covering bonds with a par value of $6,470,000 and
$6,605,000, respectively, were on deposit with regulatory
authorities pursuant to certain statutory requirements.
Investment Diversifications: The Companies' investment policies
related to the investment portfolio require diversification by
asset type, company and industry and set limits on the amount
which can be invested in an individual issuer. Such policies are
at least as restrictive as those set forth by regulatory
authorities. The following percentages relate to holdings at
December 31, 1998 and December 31, 1997. Fixed maturities included
investments in basic industrials (26% in 1998, 30% in 1997),
conventional mortgage-backed securities (25% in 1998, 13% in
1997), financial companies (19% in 1998, 24% in 1997), other asset-
backed securities (11% in 1998) and various government bonds and
government or agency mortgage-backed securities (5% in 1998, 17%
in 1997). Mortgage loans on real estate have been analyzed
91
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
3. INVESTMENT OPERATIONS (continued)
by geographical location with concentrations by state identified as
California (12% in 1998 and 1997), Utah (11% in 1998, 13% in 1997)
and Georgia (10% in 1998, 11% in 1997). There are no other
concentrations of mortgage loans in any state exceeding ten
percent at December 31, 1998 and 1997. Mortgage loans on real
estate have also been analyzed by collateral type with significant
concentrations identified in office buildings (36% in 1998, 43% in
1997), industrial buildings (32% in 1998, 33% in 1997) and retail
facilities (20% in 1998, 15% in 1997). Equity securities are not
significant to the Companies' overall investment portfolio.
No investment in any person or its affiliates (other than bonds
issued by agencies of the United States government) exceeded ten
percent of stockholder's equity at December 31, 1998.
4. COMPREHENSIVE INCOME
As of January 1, 1998, the Companies adopted the SFAS No. 130,
"Reporting Comprehensive Income." SFAS No. 130 establishes new
rules for the reporting and display of comprehensive income and
its components; however, the adoption of this statement had no
impact on the Companies' net income or stockholder's equity. SFAS
No. 130 requires unrealized gains or losses on the Companies'
available for sale securities (net of VPIF, DPAC and deferred
income taxes) to be included in other comprehensive income. Prior
to the adoption of SFAS No. 130, unrealized gains (losses) were
reported separately in stockholder's equity. Prior year financial
statements have been reclassified to conform to the requirements
of SFAS No. 130.
Total comprehensive income (loss) for the Companies includes
$1,015,000 for the year ended December 31, 1998 for First Golden
($159,000, $536,000 and $(57,000), respectively, for the periods
October 25, 1997 through December 31, 1997, January 1, 1997
through October 24, 1997 and December 17, 1996 through December
31, 1996). Other comprehensive income excludes net investment
gains (losses) included in net income which merely represent
transfers from unrealized to realized gains and losses. These
amounts total $(2,133,000) in 1998. Such amounts, which have been
measured through the date of sale, are net of income taxes and
adjustments to VPIF and DPAC totaling $705,000 in 1998.
5. FAIR VALUES OF FINANCIAL INSTRUMENTS
SFAS No. 107, "Disclosures about Fair Value of Financial
Instruments," requires disclosure of estimated fair value of all
financial instruments, including both assets and liabilities
recognized and not recognized in a company's balance sheet, unless
specifically exempted. SFAS No. 119, "Disclosure about Derivative
Financial Instruments and Fair Value of Financial Instruments,"
requires additional disclosures about derivative financial
instruments. Most of the Companies' investments, investment
contracts and debt fall within the standards' definition of a
financial instrument. Fair values for the Companies' insurance
contracts other than investment contracts are not required to be
disclosed. In cases where quoted market prices are not available,
estimated fair values are based on estimates using present value
or other valuation techniques. Those techniques are significantly
affected by the assumptions used, including the discount rate and
estimates of future cash flows. Accounting, actuarial and
regulatory bodies are continuing to study the methodologies to be
used in developing fair value information, particularly as it
relates to such things as liabilities for insurance contracts.
Accordingly, care should be exercised in deriving conclusions
about the Companies' business or financial condition based on the
information presented herein.
The Companies closely monitor the composition and yield of
invested assets, the duration and interest credited on insurance
liabilities and resulting interest spreads and timing of cash
flows. These amounts
92
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
5. FAIR VALUES OF FINANCIAL INSTRUMENTS (continued)
are taken into consideration in the Companies' overall management
of interest rate risk, which attempts to minimize exposure to changing
interest rates through the matching of investment cash flows with amounts
expected to be due under insurance contracts. These assumptions may not
result in values consistent with those obtained through an actuarial
appraisal of the Companies' business or values that might arise in
a negotiated transaction.
The following compares carrying values as shown for financial
reporting purposes with estimated fair values:
<TABLE>
POST-MERGER
-----------------------------------------------
December 31, 1998 December 31, 1997
---------------------- -----------------------
Estimated Estimated
Carrying Fair Carrying Fair
Value Value Value Value
----------- --------- ---------- -----------
(Dollars in thousands)
<S> <C> <C> <C> <C>
ASSETS
Fixed maturities, available
for sale...................... $ 741,985 $ 741,985 $ 414,401 $ 414,401
Equity securities.............. 11,514 11,514 3,904 3,904
Mortgage loans on real estate.. 97,322 99,762 85,093 86,348
Policy loans................... 11,772 11,772 8,832 8,832
Short-term investments......... 41,152 41,152 14,460 14,460
Cash and cash equivalents...... 6,679 6,679 21,039 21,039
Separate account assets........ $3,396,114 $3,396,114 $1,646,169 $1,646,169
LIABILITIES
Annuity products............... 869,009 827,597 493,181 469,714
Surplus notes.................. 85,000 90,654 25,000 28,837
Line of credit with affiliate.. -- -- 24,059 24,059
Separate account liabilities... 3,396,114 3,396,114 1,646,169 1,646,169
</TABLE>
The following methods and assumptions were used by the Companies
in estimating fair values.
Fixed Maturities: Estimated fair values of conventional mortgage-
backed securities not actively traded in a liquid market and
publicly traded securities are estimated using a third party
pricing system. This pricing system uses a matrix calculation
assuming a spread over U.S. Treasury bonds based upon the expected
average lives of the securities.
Equity Securities: Estimated fair values of equity securities,
which consist of the Companies' investment in the portfolios
underlying its separate accounts, are based upon the quoted fair
value of individual securities comprising the individual
portfolios. For equity securities not actively traded, estimated
fair values are based upon values of issues of comparable returns
and quality.
Mortgage Loans on Real Estate: Fair values are estimated by
discounting expected cash flows, using interest rates currently
offered for similar loans.
Policy Loans: Carrying values approximate the estimated fair value
for policy loans.
93
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
5. FAIR VALUES OF FINANCIAL INSTRUMENTS (continued)
Short-Term Investments and Cash and Cash Equivalents: Carrying
values reported in the Companies' historical cost basis balance
sheet approximate estimated fair value for these instruments due
to their short-term nature.
Separate Account Assets: Separate account assets are reported at
the quoted fair values of the individual securities in the
separate accounts.
Annuity Products: Estimated fair values of the Companies'
liabilities for future policy benefits for the divisions of the
variable annuity products with fixed interest guarantees and for
supplemental contracts without life contingencies are stated at
cash surrender value, the cost the Companies would incur to
extinguish the liability.
Surplus Notes: Estimated fair value of the Companies' surplus
notes were based upon discounted future cash flows using a
discount rate approximating the Companies' return on invested
assets.
Line Of Credit With Affiliate: Carrying value reported in the
Companies' historical cost basis balance sheet approximates
estimated fair value for this instrument.
Separate Account Liabilities: Separate account liabilities are
reported at full account value in the Companies' historical cost
balance sheet. Estimated fair values of separate account
liabilities are equal to their carrying amount.
6. MERGER
Transaction: On October 23, 1997, Equitable's shareholders
approved the Merger Agreement dated July 7, 1997 among Equitable,
PFHI and ING. On October 24, 1997, PFHI, a Delaware corporation,
acquired all of the outstanding capital stock of Equitable
according to the Merger Agreement. PFHI is a wholly owned
subsidiary of ING, a global financial services holding company
based in The Netherlands. Equitable, an Iowa corporation, in turn,
owned all the outstanding capital stock of Equitable Life
Insurance Company of Iowa ("Equitable Life") and Golden American
and their wholly owned subsidiaries. In addition, Equitable owned
all the outstanding capital stock of Locust Street Securities,
Inc. ("LSSI"), Equitable Investment Services, Inc. (subsequently
dissolved), DSI, Equitable of Iowa Companies Capital Trust,
Equitable of Iowa Companies Capital Trust II and Equitable of Iowa
Securities Network, Inc. (subsequently renamed ING Funds
Distributor, Inc.). In exchange for the outstanding capital stock
of Equitable, ING paid total consideration of approximately $2.1
billion in cash and stock and assumed approximately $400 million
in debt. As a result of this transaction, Equitable was merged
into PFHI, which was simultaneously renamed Equitable of Iowa
Companies, Inc. ("EIC" or the "Parent"), a Delaware corporation.
All costs of the merger, including expenses to terminate certain
benefit plans, were paid by the Parent.
Accounting Treatment: The merger was accounted for as a purchase
resulting in a new basis of accounting, reflecting estimated fair
values for assets and liabilities at October 24, 1997. The
purchase price was allocated to EIC and its subsidiaries with
$227,497,000 allocated to the Companies. Goodwill was established
for the excess of the merger cost over the fair value of the net
assets and attributed to EIC and its subsidiaries including Golden
American and First Golden. The amount of goodwill allocated to the
Companies relating to the merger was $151,127,000 at the merger
date and is being amortized over 40 years on a straight-line
basis. The carrying value of goodwill will be reviewed
periodically for any indication of impairment in value. The
Companies' DPAC, previous balance of VPIF and unearned revenue
reserve, as of the merger date, were eliminated and a new asset of
$44,297,000 representing VPIF was established for all policies in
force at the merger date.
94
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
6. Merger (continued)
Value of Purchased Insurance In Force: As part of the merger, a
portion of the acquisition cost was allocated to the right to
receive future cash flows from insurance contracts existing with
the Companies at the merger date. This allocated cost represents
VPIF reflecting the value of those purchased policies calculated
by discounting the actuarially determined expected future cash
flow at the discount rate determined by ING.
An analysis of the VPIF asset is as follows:
POST-MERGER
-------------------------------------
For the period
For the year October 25, 1997
ended through
December 31, 1998 December 31, 1997
----------------- -----------------
(Dollars in thousands)
Beginning balance................. $43,174 $44,297
-------- --------
Imputed interest.................. 2,802 1,004
Amortization...................... (7,753) (1,952)
Changes in assumptions of
timing of gross profits.......... 227 --
-------- --------
Net amortization.................. (4,724) (948)
Adjustment for unrealized gains
on available for sale
securities....................... (28) (175)
Adjustment for other receivables
and merger costs................. (2,445) --
-------- --------
Ending balance.................... $35,977 $43,174
======= =======
Interest is imputed on the unamortized balance of VPIF at a rate
of 7.38% for the year ended December 31, 1998 and 7.03% for the
period October 25, 1997 through December 31, 1997. The
amortization of VPIF, net of imputed interest, is charged to
expense. VPIF decreased $2,664,000 in the second quarter of 1998
to adjust the value of other receivables at merger date and
increased $219,000 in the first quarter of 1998 as a result of an
adjustment to the merger costs. VPIF is adjusted for the
unrealized gains (losses) on available for sale securities; such
changes are included directly in stockholder's equity. Based on
current conditions and assumptions as to the impact of future
events on acquired policies in force, the expected approximate net
amortization relating to VPIF as of December 31, 1998 is
$4,300,000 in 1999, $4,000,000 in 2000, $3,900,000 in 2001,
$3,700,000 in 2002 and $3,300,000 in 2003. Actual amortization may
vary based upon changes in assumptions and experience.
7. ACQUISITION
Transaction: On August 13, 1996, Equitable acquired all of the
outstanding capital stock of BT Variable from Whitewood, a wholly
owned subsidiary of Bankers Trust Company ("Bankers Trust"),
according to the terms of the Purchase Agreement dated May 3, 1996
between Equitable and Whitewood. In exchange for the outstanding
capital stock of BT Variable, Equitable paid the sum of
$93,000,000 in cash to Whitewood in accordance with the terms of
the Purchase Agreement. Equitable also paid the sum of $51,000,000
in cash to Bankers Trust to retire certain debt owed by BT
Variable to Bankers Trust pursuant to a revolving credit arrangement.
After the acquisition, the BT Variable, Inc. name was changed to EIC
Variable, Inc. On April 30, 1997, EIC Variable, Inc. was liquidated
and its investments in
95
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
7. Acquisition (continued)
Golden American and DSI were transferred to Equitable, while the
remainder of its net assets were contributed to Golden American.
On December 30, 1997, EIC Variable, Inc. was dissolved.
Accounting Treatment: The acquisition was accounted for as a
purchase resulting in a new basis of accounting, which reflected
estimated fair values for assets and liabilities at August 13,
1996. The purchase price was allocated to the three companies
purchased - BT Variable, DSI and Golden American. The allocation
of the purchase price to Golden American was approximately
$139,872,000. Goodwill was established for the excess of the
purchase price over the fair value of the net assets acquired and
attributed to Golden American. The amount of goodwill relating to
the acquisition was $41,113,000 and was amortized over 25 years on
a straight-line basis until the October 24, 1997 merger with ING.
Golden American's DPAC, previous balance of VPIF and unearned
revenue reserve, as of the acquisition date, were eliminated and
an asset of $85,796,000 representing VPIF was established for all
policies in force at the acquisition date.
Value of Purchased Insurance In Force: As part of the
acquisition, a portion of the acquisition cost was allocated to
the right to receive future cash flows from the insurance
contracts existing with Golden American at the date of
acquisition. This allocated cost represents VPIF reflecting the
value of those purchased policies calculated by discounting the
actuarially determined expected future cash flows at the discount
rate determined by Equitable.
An analysis of the VPIF asset is as follows:
<TABLE>
POST-ACQUISITION | PRE-ACQUISITION
------------------------------------|----------------
For the period For the period | For the period
January 1, 1997 August 14,1996 | January 1, 1996
through through | through
October 24, 1997 December 31, 1996 | August 13, 1996
---------------- ----------------- | ---------------
(Dollars in thousands)
<S> <C> <C> | <C>
Beginning balance................ $83,051 $85,796 | $6,057
------- ------- | ------
Imputed interest................. 5,138 2,465 | 273
Amortization..................... (12,656) (5,210) | (1,224)
Changes in assumption of | ------
timing of gross profits......... 2,293 -- | --
------- ------- |
Net amortization................. (5,225) (2,745) | (951)
Adjustment for unrealized gains |
(losses) on available for sale |
securities...................... (373) -- | 11
------- ------- | ------
Ending balance $77,453 $83,051 | $5,117
======= ======= | ======
</TABLE>
Pre-Acquisition VPIF represents the remaining value assigned to in
force contracts when Bankers Trust purchased Golden American from
Mutual Benefit Life Insurance Company in Rehabilitation ("Mutual
Benefit") on September 30, 1992.
Interest was imputed on the unamortized balance of VPIF at rates
of 7.70% to 7.80% for the period August 14, 1996 through October
24, 1997. The amortization of VPIF net of imputed interest was
charged to expense. VPIF was also adjusted for the unrealized
gains (losses) on available for sale securities; such changes were
included directly in stockholder's equity.
8. INCOME TAXES
Golden American files a consolidated federal income tax return.
Under the Internal Revenue Code, a newly acquired insurance
company cannot file as part of its parent's consolidated tax
return for 5 years.
96
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
8. INCOME TAXES(continued)
At December 31, 1998, the Companies have net operating loss
("NOL") carryforwards for federal income tax purposes of
approximately $50,917,000. Approximately $5,094,000, $3,354,000
and $42,469,000 of these NOL carryforwards are available to offset
future taxable income of the Companies through the years 2011,
2012 and 2013, respectively.
INCOME TAX EXPENSE
Income tax expense (benefit) included in the consolidated
financial statements is as follows:
<TABLE>
POST-MERGER | POST-ACQUISITION | PRE-ACQUISITION
------------------------------------ | ----------------------------------- | ---------------
For the period | For the period For the period | For the period
For the year October 25,1997 | January 1,1997 August 14, 1996 | January 1, 1996
ended through | through through | through
December 31, 1998 December 31, 1997 | October 24, 1997 December 31, 1996 | August 13, 1996
----------------- ----------------- | ---------------- ----------------- | ---------------
| (Dollars in thousands) |
<S> <C> <C> | <C> <C> | <C>
Current..................... -- -- | $ 12 -- | --
Deferred.................... $5,279 $146 | (1,349) $220 | $(1,463)
------ ---- | |
$5,279 $146 | $(1,337) $220 | $(1,463)
====== ==== | ======= ==== | =======
</TABLE>
The effective tax rate on income (loss) before income taxes is
different from the prevailing federal income tax rate. A
reconciliation of this difference is as follows:
<TABLE>
POST-MERGER | POST-ACQUISITION | PRE-ACQUISITION
------------------------------------ | ----------------------------------- | ---------------
For the period | For the period For the period | For the period
For the year October 25,1997 | January 1,1997 August 14, 1996 | January 1, 1996
ended through | through through | through
December 31, 1998 December 31, 1997 | October 24, 1997 December 31, 1996 | August 13, 1996
----------------- ----------------- | ---------------- ----------------- | ---------------
| (Dollars in thousands) |
<S> <C> <C> | <C> <C> | <C>
| |
Income (loss) before | |
income taxes.............. $10,353 $(279) | $ ( 608) $570 | $1,736
======= ===== | ======= ==== | ======
Income tax (benefit) at | |
federal statutory rate.... $ 3,624 $ (98) | $ (213) $200 | $ 607
Tax effect (decrease) of: | |
Realization of NOL | |
carryforwards........... -- -- | -- -- | (1,214)
Goodwill amortization..... 1,322 220 | -- -- | --
Compensatory stock | |
option and restricted | |
stock expense............ -- -- | (1,011) -- | --
Meals and | |
entertainment............ 157 23 | 53 20 | --
Other items............... 176 1 | (166) -- | --
Change in valuation | |
allowance................. -- -- | -- -- | (856)
=------ ----- | ------- ---- | -------
Income tax expense | |
(benefit)................. $ 5,279 $ 146 | $(1,337) $220 | $(1,463)
======= ===== | ======= ==== | =======
</TABLE>
97
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
8. INCOME TAXES (continued)
DEFERRED INCOME TAXES
The tax effect of temporary differences giving rise to the
Companies' deferred income tax assets and liabilities at December
31, 1998 and 1997 is as follows:
POST-MERGER
------------------------------------
December 31, 1998 December 31, 1997
----------------- -----------------
(Dollars in thousands)
Deferred tax assets:
Net unrealized depreciation of
securities at fair value.......... $ 691 --
Future policy benefits............. 66,273 $27,399
Deferred policy acquisition costs.. -- 4,558
Goodwill........................... 16,323 17,620
Net operating loss carryforwards... 17,821 3,044
Other.............................. 1,272 1,548
-------- -------
102,380 54,169
Deferred tax liabilities:
Net unrealized appreciation of
securities at fair value.......... -- (130)
Fixed maturity securities.......... (1,034) (1,665)
Deferred policy acquisition costs.. (55,520) --
Mortgage loans on real estate...... (845) (845)
Value of purchased insurance in
force............................. (12,592) (15,172)
Other.............................. (912) (127)
-------- --------
(70,903) (17,939)
-------- --------
Deferred income tax asset........... $ 31,477 $ 36,230
======== ========
The Companies are required to establish a "valuation allowance"
for any portion of the deferred tax assets management believes
will not be realized. In the opinion of management, it is more
likely than not the Companies will realize the benefit of the
deferred tax assets; therefore, no such valuation allowance has
been established.
9. RETIREMENT PLANS
Defined Benefit Plans: In 1998 and 1997, the Companies were
allocated their share of the pension liability associated with
their employees. The Companies' employees are covered by the
employee retirement plan of an affiliate, Equitable Life. Further,
Equitable Life sponsors a defined contribution plan that is
qualified under Internal Revenue Code Section 401(k). The
following tables summarize the benefit obligations and the funded
status for pension benefits over the two-year period ended
December 31, 1998:
98
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
9. RETIREMENT PLANS (continued)
1998 1997
-------- ------
(Dollars in thousands)
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at January 1............ $ 956 $192
Service cost............................... 1,138 682
Interest cost.............................. 97 25
Actuarial loss............................. 2,266 57
Benefit payments........................... (3) --
------ ----
Benefit obligation at December 31.......... $4,454 $956
====== ====
1998 1997
-------- ------
(Dollars in thousands)
FUNDED STATUS
Funded status at December 31............... $(4,454) $(956)
Unrecognized net loss...................... 2,266 --
------- -----
Net amount recognized...................... $(2,188) $(956)
======= =====
During 1998 and 1997, the Companies' plan assets were held by
Equitable Life, an affiliate.
The weighted-average assumptions used in the measurement of the
Companies' benefit obligation are as follows:
1998 1997
------ ------
DECEMBER 31
Discount rate................................ 6.75% 7.25%
Expected return on plan assets............... 9.50 9.00
Rate of compensation increase................ 4.00 5.00
The following table provides the net periodic benefit cost for the
fiscal years 1998 and 1997:
<TABLE>
POST-MERGER | POST-ACQUISITION
------------------------------------ | ----------------
For the period | For the period
For the year October 25,1997 | January 1,1997
ended through | through
December 31, 1998 December 31, 1997 | October 24, 1997
----------------- ----------------- | ----------------
(Dollars in thousands)
<S> <C> <C> | <C>
Service cost................ $1,138 $114 | $568
Interest cost............... 97 10 | 15
Amortization of net loss.... -- -- | 1
------ ---- | ----
Net periodic benefit cost... $1,235 $124 | $584
====== ==== | ====
</TABLE>
There were no gains or losses resulting from curtailments or settlements
during 1998 or 1997.
99
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
9. RETIREMENT PLANS (continued)
The projected benefit obligation, accumulated benefit obligation
and fair value of plan assets for pension plans with accumulated
benefit obligations in excess of plan assets were $4,454,000,
$3,142,000 and $0, respectively, as of December 31, 1998 and
$956,000, $579,000 and $0, respectively, as of December 31, 1997.
10. RELATED PARTY TRANSACTIONS
Operating Agreements: DSI acts as the principal underwriter (as
defined in the Securities Act of 1933 and the Investment Company
Act of 1940, as amended) and distributor of the variable insurance
products issued by the Companies. DSI is authorized to enter into
agreements with broker/dealers to distribute the Companies'
variable insurance products and appoint representatives of the
broker/dealers as agents. For the year ended December 31, 1998 and
for the periods October 25, 1997 through December 31, 1997 and
January 1, 1997 through October 24, 1997, the Companies paid
commissions to DSI totaling $117,470,000, $9,931,000 and
$26,419,000, respectively ($9,995,000 for the period August 14,
1996 through December 31, 1996 and $17,070,000 for the period
January 1, 1996 through August 13, 1996).
Golden American provides certain managerial and supervisory
services to DSI. The fee paid by DSI for these services is
calculated as a percentage of average assets in the variable
separate accounts. For the year ended December 31, 1998 and for
the periods October 25, 1997 through December 31, 1997 and January
1, 1997 through October 24, 1997, the fee was $4,771,000, $508,000
and $2,262,000, respectively. For the periods August 14, 1996
through December 31, 1996 and January 1, 1996 through August 13,
1996 the fee was $877,000 and $1,390,000, respectively.
Effective January 1, 1998, the Companies have an asset management
agreement with ING Investment Management LLC ("ING IM"), an
affiliate, in which ING IM provides asset management services.
Under the agreement, the Companies record a fee based on the value
of the assets under management. The fee is payable quarterly. For
the year ended December 31, 1998, the Companies incurred fees of
$1,504,000 under this agreement.
Prior to 1998, the Companies had a service agreement with
Equitable Investment Services, Inc. ("EISI"), an affiliate, in
which EISI provided investment management services. Payments for
these services totaled $200,000, $768,000 and $72,000 for the
periods October 25, 1997 through December 31, 1997, January 1,
1997 through October 24, 1997 and August 14, 1996 through December
31, 1996, respectively.
Golden American has a guaranty agreement with Equitable Life, an
affiliate. In consideration of an annual fee, payable June 30,
Equitable Life guarantees to Golden American that it will make
funds available, if needed, to Golden American to pay the
contractual claims made under the provisions of Golden American's
life insurance and annuity contracts. The agreement is not, and
nothing contained therein or done pursuant thereto by Equitable
Life shall be deemed to constitute, a direct or indirect guaranty
by Equitable Life of the payment of any debt or other obligation,
indebtedness or liability, of any kind or character whatsoever, of
Golden American. The agreement does not guarantee the value of the
underlying assets held in separate accounts in which funds of
variable life insurance and variable annuity policies have been
invested. The calculation of the annual fee is based on risk based
capital. As Golden American's risk based capital level was above
required amounts, no annual fee was payable in 1998 or in 1997.
Golden American provides certain advisory, computer and other
resources and services to Equitable Life. Revenues for these
services, which reduced general expenses incurred by Golden
American, totaled $5,833,000 for the year ended December 31, 1998
($1,338,000 and $2,992,000 for the periods October 25,
100
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
10. RELATED PARTY TRANSACTIONS (continued)
1997 through December 31, 1997 and January 1, 1997 through October
24, 1997, respectively). No services were provided by Golden American
in 1996.
The Companies have a service agreement with Equitable Life in
which Equitable Life provides administrative and financial related
services. Under this agreement, the Companies incurred expenses of
$1,058,000 for the year ended December 31, 1998 ($13,000 and
$16,000 for the periods October 25, 1997 through December 31, 1997
and January 1, 1997 through October 24, 1997, respectively).
First Golden provides resources and services to DSI. Revenues for
these services, which reduce general expenses incurred by the
Companies, totaled $75,000 in 1998.
For the year ended December 31, 1998, the Companies had premiums,
net of reinsurance, for variable products from four affiliates,
Locust Street Securities, Inc., Vestax Securities Corporation, DSI
and Multi-Financial Securities Corporation of $122,900,000,
$44,900,000, $13,600,000 and $13,400,000, respectively. The
Companies had premiums, net reinsurance, for variable products
from three affiliates, Locust Street Securities, Inc., Vestax
Securities Corporation and DSI of $9,300,000, $1,900,000 and
$2,100,000 respectively, for the period October 25, 1997 through
December 31, 1997 ($16,900,000, $1,200,000 and $400,000 for the
period January 1, 1997 through October 24, 1997, respectively).
Reciprocal Loan Agreement: Golden American maintains a reciprocal
loan agreement with ING America Insurance Holdings, Inc. ("ING
AIH"), a Delaware corporation and affiliate, to facilitate the
handling of unusual and/or unanticipated short-term cash
requirements. Under this agreement which became effective January
1, 1998 and expires December 31, 2007, Golden American and ING AIH
can borrow up to $65,000,000 from one another. Prior to lending
funds to ING AIH, Golden American must obtain the approval of the
State of Delaware Department of Insurance. Interest on any Golden
American borrowings is charged at the rate of ING AIH's cost of
funds for the interest period plus 0.15%. Interest on any ING AIH
borrowings is charged at a rate based on the prevailing interest
rate of U.S. commercial paper available for purchase with a
similar duration. Under this agreement, Golden American incurred
interest expense of $1,765,000 in 1998. At December 31, 1998,
Golden American did not have any borrowings or receivables from
ING AIH under this agreement.
Line of Credit: Golden American maintained a line of credit
agreement with Equitable to facilitate the handling of unusual
and/or unanticipated short-term cash requirements. Under this
agreement which became effective December 1, 1996 and expired
December 31, 1997, Golden American could borrow up to $25,000,000.
Interest on any borrowings was charged at the rate of Equitable's
monthly average aggregate cost of short-term funds plus 1.00%.
Under this agreement, Golden American incurred interest expense of
$211,000 for the year ended December 31, 1998 ($213,000 for the
period October 25, 1997 through December 31, 1997, $362,000 for
the period January 1, 1997 through October 24, 1997 and $85,000
for the period August 14, 1996 through December 31, 1996). The
outstanding balance was paid by a capital contribution.
Surplus Notes: On December 30, 1998, Golden American issued a
7.25% surplus note in the amount of $60,000,000 to Equitable Life.
The note matures on December 29, 2028. The note and related
accrued interest is subordinate to payments due to policyholders,
claimant and beneficiary claims, as well as debts owed to all
other classes of debtors, other than surplus note holders, of
Golden American. Any payment of principal and/or interest made is
subject to the prior approval of the Delaware Insurance
Commissioner. Golden American incurred no interest in 1998.
101
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
10. RELATED PARTY TRANSACTIONS (continued)
On December 17, 1996, Golden American issued an 8.25% surplus note
in the amount of $25,000,000 to Equitable. The note matures on
December 17, 2026. The note and related accrued interest is
subordinate to payments due to policyholders, claimant and
beneficiary claims, as well as debts owed to all other classes of
debtors of Golden American. Any payment of principal made is
subject to the prior approval of the Delaware Insurance
Commissioner. Golden American incurred interest totaling
$2,063,000 in 1998 ($344,000 and $1,720,000 for the periods
October 25, 1997 through December 31, 1997 and January 1, 1997
through October 24, 1997, respectively). On December 17, 1996,
Golden American contributed the $25,000,000 to First Golden
acquiring 200,000 shares of common stock (100% of outstanding
stock) of First Golden.
Stockholder's Equity: On September 23, 1996, EIC Variable, Inc.
contributed $50,000,000 of Preferred Stock to the Companies'
additional paid-in capital. During 1998, Golden American received
$122,500,000 of capital contributions from its Parent.
11. COMMITMENTS AND CONTINGENCIES
Contingent Liability: In a transaction that closed on September
30, 1992, Bankers Trust acquired from Mutual Benefit, in
accordance with the terms of an Exchange Agreement, all of the
issued and outstanding capital stock of Golden American and DSI
and certain related assets for consideration with an aggregate
value of $13,200,000 and contributed them to BT Variable. The
transaction involved settlement of pre-existing claims of Bankers
Trust against Mutual Benefit. The ultimate value of these claims
has not yet been determined by the Superior Court of New Jersey
and, prior to August 13, 1996, was contingently supported by a
$5,000,000 note payable from Golden American and a $6,000,000
letter of credit from Bankers Trust. Bankers Trust estimated the
contingent liability due from Golden American amounted to $439,000
at August 13, 1996. At August 13, 1996, the balance of the escrow
account established to fund the contingent liability was
$4,293,000.
On August 13, 1996, Bankers Trust made a cash payment to Golden
American in an amount equal to the balance of the escrow account
less the $439,000 contingent liability discussed above. In
exchange, Golden American irrevocably assigned to Bankers Trust
all of Golden American's rights to receive any amounts to be
disbursed from the escrow account in accordance with the terms of
the Exchange Agreement. Bankers Trust also irrevocably agreed to
make all payments becoming due under the Golden American note and
to indemnify Golden American for any liability arising from the
note.
Reinsurance: At December 31, 1998, the Companies had reinsurance
treaties with four unaffiliated reinsurers and one affiliated
reinsurer covering a significant portion of the mortality risks
under variable contracts. The Companies remain liable to the
extent reinsurers do not meet their obligations under the
reinsurance agreements. Reinsurance ceded in force for life
mortality risks were $111,552,000 and $96,686,000 at December 31,
1998 and 1997, respectively. At December 31, 1998, the Companies
have a net receivable of $7,470,000 for reserve credits,
reinsurance claims or other receivables from these reinsurers
comprised of $439,000 for claims recoverable from reinsurers,
$543,000 for a payable for reinsurance premiums and $7,574,000 for
a receivable from an unaffiliated reinsurer. Included in the
accompanying financial statements are net considerations to
reinsurers of $4,797,000, $326,000, $1,871,000, $875,000 and
$600,000 and net policy benefits recoveries of $2,170,000,
$461,000, $1,021,000, $654,000 and $1,267,000 for the year ended
December 31, 1998 and for the periods October 25, 1997 through
December 31, 1997, January 1, 1997 through October 24, 1997,
August 14, 1996 through December 31, 1996 and January 1, 1996
through August 13, 1996, respectively.
102
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
11. COMMITMENTS AND CONTINGENCIES (continued)
Effective June 1, 1994, Golden American entered into a modified
coinsurance agreement with an unaffiliated reinsurer. The
accompanying financial statements are presented net of the effects
of the treaty which increased income by $1,022,000, $265,000,
$335,000, $10,000 and $56,000 for the year ended December 31, 1998
and for the periods October 25, 1997 through December 31, 1997,
January 1, 1997 through October 24, 1997, August 14, 1996 through
December 31, 1996 and January 1, 1996 through August 13, 1996,
respectively.
Guaranty Fund Assessments: Assessments are levied against the
Companies by life and health guaranty associations in most states
in which the Companies are licensed to cover losses of
policyholders of insolvent or rehabilitated insurers. In some
states, these assessments can be partially recovered through a
reduction in future premium taxes. The Companies cannot predict
whether and to what extent legislative initiatives may affect the
right to offset. The associated cost for a particular insurance
company can vary significantly based upon its fixed account
premium volume by line of business and state premiums as well as
its potential for premium tax offset. The Companies have
established an undiscounted reserve to cover such assessments and
regularly reviews information regarding known failures and revises
its estimates of future guaranty fund assessments. Accordingly,
the Companies accrued and charged to expense an additional
$1,123,000 for the year ended December 31, 1998, $141,000 for the
period October 25, 1997 through December 31, 1997, $446,000 for
the period January 1, 1997 through October 24, 1997, $291,000 for
the period August 14, 1996 through December 31, 1996 and $480,000
for the period January 1, 1996 through August 13, 1996. At
December 31, 1998, the Companies have an undiscounted reserve of
$2,446,000 to cover estimated future assessments (net of related
anticipated premium tax credits) and has established an asset
totaling $586,000 for assessments paid which may be recoverable
through future premium tax offsets. The Companies believe this
reserve is sufficient to cover expected future guaranty fund
assessments, based upon previous premiums, and known insolvencies
at this time.
Litigation: The Companies, like other insurance companies, may be
named or otherwise 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. The Companies currently
believe no pending or threatened lawsuits exist that are
reasonably likely to have a material adverse impact on the
Companies.
Vulnerability from Concentrations: The Companies have various
concentrations in its investment portfolio (see Note 3 for further
information). The Companies' asset growth, net investment income
and cash flow are primarily generated from the sale of variable
products and associated future policy benefits and separate
account liabilities. Substantial changes in tax laws that would
make these products less attractive to consumers and extreme
fluctuations in interest rates or stock market returns which may
result in higher lapse experience than assumed could cause a
severe impact to the Companies' financial condition. Two
broker/dealers generated 27% of the Companies' sales (53% by two
broker/dealers during 1997).
Leases: The Companies lease their home office space, certain
other equipment and capitalized computer software under operating
leases which expire through 2018. During the year ended December
31, 1998 and for the periods October 25, 1997 through December 31,
1997, January 1, 1997 through October 24, 1997, August 14, 1996
through December 31, 1996 and January 1, 1996 through August 13,
1996, rent expense totaled $1,241,000, $39,000, $331,000, $147,000
and $247,000, respectively. At December 31, 1998, minimum rental
payments due under all non-cancelable operating leases with
initial terms of one
103
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
11. COMMITMENTS AND CONTINGENCIES (continued)
year or more are: 1999 - $1,528,000; 2000 - $1,429,000; 2001 - $1,240,000;
2002 - $1,007,000; 2003 - $991,000 and 2004 and thereafter - $5,363,000.
Revolving Note Payable: To enhance short-term liquidity, the
Companies have established a revolving note payable effective July
27, 1998 and expiring July 31, 1999 with SunTrust Bank, Atlanta
(the "Bank"). The note was approved by the Boards of Directors of
Golden American and First Golden on August 5, 1998 and September
29, 1998, respectively. The total amount the Companies may have
outstanding is $85,000,000, of which Golden American and First
Golden have individual credit sublimits of $75,000,000 and
$10,000,000, respectively. The note accrues interest at an annual
rate equal to: (1) the cost of funds for the Bank for the period
applicable for the advance plus 0.25% or (2) a rate quoted by the
Bank to the Companies for the advance. The terms of the agreement
require the Companies to maintain the minimum level of Company
Action Level Risk Based Capital as established by applicable state
law or regulation. During the year ended December 31, 1998, the
Companies incurred interest expense of $352,000. At December 31,
1998, the Companies did not have any borrowings under this
agreement.
104
<PAGE>
<PAGE>
[Shaded Section Header]
- ----------------------------------------------------------------------
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 Withdrawal Option 5
Other Information 6
Financial Statements of Separate Account B 6
Appendix Description of Bond Ratings A-1
34
<PAGE>
<PAGE>
- ----------------------------------------------------------------------
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
106302 VALUE 02/01/00
{xx}
<PAGE>
<PAGE>
APPENDIX A
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
guarantee 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 partial 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 $124,230
( $100,000 X 1.075 ^ 3 )
2. N = 2,555 ( 365 X 7 )
3. Market Value Adjustment = $124,230 X
(( 1.07 / 1.0850 ) ^ ( 2,555 / 365 ) - 1 ) = $11,535
Therefore, the amount paid to you on full surrender ignoring any
surrender charge is $112,695 ( $124,230 - $11,535 ).
EXAMPLE #2: FULL SURRENDER -- EXAMPLE OF A POSITIVE MARKET VALUE
ADJUSTMENT
Assume $100,000 was allocated to a Fixed Interest Allocation with a
guaranteed interest period of 10 years, a guaranteed interest rate of 7.5%,
an initial Index Rate ("I") of 7%; that a full surrender is
requested 3 years into the guaranteed interest period; that the then Index
Rate for a 7 year guaranteed interest period ("J") is 6%; and that no
prior transfers or partial 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 $124,230
( $100,000 X 1.075 ^ 3 )
2. N = 2,555 ( 365 X 7 )
3. Market Value Adjustment = $124,230 X
(( 1.07 / 1.0650 ) ^ ( 2,555 / 365 ) - 1 ) = $4,141
Therefore, the amount paid to you on full surrender ignoring any
surrender charge is $128,371 ( $124,230 + $4,141 ).
EXAMPLE #3: WITHDRAWAL -- EXAMPLE OF A NEGATIVE MARKET VALUE
ADJUSTMENT
Assume $200,000 was allocated to a Fixed Interest Allocation with a
guaranteed interest period of 10 years, a guaranteed interest rate of 7.5%,
an initial Index Rate ("I") of 7%; that a partial withdrawal of
$112,695 is requested 3 years into the guaranteed interest period; that
the then Index Rate ("J") for a 7 year guaranteed interest period is 8%;
and that no prior transfers or partial withdrawals affecting this
Fixed Interest Allocation have been made.
First calculate the amount that must be withdrawn from the Fixed
Interest Allocation to provide the amount requested.
1. The contract value of the Fixed Interest Allocation on the date of
withdrawal is $248,459
( $200,000 X 1.075 ^ 3 )
2. N = 2,555 ( 365 X 7 )
3. Amount that must be withdrawn =
(( $112,695 / ( 1.07 / 1.0850 ) ^ ( 2,555 / 365 )) = $124,230
A1
<PAGE>
<PAGE>
Then calculate the Market Value Adjustment on that amount
4. Market Value Adjustment = $124,230 X
(( 1.07 / 1.0850 ) ^ ( 2,555 / 365 ) - 1 ) = $11,535
Therefore, the amount of the withdrawal paid to you is
$112,695, as requested. The Fixed Interest Allocation will be reduced
by the amount of the withdrawal, $112,695, and also reduced by the
Market Value Adjustment of $11,535, for a total reduction in the
Fixed Interest Allocation of $124,230.
EXAMPLE #4: WITHDRAWAL -- EXAMPLE OF A POSITIVE MARKET VALUE
ADJUSTMENT
Assume $200,000 was allocated to a Fixed Interest Allocation with a
guaranteed interest period of 10 years, a guaranteed interest rate of 7.5%,
an initial Index Rate of 7%; that a partial withdrawal of $128,371
requested 3 years into the guaranteed interest period; that the then Index
Rate ("J") for a 7 year guaranteed interest period is 6%; and that no
prior transfers or withdrawals affecting this Fixed Interest
Allocation have been made.
First calculate the amount that must be withdrawn from the Fixed
Interest Allocation to provide the amount requested.
1. The contract value of Fixed Interest Allocation on the date of
surrender is $248,459
( $200,000 X 1.075 ^ 3 )
2. N = 2,555 ( 365 X 7 )
3. Amount that must be withdrawn =
(( $128,371 / ( 1.07 / 1.0650 ) ^ ( 2,555 / 365 )) = $124,230
Then calculate the Market Value Adjustment on that amount
4. Market Value Adjustment = $124,230 X
(( 1.07 / 1.0650 ) ^ ( 2,555 / 365 ) - 1 ) = $4,141
Therefore, the amount of the partial withdrawal paid to you is
$128,371, as requested. The Fixed Interest Allocation will be reduced
by the amount of the partial withdrawal, $128,371, but increased by the
Market Value Adjustment of $4,141, for a total reduction in the
Fixed Interest Allocation of $124,230.
A2
<PAGE>
<PAGE>
APPENDIX B
SURRENDER CHARGE FOR EXCESS WITHDRAWALS EXAMPLE
The following assumes you made an initial premium payment of $25,000
and additional premium payments of $25,000 in each of the second and
third contract years, for total premium payments under the Contract of
$75,000. It also assumes a withdrawal at the beginning of the fifth
contract year of 30% of the contract value of $90,000.
In this example, $15,000 (maximum of $15,000 or $75,000 x .10) is the
maximum free withdrawal amount that you may withdraw during the
contract year without a surrender charge. The total withdrawal would
be $27,000 ($90,000 x .30). Therefore, $12,000 ($27,000 - $15,000) is
considered an excess withdrawal of a part of the initial premium
payment of $25,000 and would be subject to a 4% surrender charge of
$480 ($12,000 x .04). This example does not take into account any
Market Value Adjustment or deduction of any premium taxes.
B1
<PAGE>
<PAGE>
ING VARIABLE ANNUITIES
GOLDEN AMERICAN LIFE INSURANCE COMPANY
Golden American Life Insurance Company is a stock company domiciled
in Delaware
106302 VALUE 02/01/00
<PAGE>
VERSION 2
<PAGE>
PROFILE AND PROSPECTUS FOR VALUE
<PAGE>
ING VARIABLE ANNUITIES
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B OF GOLDEN AMERICAN LIFE INSURANCE COMPANY
[begin shaded block]
PROFILE OF
GOLDENSELECT VALUE
FIXED AND VARIABLE ANNUITY CONTRACT
FEBRUARY 1, 2000
[inset within shaded block]
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.
[end inset within shaded block]
[end shaded block]
1. THE ANNUITY CONTRACT
The Contract offered in this prospectus is a deferred combination
variable and fixed annuity contract between you and Golden American
Life Insurance Company. The Contract provides a means for you to
invest on a tax-deferred basis in (i) one or more of the 25 mutual
fund investment portfolios through our Separate Account B and/or
(ii) in a fixed account of Golden American with guaranteed interest
periods. The 25 mutual fund portfolios are listed on page [3] below.
We currently offer guaranteed interest periods of 6 months, 1, 3, 5, 7
and 10 years in the fixed account. We set the interest rates in the fixed
account (which will never be less than 3%) periodically. We may credit a
different interest rate for each interest period. The interest you earn
in the fixed account as well as your principal is guaranteed by Golden
American as long as you do not take your money out before the maturity
date for the applicable interest period. If you withdraw your money
from the fixed account more than 30 days before the applicable
maturity date, we will apply a market value adjustment. A market value
adjustment could increase or decrease your contract value and/or the
amount you take out. Generally, the investment portfolios are designed
to offer a better return than the fixed account. However, this is NOT
guaranteed. You may not make any money, and you can even lose the
money you invest.
The Contract, like all deferred variable annuity contracts, has two
phases: the accumulation phase and the income phase. The accumulation
phase is the period between the contract date and the date on which you
start receiving the annuity payments under your Contract. The amounts you
accumulate during the accumulation phase will determine the amount of
annuity payments you will receive. The income phase begins on the
annuity start date, which is the date you start receiving regular
annuity payments from your Contract.
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:
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<PAGE>
<PAGE>
<TABLE>
<CAPTIONS>
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 |
| life with a your life or longer for a specified |
| period certain period such as 10 or 20 years or |
| until the total amount used to buy |
| this option has been repaid. This |
| option comes with an added guarantee |
| that payments will continue to your |
| beneficiary for the remainder of |
| such period if you should die during |
| the period. |
| |
|---------------------------------------------------------------------|
| |
| Option 3 Joint life Payments are made for your life |
| income and the life of another person |
| (usually your spouse). |
| |
|---------------------------------------------------------------------|
| |
| Option 4 Annuity plan Any other annuitization plan that we |
| choose to offer on the annuity start |
| date. |
| |
-----------------------------------------------------------------------
</TABLE>
Annuity payments under Options 1, 2 and 3 are fixed. Annuity payments
under Option 4 may be fixed or variable. If variable and subject to the
Investment Company Act of 1940, it will comply with 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 $25,000 or
more up to and including age 85. You may make additional payments
of $1,000 or more ($250 for a qualified Contract) at any time
before you turn age 85 during the accumulation phase. Under certain
circumstances, we may waive the minimum initial and additional
premium payment requirement. Any initial or additional premium
payment that would cause the contract value of all annuities that you
maintain with us to exceed $1,000,000 requires our prior approval.
Who may purchase this Contract? The Contract may be purchased by
individuals as part of a personal retirement plan (a "non-qualified
Contract"), or as a Contract that qualifies for special tax treatment
when purchased as either an Individual Retirement Annuity (IRA) or
in connection with a qualified retirement plan (each a "qualified
Contract").
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, and 1, 3, 5, 7 and 10 years,
and/or (2) into any one or more of the following 25 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 and the Warburg Pincus Trust.
Keep in mind that while an investment in the fixed accounts 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>
<S> <C> <C>
THE GCG TRUST
Liquid Asset Series Capital Growth Series Small Cap Series
Limited Maturity Bond Series Growth Series Real Estate Series
Global Fixed Income Series Value Equity Series Hard Assets Series
Total Return Series Research Series Developing World Series
Fully Managed Series Managed Global Series
Equity Income Series All Cap Series
Investors Series Capital Appreciation Series
Large Cap Value Series Mid-Cap Growth Series
Rising Dividends Series Strategic Equity Series
THE PIMCO TRUST
PIMCO High Yield Bond Portfolio
PIMCO StocksPLUS Growth and Income Portfolio
THE WARBURG PINCUS TRUST
International Equity Portfolio
</TABLE>
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<PAGE>
<PAGE>
5. EXPENSES
The Contract has insurance features and investment features, and there
are charges related to each. The Company currently does not deduct an
annual contract administrative charge but may in the future charge
an annual contract administrative fee of $30 or 2% of the contract
value, whichever is less. We also collect a mortality and expense risk
charge and an asset-based administrative charge. These 2 charges are
deducted daily directly from the amounts in the investment portfolios.
The asset-based administrative charge is 0.15% annually. The annual
rate of the mortality and expense risk charge depends on the death
benefit you choose:
<TABLE>
<CAPTION>
Standard Enhanced Death Benefits
Death Benefit Annual Ratchet 3% Solution 5% Solution 7% Solution
------------- -------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Mortality & Expense Risk Charge 0.75% 0.95% 0.90% 1.05% 1.20%
Asset-Based Administrative Charge 0.15% 0.15% 0.15% 0.15% 0.15%
Total 0.90% 1.10% 1.05% 1.20% 1.35%
</TABLE>
Each investment portfolio has charges for investment management fees
and other expenses. These charges, which vary by investment portfolio,
currently range from 0.59% to 1.83% annually (see following table)
of the portfolio's average daily net asset balance.
If you withdraw money from your Contract, or if you begin receiving
annuity payments, the Company may deduct a premium tax of 0%-3.5% to
pay to your state.
We deduct a surrender charge if you surrender your Contract or withdraw
an amount exceeding the free withdrawal amount. The free withdrawal
amount in any contract year is the greater of (i) any earnings less
previous withdrawals; or (ii) 10% of premium payments paid within the
last 7 years and not previously withdrawn, less any previous withdrawals
taken in the same contract year. The following table shows the schedule
of the surrender charge that will apply. The surrender charge is a
percent of each premium payment withdrawn.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Complete Years Elapsed 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7+
Since Premium Payment | | | | | | |
Surrender Charge 6% | 6% | 6% | 5% | 4% | 3% | 1% | 0%
</TABLE>
The following table is designed to help you understand the Contract
charges. The "Total Annual Insurance Charges" column includes the
maximum mortality and expense risk charge, the asset-based
administrative charge, and reflects the annual contract administrative
charge as 0.04% (based on an average contract value of $75,000).
The "Total Annual Investment Portfolio Charges" column reflects the
portfolio charges for each portfolio and are based on actual
expenses as of December 31, 1998, except for (i) portfolios that
had not commenced operations as of December 31, 1998
where the charges have been, and (ii) the 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. For Years 1 and 10, the examples show the total annual
charges assessed during that time and assume that you have elected the
Percent Solution Enhanced Death Benefit with a 7% Solution. For these
examples, the premium tax is assumed to be 0%.
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<PAGE>
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
| EXAMPLES: |
| TOTAL ANNUAL -------- |
| TOTAL ANNUAL INVESTMENT TOTAL TOTAL CHARGES AT THE END OF: |
| INSURANCE PORTFOLIO ANNUAL |
|INVESTMENT PORTFOLIO CHARGES CHARGES CHARGES 1 YEAR 10 YEARS |
| |
|--------------------------------------------------------------------------------------------|
<S> <C> <C> <C> <C> <C> |
|THE GCG TRUST |
|Liquid Asset 1.39% 0.59% 1.98% $ 80.10 $230.04 |
|Limited Maturity Bond 1.39% 0.60% 1.99% $ 80.20 $231.09 |
|Global Fixed Income 1.39% 1.60% 2.99% $ 90.20 $330.51 |
|Total Return 1.39% 0.97% 2.36% $ 83.91 $269.13 |
|Fully Managed 1.39% 0.98% 2.37% $ 84.01 $270.14 |
|Equity Income 1.39% 0.98% 2.37% $ 84.01 $270.14 |
|Investors 1.39% 1.01% 2.38% $ 84.10 $271.15 |
|Large Cap Value 1.39% 1.01% 2.38% $ 84.10 $271.15 |
|Rising Dividends 1.39% 0.98% 2.37% $ 84.01 $270.14 |
|Capital Growth 1.39% 1.08% 2.47% $ 85.01 $280.15 |
|Growth 1.39% 1.09% 2.48% $ 85.11 $281.15 |
|Value Equity 1.39% 0.98% 2.37% $ 84.01 $270.14 |
|Research 1.39% 0.94% 2.83% $ 83.61 $266.10 |
|Managed Global 1.39% 1.26% 2.65% $ 85.99 $299.15 |
|All Cap 1.39% 1.01% 2.38% $ 84.10 $271.15 |
|Strategic Equity 1.39% 0.99% 2.38% $ 84.11 $271.15 |
|Small Cap 1.39% 0.99% 2.38% $ 84.11 $271.15 |
|Capital Appreciation 1.39% 0.98% 2.37% $ 84.01 $270.14 |
|Mid-Cap Growth 1.39% 0.95% 2.34% $ 83.71 $267.11 |
|Real Estate 1.39% 0.98% 2.37% $ 84.01 $270.14 |
|Hard Assets 1.39% 1.00% 2.39% $ 84.21 $272.15 |
|Developing World 1.39% 1.83% 3.22% $ 92.49 $351.89 |
| |
|THE PIMCO TRUST |
|PIMCO High Yield Bond 1.39% 0.75% 2.14% $ 81.70 $246.70 |
|PIMCO StocksPLUS |
| Growth and Income 1.39% 0.65% 2.04% $ 80.70 $236.32 |
| |
|THE WARBURG PINCUS TRUST |
|International Equity 1.39% 1.33% 2.72% $ 87.51 $304.72 |
----------------------------------------------------------------------------------------------
</TABLE>
The "Total Annual Investment Portfolio Charges" reflect current
expense reimbursements for the Total Return and Global Fixed Income
portfolios. The Year 1 examples above include a 6% surrender charge.
For more detailed information, see the fee table in the prospectus
for the Contract.
For the newly formed portfolios, the charges have been estimated.
The "Total Annual Investment Portfolio Charges" reflect current
expense reimbursements for applicable investment
portfolios. The 1 Year examples above include a 6% surrender charge.
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.
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 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 will 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 described on
page [6]. 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
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<PAGE>
<PAGE>
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. Since this is a new
Contract, there is no actual performance history to illustrate.
Actual performance information will be shown in an updated prospectus.
Please keep in mind that past or hypothetical performance is not a
guarantee of future results.
9. DEATH BENEFIT
You may choose (i) the Standard Death Benefit, (ii) the Percent
Solution Enhanced Death Benefit currently offering a 3%, 5% or 7%
Solution, or (iii) the Annual Ratchet Enhanced Death Benefit. The
Percent Solution Enhanced Death Benefit and the Annual Ratchet Enhanced
Death Benefit are available only if the contract owner or the annuitant
(if the contract owner is not an individual) is not more than 70 years
old at the time of purchase.
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 the 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 due proof of death 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.
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 after subtracting
any withdrawals; or
3) the cash surrender value.
Note: The amount of the death benefit could be reduced by premium taxes
owed and withdrawals not presviously deducted.
Under the Percent 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 after
subtracting 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 of the enhanced death benefit 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 subtract any withdrawals made since the preceding
day, then we adjust for any market value adjustment, and then we
subtract any associated surrender charges. If you select the 7%
interest rate, there is a maximum enhanced death benefit of 2 times
all premium payments, less an amount to reflect withdrawals.
*Note: You select the enhanced death benefit interest rate of
3%, 5% or 7% when you purchase the Contract. The interest
rate used for calculating the death benefit for the Liquid
Asset and Limited Maturity Bond investment portfolios will be
the lesser of the enhanced death benefit annual effective rate
you selected or the net rate of return for such portfolios
during the applicable period. The interest rate used for
calculating the death benefit for your investment in the fixed
account will be the lesser of the enhanced death benefit annual
5
<PAGE>
<PAGE>
effective rate you selected or the interest credited to
such investment during the applicable period. The investments
you select will affect your maximum death benefit as explained
above.
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 after
subtracting any withdrawals;
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 70, 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 if the preceding day is the contract date), then we add
additional premiums paid since the preceding day, and then we
subtract any withdrawals made since the preceding day, then we
adjust for any market value adjustment, and then we subtract
for any associated surrender charges. That amount becomes the
new enhanced death benefit.
Note: 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.
10. OTHER INFORMATION
Free Look. If you cancel the Contract within 10 days after you
receive it, you will receive a refund of the contract value.
We determine your contract value at the close of business on the
day we receive your written refund request. For purposes of the
refund during the free look period (i) we adjust your contract value
for any market value adjustment (if you have invested in the
fixed account), and (ii)then we include a refund of any charges deducted
from your contract value. Because of the market risks associated
with investing in the portfolios and the potential positive
or negative effect of the market value adjustment, the contract value
returned may be greater or less than the premium payment you paid.
Some states require us to return to you the amount of the paid
premium (rather than the contract value in which case you
will not be subject to investment risk during the free look period.
Also, in some states, you may be entitled to a longer free look
period. We determine your contract value at the close of business on
the day we receive your written refund request.
Transfers among Investment Portfolios and the Fixed Account. You can
make transfers among your investment portfolios and your investment
in the fixed account as frequently as you wish without any current tax
implications. The minimum amount for a transfer is $100. There is
currently no charge for transfers, and we do not limit the number of
transfers. The Company may, in the future, charge a $25 fee for any
transfer after the twelfth transfer in a contract year or limit the
number of transfers allowed. Keep in mind that if you transfer or
otherwise withdraw your money from the fixed account more than 30 days
before the applicable maturity date, we will apply a market value
adjustment. A market value adjustment could increase or decrease your
contract value and/or the amount you transfer or withdraw.
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.
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.
6
Value Profile
<PAGE>
<PAGE>
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.
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.
11. INQUIRIES If you need more information after reading this
prospectus, please contact us at:
Customer Service Center
P.O. Box 2700
West Chester, PA 19380
(800) 366-0066
or your registered representative.
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<PAGE>
<PAGE>
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8
<PAGE>
<PAGE>
SEPARATE ACCOUNT B OF GOLDEN AMERICAN LIFE INSURANCE COMPANY
GOLDEN AMERICAN LIFE INSURANCE COMPANY
FEBRUARY 1, 2000
DEFERRED COMBINATION VARIABLE AND
FIXED ANNUITY PROSPECTUS
GOLDENSELECT VALUE
- -----------------------------------------------------------------------
This prospectus describes GOLDENSELECT VALUE, a group and individual deferred
variable annuity contract (the "Contract") offered by Golden American Life
Insurance Company (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 25 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:
<TABLE>
<C> <C>
T. ROWE PRICE ASSOCIATES, INC. CAPITAL GUARDIAN TRUST COMPANY
Equity Income Series Large Cap Value Series
Fully Managed Series Managed Global Series
A I M CAPITAL MANAGEMENT, INC. Small Cap Series
Capital Appreciation Series ALLIANCE CAPITAL MANAGEMENT L. P.
Strategic Equity Series Capital Growth Series
KAYNE ANDERSON INVESTMENT MANAGEMENT, LLC JANUS CAPITAL CORPORATION
Rising Dividends Series Growth Series
EII REALTY SECURITIES, INC. MASSACHUSETTS FINANCIAL SERVICES COMPANY
Real Estate Series Mid-Cap Growth Series
BARING INTERNATIONAL INVESTMENT LIMITED (AN AFFILIATE) Research Series
Developing World Series Total Return Series
Global Fixed Income Series ING INVESTMENT MANAGEMENT, LLC (AN AFFILIATE)
Hard Assets Series Limited Maturity Bond Series
SALOMON BROTHERS ASSET MANAGEMENT, INC. Liquid Asset Series
All Cap Series PACIFIC INVESTMENT MANAGEMENT COMPANY
Investor Series PIMCO High Yield Bond Portfolio
EAGLE ASSET MANAGEMENT, INC. PIMCO StocksPLUS Growth and Income Portfolio
Value Equity Series CREDIT SUISSE ASSET MANAGEMENT, LLC
International Equity Portfolio
</TABLE>
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.
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, dated May 1, 1999 has been filed
with the Securities and Exchange Commission. 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 Statement of Additional Information
("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 TROUGH THE GCG TRUST, THE PIMCO TRUST OR
THE WARBURG PINCUS TRUST 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 TRUST AND THE WARBURG PINCUS TRUST.
<PAGE>
<PAGE>
- ------------------------------------------------------------------------
TABLE OF CONTENTS
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
Index of Special Terms............................................. 1
Fees and Expenses.................................................. 2
Performance Information............................................ 5
Accumulation Unit............................................... 5
Net Investment Factor........................................... 5
Financial Statements............................................ 6
Performance Information......................................... 6
Golden American Life Insurance Company............................. 7
The Trusts......................................................... 7
Golden American Separate Account B................................. 8
The Investment Portfolios.......................................... 8
Investment Objectives........................................... 8
Investment Management Fees.. .......................... 10
The Fixed Interest Allocation...................................... 10
Selecting a Guaranteed Interest Period.......................... 11
Guaranteed Interest Rates....................................... 11
Transfers from a Fixed Interest Allocation...................... 11
Withdrawals from a Fixed Interest Allocation.................... 12
Market Value Adjustment......................................... 12
The Annuity Contract............................................... 13
Contract Date and Contract Year................................. 13
Annuity Start Date.............................................. 13
Contract Owner.................................................. 14
Annuitant....................................................... 14
Beneficiary..................................................... 14
Purchase and Availability of the Contract....................... 15
Crediting of Premium Payments................................... 15
Contract Value ................................................. 16
Cash Surrender Value............................................ 16
Surrendering to Receive the Cash Surrender Value................ 16
Addition, Deletion or Substitution of Subaccounts
and Other Changes............................................. 17
The Fixed Account............................................... 17
Other Important Provisions...................................... 17
Withdrawals........................................................ 17
Regular Withdrawals............................................. 17
Systematic Withdrawals.......................................... 17
IRA Withdrawals................................................. 18
Transfers Among Your Investments................................... 19
Dollar Cost Averaging........................................... 19
Automatic Rebalancing........................................... 20
Death Benefit Choices.............................................. 20
Death Benefit During the Accumulation Phase..................... 20
Standard Death Benefit....................................... 21
Enhanced Death Benefits...................................... 21
Death Benefit During the Income Phase........................... 22
Charges and Fees................................................... 22
Charge Deduction Subaccount..................................... 22
Charges Deducted from the Contract Value........................ 22
Surrender Charge............................................. 22
Free Withdrawal Amount....................................... 23
Surrender Charge for Excess Withdrawals...................... 23
Premium Taxes................................................ 23
Administrative Charge........................................ 23
Excess Transfer Charge....................................... 23
Charges Deducted from the Subaccounts........................... 24
Mortality and Expense Risk Charge............................ 24
Asset-Based Administrative Charge............................ 24
Trust Expenses.................................................. 24
The Annuity Options................................................ 24
Annuitization of Your Contract.................................. 24
Selecting the Annuity Start Date................................ 25
</TABLE>
(i)
<PAGE>
<PAGE>
- ------------------------------------------------------------------------
TABLE OF CONTENTS (CONTINUED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
Frequency of Annuity Payments................................... 25
The Annuity Options............................................. 25
Income for a Fixed Period.................................... 25
Income for Life with a Period Certain........................ 25
Joint Life Income............................................ 25
Annuity Plan................................................. 25
Payment When Named Person Dies.................................. 26
Other Contract Provisions.......................................... 26
Reports to Contract Owners...................................... 26
Suspension of Payments.......................................... 26
In Case of Errors in Your Application........................... 26
Assigning the Contract as Collateral............................ 26
Contract Changes-Applicable Tax Law............................. 26
Free Look....................................................... 26
Group or Sponsored Arrangements................................. 27
Selling the Contract............................................ 27
Other Information.................................................. 27
Voting Rights................................................... 27
Year 2000 Problem............................................... 27
State Regulation................................................ 28
Legal Proceedings............................................... 28
Legal Matters................................................... 28
Experts......................................................... 28
Federal Tax Considerations......................................... 28
More Information About Golden American............................. 34
Financial Statements of Golden American Life Insurance Company..... 56
Statement of Additional Information
Table of Contents............................................... 91
Appendix A
Market Value Adjustment Examples................................ A1
Appendix B
Surrender Charge for Excess Withdrawals Example................. B1
</TABLE>
(ii)
<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:
<TABLE>
<CAPTION>
<S> <C>
SPECIAL TERM PAGE
Accumulation Unit 5
Annual Ratchet Enhanced Death Benefit 21
Annuitant 14
Annuity Start Date 13
Cash Surrender Value 16
Contract Date 13
Contract Owner 14
Contract Value 16
Contract Year 13
Fixed Interest Allocation 10
Free Withdrawal Amount 23
Market Value Adjustment 12
Net Investment Factor 5
Percent Solution Enhanced Death Benefit 21
Standard Death Benefit 21
</TABLE>
The following terms as used in this prospectus have the same or
substituted meanings as the corresponding terms currently used in the
Contract:
<TABLE>
<CAPTION>
TERM USED IN THIS PROSPECTUS CORRESPONDING TERM USED IN THE CONTRACT
<S> <C>
Accumulation Unit Value Index of Investment Experience
Annuity Start Date Annuity Commencement Date
Contract Owner Owner or Certificate Owner
Contract Value Accumulation Value
Excess 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
</TABLE>
1
<PAGE>
<PAGE>
- -----------------------------------------------------------------------
FEES AND EXPENSES
- -----------------------------------------------------------------------
CONTRACT OWNER TRANSACTION EXPENSES*
Surrender Charge:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Complete Years Elapsed 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7+
Since Premium Payment | | | | | | |
Surrender Charge 6% | 6% | 6% | 5% | 4% | 3% | 1% | 0%
</TABLE>
Transfer Charge................................................. None**
* If you invested in a Fixed Interest Allocation, a Market Value Adjustment
may apply to certain transactions. This may increase or decrease your
contract value and/or your transfer or surrender amount.
** We may in the future charge $25 per transfer if you make more than
12 transfers in a contract year.
ANNUAL CONTRACT ADMINISTRATIVE CHARGE
Administrative Charge........................................... $ 0
(We may in the future charge an annual contract administrative
charge of $30 or 2% of your contract value, whichever is less.)
SEPARATE ACCOUNT ANNUAL CHARGES***
<TABLE>
<CAPTION>
Standard Enhanced Death Benefit
Death Benefit Annual Ratchet
------------- --------------
<S> <C> <C>
Mortality and Expense Risk Charge...... 0.75% 0.95%
Asset-Based Administrative Charge...... 0.15% 0.15%
Total Separate Account Expenses........ 0.90% 1.10%
</TABLE>
<TABLE>
<CAPTION>
Percent Solution Enhanced Death Benefit
---------------------------------------
3% Solution 5% Solution 7% Solution
----------- ----------- -----------
<S> <C> <C> <C>
Mortality and Expense Risk Charge...... 0.90% 1.05% 1.20%
Asset-Based Administrative Charge...... 0.15% 0.15% 0.15%
Total Separate Account Expenses........ 1.05% 1.20% 1.35%
</TABLE>
***As a percentage of average daily assets in each subaccount. The
Separate Account Annual Charges are deducted daily.
THE GCG TRUST ANNUAL EXPENSES (as a percentage of the average daily net
assets of a portfolio):
[Table with Shaded Heading and Shaded lines for readability]
|---------------------------------------------------------------------------|
| OTHER TOTAL |
| EXPENSES(2) EXPENSES |
| MANAGEMENT AFTER EXPENSE AFTER EXPENSE |
| PORTFOLIO FEES(1) REIMBURSEMENT REIMBURSEMENT(3) |
|---------------------------------------------------------------------------|
| Liquid Asset 0.59% 0.00% 0.59% |
| Limited Maturity Bond 0.60% 0.00% 0.60% |
| Global Fixed Income 1.60% 0.00% 1.60%(3) |
| Total Return 0.94% 0.03% 0.97%(3) |
| Fully Managed 0.98% 0.00% 0.98% |
| Equity Income 0.98% 0.00% 0.98% |
| Investors 1.00% 0.01% 1.01% |
| Large Cap Value 1.00% 0.01% 1.01% |
| Rising Dividends 0.98% 0.00% 0.98% |
| Capital Growth 1.08% 0.00% 1.08% |
| Growth 1.08% 0.01% 1.09% |
| Value Equity 0.98% 0.00% 0.98% |
| Research 0.94% 0.00% 0.94% |
| Managed Global 1.25% 0.01% 1.26% |
| All Cap 1.00% 0.01% 1.01% |
| Capital Appreciation 0.98% 0.00% 0.98% |
| Mid-Cap Growth 0.94% 0.01% 0.95% |
| Strategic Equity 0.98% 0.01% 0.99% |
| Small Cap 0.98% 0.01% 0.99% |
| Real Estate 0.98% 0.01% 0.99% |
| Hard Assets 0.98% 0.02% 1.00% |
| Developing World 1.75% 0.08% 1.83% |
|---------------------------------------------------------------------------|
2
<PAGE>
<PAGE>
(1) Fees decline as the total assets of one or more 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, 1998, except for portfolios that
commenced operations in 1998 where the charges have been
estimated.
(3) Total expenses are based on actual expenses for the fiscal year
ended December 31, 1998. Directed Services, Inc. is currently
reimbursing expenses to maintain total expenses at 0.97% for
the Total Return portfolio and 1.60% for the Global Fixed Income
portfolio as shown. Without this reimbursement, and based on
current estimates, total expenses would be 0.98% for the Total
Return portfolio and 1.74% for the Global Fixed Income portfolio.
This reimbursement agreement will remain in place through
August 14, 2000 after which it may be terminated at any time.
THE PIMCO TRUST ANNUAL EXPENSES (as a percentage of the average daily
net assets of a portfolio):
[Table with Shaded Heading]
|---------------------------------------------------------------------------|
| OTHER TOTAL |
| EXPENSES EXPENSES |
| MANAGEMENT AFTER EXPENSE AFTER EXPENSE |
| PORTFOLIO FEES(1) REIMBURSEMENT(1) REIMBURSEMENT(1) |
|---------------------------------------------------------------------------|
| PIMCO High Yield Bond 0.50% 0.25%(2) 0.75% |
| PIMCO StocksPLUS Growth |
| and Income 0.40% 0.25% 0.65% |
|---------------------------------------------------------------------------|
(1) PIMCO has agreed to waive some or all of its other expenses,
subject to potential future reimbursement, to the extent that
total expenses for the PIMCO High Yield Bond portfolio and PIMCO
StocksPLUS Growth and Income portfolio would exceed 0.75% and
0.65%, respectively, due to payment by the portfolios of their
pro rata portion of Trustees' fees. Without this agreement, and
based on current estimates, total expenses would be 0.81% for the
PIMCO High Yield Bond Portfolio and 0.72% for the PIMCO
StocksPLUS Growth and Income portfolio.
(2) Since the PIMCO High Yield Bond portfolio commenced operations on
April 30, 1998, other expenses as shown has been annualized for
the year ended December 31, 1998.
THE WARBURG PINCUS TRUST ANNUAL EXPENSES (as a percentage of the
average daily net assets of a portfolio):
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
| | | | |
| | | OTHER | TOTAL |
| | | EXPENSES | EXPENSES |
| | ADVISORY | AFTER EXPENSE | AFTER EXPENSE |
| PORTFOLIO | FEES | REIMBURSEMENT(1) | REIMBURSEMENT(1) |
| | | | |
|------------------------------------------------|--------------------------------------------------------|
<S> <C> <C> <C> |
| International Equity | 1.00% | 0.33% | 1.33% |
| | | | |
|------------------------------------------------|--------------------------------------------------------|
</TABLE>
Total expenses are based on actual expenses for fiscal year ended
December 31, 1998.
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 and the PIMCO
Trust for additional information on 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.
3
<PAGE>
<PAGE>
Examples:
- --------
In the following examples, surrender charges may apply if you choose to
annuitize within the first 7 contract years. The examples assume
election of the Percent Solution Enhanced Death Benefit with a 7%
Solution and are based on an assumed 5% annual return.
If you surrender your Contract at the end of the applicable time
period, you would pay the following expenses for each $1,000 invested:
<TABLE>
<CAPTION>
<S> <C> <C>
THE GCG TRUST 1 YEAR 3 YEARS
Liquid Asset................. $80.10 $122.09
Limited Maturity Bond........ $80.20 $122.40
Global Fixed Income.......... $90.20 $152.42
Total Return................. $83.91 $133.61
Equity Income................ $84.01 $133.91
Fully Managed................ $84.01 $133.91
Rising Dividends............. $84.01 $133.91
Growth & Income.............. $85.01 $136.92
Growth....................... $85.11 $137.22
Value Equity................. $84.01 $133.91
Research..................... $83.61 $132.71
Strategic Equity............. $84.11 $134.21
Capital Appreciation......... $84.01 $133.91
Mid-Cap Growth............... $83.71 $133.01
Small Cap.................... $84.11 $134.21
Real Estate.................. $84.01 $133.91
Hard Assets.................. $84.21 $134.32
Developing World............. $92.49 $159.19
THE PIMCO TRUST
PIMCO High Yield Bond........ $81.70 $126.96
PIMCO StocksPLUS Growth
and Income................. $80.70 $123.92
THE WARBURG PINCUS TRUST
International Equity......... $87.51 $144.40
</TABLE>
4
<PAGE>
<PAGE>
If you do not surrender your Contract or if you annuitize on the
annuity start date, you would pay the following expenses for each
$1,000 invested:
<TABLE>
<CAPTION>
THE GCG TRUST 1 YEAR 3 YEARS
<S> <C> <C>
Liquid Asset................. $20.10 $62.09
Limited Maturity Bond........ $20.20 $62.40
Global Fixed Income.......... $30.20 $92.42
Total Return................. $23.91 $73.61
Equity Income................ $24.01 $73.91
Fully Managed................ $24.01 $73.91
Rising Dividends............. $24.01 $73.91
Growth & Income.............. $25.01 $76.92
Growth....................... $25.11 $77.22
Value Equity................. $24.01 $73.91
Research..................... $23.61 $72.71
Strategic Equity............. $24.11 $74.21
Capital Appreciation......... $24.01 $73.91
Mid-Cap Growth............... $23.71 $73.01
Small Cap.................... $24.11 $74.21
Real Estate.................. $24.01 $73.91
Hard Assets.................. $24.21 $74.52
Developing World............. $32.49 $99.19
THE PIMCO TRUST
PIMCO High Yield Bond........ $21.70 $66.96
PIMCO StocksPLUS Growth
and Income................. $20.70 $63.92
THE WARBURG PINCUS TRUST
International Equity......... $25.71 $84.40
</TABLE>
The examples above reflect the annual administrative charge as an
annual charge of 0.04% of assets (based on an average contract value of
$75,000). If a different death benefit or a different Percent Solution
is elected instead of the Percent Solution Enhanced Death Benefit with
a 7% Solution used in the examples, the actual expenses will be less
than those represented in the examples.
THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN SUBJECT TO THE TERMS OF YOUR CONTRACT.
- -----------------------------------------------------------------------
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.
5
<PAGE>
<PAGE>
(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.
FINANCIAL STATEMENTS
The unaudited financial statements of Separate Account B for the years
ended December 31, 1998 and 1997 are included in the Statement of
Additional Information. The audited consolidated financial statements
of Golden American for the years ended December 31, 1998, 1997, and
1996 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 accumulative 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, 3, 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
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 otal 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. In addition, we
may present historic performance data for the
investment portfolios since their inception reduced by some or all of
the fees and charges under the Contract. Such adjusted historic
performance includes data that precedes the inception dates of the
subaccounts of Separate Account B. This data is designed to show the
performance that would have resulted if the Contract had been in
existence before the separate account began investing in the portfolios.
Current yield for the Liquid Asset subaccount is based on income
received by a hypothetical investment over a given 7-day period,
less expenses accrued, and then "annualized" (i.e., assuming that
the 7-day yield would be received for 52 weeks). We calculate
"effective yield" for the Liquid Asset subaccount in a manner
similar to that used to calculate yield, but when annualized,
the income earned by the investment is assumed to be reinvested.
The "effective yield" will thus be slightly higher than the
"yield" because of the compounding effect of earnings. We calculate
quotations of yield for the remaining subaccounts on all investment
income per accumulation unit earned during a given 30-day period,
after subtracting fees and expenses accrued during the period,
assuming no surrender.
We may compare performance information for a subaccount to: (i) the
Standard & Poor's 500 Stock Index, Dow Jones Industrial Average,
Donoghue Money Market Institutional Averages, or any other applicable
market indices, (ii) other variable annuity separate accounts or other
investment products tracked by Lipper Analytical Services (a widely
used independent research firm which ranks mutual funds and other
investment companies), or any other rating service, and (iii) the
Consumer Price Index (measure for inflation) to determine the real rate of
return of an investment in the Contract. Our reports and promotional
6
<PAGE>
<PAGE>
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 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.
Our principal office is located at 1475 Dunwoody Drive, West Chester,
Pennsylvania 19380. For more information, see "More Information About
Golden American."
- -----------------------------------------------------------------------
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 Securities and Exchange
Commission 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 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 Trust is 840 Newport Center Drive, Suite 300,
Newport Center, CA 92660.
The Warburg Pincus Trust is also a mutual fund whose shares are
available to separate accounts of life insurance companies, including
Golden American and Equitable life Insurance Company of Iowa, and to
certain qualified and retirement plans. The address of the
Warburg Pincus Trust is 466 Lexington Avenue, New York, NY 10017.
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 Trust, the Warburg Pincus Trust, Directed
Services, Inc., Pacific Investment Management Company, Warburg Pincus
Asset Management, Inc. 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
TRUST AND THE WARBURG PINCUS TRUST IN THE ACCOMPANYING
PROSPECTUSES FOR EACH TRUST. YOU SHOULD READ THEM CAREFULLY BEFORE
INVESTING.
7
<PAGE>
<PAGE>
- -----------------------------------------------------------------------
GOLDEN AMERICAN SEPARATE ACCOUNT B
- -----------------------------------------------------------------------
Golden American Separate Account B ("Account B") was established as a
separate account of the Company on July 14, 1988. It is registered
with the Securities and Exchange Commission as a unit investment trust
under the Investment Company Act of 1940. Account B is a separate
investment account used for our variable annuity contracts. We own all
the assets in Account B but such assets are kept separate from our
other accounts.
Account B is divided into subaccounts. Each subaccount invests
exclusively in shares of one investment portfolio of the GCG Trust,
PIMCO Trust or the Warburg Pincus Trust. 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 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 the subaccounts
whose assets we attribute to other variable annuity contracts supported
by Account B. If the assets in Account B exceed the required reserves
and other liabilities, we may transfer the excess to our general account.
We are obligated to pay all benefits and make all payments provided
under the Contracts.
We currently offer other variable annuity contracts that invest in
Account B but are not discussed in this prospectus. Account B may also
invest in other investment portfolios which are not available under your
Contract.
- -----------------------------------------------------------------------
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. You can find detailed
information about the investment portfolios in the prospectuses
for the GCG Trust, the PIMCO Trust and the Warburg Pincus Trust.
You should read these prospectuses before investing.
[Shaded Table Header]
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 with
Bond 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 Seeks high total return.
Income Invests primarily in high-grade fixed income
securities, both foreign and domestic.
----------------------------------------------------
Total Return Seeks above-average income (compared to a portfolio
entirely invested in equity securities)
consistent with the prudent employment of
capital.
Invests primarily in a combination of equity
and fixed income securities.
----------------------------------------------------
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.
----------------------------------------------------
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.
----------------------------------------------------
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.
----------------------------------------------------
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".
----------------------------------------------------
Capital Growth Seeks long-term total return.
Invests primarily in common stocks of
companies where the potential for change
(earnings acceleration) is significant.
----------------------------------------------------
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.
----------------------------------------------------
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.
----------------------------------------------------
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.
----------------------------------------------------
Managed Global Seeks capital appreciation. Current income is only
an incidental consideration.
Invests primarily in common stocks traded in
securities markets throughout the world.
----------------------------------------------------
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.
----------------------------------------------------
Capital Seeks long-term capital growth.
Appreciation Invests primarily in equity securities
believed by the portfolio manager to be
undervalued.
----------------------------------------------------
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.
----------------------------------------------------
9
<PAGE>
<PAGE>
Strategic Equity Seeks capital appreciation.
Invests primarily in common stocks of medium-
and small-sized companies.
----------------------------------------------------
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.
----------------------------------------------------
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.
---------------------------------------------------
THE PIMCO TRUST
PIMCO High Yield Seeks to maximize total return, consistent with
Bond preservation of capital and prudent investment
management.
Invests in at least 65% of its assets in a
diversified portfolio of junk bonds rated at least
B by Moody's Investor Services, Inc. or Standard &
Poor's or, if unrated, determined by the portfolio
manager to be of comparable quality.
----------------------------------------------------
PIMCO StocksPLUS Seeks to achieve a total return which exceeds
Growth and the total return performance of the S&P 500.
Income Invests primarily in common stocks, options,
futures, options on futures and swaps.
----------------------------------------------------
THE WARBURG PINCUS TRUST
International Seeks long-term appreciation.
Equity Invests primarily in a broadly diversified
portfolio of equity securities of companies
that have their principal business activities
outside of the United States.
----------------------------------------------------
INVESTMENT MANAGEMENT FEES
Directed Services, Inc., serves as the overall manager 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. Directed Services (and not the GCG Trust)
pays each portfolio manager a monthly fee for managing the assets of a
portfolio. For a list of the portfolio managers, see the front cover of
this prospectus. Directed Services does not bear the expenses 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 the PIMCO Trust. The PIMCO Trust pays PIMCO a monthly
advisory fee and a monthly administrative fee of 0.25% 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 Trust.
Credit Suisse Asset Management, LLC serves as the investment advisor of
the Warburg Pincus Trust. The Warburg Trust pays Credit Suisse Asset
Management a monthly advisory fee based on the average daily net assets of
the investment portfolio and also procures the services necessary for the
operation of its portfolios. The Warburg Trust pays monthly administrative
fees to two co-administrators for administrative services, one of which is an
affiliate of Credit Suisse Asset Management. The month administrative fee
is based on the portfolio's average daily net assets. Credit Suisse Asset
Management does not bear any portfolio expenses.
You can find detailed information about each portfolio's management
in the prospectuses for the GCG Trust, the PIMCO Trust and the Warburg
Pincus Trust. You should read these prospectuses before investing.
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THE FIXED INTEREST ALLOCATION
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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
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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 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 TAKE A MARKET VALUE
ADJUSTMENT.
Assets supporting amounts allocated to the Fixed Account are available
to fund the claims of all classes of our customers, contract owners and
other creditors. Interests under your Contract relating to the Fixed
Account are registered under the Securities Act of 1933, but the Fixed
Account is not registered under the 1940 Act.
SELECTING A GUARANTEED INTEREST PERIOD
You may select one or more Fixed Interest Allocations with specified
guaranteed interest periods. A guaranteed interest period is the
period that a rate of interest is guaranteed to be credited to your
Fixed Interest Allocation. We may at any time decrease or increase the
number of guaranteed interest periods offered. In addition, we may
offer DCA Fixed Interest Allocations, which are 6-month and 1-year Fixed
Interest Allocations available exclusively in connection with our dollar
cost averaging program. For more information on DCA Fixed Interest
Allocations, see "Transfers Among Your Investments - Dollar Cost Averaging."
Your contract value in the Fixed Account is the sum of your Fixed
Interest Allocations and the interest credited, as adjusted for any
withdrawals (including any Market Value Adjustment applied to such
withdrawal), transfers or other charges we may impose. Your Fixed Interest
Allocation will be credited with the guaranteed interest rate in effect
for the guaranteed interest period you selected when we receive and
accept your premium or reallocation of contract value. We will credit
interest daily at a rate which yields the quoted guaranteed interest rate.
GUARANTEED INTEREST RATES
Each Fixed Interest Allocation will have an interest rate that is
guaranteed as long as you do not take your money out until its maturity date.
We do nothave 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
the 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 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
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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 which
is 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 subaccount(s) or new guaranteed interest period(s) 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.
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. See "Charges and Fees." 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 not assess your withdrawal against
any Fixed Interest Allocations unless the withdrawal exceeds the contract
value in the subaccounts in which you are invested. 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.
MARKET VALUE ADJUSTMENT
A Market Value Adjustment may decrease, increase or have no effect on
your contract value.
We will apply a Market Value Adjustment (i) whenever you withdraw or
transfer money from a Fixed Interest Allocation (unless made within 30
days before the maturity date of the applicable guaranteed interest
period, or under the systematic withdrawal or dollar cost averaging
programs) and (ii) if on the annuity start date a guaranteed interest
period for any Fixed Interest Allocation does not end on or within 30
days of the annuity start date.
We determine the Market Value Adjustment by multiplying the amount you
withdraw, transfer or apply to an income plan by the following factor:
( 1+I )N/365
(---------) -1
(1+J+.0050)
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Where,
o "I" is the Index Rate for the affected Fixed Interest Allocation
as of the first day of its guaranteed interest period;
o "J" is equal to the following:
(1) If calculated for a Fixed Interest Allocation of 1 year or
more, then "J" is the Index Rate for a new Fixed Interest
Allocation with a guaranteed interest period equal to the
time remaining (rounded up to the next full year except in
Pennsylvania) in the guaranteed interest period;
(2) If calculated for a Fixed Interest Allocation of 6 months,
then "J" is the lesser of the Index Rate for a new Fixed
Interest Allocation with (i) a 6 month guaranteed interest
period, or (ii) a 1 year guaranteed interest period at the
time of calculation; and
o "N" is the remaining number of days in the guaranteed interest
period at the time of calculation.
The Index Rate is the average of the Ask Yields for U.S. Treasury
Strips as quoted by a national quoting service for a period equal to
the applicable guaranteed interest period. The average currently is
based on the period starting from the 22nd day of the calendar month
two months prior to the month of the Index Rate determination and
ending the 21st day of the calendar month immediately before the
month of determination. We currently calculate the Index Rate once
each calendar month but have the right to calculate it more frequently.
The Index Rate will always be based on a period of at least 28 days.
If the Ask Yields are no longer available, we will determine the Index
Rate by using a suitable and approved, if required, replacement method.
A Market Value Adjustment may be positive, negative or result in no
change. In general, if interest rates are rising, you bear the risk
that any Market Value Adjustment will likely be negative and reduce
your contract value. On the other hand, if interest rates are falling,
it is more likely that you will receive a positive Market Value
Adjustment that increases your contract value. In the event of a full
surrender, transfer or annuitization from a Fixed Interest Allocation,
we will add or subtract any Market Value Adjustment from the amount
surrendered, transferred or annuitized. In the event of a partial
withdrawal, transfer or annuitization, we will add or subtract any
Market Value Adjustment from the total amount withdrawn, transferred or
annuitized in order to provide the amount requested. If a negative
Market Value Adjustment exceeds your contract value in the Fixed
Interest Allocation, we will consider your request to be a full
surrender, transfer or annuitization.
Several examples which illustrate how the Market Value Adjustment
works are included in Appendix A.
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THE ANNUITY CONTRACT
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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 Trust and the Warburg Pincus Trust through
Golden American 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.
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CONTRACT OWNER
You are the contract owner. You are also the annuitant unless another
annuitant is named in the application. You have the rights and options
described in the Contract. One or more persons may own the Contract.
If there are multiple owners named, the age of the oldest owner will
determine the applicable death benefit if such death benefit is available
for multiple owners.
The death benefit becomes payable when you die. In the case of a sole
contract owner who dies before the income phase begins, we will pay the
beneficiary the death benefit when 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. The age of the older owner will
determine the applicable death benefit if Enhanced Death Benefits
are available for multiple owners.
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.
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)).
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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 and the
guaranteed death benefit. 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 $25,000 or more. You may make
additional payments of at least $1,000 or more at any time after the
free look period before you turn age 85. Under certain
circumstances, we may waive the minimum premium payment requirement.
We may also change the minimum initial or additional premium
requirements for certain group or sponsored arrangements. Any
initial or additional premium payment that would cause the contract
value of all annuities that you maintain with us to exceed $1,000,000
requires our prior approval.
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 all information necessary
is received. In certain states we also accept initial and
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. For initial premium payments, the payment
will be credited at the accumulation unit value next determined after
receipt of your premium payment and the completed application. Once the
completed application is received, we will allocate the payment to the
subaccount 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. 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 subaccount(s) 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 Account B
with respect to the Contract. The net investment results of each
subaccount vary primarily with its investment performance.
In some states, we may require that an initial premium designated for a
subaccount of Account B or the Fixed Account be allocated to a subaccount
specially designated by the Company (currently, the Liquid Asset
subaccount) during the free look period. After the free look period, we
will convert your contract value (your initial premium plus any
earnings less any expenses) into accumulation units of the subaccounts
you previously selected. The accumulation units will be allocated
based on the accumulation unit value next computed for each subaccount.
Initial premiums designated for Fixed Interest Allocations will be
allocated to a Fixed Interest Allocation with the guaranteed interest
period you have chosen; however, in the future we may allocate those
premiums to the specially designated subaccount during the free look
period.
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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(s) is the sum of premium payments
allocated to the Fixed Interest Allocation(s) under the Contract, plus
credited interest, minus any transfers and withdrawals (including any
Market Value Adjustment applied to such withdrawal, contract fees, 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 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 adjust for
any Market Value Adjustment, then we deduct any surrender charge, any
charge for premium taxes, and any other charges incurred but not yet
deducted.
SURRENDERING TO RECEIVE THE CASH SURRENDER VALUE
You may surrender the Contract at any time while the annuitant is
living and before the annuity start date. A surrender will be
effective on the date your written request and the Contract are
received at our Customer Service Center. We will determine and pay the
cash surrender value at the price next determined after receipt of all
paperwork required in order for us to process your surrender. Once paid,
all benefits under the Contract will be terminated.For administrative
purposes, we will transfer your money to a specially designated
subaccount (currently the Liquid Asset subaccount) prior to
processing the surrender. This transfer will have no effect on
your cash surrender value. You may receive the cash surrender value
in a single sum payment or apply it under one or more annuity options.
We will usually pay the cash surrender value within 7 days.
Consult your tax advisor regarding the tax consequences associated with
surrendering your Contract. A surrender made before you reach age 59
1/2 may result in a 10% tax penalty. See "Federal Tax Considerations"
for more details.
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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 Securities and Exchange Commission (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 a portfolio
subject to those instructions, we will execute your instructions using
the substituted portfolio, unless you request
otherwise.
We also reserve the right to: (i) deregister Account B under the 1940
Act; (ii) operate Account B as a management company under the 1940 Act
if it is operating as a unit investment trust; (iii) operate 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 Account B; and (v) combine 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.
OTHER CONTRACTS
We offer other variable annuity contracts that also invest in the
same investment portfolios of the Trusts. These contracts have different
charges that could effect their performance, and may offer different
benefits more
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
annuitant, you may withdraw all or part of your money. Keep in mind
that if you request a withdrawal for more than 90% of the cash surrender
value, we will treat it as a request to surrender the Contract. If any
single withdrawal or the sum of withdrawals exceeds the Free Withdrawal
Amount, you will incur a surrender charge. The Free Withdrawal Amount in
any contract year is the greater of: (i) any earnings less previous
free withdrawals; or (ii) 10% of premium payments paid within the
past 7 years and not previously withdrawn, less any previous
free withdrawals taken in the same contract year. You need
to submit to us a written request specifying the Fixed Interest
Allocations or subaccounts from which amounts are to be withdrawn,
otherwise the withdrawal will be made on a pro rata basis from all
of the subaccounts in which you are invested. If there is not enough
contract value in the subaccounts, we will deduct the balance
of the withdrawal from your Fixed Interest Allocations starting with
the guaranteed interest periods nearest their maturity dates until we
have honored your request. We will apply a Market Value Adjustment to
any withdrawal from your Fixed Interest Allocation taken more than 30
days before its maturity date. Definitive guidance on the proper
federal tax treatment of the Market Value Adjustment has not been issued.
You may want to discuss the potential tax consequences of a Market Value
Adjustment with your tax adviser. We will determine the contract value as
of the close of business on the day we receive your withdrawal request
at our Customer Service Center. The contract value may be more or less
than the premium payments made.
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 effect the
amount you receive.
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 $100. 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.
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. You decide when you
would like systematic payments to start as long as it starts at least 28 days
after your contract date. You also select the date on which the systematic
withdrawals will be made, but this date cannot be later than the 28th day
of the
month. If you have elected to receive systematic withdrawals but have not
chosen a date, we will make the withdrawals on the same calendar day of each
month as your contract date. If your contract date is after the 28th, your
systematic withdrawal will be made on the 28th day of each month.
Each systematic withdrawal amount must be a minimum of $100. The amount of
your systematic withdrawal can either be (1) a fixed dollar amount, or (2) an
amount based on a percentage of the premiums not previously withdrawn from the
subaccounts in which your are invested. 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 0.833%
Quarterly 2.50%
Annually 10.00%
If your systematic withdrawal is a fixed dollar amount and the amount to be
withdrawn would exceed the applicable maximum percentage of your contract
value on any withdrawal date, we will autmatically reduce the amount withdrawn
so that it equals such percentage. Thus, your fixed dollar systematic
withdrawals will never exceed the maximum percentage. If you want fixed dollar
systematic withdrawals to exceed the maximum percentage and are willing to
incur
associated surrender charges, consider the Fixed Dollar Systematic Withdrawal
Feature which you may add to your regular systematic withdrawal program.
If your systematic withdrawal is based on a percentage of the premiums not
previously withdrawn from the subaccounts in which you are invested and the
amount to be withdrawn based on that percentage would be less than $100, we
will automatically increase the amount to $100 as long as it does not exceed
the maximum percentage If the systematic withdrawal would exceed the
maximum percentage, we will send the amount, and then automatically cancel
your systematic withdrawal option.
Systematic withdrawals from Fixed Interest Allocations are limitesd 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) or 72(t) distributions. A
Fixed Interest Allocation may not participate in both the systematic withdrawal
option and the dollar cost averaging program at the same time.
You may change the amount or percentage of your systematic withdrawal once
each
contract year or cancel this option at any time by sending satisfactory notice
to our Customer Service Center at least 7 days before the next scheduled
withdrawal
date. The systematic withdrawal option may commence in a contract year where a
regular withdrawal has been taken but you may not change the amount or
percentage
of your withdrawals in any contract year during which you have previously
taken a
regualy withdrawal. You may not elect the systematic withdrawal option if you
are
taking IRA withdrawals.
Fixed dollar Systematic Withdrawal Feature. You may add the Fixed Dollar
Systematic Withdrawal Feature to your regular fixed dollar systematic
withdrawal program. This feature allows you to receive a systematic withdrawal
in a fixed dollar amount regardless of any surrender charges or Market Value
Adjustments. Systematic withdrawals from Fixed Interest Allocations under
the Fixed Dollar Systematic Withdrawal Feature are available only in connection
with Section 72(q) or 72(t) distributions. You choose the amount of the fixed
systematic withdrawals, which may total up to an annual maximum of 10% of your
premium payments not previously withdrawn as determined on the day we receive
your election of this feature. The maximum limit will not be recalculated
when you make additional premium payments, unless you instruct us to do 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 a(rather than to the systematic withdrawal) so that the amount
of each systematic withdrawal remains fixed.
Flat dollar systematic withdrawals which are intended to satisfy the
requirements of
Section 72(q) or 72(t) of the Tax Code may exceed the maximum. Such
withdrawals are
subject to surrender charges and Market Value Adjustment when they exceed the
applicable free withdrawal amount.
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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 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 Statement of
Additional Information. 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
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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 us
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. A withdrawal made before the taxpayer reaches age
59 1/2 may result in a 10% penalty tax. See "Federal Tax
Considerations" for more details.
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TRANSFERS AMONG YOUR INVESTMENTS
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You may transfer your contract value among the subaccounts in which you
are invested and your Fixed Interest Allocations at the end of the
free look period until the annuity start date. We currently do not charge
you for transfers made during a contract year, but reserve the right to
charge $25 for each transfer after the twelfth transfer in a contract year.
We also reserve the right to limit the number of transfers you may make
and may otherwise modify or terminate transfer privileges if required by
our business judgement or in accordance with applicable law. We will
apply a Market Value Adjustment to transfers from a Fixed Interest
Allocation taken more than 30 days before its maturity date, unless the
transfer is made under the dollar cost averaging program.
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. Account B
and the Company will not be liable for following instructions
communicated by telephone or over the internet 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.
DOLLAR COST AVERAGING
You may elect to participate in our dollar cost averaging program if you
have at least $1,200 of contract value in the (i) Limited Maturity Bond
subaccount or the Liquid Asset subaccount, or (ii) a Fixed Interest
Allocation with either a 6-month or a 1-year guaranteed interest period.
These subaccounts or Fixed Interest Allocations serve as the source accounts
from which we will, on a monthly basis, automatically transfer a set dollar
amount of money to other subaccounts selected by you. We also may offer
DCA Fixed Interest Allocations, which are 6-month and 1-year Fixed
Interest Allocations available exclusively for use with the dollar cost
averaging program. The DCA Fixed Interest Allocations require a minimum
premium payment of $1,200 directed into a DCA Fixed Interest Allocation.
The dollar cost averaging program is designed to lessen the impact of market
fluctuation on your investment. Since we transfer the same dollar amount
to other subaccounts each month, more units of a subaccount are purchased if
the value of its unit is low and less 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
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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
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.
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 currently in operation at the time.
AUTOMATIC REBALANCING
If you have at least $10,000 of contract value invested in the
subaccounts of Account B, you may elect to have your investments in the
subaccounts automatically rebalanced. 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 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
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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 payment.
You may choose from the following 3 death benefit choices: (1) the
Standard Death Benefit; (2) the Percent Solution Enhanced Death Benefits
(with 3%, 5% and 7% Solutions currently available); and (3) the
Annual Ratchet Enhanced Death Benefit. 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.
STANDARD DEATH BENEFIT. You will automatically receive the Standard
Death Benefit unless you elect one of the enhanced death benefits. The
standard death benefit under the Contract is the greatest of (i) your
contract value; (ii) total premium payments less any withdrawals; and
(iii) the cash surrender value.
ENHANCED DEATH BENEFITS. If the 3%, 5% or 7% Solution Enhanced Death
Benefit or the Annual Ratchet Enhanced Death Benefit is elected, the
death benefit under the Contract is the greatest of (i) the contract
value; (ii) total premium payments less any withdrawals; (iii) the cash
surrender value; and (iv) the enhanced death benefit as calculated
below.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
| |
| HOW THE ENHANCED DEATH BENEFIT IS CALCULATED |
| |
| PERCENT SOLUTION ANNUAL RATCHET |
| |
-----------------------------------------------------------------------------|
<S> <C> |
| We credit interest each | On each contract anniversary |
| business day at the enhanced | that occurs on or before the |
| death benefit annual effective | contract owner turns age 70, |
| rate* to the enhanced death | we compare the prior enhanced |
| benefit from the preceding day | death benefit to the contract |
| (which would be the initial | value, and select the larger |
| premium if the preceding day is | amount as the new enhanced |
| the contract date), then we add | death benefit. |
| additional premiums paid since | |
| the preceding day, then we | On all other days, the enhanced |
| subtract any withdrawals made | death benefit is the amount |
| since the preceding day, then we | determined below. We first take |
| adjust for any Market Value | the enhanced death benefit from |
| adjustment, and then | the preceding day (which would be |
| we subtract any associated | the initial premium if the |
| surrender charges. | preceding day is the contract |
| | date) and then we add additional |
| **If you select the 7% Solution, | premiums paid since the preceding |
| there is a maximum enhanced death | day, then we subtract any |
| benefit of two times all | withdrawals made since the |
| premium payments, as reduced by | preceding day, then we adjust for |
| withdrawals.*** If you select | any Market Value Adjustment, and |
| the 3% or 5% Solution, there is | then we subtract any associated |
| no maximum on the enhanced | surrender charges. That amount |
| death benefit. | becomes the new enhanced death |
| | benefit. |
| | |
------------------------------------------------------------------------------
</TABLE>
* You select the enhanced death benefit interest rate of 3%, 5% or 7%
when you purchase the Contract. The actual interest rate used for
calculating the death benefit for the Liquid Asset and Limited
Maturity Bond subaccounts will be the lesser of the enhanced
death benefit annual effective rate or the net rate of return
for such subaccounts during the applicable period. The interest
rate used for calculating the death benefit for your Fixed
Interest Allocation will be the lesser of the enhanced death
benefit annual effective rate or the interest credited to such
investment during the applicable period. Thus, selecting these
investments may limit the enhanced death benefit. If we offer
additional subaccounts in the future, we may restrict those
new subaccounts from participating in the 7% Solution Enhanced
Death Benefit.
** Each premium payment reduced by any withdrawals and any associated
surrender charges incurred, will continue to grow at the enhanced
death benefit interest rate, compounded daily.
*** Each withdrawal reduces the maximum enhanced death benefit as
follows: first, the maximum enhanced death benefit is reduced by
the amount of any withdrawal of earnings; then, it is reduced in
proportion to the reduction in the contract value for any
withdrawal of premium (in each case, including any associated
surrender charges) and as adjusted for any Market Value Adjustment.
If those withdrawals in a contract year do not exceed 7% of
cumulative premiums and did not exceed 7%
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of cumulative premiums in any prior contract year, such withdrawals
will be treated as withdrawals of earnings for the purpose of
calculating the maximum enhanced death benefit.
The Percent Solution Enhanced Death Benefit and the Annual Ratchet
Enhanced Death Benefit are available only at the time you purchase your
Contract and only if the contract owner or annuitant (when the contract
owner is other than an individual) is not more than 70 years old at the
time of purchase. The Percent Solution Enhanced Death Benefit may not
be available where a Contract is held by joint owners.
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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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:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Complete Years Elapsed 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7+
Since Premium Payment | | | | | | |
Surrender Charge 6% | 6% | 6% | 5% | 4% | 3% | 1% | 0%
</TABLE>
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
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(ii) you are first diagnosed by a qualifying medical professional, on or
after the first contract anniversary, as having a qualifying terminal
illness. We have the right to require an examination by a physician
of our choice. If we require such an examination, we will pay for it.
You are required to send us satisfactory written proof of illness.
See your Contract for more information. The waiver of surrender charge
may not be available in all states.
FREE WITHDRAWAL AMOUNT. The Free Withdrawal Amount in any contract
year is the greater of: (i) any earnings less previous free
withdrawals; or (ii) 10% of premium payments paid within the past 7
years and not previously withdrawn, less any previous free withdrawals
taken in the same contract year.
SURRENDER CHARGE FOR EXCESS WITHDRAWALS. We will deduct a surrender
charge for excess withdrawals. We consider a withdrawal to be an
"excess withdrawal" when the amount you withdraw in any contract year
exceeds the Free Withdrawal Amount. Where you are receiving systematic
withdrawals, any combination of regular withdrawals taken and any
systematic withdrawals expected to be received in a contract year
will be included in determining the amount of the excess withdrawal.
Such a withdrawal will be considered a partial surrender of the Contract
and we will impose a surrender charge and any associated premium tax.
We will deduct such charges from the contract value in proportion to the
contract value in each subaccount or Fixed Interest Allocation from
which the excess withdrawal was taken. In instances where the excess
withdrawal equals the entire contract value in such subaccounts or Fixed
Interest Allocations, we will deduct charges proportionately from all
other subaccounts and Fixed Interest Allocations in which you are invested.
ANY WITHDRAWAL FROM A FIXED INTEREST ALLOCATION MORE THAN 30 DAYS BEFORE
ITS MATURITY DATE WILL TRIGGER A MARKET VALUE ADJUSTMENT.
For the purpose of calculating the surrender charge for an excess
withdrawal: a) we treat premiums as being withdrawn on a first-in,
first-out basis; and b) amounts withdrawn which are not considered an
excess withdrawal are not considered a withdrawal of any premium
payments. We have included an example of how this works in Appendix B.
Although we treat premium payments as being withdrawn before earnings
for purpose of calculating the surrender charge for excess withdrawals,
the federal tax law treats earnings as withdrawn first.
PREMIUM TAXES. We may make a charge for state and local premium taxes
depending on your state of residence. The tax can range from 0% to 3.5%
of the premium payment. We have the right to change this amount
to conform with changes in the law or if you change your state of
residence.
We deduct the premium tax from your contract value on the annuity
start date. However, some jurisdictions impose a premium tax at the
time that initial and additional premiums are paid, regardless of when
the annuity payments begin. In those states we may defer collection of
the premium taxes from your contract value and deduct it when you surrender
the Contract, when you take an excess withdrawal, or on the annuity
start date.
ADMINISTRATIVE CHARGE. We currently do not charge an annual
administrative charge but may in the future deduct an annual administrative
charge of $30 or 2% of the contract value, whichever is smaller. Such
charge, if any, will be made on each Contract anniversary, or if you
surrender your Contract prior to a Contract anniversary, at the time
we determine the cash surrender value payable to you. If we deduct an
annual administrative charge, it will be deducted proportionately from
all subaccounts in which you are invested. If there is no contract value
in those subaccounts, we will deduct the charge from your Fixed Interest
Allocations starting with the guarantee interest periods nearest their
maturity dates until the charge has been paid.
TRANSFER CHARGE. We currently do not deduct any charges for
transfers made during a contract year. We have the right, however, to
assess up to $25 for each transfer after the twelfth transfer in a contract
year. If such a charge is assessed, we would deduct the charge from the
subaccounts and the Fixed Interest Allocations from which each such transfer
is made in proportion to the amount being transferred from each subaccount
and Fixed Interest Allocation, unless you have chosen to have all charges
deducted from a single subaccount. The charge will not apply to any
transfers due to the election of dollar cost averaging, auto rebalancing
and transfers we make to and from any subaccount specially designated by
the Company for such purpose.
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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 0.75% of the assets you have in each subaccount. The
charge is deducted on each business day at the rate of .002063% 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 0.95% for the
Annual Ratchet Death Benefit, or 0.90% for the 3% Solution Death
Benefit, 1.05% for the 5% Solution Death Benefit, or 1.20% for the 7%
Solution Death Benefit, of the assets you have in each subaccount. The
charge is deducted each business day at the rate of .002615%, .002477%,
.002892%, or .003308%, 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.
TRUST EXPENSES
There are fees and charges deducted from each investment portfolio of the
GCG Trust, the PIMCO Trust and the Warburg Pincus Trust. Please read the
respective Trust prospectus for details.
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THE ANNUITY OPTIONS
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ANNUITIZATION OF YOUR CONTRACT
If the annuitant and contract owner are living on the annuity start
date, we will begin making payments to the contract owner under an
income plan. We will make these payments under the annuity option
chosen. You may change annuity option by making a written request to
us at least 30 days before the annuity start date. The amount of the
payments will be determined by applying your contract value adjusted
for any applicable Market Value Adjustment on the annuity start date in
accordance with the annuity option you chose.
You may also elect an annuity option on surrender of the Contract for
its cash surrender value or you may choose one or more annuity options
for the payment of death benefit proceeds while it is in effect and
before the annuity start date. If, at the time of the contract owner's
death or the annuitant's death (if the contract owner is not an
individual), no option has been chosen for paying death benefit
proceeds, the beneficiary may choose an annuity option within 60 days.
In all events, payments of death benefit proceeds must comply with the
distribution requirements of applicable federal tax law.
The minimum monthly annuity income payment that we will make is $20.
We may require that a single sum payment be made if the contract value
is less than $2,000 or if the calculated monthly annuity income payment
is less than $20.
For each annuity option we will issue a separate written agreement
putting the annuity option into effect. Before we pay any annuity
benefits, we require the return of your Contract. If your Contract has
been lost, we will require that you complete and return the applicable
lost Contract form. Various factors will affect the level of annuity
benefits, such as the annuity option chosen, the applicable payment
rate used and the investment performance of the portfolios and interest
credited to the Fixed Interest Allocations.
Our current annuity options provide only for fixed payments. Fixed
annuity payments are regular payments, the amount of which is fixed and
guaranteed by us. Some fixed annuity options provide fixed payments
either for a specified period of time or for the life of the annuitant.
The amount of life income payments will 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:
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(1) The person named to receive payment is other than the contract
owner or beneficiary;
(2) The person named is not a natural person, such as a corporation; or
(3) Any income payment would be less than the minimum annuity income
payment allowed.
SELECTING THE ANNUITY START DATE
You select the annuity start date which is the date on which the annuity
payments commence. The annuity start date must be at least 5 years from
the contract date but before the month immediately following the
annuitant's 90th birthday, or 10 years from the contract date, if later.
If, on the annuity start date, a surrender charge remains, the elected
annuity option must include a period certain of at least 5 years.
If you do not select an annuity start date, it will automatically begin
in the month following the annuitant's 90th birthday, or 10 years from
the contract date, if later.
If the annuity start date occurs when the annuitant is at an advanced
age, such as over age 85, it is possible that the Contract will not be
considered an annuity for federal tax purposes. See "Federal Tax
Considerations" and the Statement of Additional Information. For a
Contract purchased in connection with a qualified plan, other than a
Roth IRA, distributions must commence not later than April 1st of the
calendar year following the calendar year in which you attain age 70
1/2 or, in some cases, retire. Distributions may be made through
annuitization or withdrawals. You should consult your tax adviser for
tax advice.
FREQUENCY OF ANNUITY PAYMENTS
You choose the frequency of the annuity payments. They may be monthly,
quarterly, semi-annually or annually. If we do not receive written
notice from you, we will make the payments monthly. There may be
certain restrictions on minimum payments that we will allow.
THE ANNUITY OPTIONS
We offer the 4 annuity options shown below. Payments under Options
1, 2 and 3 are fixed. Payments under Option 4 may be fixed or variable.
For a fixed annuity option, the contract value in the subaccounts is
transferred to the Company's general account.
OPTION 1. INCOME FOR A FIXED PERIOD. Under this option, we make
monthly payments in equal installments for a fixed number of years
based on the contract value on the annuity start date. We guarantee
that each monthly payment will be at least the amount stated in your
Contract. If you prefer, you may request that payments be made in
annual, semi-annual or quarterly installments. We will provide you
with illustrations if you ask for them. If the cash surrender value or
contract value is applied under this option, a 10% penalty tax may
apply to the taxable portion of each income payment until the contract
owner reaches age 59 1/2.
OPTION 2. INCOME FOR LIFE WITH A PERIOD CERTAIN. Payment is made
for the life of the annuitant in equal monthly installments and
guaranteed for at least a period certain such as 10 or 20 years. Other
periods certain may be available to you on request. You may choose a
refund period instead. Under this arrangement, income is guaranteed
until payments equal the amount applied. If the person named lives
beyond the guaranteed period, payments continue until his or her death.
We guarantee that each payment will be at least the amount specified in
the Contract corresponding to the person's age on his or her last
birthday before the annuity start date. Amounts for ages not shown in
the Contract are available if you ask for them.
OPTION 3. JOINT LIFE INCOME. This option is available when there
are 2 persons named to determine annuity payments. At least one of the
persons named must be either the contract owner or beneficiary of the
Contract. We guarantee monthly payments will be made as long as at
least one of the named persons is living. There is no minimum number
of payments. Monthly payment amounts are available if you ask for
them.
OPTION 4. ANNUITY PLAN. The contract value can be applied to any
other annuitization plan that we choose to offer on the annuity start
date. Annuity payments under Option 4 may be fixed or variable. If
variable and subject to the Investment Company Act of 1940, it will
comply with the requirements of such Act.
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PAYMENT WHEN NAMED PERSON DIES
When the person named to receive payment dies, we will pay any amounts
still due as provided in the annuity agreement between you and Golden
American. The amounts we will pay are determined as follows:
(1) For Option 1, or any remaining guaranteed payments under Option 2,
we will continue payments. Under Options 1 and 2, the discounted
values of the remaining guaranteed payments may be paid in a single
sum. This means we deduct the amount of the interest each
remaining guaranteed payment would have earned had it not been paid
out early. The discount interest rate is never less than 3% for
Option 1 and Option 2 per year. We will, however, base the
discount interest rate on the interest rate used to calculate the
payments for Options 1 and 2 if such payments were not based on the
tables in the Contract.
(2) For Option 3, no amounts are payable after both named persons have
died.
(3) For Option 4, the annuity option agreement will state the amount
we will pay, if any.
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OTHER CONTRACT PROVISIONS
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REPORTS TO CONTRACT OWNERS
We will send you a quarterly report within 31 days after the end of
each calendar quarter. The report will show the contract value, cash
surrender value, and the death benefit as of the end of the calendar
quarter. The report will also show the allocation of your contract
value and 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 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 Account B
may not reasonably occur or so that the Company may not reasonably
determine the value of Account B's net assets; or (4)during any
other period when the SEC so permits for the protection of
security holders. We have the right to delay payment of amounts from
a Fixed Interest Allocation for up to 6 months.
IN CASE OF ERRORS IN YOUR APPLICATION
If an age or sex given in the application or enrollment form is
misstated, the amounts payable or benefits provided by the Contract
shall be those that the premium payment would have bought at the
correct age or sex.
ASSIGNING THE CONTRACT AS COLLATERAL
You may assign a non-qualified Contract as collateral security for a
loan butyou should understand that your rights and any beneficiary's
rights may be subject to the terms of the assignment. An assignment may
have federal tax consequences. You must give us satisfactory written
notice at our Customer Service Center in order to make or release an
assignment. We are not responsible for the validity of any assignment.
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.
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FREE LOOK
You may cancel your Contract within your 10-day free look period. We
deem the free look period to expire 15 days after we mail the
Contract to you. Some states may require a longer free look period.
To cancel, you need to send your Contract to our Customer Service
Center or to the agent from whom you purchased it. We will refund
the contract value. For purposes of the refund during the free look
period,(i) we adjust your contract value for any market value adjustment
(if you have invested in the fix account), and (ii) then we include
a refund of any charges deducted from your contract value. Because of
the market risks associated with investing in the portfolios, the contract
value returned may be greater or less than the premium payment you paid.
Some states require us to return to you the amount of the paid premium (rather
than the contract value) in which case you will not be subject to
investment risk during the free look period. In these states, your
premiums designated for investment in the subaccounts will 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, 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 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
6.5% commission, and passes through 100% of the commission to the
broker-dealer whose registered representative sold the Contract:
[Shaded Table Header]
Underwriter Compensation
|----------------------------------------------------------------------------|
| NAME OF PRINCIPAL | AMOUNT OF | OTHER |
| UNDERWRITER | COMMISSION TO BE PAID | COMPENSATION |
| | | |
| Directed Services, Inc. | Maximum of 6.5% | Reimbursement of any |
| | of any initial | covered expenses incurred|
| | or additional | by registered |
| | premium payments | representatives in |
| | except when combined | connection with |
| | with some annual | the distribution |
| | trail commissions. | of the Contracts. |
|----------------------------------------------------------------------------|
Certain sales agreements may provide for a combination of a certain
percentage of commission at the time of sale and an annual trail
commission (which when combined could exceed 6.5% of total premium
payments).
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OTHER INFORMATION
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VOTING RIGHTS
We will vote the shares of a Trust owned by Account B according to your
instructions. However, if the Investment Company Act of 1940 or any
related regulations should change, or if interpretations of it or
related regulations should change, and we decide that we are permitted
to vote the shares of a Trust in our own right, we may decide to do so.
We determine the number of shares that you have in a subaccount by
dividing the Contract's contract value in that subaccount by the net
asset value of one share of the portfolio in which a subaccount invests.
We count fractional votes. We will determine the number of shares you
can instruct us to vote 180 days or less before a Trust's meeting.
We will ask you for voting instructions by mail at least 10 days before
the meeting. If we do not receive your instructions in time, we will
vote the shares in the same proportion as the instructions received
from all contracts in that subaccount. We will also vote shares we
hold in Account B which are not attributable to contract owners in
the same proportion.
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STATE REGULATION
We are regulated by the Insurance Department of the State of Delaware.
We are also subject to the insurance laws and regulations of all
jurisdictions where we do business. The variable Contract offered by
this prospectus has been approved where required by those
jurisdictions. We are required to submit annual statements of our
operations, including financial statements, to the Insurance
Departments of the various jurisdictions in which we do business to
determine solvency and compliance with state insurance laws and
regulations.
LEGAL PROCEEDINGS
The Company, like other insurance companies, may be involved in
lawsuits, including class action lawsuits. In some class action and
other lawsuits involving insurers, substantial damages have been sought
and/or material settlement payments have been made. We believe that
currently there are no pending or threatened lawsuits that are
reasonably likely to have a material adverse impact on the Company or
Account B.
LEGAL MATTERS
The legal validity of the Contracts was passed on by Myles R. Tashman,
Esquire, Executive Vice President, General Counsel and Secretary of
Golden American. Sutherland Asbill & Brennan LLP of Washington, D.C.
has provided advice on certain matters relating to federal securities
laws.
EXPERTS
The audited financial statements of Golden American Life Insurance Company
and Separate Account B appearing or incorporated by reference in the Statement
of Additional Information and Registration Statement have been audited by
Ernst & Young LLP, independent auditors, as set forth in their reports thereon
appearing or incorporated by reference in the Statement of Additional
Information and in the Registration Statement and are included or incorporated
by reference in reliance upon such reports given upon the authority of such
firm as experts in accounting and auditing.
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FEDERAL TAX CONSIDERATIONS
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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
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incorporated into our Contract administration procedures. Contract
owners, participants and beneficiaries are responsible for determining
that contributions, distributions and other transactions with respect
to the Contract comply with applicable law. Therefore, you should seek
competent legal and tax advice regarding the suitability of a Contract
for your particular situation. The following discussion assumes that
qualified Contracts are purchased with proceeds from and/or
contributions under retirement plans that qualify for the intended
special federal income tax treatment.
TAX STATUS OF THE CONTRACTS
DIVERSIFICATION REQUIREMENTS. The Code requires that the investments
of a variable account be "adequately diversified" in order for nonqualified
Contracts to be treated as annuity contracts for federal income tax
purposes. It is intended that Account B, through the subaccounts, will
satisfy these diversification requirements.
In certain circumstances, owners of variable annuity contracts have
been considered for federal income tax purposes to be the owners of the
assets of the separate account supporting their contracts due to their
ability to exercise investment control over those assets. When this is
the case, the contract owners have been currently taxed on income and
gains attributable to the separate account assets. There is little
guidance in this area, and some features of the Contracts, such as the
flexibility of a contract owner to allocate premium payments and transfer
contract values, have not been explicitly addressed in published rulings.
While we believe that the Contracts do not give contract owners
investment control over 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 Account B assets supporting the Contract.
REQUIRED DISTRIBUTIONS. In order to be treated as an annuity
contract for federal income tax purposes, the Code requires any non-
qualified Contract to contain certain provisions specifying how your
interest in the Contract will be distributed in the event of your
death. The non-qualified Contracts contain provisions that are
intended to comply with these Code requirements, although no
regulations interpreting these requirements have yet been issued. We
intend to review such provisions and modify them if necessary to assure
that they comply with the applicable requirements when such
requirements are clarified by regulation or otherwise.
Other rules may apply to Qualified Contracts.
The following discussion assumes that the Contracts will qualify as
annuity contracts for federal income tax purposes.
TAX TREATMENT OF ANNUITIES
IN GENERAL. We believe that if you are a natural person you will not
be taxed on increases in the value of a Contract until a distribution
occurs or until annuity payments begin. (For these purposes, the
agreement to assign or pledge any portion of the contract value, and,
in the case of a qualified Contract, any portion of an interest in the
qualified plan, generally will be treated as a distribution.)
TAXATION OF NON-QUALIFIED CONTRACTS
NON-NATURAL PERSON. The owner of any annuity contract who is not a
natural person generally must include in income any increase in the
excess of the contract value over the "investment in the contract"
(generally, the premiums or other consideration you paid for the contract
less any nontaxable withdrawals)during the taxable year. There are some
exceptions to this rule and a prospective contract owner that is not a
natural person may wish to discuss these with a tax adviser. The following
discussion generally applies to Contracts owned by natural persons.
WITHDRAWALS. When a withdrawal from a non-qualified Contract occurs,
the amount received will be treated as ordinary income subject to tax
up to an amount equal to the excess (if any) of the contract value
(unreduced by the amount of any surrender charge) immediately before
the distribution over the contract owner's investment in the Contract
at that time. The tax treatment of market value adjustments is
uncertain. You should consult a tax adviser if you are considering
taking a withdrawal from your Contract in circumstances where a market
value adjustment would apply.
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In the case of a surrender under a non-qualified Contract, the amount
received generally will be taxable only to the extent it exceeds the
contract owner's investment in the Contract.
PENALTY TAX ON CERTAIN WITHDRAWALS. In the case of a distribution
from a non-qualified Contract, there may be imposed a federal tax
penalty equal to 10% of the amount treated as income. In general,
however, there is no penalty on distributions:
o made on or after the taxpayer reaches age 59 1/2;
o made on or after the death of a contract owner;
o attributable to the taxpayer's becoming disabled; or
o made as part of a series of substantially equal periodic payments
for the life (or life expectancy) of the taxpayer.
Other exceptions may be applicable under certain circumstances and
special rules may be applicable in connection with the exceptions
enumerated above. A tax adviser should be consulted with regard to
exceptions from the penalty tax.
ANNUITY PAYMENTS. Although tax consequences may vary depending on
the payment option elected under an annuity contract, a portion of each
annuity payment is generally not taxed and the remainder is taxed as
ordinary income. The non-taxable portion of an annuity payment is
generally determined in a manner that is designed to allow you to
recover your investment in the Contract ratably on a tax-free basis
over the expected stream of annuity payments, as determined when
annuity payments start. Once your investment in the Contract has been
fully recovered, however, the full amount of each annuity payment is
subject to tax as ordinary income.
TAXATION OF DEATH BENEFIT PROCEEDS. Amounts may be distributed from
a Contract because of your death or the death of the annuitant.
Generally, such amounts are includible in the income of recipient as
follows: (i) if distributed in a lump sum, they are taxed in the same
manner as a surrender of the Contract, or (ii) if distributed under a
payment option, they are taxed in the same way as annuity payments.
TRANSFERS, ASSIGNMENTS, EXCHANGES AND ANNUITY DATES OF A CONTRACT.
A transfer or assignment of ownership of a Contract, the designation of
an annuitant, the selection of certain dates for commencement of the
annuity phase, or the exchange of a Contract may result in certain tax
consequences to you that are not discussed herein. A contract owner
contemplating any such transfer, assignment or exchange, should consult
a tax advisor as to the tax consequences.
WITHHOLDING. Annuity distributions are generally subject to
withholding for the recipient's federal income tax liability.
Recipients can generally elect, however, not to have tax withheld from
distributions.
MULTIPLE CONTRACTS. All annuity contracts that are issued by us (or
our affiliates) to the same contract owner during any calendar year are
treated as one annuity contract for purposes of determining the amount
includible in such contract owner's income when a taxable distribution
occurs.
TAXATION OF QUALIFIED CONTRACTS
The Contracts are designed for use with several types of qualified
plans. The tax rules applicable to participants in these qualified
plans vary according to the type of plan and the terms and
contributions 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
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be bound by the terms and conditions of such plans to the extent such
terms contradict the Contract, unless the Company consents.
DISTRIBUTIONS. Annuity payments are generally taxed in the same
manner as under a non-qualified Contract. When a withdrawal from a
qualified Contract occurs, a pro rata portion of the amount received is
taxable, generally based on the ratio of the contract owner's
investment in the Contract (generally, the premiums or other
consideration paid for the Contract) to the participant's total accrued
benefit balance under the retirement plan. For qualified Contracts,
the investment in the Contract can be zero. For Roth IRAs,
distributions are generally not taxed, except as described below.
For qualified plans under Section 401(a) and 403(b), the Code requires
that distributions generally must commence no later than the later of
April 1 of the calendar year following the calendar year in which the
contract owner (or plan participant) (i) reaches age 70 1/2 or (ii)
retires, and must be made in a specified form or manner. If the plan
participant is a "5 percent owner" (as defined in the Code),
distributions generally must begin no later than April 1 of the
calendar year following the calendar year in which the contract owner
(or plan participant) reaches age 70 1/2. For IRAs described in
Section 408, distributions generally must commence no later than April
1 of the calendar year following the calendar year in which the
contract owner (or plan participant) reaches age 70 1/2. Roth IRAs
under Section 408A do not require distributions at any time before the
contract owner's death.
WITHHOLDING. Distributions from certain qualified plans generally
are subject to withholding for the contract owner's federal income tax
liability. The withholding rates vary according to the type of
distribution and the contract owner's tax status. The contract owner
may be provided the opportunity to elect not to have tax withheld from
distributions. "Eligible rollover distributions" from section 401(a)
plans and section 403(b)tax-sheltered annuities are subject to a
mandatory federal income tax withholding of 20%. An eligible rollover
distribution is the taxable portion of any distribution from such a
plan, except certain distributions that are required by the Code or
distributions in a specified annuity form. The 20% withholding does
not apply, however, if the contract owner chooses a "direct rollover"
from the plan to another tax-qualified plan or IRA.
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.
REQUIRED DISTRIBUTIONS UPON CONTRACT OWNER'S DEATH
We will not allow any payment of benefits provided under a non-qualified
Contract which do not satisfy the requirements of Section 72(s) of the Code.
If any owner of a non-qualified Contract dies before the annuity start
date, the death benefit payable to the beneficiary will be distributed
as follows: (a) the death benefit must be completely distributed within
5 years of the contract owner's date of death; or (b) the beneficiary
may elect, within the 1-year period after the contract owner's date of
death, to receive the death benefit in the form of an annuity from us,
provided that (i) such annuity is distributed in substantially equal
installments over the life of such beneficiary or over a period not
extending beyond the life expectancy of such beneficiary; and (ii) such
distributions begin not later than 1 year after the contract owner's
date of death.
Notwithstanding (a) and (b) above, if the sole contract owner's
beneficiary is the deceased owner's surviving spouse, then such spouse
may elect to continue the Contract under the same terms as before the
contract owner's death. Upon receipt of such election from the spouse
at our Customer Service Center: (1) all rights of the spouse as
contract owner's beneficiary under the Contract in effect prior to such
election will cease; (2) the spouse will become the owner of the
Contract and will also be treated as the contingent annuitant, if none
has been named and only if the deceased owner was the annuitant; and
(3) all rights and privileges granted by the Contract or allowed by
Golden American will belong to the spouse as contract owner of the
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.
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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.
CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS
Section 401(a) of the Code permits corporate employers to establish
various types of retirement plans for employees, and permits self-
employed individuals to establish these plans for themselves and their
employees. These retirement plans may permit the purchase of the
Contracts to accumulate retirement savings under the plans. Adverse
tax or other legal consequences to the plan, to the participant, or to
both may result if this Contract is assigned or transferred to any
individual as a means to provide benefit payments, unless the plan
complies with all legal requirements applicable to such benefits
before transfer of the Contract. Employers intending to use the
Contract with such plans should seek competent advice.
INDIVIDUAL RETIREMENT ANNUITIES
Section 408 of the Code permits eligible individuals to contribute to
an individual retirement program known as an "Individual Retirement
Annuity" or "IRA." These IRAs are subject to limits on the amount that
can be contributed, the deductible amount of the contribution, the
persons who may be eligible, and the time when distributions commence.
Also, distributions from certain other types of qualified retirement
plans may be "rolled over" or transferred on a tax-deferred basis into
an IRA. There are significant restrictions on rollover or transfer
contributions from Savings Incentive Match Plans (SIMPLE), under which
certain employers may provide contributions to IRAs on behalf of their
employees, subject to special restrictions. Employers may establish
Simplified Employee Pension (SEP) Plans to provide IRA contributions on
behalf of their employees. Sales of the Contract for use with IRAs may
be subject to special requirements of the IRS.
ROTH IRAS
Section 408A of the Code permits certain eligible individuals
to contribute to a Roth IRA. Contributions to a Roth IRA,
which are subject to certain limitations, are not deductible, and
must be made in cash or as a rollover or transfer from another Roth
IRA or other IRA. A rollover from or conversion of an IRA to a Roth
IRA may be subject to tax, and other special rules may apply.
Distributions from a Roth IRA generally are not taxed, except that,
once aggregate distributions exceed contributions to the Roth IRA,
income tax and a 10% penalty tax may apply to distributions made (1)
before age 59 1/2 (subject to certain exceptions) or (2) during the
five taxable years starting with the year in which the first
contribution is made to the Roth IRA.
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 BENEFITS
The Contract includes an Enhanced Death Benefit that in some cases may
exceed the greater of the premium payments or the contract value. The
Internal Revenue Service has not ruled whether an Enhanced Death Benefit
could be characterized as an incidental benefit, the amount of which is
limited in any Code section 401(a) pension or profit-sharing plan or Code
section 403(b) tax sheltered annuity. Employers using the Contract may
want to consult their tax adviser regarding such limitation. Further,
the Internal Revenue Service has not addressed in a ruling of general
applicability whether a death benefit provision such as the Enhanced
Death Benefit provision in the Contract comports with IRA qualification
requirements.
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
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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). A tax adviser should be consulted with respect to legislative
developments and their effect on the Contract.
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[Shaded Section Header]
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MORE INFORMATION ABOUT GOLDEN AMERICAN LIFE INSURANCE COMPANY
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SELECTED FINANCIAL DATA
The following selected financial data prepared in accordance with
generally accepted accounting principles ("GAAP") for Golden
American should be read in conjunction with the financial
statements and notes thereto included in this prospectus.
On October 24, 1997, PFHI Holdings, Inc. ("PFHI"), a Delaware
corporation, acquired all of the outstanding capital stock of
Equitable of Iowa Companies ("Equitable of Iowa"), according to a
merger agreement among Equitable of Iowa, PFHI, and ING Groep N.V.
(the "ING acquisition"). On August 13, 1996, Equitable of Iowa
acquired all of the outstanding capital stock of BT Variable,
Inc., then the parent of Golden American (the "Equitable
acquisition"). For financial statement purposes, the ING
acquisition was accounted for as a purchase effective October 25,
1997 and the Equitable acquisition was accounted for as a purchase
effective August 14, 1996. As a result, the financial data
presented below for periods after October 24, 1997, are presented
on the Post-Merger new basis of accounting, for the period August
14, 1996 through October 24, 1997, are presented on the Post-
Acquisition basis of accounting, and for August 13, 1996 and prior
periods are presented on the Pre-Acquisition basis of accounting.
<TABLE>
SELECTED GAAP BASIS FINANCIAL DATA
(IN THOUSANDS)
Post-Merger | Post-Acquisition
--------------------------------------------|---------------------------------
For the Period For For the Period | For the Period For the Period
January 1, 1999 the Year October 25, | January 1, August 14, 1996
through Ended 1997 through | 1997 through 1996 through
September 30, December 31, December 31, | October 24, December 31,
1999 1998 1997 | 1997 1996
------------ ------------ -------------- | -------------- ---------------
<S> <C> <C> <C> | <C> <C>
Annuity and Interest |
Sensitive Life |
Product Charges....... $ 55,195 $ 39,119 $ 3,834 | $18,288 $ 8,768
Net Income before |
Federal Income Tax.... $ 7,269 $ 10,353 $ (279) | $ (608) $ 570
Net Income (Loss)....... $ 3,551 $ 5,074 $ (425) | $ 729 $ 350
Total Assets............ $7,312,027 $4,752,533 $2,446,395 | N/A $1,677,899
Total Liabilities....... $6,858,151 $4,398,639 $2,219,082 | N/A $1,537,415
Total Stockholder's |
Equity................ $ 453,876 $ 353,894 $ 227,313 | N/A $ 140,484
</TABLE>
<TABLE>
(IN THOUSANDS)
Pre-Acquisition
---------------------------------------
For the Period
January 1, For the Years
1996 through Ended December 31,
August 13, ----------------------
1996 1995 1994
-------------- ---------- ----------
<S> <C> <C> <C>
Annuity and Interest
Sensitive Life
Product Charges....... $12,259 $ 18,388 $ 17,519
Net Income before
Federal Income Tax.... $ 1,736 $ 3,364 $ 2,222
Net Income (Loss)....... $ 3,199 $ 3,364 $ 2,222
Total Assets............ N/A $1,203,057 $1,044,760
Total Liabilities....... N/A $1,104,932 $ 955,254
Total Stockholder's
Equity................ N/A $ 98,125 $ 89,506
</TABLE>
39
<PAGE>
<PAGE>
BUSINESS ENVIRONMENT
The current business and regulatory environment remains
challenging for the insurance industry. The variable annuity
competitive environment is intense and is dominated by a number of
large variable product companies with strong distribution, name
recognition and wholesaling capabilities. Increasing competition
from traditional insurance carriers as well as banks and mutual
fund companies offer consumers many choices. However, overall
demand for variable products remains strong for several reasons
including: strong stock market performance over the last five
years; relatively low interest rates; an aging U. S. population
that is increasingly concerned about retirement and estate
planning, as well as maintaining their standard of living in
retirement; and potential reductions in government and employer-
provided benefits at retirement as well as lower public confidence
in the adequacy of those benefits.
In October of 1997, Golden American introduced three new variable
annuity products (GoldenSelect Access, GoldenSelect ES II and
GoldenSelect Premium Plus) which have contributed significantly to
sales.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
The purpose of this section is to discuss and analyze Golden
American Life Insurance Company's ("Golden American") consolidated
results of operations. In addition, some analysis and information
regarding financial condition and liquidity and capital resources
has also been provided. This analysis should be read jointly with
the consolidated financial statements, related notes and the
Cautionary Statement Regarding Forward-Looking Statements, which
appear elsewhere in the financial report. Golden American reports
financial results on a consolidated basis. The consolidated financial
statements include the accounts of Golden American and its wholly
owned subsidiary, First Golden American Life Insurance Company of
New York ("First Golden," and collectively with Golden American,
the "Companies").
RESULTS OF OPERATIONS
MERGER. On October 23, 1997, Equitable of Iowa Companies'
("Equitable") shareholders approved an Agreement and Plan of
Merger ("Merger Agreement") dated July 7, 1997 among Equitable,
PFHI Holdings, Inc. ("PFHI") and ING Groep N.V. ("ING"). On
October 24, 1997, PFHI, a Delaware corporation, acquired all of
the outstanding capital stock of Equitable according to the Merger
Agreement. PFHI is a wholly owned subsidiary of ING, a global
financial services holding company based in The Netherlands.
Equitable, an Iowa corporation, in turn owned all the outstanding
capital stock of Equitable Life Insurance Company of Iowa
("Equitable Life") and Golden American and their wholly owned
subsidiaries. In addition, Equitable owned all the outstanding
capital stock of Locust Street Securities, Inc., Equitable
Investment Services, Inc. (subsequently dissolved), Directed
Services, Inc. ("DSI"), Equitable of Iowa Companies Capital Trust,
Equitable of Iowa Companies Capital Trust II and Equitable of Iowa
Securities Network, Inc. (subsequently renamed ING Funds
Distributor, Inc.). In exchange for the outstanding capital stock
of Equitable, ING paid total consideration of approximately $2.1
billion in cash and stock and assumed approximately $400 million
in debt. As a result of this transaction, Equitable of Iowa
Companies was merged into PFHI, which was simultaneously renamed
Equitable of Iowa Companies, Inc. ("EIC" or "Parent"), a Delaware
corporation.
For financial statement purposes, the change in control of the
Companies through the ING merger was accounted for as a purchase
effective October 25, 1997. This merger resulted in a new basis of
accounting reflecting estimated fair values of assets and
liabilities at the merger date. As a result, the Companies'
financial statements for periods after October 24, 1997 are
presented on the Post-Merger new basis of accounting.
The purchase price was allocated to EIC and its subsidiaries with
$227.6 million allocated to the Companies. Goodwill of $1.4
billion was established for the excess of the merger cost over the
fair value of the assets and liabilities of EIC with $151.1
million attributed to the Companies. Goodwill resulting
40
<PAGE>
<PAGE>
from the merger is being amortized over 40 years on a straight-line
basis. The carrying value will be reviewed periodically for any
indication of impairment in value.
CHANGE IN CONTROL--ACQUISITION. On August 13, 1996, Equitable
acquired all of the outstanding capital stock of BT Variable, Inc.
("BT Variable") and its wholly owned subsidiaries, Golden American
and DSI. After the acquisition, the BT Variable, Inc. name was
changed to EIC Variable, Inc. On April 30, 1997, EIC Variable,
Inc. was liquidated and its investments in Golden American and DSI
were transferred to Equitable, while the remainder of its net
assets were contributed to Golden American. On December 30, 1997,
EIC Variable, Inc. was dissolved.
For financial statement purposes, the change in control of Golden
American through the acquisition of BT Variable was accounted for
as a purchase effective August 14, 1996. This acquisition resulted
in a new basis of accounting reflecting estimated fair values of
assets and liabilities at the acquisition date. As a result, the
Companies' financial statements for the period August 14, 1996
through October 24, 1997 are presented on the Post-Acquisition
basis of accounting and for August 13, 1996 and prior periods are
presented on the Pre-Acquisition basis of accounting.
The purchase price was allocated to the three companies purchased
- - BT Variable, DSI, and Golden American. The allocation of the
purchase price to Golden American was approximately $139.9
million. Goodwill of $41.1 million was established for the excess
of the acquisition cost over the fair value of the assets and
liabilities and attributed to Golden American. At June 30, 1997,
goodwill was increased by $1.8 million due to the adjustment of
the value of a receivable existing at the acquisition date. Before
the ING merger, goodwill resulting from the acquisition was being
amortized over 25 years on a straight-line basis.
<TABLE>
THE FIRST NINE MONTHS OF 1999 COMPARED TO THE SAME PERIOD OF 1998
PREMIUMS.
PERCENTAGE DOLLAR
NINE MONTHS ENDED SEPTEMBER 30 1999 CHANGE CHANGE 1998
---- ---------- ------ ----
(Dollars in millions)
<S> <C> <C> <C> <C>
Variable annuity premiums:
Separate account................ $1,783.5 64.9% $702.1 $1,081.4
Fixed account................... 539.4 55.6 192.8 346.6
-------- ---- ------ --------
Total variable annuity premiums... 2,322.9 62.7 894.9 1,428.0
Variable life premiums............ 7.0 (38.9) (4.4) 11.4
-------- ---- ------ --------
Total premiums.................... $2,329.9 61.9% $890.5 $1,439.4
======== ==== ====== ========
</TABLE>
For the Companies' variable contracts, premiums collected are not reported as
revenues, but as deposits to insurance liabilities. Revenues for these
products are recognized over time in the form of investment income and
product charges.
Variable annuity separate account premiums increased 64.9% during the
first nine months of 1999. The fixed account portion of the Companies'
variable annuity premiums increased 55.6% during the first nine months
of 1999. These increases resulted from increased sales of the Premium
Plus variable annuity product.
Premiums, net of reinsurance, for variable products from two
significant broker/dealers each having at least ten percent of total
sales for the nine months ended September 30, 1999 totaled $664.2
million, or 29% of total premiums ($142.6 million, or 10%, from the
one significant broker/dealer for the nine months ended September 30,
1998).
41
<PAGE>
<PAGE>
<TABLE>
REVENUES.
PERCENTAGE DOLLAR
NINE MONTHS ENDED JUNE 30 1999 CHANGE CHANGE 1998
---- ---------- ------ ----
(Dollars in millions)
<S> <C> <C> <C> <C>
Annuity and interest sensitive
life product charges............ $ 55.2 104.5% $ 28.2 $ 27.0
Management fee revenue............ 6.8 107.4 3.5 3.3
Net investment income............. 42.7 45.7 13.4 29.3
Realized gains(losses) on
investments..................... (2.2) (607.5) (2.6) 0.4
Other income...................... 7.4 55.0 2.6 4.8
------- ------ ------ ------
Total premiums.................... $ 109.9 69.6% $ 45.1 $ 64.8
======= ====== ====== ======
</TABLE>
Total revenues increased 69.6% in the first nine months of 1999 from
the same period in 1998. Annuity and interest sensitive life product
charges increased 104.5% in the first nine months of 1999 due to
additional fees earned from the increasing block of business
in the separate accounts.
Golden American provides certain managerial and supervisory services
to Directed Services, Inc. ("DSI"). The fee paid to Golden American
for these services, which is calculated as a percentage of average
assets in the variable separate accounts, was $6.8 million and $3.3
million for the first nine months of 1999 and 1998, respectively.
Net investment income increased 45.7% in the first nine months of 1999
due to growth in invested assets from September 30, 1998. The
Companies had $2.2 million of realized losses resulting from the
writedown of two fixed maturities in the second quarter of 1999 and
from the sale of investments in the first nine months of 1999,
compared to gains of $0.4 million in the same period of 1998. Other
income increased $2.6 million to $7.4 million in the first nine months
of 1999 due primarily to income received due to a modified coinsurance
agreement with an unaffiliated reinsurer, which was offset by a
reduction in the Companies' deferred policy acquisition costs.
EXPENSES. Total insurance benefits and expenses increased $44.5
million, or 84.6%, to $97.0 million in the first nine months of 1999.
Interest credited to account balances increased $61.3 million, or
95.6%, to $125.4 million in the first nine months of 1999. The extra
credit bonus on the Premium Plus variable annuity product increased
$49.9 million to $85.7 million at September 30, 1999 resulting in an
increase in interest credited during the first nine months of 1999
compared to the same period in 1998. The bonus interest on the fixed
account increased $2.6 million to $7.6 million at September 30, 1999
resulting in an increase in interest credited during the first nine
months of 1999 compared to the same period in 1998. The remaining
increase in interest credited relates to higher account balances
associated with the Companies' fixed account option within the
variable products.
Commissions increased $49.6 million, or 58.4%, to $134.6 million in
the first nine months of 1999. Insurance taxes, state licenses, and
fees increased $0.9 million, or 32.3%, to $3.5 million in the first
nine months of 1999. Changes in commissions and insurance taxes, state
licenses, and fees are generally related to changes in the level and
composition of variable product sales. Insurance taxes, state
licenses, and fees are impacted by several other factors, which
include an increase in FICA taxes primarily due to bonuses and
expenses for the triennial insurance department examination of Golden
American. Most costs incurred as the result of sales have been deferred,
thus having very little impact on current earnings.
General expenses increased $24.1 million, or 102.5%, to $47.6 million
in the first nine months of 1999. Management expects general expenses
to continue to increase in 1999 as a result of the emphasis on
expanding the salaried wholesaler distribution network and the growth
in sales. The Companies use a network of wholesalers to distribute
products and the salaries and sales bonuses of these wholesalers are
included in
42
<PAGE>
<PAGE>
general expenses. The portion of these salaries and
related expenses that varies directly with production levels is
deferred thus having little impact on current earnings. The increase
in general expenses was partially offset by reimbursements received
from DSI and Equitable Life, an affiliate, for certain advisory,
computer, and other resources and services provided by Golden
American.
The Companies' previous balances of deferred policy acquisition costs
("DPAC"), value of purchased insurance in force ("VPIF"), and unearned
revenue reserve were eliminated and an asset of $44.3 million
representing VPIF was established for all policies in force at the
merger date. During the first nine months of 1999, VPIF was adjusted
to increase amortization by $0.7 million to reflect changes in the
assumptions related to the timing of estimated gross profits. During
the first nine months of 1998, VPIF decreased $2.7 million to adjust
the value of other receivables and increased $0.2 million as a result
of an adjustment to the merger costs. Amortization of DPAC increased
$15.7 million, or 390.7%, in the first nine months of 1999. This
increase resulted from growth in policy acquisition costs deferred
from $133.6 million at September 30, 1998 to $244.8 million at
September 30, 1999, which was generated by expenses associated with
the large sales volume experienced since September 30, 1998. Based on
current conditions and assumptions as to the impact of future events
on acquired policies in force, the expected approximate net
amortization relating to VPIF as of September 30, 1999 is $1.1 million
for the remainder of 1999, $4.3 million in 2000, $4.0 million in 2001,
$3.6 million in 2002, $3.2 million in 2003, and $2.4 million in 2004.
Actual amortization may vary based upon changes in assumptions and
experience.
Amortization of goodwill during the first nine months of 1999 totaled
$2.8 million, unchanged from the first nine months of 1998. Goodwill
resulting from the merger is being amortized on a straight-line basis
over 40 years.
Interest expense on the $25 million surplus note issued in December
1996 and expiring December 2026 was $1.5 million in the first nine
months of 1999, unchanged from the same period of 1998. Interest
expense on the $60 million surplus note issued in December 1998 and
expiring December 2028 was $3.3 million in the first nine months of
1999. Golden American also paid $0.7 million in the first nine months
of 1999 compared to $1.3 million in the same period of 1998 to ING
America Insurance Holdings, Inc. ("ING AIH") for interest on the
reciprocal loan agreement. Interest expense on the revolving note
payable with SunTrust Bank, Atlanta was $0.1 million for the first
nine months of 1999. In addition, Golden American paid interest of
$0.2 million during the first quarter of 1998 on the line of
credit with Equitable, which was repaid with a capital contribution
from the Parent and with funds borrowed from ING AIH.
INCOME. Net income for the first nine months of 1999 was $3.6
million, a decrease of $1.3 million from net income of $4.9 million in
the same period of 1998.
Comprehensive loss for the first nine months of 1999 was $18,000, a
decrease of $5.5 million from comprehensive income of $5.5 million in
the same period of 1998.
43
<PAGE>
<PAGE>
1998 COMPARED TO 1997
The following analysis combines Post-Merger and Post-Acquisition
activity for 1997.
PREMIUMS.
<TABLE>
POST-MERGER COMBINED POST-MERGER | POST-ACQUISITION
For the Period | For the Period
For the Year For the Year October 25, 1997 | January 1, 1997
ended ended through | through
December 31, 1998 December 31, 1997 December 31, 1997 | October 24, 1997
----------------- ----------------- ----------------- | ----------------
(Dollars in millions) |
<S> <C> <C> <C> | <C>
Variable annuity |
premiums: |
Separate account.... $1,513.3 $291.2 $111.0 | $180.2
Fixed account....... 588.7 318.0 60.9 | 257.1
-------- ------ ------ | ------
2,102.0 609.2 171.9 | 437.3
Variable life |
premiums............ 13.8 15.6 1.2 | 14.4
-------- ------ ------ | ------
Total premiums........ $2,115.8 $624.8 $173.1 | $451.7
======== ====== ====== | ======
</TABLE>
For the Companies' variable contracts, premiums collected are not
reported as revenues, but are reported as deposits to insurance
liabilities. Revenues for these products are recognized over time in
the form of investment income and product charges.
Variable annuity separate account premiums increased 419.7% in 1998
primarily due to increased sales of the Premium Plus product
introduced in October of 1997 and the increased sales levels of the
Companies' other products. The fixed account portion of the Companies'
variable annuity premiums increased 85.1% in 1998. Variable life
premiums decreased 11.4% in 1998. Total premiums increased 238.7% in
1998.
During 1998, the Companies' sales were further diversified among
broker/dealers. Premiums, net of reinsurance, for variable products
from two significant broker/dealers having at least ten percent of
total sales for the year ended December 31, 1998 totaled $580.7
million, or 27% of premiums ($328.2 million, or 53% from two
significant broker/dealers for the year ended December 31, 1997).
REVENUES.
<TABLE>
POST-MERGER COMBINED POST-MERGER | POST-ACQUISITION
For the Period | For the Period
For the Year For the Year October 25, 1997 | January 1, 1997
ended ended through | through
December 31, 1998 December 31, 1997 December 31, 1997 | October 24, 1997
----------------- ----------------- ----------------- | ----------------
(Dollars in millions) |
<S> <C> <C> <C> | <C>
Annuity and interest |
sensitive life |
product charges...... $39.1 $22.1 $3.8 | $18.3
Management fee |
revenue.............. 4.8 2.8 0.5 | 2.3
Net investment |
income............... 42.5 26.8 5.1 | 21.7
Realized gains (losses) |
on investments....... (1.5) 0.1 -- | 0.1
Other income........... 5.6 0.7 0.3 | 0.4
----- ----- ---- | -----
$90.5 $52.5 $9.7 | $42.8
===== ===== ==== | =====
</TABLE>
44
<PAGE>
<PAGE>
Total revenues increased 72.3%, or $38.0 million, to $90.5 million in
1998. Annuity and interest sensitive life product charges increased
76.8%, or $17.0 million, to $39.1 million in 1998 due to additional
fees earned from the increasing block of business under management in
the separate accounts and an increase in surrender charge revenues.
This increase was partially offset by the elimination of the unearned
revenue reserve related to in force acquired business at the merger
date, which resulted in lower annuity and interest sensitive life
product charges compared to Post-Acquisition levels.
Golden American provides certain managerial and supervisory services
to DSI. The fee paid to Golden American for these services, which is
calculated as a percentage of average assets in the variable separate
accounts, was $4.8 million for 1998 and $2.8 million for 1997.
Net investment income increased 58.6%, or $15.7 million, to $42.5
million in 1998 from $26.8 million in 1997 due to growth in invested
assets. During 1998, the Company had net realized losses on
investments of $1.5 million, which included a $1.0 million write down
of two impaired bonds, compared to gains of $0.1 million in 1997.
Other income increased $4.9 million to $5.6 million in 1998 due
primarily to income received under a modified coinsurance agreement
with an unaffiliated reinsurer as a result of increased sales.
EXPENSES.
<TABLE>
POST-MERGER COMBINED POST-MERGER | POST-ACQUISITION
For the Period | For the Period
For the Year For the Year October 25, 1997 | January 1, 1997
ended ended through | through
December 31, 1998 December 31, 1997 December 31, 1997 | October 24, 1997
----------------- ----------------- ----------------- | ----------------
(Dollars in millions) |
<S> <C> <C> <C> | <C>
Insurance benefits |
and expenses: |
Annuity and interest |
sensitive life |
benefits: |
Interest credited to |
account balances.. $94.9 $26.7 $7.4 | $19.3
Benefit claims |
incurred in excess |
of account |
balances.......... 2.1 0.1 -- | 0.1
Underwriting, |
acquisition, and |
insurance expense: |
Commission.......... 121.2 36.3 9.4 | 26.9
General Expenses.... 37.6 17.3 3.4 | 13.9
Insurance taxes..... 4.1 2.3 0.5 | 1.8
Policy acquisition |
costs deferred (197.8) (42.7) (13.7) | (29.0)
Amortization: |
Deferred policy |
acquisition |
costs........... 5.1 2.6 0.9 | 1.7
Value of purchased |
insurance in |
force........... 4.7 6.1 0.9 | 5.2
Goodwill............ 3.8 2.0 0.6 | 1.4
------ ----- ----- | -----
$ 75.7 $50.7 $ 9.4 | $41.3
====== ===== ===== | =====
</TABLE>
Total insurance benefits and expenses increased 49.2%, or $25.0
million, in 1998 from $50.7 million in 1997. Interest credited to
account balances increased 255.4%, or $68.2 million, in 1998 from
$26.7 in 1997. The extra credit bonus on the Premium Plus product
introduced in October of 1997 generated a $51.6 million increase in
interest credited during 1998 compared to 1997. The remaining increase
in interest credited related to higher account balances associated
with the Companies' fixed account option within its variable products.
45
<PAGE>
<PAGE>
Commissions increased 234.2%, or $84.9 million, in 1998 from $36.3
million in 1997. Insurance taxes increased 77.0%, or $1.8 million, in
1998 from $2.3 million in 1997. Changes in commissions and insurance
taxes are generally related to changes in the level of variable
product sales. Insurance taxes are impacted by several other factors,
which include an increase in FICA taxes primarily due to bonuses. Most
costs incurred as the result of new sales including the extra credit
bonus were deferred, thus having very little impact on current
earnings.
General expenses increased 117.7%, or $20.3 million, in 1998 from
$17.3 million in 1997. Management expects general expenses to continue
to increase in 1999 as a result of the emphasis on expanding the
salaried wholesaler distribution network. The Companies use a network
of wholesalers to distribute products and the salaries of these
wholesalers are included in general expenses. The portion of these
salaries and related expenses that varies with production levels is
deferred thus having little impact on current earnings. The increase
in general expenses was partially offset by reimbursements received
from Equitable Life, an affiliate, for certain advisory, computer and
other resources and services provided by Golden American.
At the merger date, the Companies' deferred policy acquisition costs
("DPAC"), previous balance of value of purchased insurance in force
("VPIF") and unearned revenue reserve were eliminated and a new asset
of $44.3 million representing VPIF was established for all policies in
force at the merger date. During 1998, VPIF was adjusted to reduce
amortization by $0.2 million to reflect changes in the assumptions
related to the timing of future gross profits. VPIF decreased $2.6
million in the second quarter of 1998 to adjust the value of other
receivables recorded at the time of merger and increased $0.2 million
in the first quarter of 1998 as the result of an adjustment to the
merger costs. The amortization of VPIF and DPAC increased $1.1
million, or 13.0%, in 1998. During the second quarter of 1997, VPIF
was adjusted by $2.3 million to reflect narrower spreads than the
gross profit model assumed.
Amortization of goodwill for the year ended December 31, 1998 totaled
$3.8 million compared to $2.0 million for the year ended December 31,
1997.
Interest expense on the $25 million surplus note issued December 1996
and expiring December 2026 was $2.1 million for the year ended
December 31, 1998, unchanged from the same period of 1997. In
addition, Golden American incurred interest expense of $0.2 million in
1998 compared to $0.5 million in 1997 on the line of credit with
Equitable which was repaid with a capital contribution. Golden
American also paid $1.8 million in 1998 to ING America Insurance
Holdings, Inc. ("ING AIH") for interest on the reciprocal loan
agreement. Interest expense on the revolving note payable with
SunTrust Bank, Atlanta was $0.3 million for the year ended December
31, 1998.
INCOME. Net income for 1998 was $5.1 million, an increase of $4.8
million from $0.3 million in 1997.
Comprehensive income for 1998 was $3.9 million, an increase of $1.8
million from $2.1 million in 1997.
1997 COMPARED TO 1996
The following analysis combines Post-Merger and Post-Acquisition
activity for 1997 and Post-Acquisition and Pre-Acquisition activity
for 1996 for comparison purposes. Such a comparison does not
recognize the impact of the purchase accounting and goodwill
amortization except for the periods after August 13, 1996.
46
<PAGE>
<PAGE>
PREMIUMS.
<TABLE>
POST-MERGER | COMBINED | POST-ACQUISITION
-------------------|-------------------|-----------------
For the Period | | For the Period
October 25, 1997 | For the Year | January 1, 1997
through | ended | through
December 31, 1997 | December 31, 1997 | October 24, 1997
-------------------|-------------------|-----------------
(Dollars in millions)
<S> <C> | <C> | <C>
Variable annuity | |
premiums: | |
Separate account............. $111.0 | $291.2 | $180.2
Fixed account................ 60.9 | 318.0 | 257.1
------ | ------ | ------
171.9 | 609.2 | 437.3
Variable life premiums......... 1.2 | 15.6 | 14.4
------ | ------ | ------
Total premiums................. $173.1 | $624.8 | $451.7
====== | ====== | ======
</TABLE>
<TABLE>
POST-ACQUISITION | COMBINED | PRE-ACQUISITION
-------------------|-------------------|-----------------
For the Period | | For the Period
August 14, 1996 | For the Year | January 1, 1996
through | ended | through
December 31, 1996 | December 31, 1996 | August 13, 1996
-------------------|-------------------|-----------------
(Dollars in millions)
<S> <C> | <C> | <C>
Variable annuity | |
premiums: | |
Separate account............. $ 51.0 | $182.4 | $131.4
Fixed account................ 118.3 | 245.3 | 127.0
------ | ------ | ------
169.3 | 427.7 | 258.4
Variable life premiums......... 3.6 | 14.1 | 10.5
------ | ------ | ------
Total premiums................. $172.9 | $441.8 | $268.9
====== | ====== | ======
</TABLE>
Variable annuity separate account and variable life premiums increased
59.6% and 10.1%, respectively in 1997. During 1997, stock market
returns, a relatively low interest rate environment and flat yield
curve have made returns provided by variable annuities and mutual funds
more attractive than fixed rate products such as certificates of
deposits and fixed annuities. The fixed account portion of the
Companies' variable annuity premiums increased 29.7% in 1997 due to
the Companies' marketing emphasis on fixed rates during the second
and third quarters. Premiums, net of reinsurance, for variable
products from two significant broker/dealers having at least ten
percent of total sales for the year ended December 31, 1997, totaled
$328.2 million, or 53% of premiums ($298.0 million or 67% from two
significant broker/dealers for the year ended December 31, 1996).
47
<PAGE>
<PAGE>
REVENUES.
<TABLE>
POST-MERGER | COMBINED | POST-ACQUISITION
-------------------|-------------------|-----------------
For the Period | | For the Period
October 25, 1997 | For the Year | January 1, 1997
through | ended | through
December 31, 1997 | December 31, 1997 | October 24, 1997
-------------------|-------------------|-----------------
(Dollars in millions)
<S> <C> | <C> | <C>
Annuity and interest sensitive | |
life product charges......... $3.8 | $22.1 | $18.3
Management fee revenue......... 0.5 | 2.8 | 2.3
Net investment income.......... 5.1 | 26.8 | 21.7
Realized gains (losses) on | |
investments.................. -- | 0.1 | 0.1
Other Income................... 0.3 | 0.7 | 0.4
---- | ----- | -----
$9.7 | $52.5 | $42.8
==== | ===== | =====
</TABLE>
<TABLE>
POST-ACQUISITION | COMBINED | PRE-ACQUISITION
-------------------|-------------------|-----------------
For the Period | | For the Period
August 14, 1996 | For the Year | January 1, 1996
through | ended | through
December 31, 1996 | December 31, 1996 | August 13, 1996
-------------------|-------------------|-----------------
(Dollars in millions)
<S> <C> | <C> | <C>
Annuity and interest sensitive | |
life product charges......... $ 8.8 | $21.0 | $12.2
Management fee revenue......... 0.9 | 2.3 | 1.4
Net investment income.......... 5.8 | 10.8 | 5.0
Realized gains (losses) on | |
investments.................. -- | (0.4) | (0.4)
Other income 0.5 | 0.6 | 0.1
----- | ----- | -----
$16.0 | $34.3 | $18.3
===== | ===== | =====
</TABLE>
Total revenues increased 53.3%, or $18.2 million, to $52.5 million in
1997. Annuity and interest sensitive life product charges increased
5.2%, or $1.1 million in 1997 due to additional fees earned from the
increasing block of business under management in the Separate Accounts
and an increase in the collection of surrender charges.
Golden American provides certain managerial and supervisory services
to DSI. This fee, calculated as a percentage of average assets in the
variable separate accounts, was $2.8 million for 1997 and $2.3 million
for 1996.
Net investment income increased 148.3%, or $16.0 million, to $26.8
million in 1997 from $10.8 million in 1996 due to growth in invested
assets. During 1997, the Company had net realized gains on the
disposal of investments, which were the result of voluntary sales, of
$0.1 million compared to net realized losses of $0.4 million in 1996.
48
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EXPENSES.
<TABLE>
POST-MERGER | COMBINED | POST-ACQUISITION
-------------------|-------------------|-----------------
For the Period | | For the Period
October 25, 1997 | For the Year | January 1, 1997
through | ended | through
December 31, 1997 | December 31, 1997 | October 24, 1997
-------------------|-------------------|-----------------
(Dollars in millions)
<S> <C> | <C> | <C>
Insurance benefits and | |
expenses: | |
Annuity and interest | |
sensitive life benefits: | |
Interest credited to account | |
balances................... $ 7.4 | $ 26.7 | $ 19.3
Benefit claims incurred in | |
excess of account balances. -- | 0.1 | 0.1
Underwriting, acquisition and | |
insurance expenses: | |
Commissions.................. 9.4 | 36.3 | 26.9
General expenses............. 3.4 | 17.3 | 13.9
Insurance taxes.............. 0.5 | 2.3 | 1.8
Policy acquisition costs | |
deferred................... (13.7) | (42.7) | (29.0)
Amortization: | |
Deferred policy acquisition | |
costs...................... 0.9 | 2.6 | 1.7
Present value of in force | |
acquired................... 0.9 | 6.1 | 5.2
Goodwill..................... 0.6 | 2.0 | 1.4
------ | ------ | ------
$ 9.4 | $ 50.7 | $ 41.3
====== | ====== | ======
</TABLE>
<TABLE>
POST-ACQUISITION | COMBINED | PRE-ACQUISITION
-------------------|-------------------|-----------------
For the Period | | For the Period
August 14, 1996 | For the Year | January 1, 1996
through | ended | through
December 31, 1996 | December 31, 1996 | August 13, 1996
-------------------|-------------------|-----------------
(Dollars in millions)
<S> <C> | <C> | <C>
Insurance benefits and | |
expenses: | |
Annuity and interest sensitive | |
life benefits: | |
Interest credited to account | |
balances.................. $ 5.7 | $ 10.1 | $ 4.4
Benefit claims incurred in | |
excess of account | |
balances.................. 1.3 | 2.2 | 0.9
Underwriting, acquisition and | |
insurance expenses: | |
Commissions................. 9.9 | 26.5 | 16.6
General expenses............ 5.9 | 15.3 | 9.4
Insurance taxes............. 0.7 | 1.9 | 1.2
Policy acquisition costs.... | |
deferred (11.7) | (31.0) | (19.3)
Amortization: | |
Deferred policy acquisition | |
costs..................... 0.2 | 2.6 | 2.4
Present value of in force | |
acquired.................. 2.7 | 3.7 | 1.0
Goodwill.................... 0.6 | 0.6 | --
------ | ------ | ------
$ 15.3 | $ 31.9 | $ 16.6
====== | ====== | ======
</TABLE>
Total insurance benefits and expenses increased 59.3%, or $18.8
million, in 1997 from $31.9 million in 1996. Interest credited to
account balances increased 164.4%, or $16.6 million, in 1997 as a
result of higher account balances associated with the Company's fixed
account option within its variable products.
Commissions increased 37.3%, or $9.8 million, in 1997 from $26.5
million in 1996. Insurance taxes increased 23.3%, or $0.4 million, in
1997 from $1.9 million in 1996. Increases and decreases in
commissions and insurance taxes are generally related to changes in
the level of variable product sales.
49
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<PAGE>
Insurance taxes are also impacted by several other factors which include
an increase in FICA taxes primarily due to bonuses and an increase in
state licenses and fees. Most costs incurred as the result of new sales
were deferred, thus having very little impact on earnings.
General expenses increased 12.6%, or $2.0 million, in 1997 from $15.3
million in 1996 due in part to certain expenses associated with the
merger occurring on October 24, 1997. In addition, the Company uses a
network of wholesalers to distribute its products and the salaries of
these wholesalers are included in general expenses. The portion of
these salaries and related expenses which vary with sales production
levels are deferred, thus having little impact on earnings. This
increase in general expenses was partially offset by reimbursements
received from Equitable Life, an affiliate, for certain advisory,
computer and other resources and services provided by Golden American.
During the second quarter of 1997, present value of in force acquired
("PVIF") was unlocked by $2.3 million to reflect narrower current
spreads than the gross profit model assumed. The Company's deferred
policy acquisition costs ("DPAC"), previous balance of PVIF and
unearned revenue reserve, as of the merger date, were eliminated and
an asset of $44.3 million representing PVIF was established for all
policies in force at the merger date. The amortization of PVIF and
DPAC increased $2.4 million, or 37.1%, in 1997. Based on current
conditions and assumptions as to the impact of future events on
acquired policies in force, the expected approximate net amortization
for the next five years, relating to the PVIF as of December 31, 1997,
is $6.2 million in 1998, $6.0 million in 1999, $5.6 million in 2000,
$5.0 million in 2001 and $4.2 million in 2002.
Amortization of goodwill for the year ended December 31, 1997 totaled
$2.0 million compared to $0.6 million for the year ended December 31,
1996.
Interest expense on the $25 million surplus note issued December 1996
was $2.0 million for the year ended December 31, 1997. Interest on
any line of credit borrowings was charged at the rate of Equitable's
monthly average aggregate cost of short-term funds plus 1.00%. During
1997, the Company paid $0.6 million to Equitable for interest on the
line of credit.
INCOME. Net income on a combined basis for 1997 was $0.3 million, a
decrease of $3.2 million, or 91.4%, from 1996.
FINANCIAL CONDITION
RATINGS. During 1998, the Companies' ratings were upgraded by
Standard & Poor's Rating Services ("Standard & Poor's") from AA to
AA+. During the first quarter of 1999, the Companies' ratings were
upgraded by Duff & Phelps Credit Rating Company from AA+ to AAA.
INVESTMENTS. The financial statement carrying value and amortized
cost basis of the Companies' total investment portfolio grew 8.7% and
10.5%, respectively, during the first nine months of 1999. All of the
Companies' investments, other than mortgage loans on real estate, are
carried at fair value in the Companies' financial statements. As such,
growth in the carrying value of the Companies' investment portfolio
included changes in unrealized appreciation and depreciation of fixed
maturities as well as growth in the cost basis of these securities.
Growth in the cost basis of the Companies' investment portfolio
resulted from the investment of premiums from the sale of the
Companies' fixed account options. The Companies manage the growth of
insurance operations in order to maintain adequate capital ratios. To
support the fixed account options of the Companies' variable insurance
products, cash flow was invested primarily in fixed maturities and
short-term investments.
At September 30, 1999 and December 31, 1998, the Companies had no
investments in default. At September 30, 1999 and December 31, 1998,
the Companies' investment portfolio had a yield of 6.6% and 6.4%,
respectively.
50
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The Companies estimate the total investment portfolio, excluding
policy loans, had a fair value approximately equal to 98.0%
of amortized cost value at September 30, 1999 (100.2% at December
31, 1998).
Fixed Maturities: At September 30, 1999, the Companies had fixed
maturities with an amortized cost of $815.0 million and an estimated
fair value of $798.7 million. At December 31, 1998, the Companies had
fixed maturities with an amortized cost of $739.8 million and an
estimated fair value of $742.0 million.
The Companies classify 100% of securities as available for sale. At
September 30, 1999, net unrealized depreciation on fixed maturities of
$16.3 million was comprised of gross appreciation of $0.8 million and
gross depreciation of $17.1 million. Net unrealized holding losses on
these securities, net of adjustments to VPIF, DPAC, and deferred
income taxes of $4.0 million, was included in stockholder's equity at
September 30, 1999. At December 31, 1998 net unrealized appreciation
of fixed maturities of $2.2 million was comprised of gross
appreciation of $6.7 million and gross depreciation of $4.5 million.
Net unrealized holding gains on these securities, net of adjustments
to VPIF, DPAC, and deferred income taxes of $1.0 million was included
in stockholder's equity at December 31, 1998.
The individual securities in the Companies' fixed maturities portfolio
(at amortized cost) include investment grade securities, which include
securities issued by the U.S. government, its agencies, and
corporations, that are rated at least A- by Standard & Poor's ($528.0
million or 64.8% at September 30, 1999 and $477.4 million or 64.5% at
December 31, 1998), that are rated BBB+ to BBB- by Standard & Poor's
($138.0 million or 16.9% at September 30, 1999 and $124.0 million or
16.8% at December 31, 1998) and below investment grade securities
which are securities issued by corporations that are rated BB+ to CCC-
by Standard & Poor's ($72.3 million or 8.9% at September 30, 1999 and
$51.6 million or 7.0% at December 31, 1998). Securities not rated by
Standard & Poor's had a National Association of Insurance
Commissioners ("NAIC") rating of 1, 2, 3 or 4 ($76.7 million or 9.4%
at September 30, 1999 and $86.8 million or 11.7% at December 31,
1998). The Companies' fixed maturity investment portfolio had a
combined yield at amortized cost of 6.6% at September 30, 1999 and
6.5% at December 31, 1998.
Fixed maturities rated BBB+ to BBB- may have speculative
characteristics and changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity of the
issuer to make principal and interest payments than is the case with
higher rated fixed maturities.
At September 30, 1999, the amortized cost value of the Companies'
total investment in below investment grade securities, excluding
mortgage-backed securities, was $73.7 million, or 7.4%, of the
Companies' investment portfolio ($52.7 million, or 5.9%, at December
31, 1998). The Companies intend to purchase additional below
investment grade securities but do not expect the percentage of the
portfolio invested in such securities to exceed 10% of the investment
portfolio. At September 30, 1999, the yield at amortized cost on the
Companies' below investment grade portfolio was 7.8% compared to 6.6%
for the Companies' investment grade corporate bond portfolio. AAt
December 31, 1998, the yield at amortized cost on the Companies' below
investment grade portfolio was 7.9% compared to 6.4% for the
Companies' investment grade corporate bond portfolio. The Companies
estimate the fair value of the below investment grade portfolio was
$70.5 million, or 95.6% of amortized cost value, at September 30, 1999
($51.7 million, or 98.1% of amortized cost value, at December 31,
1998).
Below investment grade securities have different characteristics than
investment grade corporate debt securities. Risk of loss upon default
by the borrower is significantly greater with respect to below
investment grade securities than with other corporate debt securities.
Below investment grade securities are generally unsecured and are
often subordinated to other creditors of the issuer. Also, issuers of
below investment grade securities usually have higher levels of debt
and are more sensitive to adverse economic conditions, such as a
recession or increasing interest rates, than are investment grade
issuers. The Companies attempt to reduce the overall risk in the below
investment grade portfolio, as in all investments, through careful
credit analysis, strict investment policy guidelines, and
diversification by company and by industry.
51
<PAGE>
<PAGE>
The Companies analyze the investment portfolio, including below
investment grade securities, at least quarterly in order to determine
if the Companies' ability to realize the carrying value on any
investment has been impaired. For debt and equity securities, if
impairment in value is determined to be other than temporary (i.e. if
it is probable the Companies will be unable to collect all amounts due
according to the contractual terms of the security), the cost basis of
the impaired security is written down to fair value, which becomes the
new cost basis. The amount of the write-down is included in earnings
as a realized loss. Future events may occur, or additional or updated
information may be received, which may necessitate future write-downs
of securities in the Companies' portfolio. Significant write-downs in
the carrying value of investments could materially adversely affect
the Companies' net income in future periods.
During the nine months ended September 30, 1999 and Ifor the year
ended December 31, 1998, fixed maturities designated as available for
sale with a combined amortized cost of $170.6 million and $145.3
million, respectively, were called or repaid by their issuers. In
total, net pre-tax losses from sales, calls, and repayments of fixed
maturities amounted to $2.2 million and $0.5 million, for the first
nine months of 1999 and for the year ended December 31, 1998,
respectively.
During the fourth quarter of 1998, Golden American determined that the
carrying value of two bonds exceeded their estimated net realizable
value. As a result, at December 31, 1998, Golden American
recognized a total pre-tax loss of approximately $1.0 million to
reduce the carrying value of the bonds to their combined net
realizable value of $2.9 million. During the second quarter of 1999,
further information was received regarding these bonds and Golden
American determined that the carrying value of the two bonds exceeded
their estimated net realizeable value. As a result, at June 30, 1999
Golden American recognized a total pre-tax loss of approximately $1.6
million to further reduce the carrying value of the bonds to their
combined net realizeable value of $1.1 million.
Equity Securities: At September 30, 1999 and December 31, 1998,
Eequity securities represented 1.5% and 1.6%, respectively, of the
Companies' investment portfolio. At September 30, 1999 and December
31, 1998, the Companies owned equity securities with a cost of $14.4
million and an estimated fair value of $13.7 million and $11.5
million, respectively. At September 30, 1999, net unrealized
depreciation of equity securities of $0.7 million was comprised of
gross appreciation of $0.3 million and gross depreciation of
$1.0 million at December 31, 1998 net unrealized depreciation of
equity securities was comprised entirely of gross depreciation of
$2.9 million . Equity securities are primarily comprised of
investments in shares of the mutual funds underlying the Companies'
registered separate accounts.
Mortgage Loans on Real Estate: Mortgage loans on real estate
represented 9.5% and 10.9% of the Companies' investment portfolio at
September 30, 1999 and at December 31, 1998, respectively. Mortgages
outstanding at amortized cost were $93.9 million September 30, 1999
with an estimated fair value of $91.2 million. Mortgages outstanding
were $97.3 million at December 31, 1998 with an estimated fair value
of $99.8 million. At September 30, 1999, the Companies' mortgage loan
portfolio included 57 loans with an average size of $1.6 million and
average seasoning of 0.8 years if weighted by the number of loans. At
December 31, 1998, Tthe Companies' mortgage loan portfolio includeds
57 loans with an average size of $1.7 million and average seasoning of
0.9 years if weighted by the number of loans. The Companies' mortgage
loans on real estate are typically secured by occupied buildings in
major metropolitan locations and not speculative developments and are
diversified by type of property and geographic location.
Mortgage loans on real estate have been analyzed by geographical
location with concentrations by state identified as California (12% in
1998 and 1997), Utah (11% in 1998, 13% in 1997) and Georgia (10% in
1998, 11% in 1997). There are no other concentrations of mortgage
loans in any state exceeding ten percent at December 31, 1998 and
1997. Mortgage loans on real estate have also been analyzed by
collateral type with significant concentrations identified in office
buildings (36% in 1998, 43% in 1997), industrial buildings (32% in
1998, 33% in 1997) and retail facilities (20% in 1998, 15% in 1997).
As of September 30, 1999, there have been no significant changes to
the concentrations of mortgage loans on real estate compared to December
31, 1998. At September 30, 1999 and December 31, 1998, the yield on
the Companies' mortgage loan portfolio was 7.3%.
52
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<PAGE>
At September 30, 1999 and December 31, 1998, no mortgage loan on real
estate was delinquent by 90 days or more. The Companies' loan
investment strategy is consistent with other life insurance
subsidiaries of ING in the U.S. The insurance subsidiaries of EIC have
experienced a historically low default rate in their mortgage loan
portfolios.
OTHER ASSETS. Accrued investment income increased $2.3 million during
the first nine months of 1999 due to an increase in the overall size
of the portfolio resulting from the investment of premiums allocated
to the fixed account options of the Companies' variable products.
DPAC represents certain deferred costs of acquiring insurance
business, principally first year commissions and interest bonuses,
extra credit bonuses and other expenses related to the production of
new business after the merger. The Companies' previous balances of
DPAC and VPIF were eliminated as of the merger date, and an asset
representing VPIF was established for all policies in force at the
merger date. VPIF is amortized into income in proportion to the
expected gross profits of in force acquired business in a manner
similar to DPAC amortization. Any expenses which vary directly with
the sales of the Companies' products are deferred and amortized. At
September 30, 1999, the Companies had DPAC and VPIF balances of $439.2
million and $33.0 million ($205.0 million and $36.0 million,
respectively at December 31, 1998). During the first nine months of
1998, VPIF decreased $2.7 million to adjust the value of other
receivables and increased $0.2 million as a result of an adjustment to
the merger costs.
Property and equipment increased $5.7 million, or 77.1%, during the
first nine months of 1999, due to the purchase of furniture and other
equipment for Golden American's new offices in West Chester,
Pennsylvania. Property and equipment increased $5.8 million during
1998, due to installation of a new policy administration system,
introduction of an imaging system as well as the growth in the
business.
Goodwill totaling $151.1 million, representing the excess of the
acquisition cost over the fair value of net assets acquired, was
established at the merger date. Accumulated amortization of goodwill
as of September 30, 1999 and December 31, 1998 was $7.2 million and
$4.4 million, respectively.
Other assets increased $35.8 million during the first nine months of
1999 due mainly to an increase in a receivable from the separate
account. Other assets increased $5.5 million during 1998 due mainly
to an increase in amounts due from an unaffiliated reinsurer under a
modified coinsurance agreement.
At September 30, 1999, the Companies had $5.6 billion of separate
account assets compared to $3.4 billion at December 31, 1998. The
increase in separate account assets resulted from market appreciation,
increased transfer activity, and sales of the Companies' variable
annuity products, net of redemptions. At December 31, 1998, the
Companies had $3.4 billion of separate account assets compared to $1.6
billion at December 31, 1997. The increase in separate account assets
resulted from market appreciation and growth in sales of the
Companies' variable annuity products, net of redemptions.
At September 30, 1999, the Companies had total assets of $7.3 billion,
a 53.9% increase from December 31, 1998. At December 31, 1998,
the Companies had total assets of $4.8 billion, an increase of 94.3%
from December 31, 1997.
LIABILITIES. In conjunction with the volume of variable annuity
sales, the Companies' total liabilities increased $2.5 billion, or
55.9%, during the first nine months of 1999 and totaled $6.9 billion
at September 30, 1999. At September 30, 1999, future policy benefits
for annuity and interest sensitive life products increased $128.3
million, or 14.6%, to $1.0 billion reflecting premium growth in the
Companies' fixed account options of its variable products, net of
transfers to the separate accounts. Market appreciation, increased
transfer activity, and premiums, net of redemptions, accounted for the
$2.2 billion, or 64.9%, increase in separate account liabilities to
$5.6 billion at September 30, 1999.
In conjunction with the volume of variable annuity sales, the
Companies' total liabilities increased $2.2 billion, or 98.2%, during
1998 and totaled $4.4 billion at December 31, 1998. Future policy
benefits for annuity and interest sensitive life products increased
$375.8 million, or 74.4%, to $881.1 million reflecting premium growth
in the Companies' fixed account option of its variable products.
Market appreciation and premium growth, net of redemptions, accounted
for the $1.7 billion, or 106.3%, increase in separate account
liabilities to $3.4 billion at December 31, 1998.
53
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<PAGE>
On September 30, 1999, Golden American issued a $75 million, 7.75%
surplus note to ING AIH, which matures on September 29, 2029.
On December 30, 1998, Golden American issued a $60 million, 7.25%
surplus note to Equitable Life, which matures on December 29, 2028.
On December 17, 1996, Golden American issued a $25 million, 8.25%
surplus note to Equitable which matures on December 17, 2026. As a
result of the merger, the surplus note is now payable to EIC.
At September 30, 1999, other liabilities increased $47.5 million from
$32.6 million at December 31, 1998, due primarily to increases in
securities payables and remittances to be applied.
At December 31, 1998, other liabilities increased $15.3 million from
$17.3 million at December 31, 1997, due primarily to increases in
accounts payable, outstanding checks, guaranty fund assessment
liability, and pension liability.
The effects of inflation and changing prices on the Companies'
financial position are not material since insurance assets and
liabilities are both primarily monetary and remain in balance. An
effect of inflation, which has been low in recent years, is a decline
in stockholder's equity when monetary assets exceed monetary
liabilities.
STOCKHOLDER'S EQUITY. Additional paid-in capital increased $100.0
million, or 28.8%, from December 31, 1998 to $447.6 million at
September 30, 1999 due to capital contributions from the Parent.
Additional paid-in capital increased $122.6 million, or 54.5%, from
December 31, 1997 to $347.6 million at December 31, 1998 primarily due
to capital contributions from the Parent.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity is the ability of the Companies to generate sufficient cash
flows to meet the cash requirements of operating, investing, and
financing activities. The Companies' principal sources of cash are
variable annuity premiums and product charges, investment income,
maturing investments, proceeds from debt issuance, and capital
contributions made by the Parent. Primary uses of these funds are
payments of commissions and operating expenses, interest and extra
premium credits, investment purchases, repayment of debt, as well as
withdrawals and surrenders.
Net cash used in operating activities was $60.0 million in the first
nine months of 1999 compared to $22.7 million in the same period of
1998. Net cash used in operating activities was $63.9 million in 1998
compared to $4.8 million in 1997. The Companies have predominantly had
negative cash flows from operating activities since Golden American
started issuing variable insurance products in 1989. These negative
operating cash flows result primarily from the funding of commissions
and other deferrable expenses related to the continued growth in the
variable annuity products. The 1998 increase in net cash used in
operating activities resulted principally from the introduction of
Golden American's extra premium credit product in October 1997. In
1998, $54.4 million in extra premium credits was added to contract
holders' account values versus $2.8 million in 1997.
Net cash used in investing activities was $111.3 million during the
first nine months of 1999 as compared to $224.5 million in the same
period of 1998. This decrease is primarily due to greater net
purchases of fixed maturities, equity securities, and mortgage loans
on real estate during the first nine months of 1998 than in the same
period of 1999. Net purchases of fixed maturities reached $79.7
million during the first nine months of 1999 versus $199.0 million in
the same period of 1998. Net sales of mortgage loans on real estate
were $3.2 million during the first nine months of 1999 compared to net
purchases of $13.2 million during the first nine months of 1998.
Net cash used in investing activities was $390.0 million during 1998
as compared to $198.5 million in 1997. This increase is primarily due
to greater net purchases of fixed maturities resulting from an
increase in funds available from net fixed account deposits. Net
purchases of fixed maturities reached
54
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$331.3 million in 1998 versus $135.3 million in 1997. Net purchases
of mortgage loans on real estate, on the other hand, declined to $12.6
million from $51.2 at December 31, 1997in the prior year. In 1998,
net purchases of short-term investments were unusually high due to
the investment of the remaining proceeds of Golden American's $60.0
million surplus note issued on December 30, 1998.
Net cash provided by financing activities was $177.5 million during
the first nine months of 1999 compared to $245.1 million during the
same period of 1998. In the first nine months of 1999, net cash
provided by financing activities was positively impacted by net fixed
account deposits of $441.7 million compared to $300.0 million in the
same period of 1998. This increase was offset by net reallocations to
the Companies' separate accounts, which increased to $439.2 million
from $163.5 million during the prior year, and by a decrease in net
borrowings of $54.8 million in the first nine months of 1999 compared
to the first nine months of 1998. In the first nine months of 1999,
another important source of cash provided by financing activities was
$100.0 million in capital contributions from the Parent compared to
$53.8 million in the first nine months of 1998. In addition, another
source of cash provided by financing activities during the third
quarter of 1999 was $75.0 million in proceeds from a surplus note
with ING AIH.
Net cash provided by financing activities was $439.5 million during
1998 as compared to $218.6 million during the prior year. In 1998, net
cash provided by financing activities was positively impacted by net
fixed account deposits of $520.8 million compared to $303.6 million in
1997. This increase was partially offset by net reallocations to the
Companies' separate accounts, which increased to $239.7 million from
$110.1 million during the prior year. In 1998, other important sources
of cash provided by financing activities were $98.4 million of capital
contributions from the Parent and $60.0 million of proceeds from the
issuance of a surplus note on December 30, 1998. The Companies have
used part of the proceeds of the surplus note to repay outstanding
short-term debt.
The Companies' liquidity position is managed by maintaining adequate
levels of liquid assets, such as cash or cash equivalents and short-
term investments. Additional sources of liquidity include borrowing
facilities to meet short-term cash requirements. Golden American
maintains a $65.0 million reciprocal loan agreement with ING AIH,
which expires on December 31, 2007. In addition, the Companies
have an $85.0 million revolving note facility with SunTrust Bank,
Atlanta, which expires on July 31, 2000. Management believes that
these sources of liquidity are adequate to meet the Companies'
short-term cash obligations.
Based on current trends, the Companies expect to continue to use net
cash in operating activities, given the continued growth of the
variable annuity products. It is anticipated that a continuation of
capital contributions from the Parent and the issuance of additional
surplus notes will cover these net cash outflows. ING is committed to
the sustained growth of Golden American. During 1999, ING will
maintain Golden American's statutory capital and surplus at the end of
each quarter at a level such that: 1) the ratio of Total Adjusted
Capital divided by Company Action Level Risk Based Capital exceeds
300%; 2) the ratio of Total Adjusted Capital (excluding surplus notes)
divided by Company Action Level Risk Based Capital exceeds 200%; and
3) Golden American's statutory capital and surplus exceeds the
"Amounts Accrued for Expense Allowances Recognized in Reserves" as
disclosed on page 3, Line 13A of Golden American's Statutory
Statement.
During the first quarter of 1999, Golden American's operations were
moved to a new site in West Chester, Pennsylvania. During the third
quarter of 1999, Golden American occupied an additional 20,000 square
feet and currently occupies 85,000 square feet of leased space, its
affiliate occupies 20,000 square feet, and it has made commitments for
an additional 20,000 square feet to be occupied by itself or its
affiliates during the fourth quarter of 1999. Previously, Golden
American's home office operations were housed in leased locations in
Wilmington, Delaware and various locations in Pennsylvania, which were
leased on a short-term basis for use in the transition to the new
office building. Golden American's New York subsidiary is housed in
leased space in New York, New York. The Companies intend to spend
approximately $1.0 million on capital needs during the remainder of
1999.
The ability of Golden American to pay dividends to its Parent is
restricted. Prior approval of insurance regulatory authorities is
required for payment of dividends to the stockholder which exceed an
annual
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limit. During 1999, Golden American cannot pay dividends to its
Parent without prior approval of statutory authorities.
Under the provisions of the insurance laws of the State of New York,
First Golden cannot distribute any dividends to its stockholder,
Golden American, unless a notice of its intent to declare a dividend
and the amount of the dividend has been filed with the New York
Insurance Department at least thirty days in advance of the proposed
declaration. If the Superintendent of the New York Insurance Department
finds the financial condition of First Golden does not warrant the
distribution, the Superintendent may disapprove the distribution by
giving written notice to First Golden within thirty days after the
filing. The management of First Golden does not anticipate paying
any dividends to Golden American during 1999.
The NAIC's risk-based capital requirements require insurance companies
to calculate and report information under a risk-based capital
formula. These requirements are intended to allow insurance regulators
to monitor the capitalization of insurance companies based upon the
type and mixture of risks inherent in a company's operations. The
formula includes components for asset risk, liability risk, interest
rate exposure and other factors. The Companies have complied with the
NAIC's risk-based capital reporting requirements. Amounts reported
indicate the Companies have total adjusted capital well above all
required capital levels.
Reinsurance: At September 30, 1999 and at December 31, 1998, Golden
American had reinsurance treaties with four unaffiliated reinsurers
and one affiliated reinsurer covering a significant portion of the
mortality risks under its variable contracts. Golden American remains
liable to the extent its reinsurers do not meet their obligations
under the reinsurance agreements.
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<PAGE>
MARKET RISK AND RISK MANAGEMENT
Asset/liability management is integrated into many aspects of the
Companies' operations, including investment decisions, product
development and crediting rates determination. As part of the risk
management process, different economic scenarios are modeled,
including cash flow testing required for insurance regulatory
purposes, to determine that existing assets are adequate to meet
projected liability cash flows. Key variables include
contractholder behavior and the variable separate accounts'
performance.
Contractholders bear the majority of the investment risks related
to the variable products. Therefore, the risks associated with the
investments supporting the variable separate accounts are assumed
by contractholders, not by the Companies (subject to, among other
things, certain minimum guarantees). The Companies' products also
provide certain minimum death benefits that depend on the
performance of the variable separate accounts. Currently the
majority of death benefit risks are reinsured, which protects the
Companies from adverse mortality experience and prolonged capital
market decline.
A surrender, partial withdrawal, transfer or annuitization made
prior to the end of a guarantee period from the fixed account may
be subject to a market value adjustment. As the majority of the
liabilities in the fixed account are subject to market value
adjustment, the Companies do not face a material amount of market
risk volatility. The fixed account liabilities are supported by a
portfolio principally composed of fixed rate investments that can
generate predictable, steady rates of return. The portfolio
management strategy for the fixed account considers the assets
available for sale. This enables the Companies to respond to
changes in market interest rates, changes in prepayment risk,
changes in relative values of asset sectors and individual
securities and loans, changes in credit quality outlook and other
relevant factors. The objective of portfolio management is to
maximize returns, taking into account interest rate and credit
risks as well as other risks. The Companies' asset/liability
management discipline includes strategies to minimize exposure to
loss as interest rates and economic and market conditions change.
57
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<PAGE>
On the basis of these analyses, management believes there is no
material solvency risk to the Companies. With respect to a 10%
drop in equity values from year-end 1998 levels, variable separate
account funds, which represent 85% of the in force as of
September 30, 1999, pass the risk in underlying fund performance
to the contract holder (except for certain minimum guarantees that
are mostly reinsured). With respect to interest rate movements
up or down 100 basis points from year-end 1998 levels, the
remaining 15% of the in force as of September 30, 1999 are fixed
account funds and almost all of these have market value adjustments
which provide significant protection against changes in interest
rates.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Any forward-looking statement contained herein or in any other
oral or written statement by the Companies or any of their
officers, directors or employees is qualified by the fact that
actual results of the Companies may differ materially from such
statement, among other risks and uncertainties inherent in the
Companies' business, due to the following important factors:
1. Prevailing interest rate levels and stock market performance,
which may affect the ability of the Companies to sell their
products, the market value and liquidity of the Companies'
investments and the lapse rate of the Companies' policies,
notwithstanding product design features intended to enhance
persistency of the Companies' products.
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<PAGE>
2. Changes in the federal income tax laws and regulations which
may affect the tax status of the Companies'products.
3. Changes in the regulation of financial services, including
bank sales and underwriting of insurance products, which
may affect the competitive environment for the Companies'
products.
4. Increasing competition in the sale of the Companies' products.
5. Other factors that could affect the performance of the
Companies, including, but not limited to, market conduct
claims, litigation, insurance industry insolvencies,
availability of competitive reinsurance on new business,
investment performance of the underlying portfolios of the
variable products, variable product design and sales volume by
significant sellers of the Companies' variable products.
6. To the extent third parties are unable to transact business in
the Year 2000 and thereafter, the Companies' operations could
be adversely affected.
OTHER INFORMATION
SEGMENT INFORMATION. During the period since the acquisition by
Bankers Trust, September 30, 1992 to date of this Prospectus,
Golden American's operations consisted of one business segment,
the sale of annuity and life insurance products. Golden American
and its affiliate DSI are party to in excess of 140 sales
agreements with broker-dealers, three of whom, Locust Street
Securities, Inc., Vestax Securities Corporation, and Multi-
Financial Securities Corporation, are affiliates of Golden
American. As of September 30, 1999, two broker-dealers produce
10% or more of Golden American's product sales.
REINSURANCE. Golden American reinsures its mortality risk
associated with the Contract's guaranteed death benefit with one
or more appropriately licensed insurance companies. Golden
American also, effective June 1, 1994, entered into a reinsurance
agreement on a modified coinsurance basis with an affiliate of a
broker-dealer which distributes Golden American's products with
respect to 25% of the business produced by that broker-dealer.
RESERVES. In accordance with the life insurance laws and
regulations under which Golden American operates, it is obligated
to carry on its books, as liabilities, actuarially determined
reserves to meet its obligations on outstanding Contracts.
Reserves, based on valuation mortality tables in general use in
the United States, where applicable, are computed to equal amounts
which, together with interest on such reserves computed annually
at certain assumed rates, make adequate provision according to
presently accepted actuarial standards of practice, for the
anticipated cash flows required by the contractual obligations and
related expenses of Golden American.
COMPETITION. Golden American is engaged in a business that is
highly competitive because of the large number of stock and mutual
life insurance companies and other entities marketing insurance
products comparable to those of Golden American. There are
approximately 2,350 stock, mutual and other types of insurers in
the life insurance business in the United States, a substantial
number of which are significantly larger than Golden American.
SERVICE AGREEMENTS. Beginning in 1994 and continuing until August
13, 1996, Bankers Trust (Delaware), a subsidiary of Bankers Trust
New York Corporation, and Golden American became parties to a service
agreement pursuant to which Bankers Trust (Delaware) agreed to provide
certain accounting, actuarial, tax, underwriting, sales, management and
other services to Golden American. Expenses incurred by Bankers Trust
(Delaware)in relation to this service agreement were reimbursed by Golden
American on an allocated cost basis. Charges billed to Golden American by
Bankers Trust (Delaware) pursuant to the service agreement for 1996 through
its termination as of August 13, 1996 were $0.5 million.
Pursuant to a service agreement between Golden American and Equitable
Life, Equitable Life provides certain administrative, financial and
other services to Golden American. Equitable Life billed Golden
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American and its subsidiary First Golden American Life Insurance
Company of New York ("First Golden"), $0.9 million, $1.1 million,
and $29,000 for the first nine months of 1999 and the years ended
December 31, 1998 and 1997, respectively, under this service
agreement.
Golden American provides to DSI certain of its personnel to perform
management, administrative and clerical services and the use of
certain facilities. Golden American charges DSI 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 DSI. In the opinion of management, this method of cost
allocation is reasonable. In 1995, the service agreement between DSI
and Golden American was amended to provide for a management fee from
DSI to Golden American for managerial and supervisory services
provided by Golden American. This fee, calculated as a percentage of
average assets in the variable separate accounts, was $6.8 million,
$4.8 million, $2.8 million and $2.3 million for the first nine months
of 1999, and the years of 1998, 1997 and 1996, respectively.
Since January 1, 1998, Golden American and First Golden have had an
asset management agreement with ING Investment Management LLC ("ING
IM"), an affiliate, in which ING IM provides asset management and
accounting services for a fee, payable quarterly. For the first nine
months of 1999 and for the year ended December 31, 1998, Golden
American and First Golden incurred fees of $1.6 million and $1.5 million,
respectively, under this agreement. Prior to 1998, Golden American and
First Golden had a service agreement with Equitable Investment Services,
Inc. ("EISI"), an affiliate, in which EISI provided investment
management services. Golden American and First Golden paid fees of
$1.0 million for 1997 and $72,000 for the period from August 14,
1996 through December 31, 1996, respectively.
Since 1997, Golden American has provided certain advisory, computer
and other resources and services to Equitable Life. Revenues for these
services totaled $0.9 million for the first nine months of 1999,
$5.8 million for 1998 and $4.3 million for 1997.
The Companies provide resources and services to DSI. Revenues for
these services totaled $0.8 million for the first nine months of 1999.
Golden American provides resources and services to ING Mutual Funds
Management Co., LLC, an affiliate. Revenues for these services
totaled $0.4 million for the first nine months of 1999 and $2.1
million for 1998.
DISTRIBUTION AGREEMENT. Under a distribution agreement, DSI 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 issued by Golden American which as of September 30,
1999 and December 31, 1998, are sold primarily through two
broker/dealer institutions. For the nine months ended September 30,
1999 and the years 1998, 1997 and 1996, commissions paid by Golden
American to DSI (including commissions paid by First Golden)
aggregated $130.4 million, $117.5 million, $36.4 million and $27.1
million, respectively.
EMPLOYEES. Golden American, as a result of its Service Agreement
with Bankers Trust (Delaware) and EIC Variable, had very few
direct employees. Instead, various management services were
provided by Bankers Trust (Delaware), EIC Variable and Bankers
Trust New York Corporation, as described above under "Service
Agreement." The cost of these services were allocated to Golden
American. Since August 14, 1996, Golden American has hired
individuals to perform various management services and has looked
to Equitable of Iowa and its affiliates for certain other
management services.
Certain officers of Golden American are also officers of DSI, and
their salaries are allocated among both companies. Certain
officers of Golden American are also officers of other Equitable
of Iowa subsidiaries. See "Directors and Executive Officers."
PROPERTIES. Golden American's principal office is located at 1475
Dunwoody Drive, West Chester, Pennsylvania 19380, where all of
Golden American's records are maintained. This office space is
leased.
STATE REGULATION. Golden American is subject to the laws of the
State of Delaware governing insurance companies and to the
regulations of the Delaware Insurance Department (the "Insurance
Department"). A detailed financial statement in the prescribed
form (the "Annual Statement") is filed with the Insurance
Department each year covering Golden American's operations for the
preceding year and its financial condition as of the end of that
year. Regulation by the Insurance Department includes periodic
examination to determine contract liabilities and reserves so that
the Insurance Department may certify
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that these items are correct. Golden American's books and accounts are
subject to review by the Insurance Department at all times. A full
examination of Golden American's operations is conducted periodically
by the Insurance Department and under the auspices of the NAIC.
In addition, Golden American is subject to regulation under the
insurance laws of all jurisdictions in which it operates. The
laws of the various jurisdictions establish supervisory agencies
with broad administrative powers with respect to various matters,
including licensing to transact business, overseeing trade
practices, licensing agents, approving contract forms,
establishing reserve requirements, fixing maximum interest rates
on life insurance contract loans and minimum rates for
accumulation of surrender values, prescribing the form and content
of required financial statements and regulating the type and
amounts of investments permitted. Golden American is required to
file the Annual Statement with supervisory agencies in each of the
jurisdictions in which it does business, and its operations and
accounts are subject to examination by these agencies at regular
intervals.
The NAIC has adopted several regulatory initiatives designed to
improve the surveillance and financial analysis regarding the
solvency of insurance companies in general. These initiatives
include the development and implementation of a risk-based capital
formula for determining adequate levels of capital and surplus.
Insurance companies are required to calculate their risk-based
capital in accordance with this formula and to include the results
in their Annual Statement. It is anticipated that these standards
will have no significant effect upon Golden American. For
additional information about the Risk-Based Capital adequacy
monitoring system and Golden American, see "Management's
Discussion and Analysis Results of Operations"
In addition, many states regulate affiliated groups of insurers,
such as Golden American, and its affiliates, under insurance
holding company legislation. Under such laws, inter-company
transfers of assets and dividend payments from insurance
subsidiaries may be subject to prior notice or approval, depending
on the size of the transfers and payments in relation to the
financial positions of the companies involved.
Under insurance guaranty fund laws in most states, insurers doing
business therein can be assessed (up to prescribed limits) for
contract owner losses incurred by other insurance companies which
have become insolvent. Most of these laws provide that an
assessment may be excused or deferred if it would threaten an
insurer's own financial strength. For information regarding
Golden American's estimated liability for future guaranty fund
assessments, see Note 11 of Notes to Financial Statements.
Although the federal government generally does not directly
regulate the business of insurance, federal initiatives often have
an impact on the business in a variety of ways. Certain insurance
products of Golden American are subject to various federal
securities laws and regulations. In addition, current and
proposed federal measures which may significantly affect the
insurance business include regulation of insurance company
solvency, employee benefit regulation, removal of barriers
preventing banks from engaging in the insurance business, tax law
changes affecting the taxation of insurance companies and the tax
treatment of insurance products and its impact on the relative
desirability of various personal investment vehicles.
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DIRECTORS AND OFFICERS
NAME (AGE) POSITION(S) WITH THE COMPANY
- ---------- ----------------------------
Barnett Chernow (50) President and Director
Myles R. Tashman (57) Director, Executive Vice President,
General Counsel and Secretary
Michael W. Cunningham (50) Director
Mark A. Tullis (44) Director
Phillip R. Lowery (46) Director
James R. McInnis (51) Executive Vice President and
Chief Marketing Officer
Stephen J. Preston (42) Executive Vice President and Chief
Actuary
E. Robert Koster (41) Senior Vice President and Chief Financial
Officer
Patricia M. Corbett (34) Treasurer and Assistant V.P.
David L. Jacobson (50) Senior Vice President and Assistant
Secretary
William L. Lowe (35) Senior Vice President, Sales and Marketing
Ronald R. Blasdell (46) Senior Vice President, Project Implementation
Steven G. Mandel (40) Senior Vice President and
Chief Information Officer
Gary F. Haynes (54) Senior Vice President, Operations
Each director is elected to serve for one year or until the next
annual meeting of shareholders or until his or her successor is
elected. Some directors are directors of insurance company
subsidiaries of Golden American's parent, Equitable of Iowa. The
principal positions of Golden American's directors and senior
executive officers for the past five years are listed below:
Mr. Barnett Chernow became President and Director of Golden American
and President of First Golden in April 1998. From 1993 to 1998, Mr.
Chernow served as Executive Vice President of Golden American. He was
elected to serve as Executive Vice President and Director of First
Golden in September 1996.
Mr. Myles R. Tashman joined Golden American in August 1994 as
Senior Vice President and was named Executive Vice President,
General Counsel and Secretary effective January 1, 1996. He was
elected to serve as a Director of Golden American in January 1998.
He also serves as a Director, Executive Vice President, General
Counsel and Secretary of First Golden.
Mr. Michael W. Cunningham became a Director of Golden American and
First Golden in April 1999. Also, he has served as a Director of
Life of Georgia and Security Life of Denver since 1995.
Currently, he serves as Executive Vice President and Chief
Financial Officer of ING North America Insurance Corporation, and
has worked for them since 1991.
Mr. Mark A. Tullis became a Director of Golden American in January
2000. He has served as Executive Vice President, Strategy and
Operations for ING Americas Region since September 1999.
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Mr. Phillip R. Lowery became a Director of Golden American in
April 1999. He has served as Executive Vice President and Chief
Actuary for ING Americas Region since 1990.
Mr. James R. McInnis joined Golden American in December, 1997 as
Executive Vice President. From 1982 through November 1997, he held
several positions with the Endeavor Group and was President upon
his departure.
Mr. E. Robert Koster was elected Senior Vice President and Chief
Financial Officer of Golden American in September 1998. From
August, 1984 to September, 1998 he has held various positions with
ING companies in The Netherlands.
Ms. Patricia M. Corbett was elected Treasurer of Golden American
in December 1998. She joined Equitable Life Insurance Company of
Iowa in 1987 and is currently Treasurer and Assistant Vice
President of Equitable Life and USG Annuity & Life Company.
Mr. David L. Jacobson joined Golden American in November 1993 as
Senior Vice President and Assistant Secretary.
Mr. Stephen J. Preston joined Golden American in December, 1993 as
Senior Vice President, Chief Actuary and Controller. He became an
Executive Vice President and Chief Actuary in June 1998.
Mr. William L. Lowe joined Equitable Life as Vice President, Sales
& Marketing in January 1994. He became a Senior Vice President,
Sales & Marketing, of Golden American in August 1997. He was also
President of Equitable of Iowa Securities Network, Inc. until
October 1998.
Mr. Steven G. Mandel joined Golden American in October 1988 and
became Senior Vice President and Chief Information Officer in
June 1998.
Mr. Ronald R. Blasdell joined Golden American in February 1994 and
became Senior Vice President, Project Implementation in June 1998.
Mr. Gary Haynes joined Golden American in April 1999 and became
Senior Vice President, Operations in April 1999.
COMPENSATION TABLES AND OTHER INFORMATION
The following sets forth information with respect to the Chief
Executive Officer of Golden American as well as the annual salary
and bonus for the next five highly compensated executive officers
for the fiscal year ended December 31, 1998. Certain executive
officers of Golden American are also officers of DSI. The salaries
of such individuals are allocated between Golden American and DSI.
Executive officers of Golden American are also officers of DSI.
The salaries of such individuals are allocated between Golden
American and DSI pursuant to an arrangement among these companies.
Throughout 1995 and until August 13, 1996, Terry L. Kendall served
as a Managing Director at Bankers Trust New York Corporation.
Compensation amounts for Terry L. Kendall which are reflected
throughout these tables prior to August 14, 1996 were not charged
to Golden American, but were instead absorbed by Bankers Trust New
York Corporation.
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EXECUTIVE COMPENSATION TABLE
The following table sets forth information with respect to the
annual salary and bonus for Golden American's Chief Executive
Officers and the five other most highly compensated executive
officers for the fiscal year ended December 31, 1998. As of
the date of this prospectus 1999 data was not yet available.
<TABLE>
LONG-TERM ALL OTHER
ANNUAL COMPENSATION COMPENSATION COMPENSATION
------------------- ------------------------ ------------
RESTRICTED SECURITIES
NAME AND STOCK AWARDS UNDERLYING
PRINCIPAL POSITION YEAR SALARY BONUS(1) OPTIONS(2) OPTIONS(3)
- ------------------ ---- ------ -------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Barnett Chernow, 1998 $284,171 $105,375 8,000
President 1997 $234,167 $ 31,859 $277,576 4,000
1996 $207,526 $150,000 $ 7,755(4)
James R. McInnis, 1998 $250,004 $626,245 2,000
Executive Vice
President
Keith Glover, 1998 $250,000 $145,120 3,900
Executive Vice
President
Myles R. Tashman, 1998 $189,337 $ 54,425 3,500
Executive Vice 1997 $181,417 $ 25,000 $165,512 5,000
President, 1996 $176,138 $ 90,000 $ 5,127(4)
General Counsel
and Secretary
Stephen J. Preston, 1998 $173,870 $ 32,152 3,500
Executive Vice 1997 $160,758 $ 16,470
President 1996 $156,937 $ 58,326
and Chief Actuary
Paul R. Schlaack, 1998 $406,730 $210,600
Former Chairman 1997 $351,000 $249,185 $1,274,518 19,000 $15,000
and Vice President 1996 $327,875 $249,185 $ 245,875 19,000 $15,000
Terry L. Kendall, 1998 $145,237 $181,417
Former President 1997 $362,833 $ 80,365 $ 644,844 16,000
and CEO 1996 $288,298 $400,000 $11,535(4)
</TABLE>
(1) The amount shown relates to bonuses paid in 1998, 1997
and 1996.
(2) Restricted stock awards granted to executive officers
vested on October 24, 1997 with the change in control of
Equitable of Iowa.
(3) Awards comprised of qualified and non-qualified stock
options. All options were granted with an exercise price equal
to the then fair market value of the underlying stock. All
options vested with the change in control of Equitable of Iowa
and were cashed out for the difference between $68.00 and the
exercise price.
(4) In 1996, Contributions were made by the Company on behalf
of the employee to PartnerShare, the deferred compensation
plan sponsored by Bankers Trust New York Corporation and its
affiliates for the benefit of all Bankers Trust employees, in
February of 1996 to employees on record as of December 31,
1996, after an employee completed one year of service with the
company. This contribution could be in the form of deferred
compensation and/or a cash payment. In 1996, Mr. Kendall
received $9,000 of deferred compensation and $2,535 of cash
payment from the plan; Mr. Chernow received $6,000 of
deferred compensation and $1,755 of cash payment from the
plan; Mr. Tashman received $4,000 of deferred compensation and
$1,127 of cash payment from the plan.
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OPTION GRANTS IN LAST FISCAL YEAR (1998)
<TABLE> POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
% OF TOTAL RATES OF STOCK
NUMBER OF OPTIONS PRICE APPRECIATION
SECURITIES GRANTED TO FOR OPTION
UNDERLYING EMPLOYEES EXERCISE TERM (3)
OPTIONS IN FISCAL OR BASE EXPIRATION ------------------
NAME GRANTED(1) YEAR PRICE (2) DATE 5% 10%
- ---- ---------- ----- --------- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Barnett Chernow 8,000 11.99 $60.518 5/26/2003 $164,016 $362,433
James R. McInnis 2,000 3.00 $60.518 5/26/2003 $ 41,004 $ 90,608
Keith Glover 3,900 5.85 $60.518 5/26/2003 $ 79,958 $176,686
Myles R. Tashman 3,500 5.25 $60.518 5/26/2003 $ 71,758 $158,564
Stephen J. Preston 3,500 5.25 $60.518 5/26/2003 $ 71,758 $158,564
</TABLE>
(1) Stock appreciation rights granted on May 26, 1998 to the
officers of Golden American have a three-year vesting period
and an expiration date as shown.
(2) The base price was equal to the fair market value of
ING's stock on on the date of grant.
(3) Total dollar gains based on indicated rates of
appreciation of share price over a the five year term of the
rights.
Directors of Golden American receive no additional compensation
for serving as a director.
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[Shaded Section Header]
- --------------------------------------------------------------------------
UNAUDITED FINANCIAL STATEMENTS OF GOLDEN AMERICAN LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------
For the Nine Months Ended September 30, 1999
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GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
September 30, 1999 December 31, 1998
------------------ -----------------
<S> <C> <C>
ASSETS
Investments:
Fixed maturities, available for sale, at
fair value (cost: 1999 -- $815,027;
1998 -- $739,772) $ 798,708 $ 741,985
Equity securities, at fair value (cost: 13,679 11,514
1999 -- $14,437; 1998 -- $14,437)
Mortgage loans on real estate 93,884 97,322
Policy loans 13,454 11,772
Short-term investments 66,519 41,152
---------- ----------
Total investments 986,244 903,745
Cash and cash equivalents 12,908 6,679
Due from affiliates 1,460 2,983
Accrued investment income 11,896 9,645
Deferred policy acquisition costs 439,176 204,979
Value of purchased insurance in force 32,984 35,977
Current income taxes recoverable 204 628
Deferred income tax asset 29,690 31,477
Property and equipment, less allowances
for depreciation of $2,807 in 1999
and $801 in 1998 13,017 7,348
Goodwill, less accumulated amortization
of $7,242 in 1999 and $4,408 in 1998 143,886 146,719
Other assets 42,072 6,239
Separate account assets 5,598,490 3,396,114
---------- ----------
Total assets $7,312,027 $4,752,533
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Policy liabilities and accruals:
Future policy benefits:
Annuity and interest sensitive life
products $1,009,382 $881,112
Unearned revenue reserve 5,855 3,840
Other policy claims and benefits 15 --
---------- ----------
1,015,252 884,952
Surplus notes 160,000 85,000
Due to affiliates 4,328 --
Other liabilities 80,081 32,573
Separate account liabilities 5,598,490 3,396,114
---------- ----------
6,858,151 4,398,639
Commitments and contingencies
Stockholder's equity:
Common stock, par value $10 per share,
authorized, issued, 2,500 2,500
and outstanding 250,000 shares
Additional paid-in capital 447,640 347,640
Accumulated other comprehensive loss (4,464) (895)
Retained earnings 8,200 4,649
---------- ----------
Total stockholder's equity 453,876 353,894
---------- ----------
Total liabilities and stockholder's
equity $7,312,027 $4,752,533
========== ==========
See accompanying notes.
</TABLE> 67
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
For the Nine For the Nine
Months ended Months ended
September 30, 1999 September 30, 1998
------------------ ------------------
<S> <C> <C>
Revenues:
Annuity and interest sensitive
life product charges $ 55,195 $ 26,984
Management fee revenue 6,755 3,257
Net investment income 42,671 29,296
Realized gains (losses) on
investments (2,215) 436
Other income 7,448 4,805
--------- --------
109,854 64,778
Insurance benefits and expenses:
Annuity and interest sensitive
life benefits:
Interest credited to account 125,404 64,110
balances
Benefit claims incurred in 3,452 862
excess of account balances
Underwriting, acquisition, and
insurance expenses:
Commissions 134,585 84,958
General expenses 47,551 23,480
Insurance taxes, state 3,545 2,680
licenses, and fees
Policy acquisition costs (244,840) (133,616)
deferred
Amortization:
Deferred policy acquisition 19,699 4,014
costs
Value of purchased insurance 4,803 3,252
in force
Goodwill 2,834 2,834
--------- --------
97,033 52,574
Interest expense 5,552 3,033
--------- --------
102,585 55,607
--------- --------
Income before income taxes 7,269 9,171
Income taxes 3,718 4,294
--------- --------
Net income $ 3,551 $ 4,877
========= ========
See accompanying notes.
</TABLE> 68
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<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
For the Nine For the Nine
Months ended Months ended
September 30, 1999 September 30, 1998
------------------ ------------------
<S> <C> <C>
NET CASH USED IN OPERATING ACTIVITIES $ (60,026) $ (22,666)
INVESTING ACTIVITIES
Sale, maturity, or repayment of investments:
Fixed maturities -- available for sale 170,548 92,707
Mortgage loans on real estate 4,241 3,145
Short-term investments -- net -- 2,575
---------- ----------
174,789 98,427
Acquisition of investments:
Fixed maturities -- available for sale (250,277) (291,687)
Equity securities -- (10,000)
Mortgage loans on real estate (1,034) (16,390)
Policy loans -- net (1,682) (1,385)
Short term investments -- net (25,367) --
---------- ----------
(278,360) (319,462)
Net purchase of property and equipment (7,700) (3,470)
---------- ----------
Net cash used in investing activities (111,271) (224,505)
FINANCING ACTIVITIES
Proceeds from reciprocal loan agreement 488,950 242,847
borrowings
Repayment of reciprocal loan agreement (488,950) (202,847)
borrowings
Proceeds from revolving note payable 131,595 20,082
Repayment of revolving note payable (131,595) --
Proceeds from surplus note 75,000 --
Repayment of line of credit borrowings -- (5,309)
Receipts from annuity and interest
sensitive life policies credited
to account balances 540,464 350,385
Return of account balances on annuity
and interest sensitive life policies (98,715) (50,370)
Net reallocations to Separate Accounts (439,223) (163,455)
Contributions from parent 100,000 53,750
---------- ----------
Net cash provided by financing 177,526 245,083
activities
---------- ----------
Increase (decrease) in cash and cash
equivalents 6,229 (2,088)
Cash and cash equivalents at beginning
of period 6,679 21,039
---------- ----------
Cash and cash equivalents at end of
period $ 12,908 $ 18,951
========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid during the period for:
Interest $ 5,078 $ 3,493
Taxes 10 80
Non-cash financing activities:
Non-cash adjustment to additional paid
in capital for adjusted merger costs -- 143
Non-cash contribution of capital from
parent to repay line of credit
borrowings -- 18,750
See accompanying notes.
</TABLE> 69
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1999
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, the financial
statements do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments considered
necessary for a fair presentation have been included. All adjustments
were of a normal recurring nature, unless otherwise noted in Management's
Discussion and Analysis and the Notes to Financial Statements. Operating
results for the nine months ended September 30, 1999 are not necessarily
indicative of the results that may be expected for the year ending
December 31, 1999. These financial statements should be read in
conjunction with the financial statements and related notes included in
the Golden American Life Insurance Company's annual report on Form 10-K
for the year ended December 31, 1998.
CONSOLIDATION
The condensed consolidated financial statements include Golden American
Life Insurance Company ("Golden American") and its wholly owned
subsidiary, First Golden American Life Insurance Company of New York
("First Golden," and with Golden American, collectively, the
"Companies"). All significant intercompany accounts and transactions
have been eliminated.
ORGANIZATION
Golden American is a wholly owned subsidiary of Equitable of Iowa
Companies, Inc. ("EIC" or the "Parent"). On October 24, 1997, PFHI
Holdings, Inc. ("PFHI"), a Delaware corporation, acquired all of the
outstanding capital stock of Equitable of Iowa Companies ("Equitable")
according to the terms of an Agreement and Plan of Merger dated July 7,
1997 among Equitable, PFHI, and ING Groep N.V. ("ING"). PFHI is a wholly
owned subsidiary of ING, a global financial services holding company
based in The Netherlands. As a result of this transaction, Equitable was
merged into PFHI, which was simultaneously renamed Equitable of Iowa
Companies, Inc., a Delaware corporation.
FAIR VALUES
Estimated fair values of publicly traded fixed maturities for 1999 are as
reported by an independent pricing service.
STATUTORY
Net loss for Golden American as determined in accordance with statutory
accounting practices was $75,508,000 and $32,198,000 for the nine months
ended September 30, 1999 and 1998, respectively. Total statutory capital
and surplus was $285,674,000 at September 30, 1999 and $183,045,000 at
December 31, 1998.
RECLASSIFICATIONS
Certain amounts in the September 30, 1998 and December 31, 1998 financial
statements have been reclassified to conform to the September 30, 1999
financial statement presentation.
2. COMPREHENSIVE INCOME
As of January 1, 1998, the Companies adopted the Statement of Financial
Accounting Standard ("SFAS") No. 130, "Reporting Comprehensive Income."
SFAS No. 130 establishes new rules for the reporting and display of
comprehensive income and its components; however, the adoption of this
statement had no impact on the Companies' net income or stockholder's
equity. SFAS No. 130 requires unrealized gains or losses on the
70
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1999
2. COMPREHENSIVE INCOME (continued)
Companies' available for sale securities (net of adjustments for value of
purchased insurance in force ("VPIF"), deferred policy acquisition costs
("DPAC"), and deferred income taxes) to be included in other
comprehensive income.
During the third quarter and first nine months of 1999, other
comprehensive income (loss) for the Companies amounted to $2,059,000 and
$(18,000), respectively ($2,426,000 and $5,478,000, respectively, for the
same periods of 1998). Included in these amounts are other comprehensive
income (loss) for First Golden of $(14,000) and $(258,000) for the third
quarter and first nine months of 1999, respectively ($601,000 and
$1,174,000, respectively, for the same periods of 1998). Other
comprehensive income (loss) excludes net investment gains (losses)
included in net income which merely represent transfers from unrealized
to realized gains and losses. These amounts totaled $(460,000) and
$(2,512,000) during the third quarter and first nine months of 1999,
respectively ($263,000 and $388,000, respectively, for the same periods
of 1998). Such amounts, which have been measured through the date of
sale, are net of income taxes and adjustments for VPIF and DPAC totaling
$(38,000) and $297,000 for the third quarter and first nine months of
1999, respectively ($40,000 and $48,000, respectively, for the same
periods of 1998).
3. INVESTMENTS
INVESTMENT VALUATION ANALYSIS: The Companies analyze the investment
portfolio at least quarterly in order to determine if the carrying value
of any investment has been impaired. The carrying value of debt and
equity securities is written down to fair value by a charge to realized
losses when an impairment in value appears to be other than temporary.
During the fourth quarter of 1998, Golden American determined that the
carrying value of two bonds exceeded their estimated net realizable
value. As a result, at December 31, 1998, Golden American recognized a
total pre-tax loss of $973,000 to reduce the carrying value of the bonds
to their combined net realizable value of $2,919,000. During the second
quarter of 1999, further information was received regarding these bonds
and Golden American determined that the carrying value of the two bonds
exceeded their estimated net realizable value. As a result, at June 30,
1999, Golden American recognized a total pre-tax loss of $1,639,000 to
further reduce the carrying value of the bonds to their combined net
realizable value of $1,137,000.
4. RELATED PARTY TRANSACTIONS
OPERATING AGREEMENTS: Directed Services, Inc. ("DSI"), an affiliate,
acts as the principal underwriter (as defined in the Securities Act of
1933 and the Investment Company Act of 1940, as amended) and distributor
of the variable insurance products issued by the Companies. DSI is
authorized to enter into agreements with broker/dealers to distribute the
Companies' variable insurance products and appoint representatives of the
broker/dealers as agents. The Companies paid commissions and expenses to
DSI totaling $50,131,000 in the third quarter and $130,419,000 for the
first nine months of 1999 ($32,104,000 and $82,548,000, respectively, for
the same periods of 1998).
Golden American provides certain managerial and supervisory services to
DSI. The fee paid by DSI for these services is calculated as a
percentage of average assets in the variable separate accounts. For the
third quarter and first nine months of 1999, the fee was $2,659,000 and
$6,755,000, respectively ($1,234,000 and $3,257,000, respectively, for
the same periods of 1998).
The Companies have an asset management agreement with ING Investment
Management LLC ("ING IM"), an affiliate, in which ING IM provides asset
management and accounting services. Under the agreement, the Companies
record a fee based on the value of the assets under management. The fee
is payable quarterly. For the third quarter and first nine months of
1999, the Companies incurred fees of $523,000 and
71
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1999
4. RELATED PARTY TRANSACTIONS (continued)
$1,637,000, respectively, under this agreement ($341,000 and $1,013,000,
respectively, for the same periods of 1998).
Golden American has a guaranty agreement with Equitable Life Insurance
Company of Iowa ("Equitable Life"), an affiliate. In consideration of an
annual fee, payable June 30, Equitable Life guarantees to Golden American
that it will make funds available, if needed, to Golden American to pay
the contractual claims made under the provisions of Golden American's
life insurance and annuity contracts. The agreement is not, and nothing
contained therein or done pursuant thereto by Equitable Life shall be
deemed to constitute, a direct or indirect guaranty by Equitable Life of
the payment of any debt or other obligation, indebtedness or liability,
of any kind or character whatsoever, of Golden American. The agreement
does not guarantee the value of the underlying assets held in separate
accounts in which funds of variable life insurance and variable annuity
policies have been invested. The calculation of the annual fee is based
on risk based capital. As Golden American's risk based capital level was
above required amounts, no annual fee was payable at June 30, 1999 or
1998.
Golden American provides certain advisory, computer and other resources
and services to Equitable Life. Revenues for these services, which
reduce general expenses incurred by Golden American, totaled $237,000 in
the third quarter of 1999 and $898,000 for the first nine months of 1999
($1,524,000 and $5,091,000, respectively, for the same periods of 1998).
The Companies have a service agreement with Equitable Life in which
Equitable Life provides administrative and financial related services.
Under this agreement, the Companies incurred expenses of $50,000 in the
third quarter of 1999 and $855,000 for the first nine months of 1999
($261,000 and $575,000, respectively, for the same periods of 1998).
The Companies provide resources and services to DSI. Revenues for these
services, which reduce general expenses incurred by the Companies,
totaled $276,000 in the third quarter of 1999 and $759,000 for the first
nine months of 1999 ($19,000 and $57,000, respectively, for the same
periods of 1998).
Golden American provides resources and services to ING Mutual Funds
Management Co., LLC, an affiliate. Revenues for these services, which
reduce general expenses incurred by Golden American, totaled $159,000 in
the third quarter of 1999 and $376,000 for the first nine months of
1999.
For the third quarter of 1999, the Companies received 7.8% of total
premiums (9.7% in the same period of 1998), net of reinsurance, for
variable products sold through four affiliates, Locust Street Securities,
Inc. ("LSSI"), Vestax Securities Corporation ("Vestax"), DSI, and Multi-
Financial Securities Corporation ("Multi-Financial") of $46,600,000,
$12,900,000, $0, and $11,000,000, respectively ($34,600,000, $14,200,000,
$1,800,000, and $4,100,000, respectively, for the same period of 1998).
For the first nine months of 1999, the Companies received 9.5% of total
premiums (10.0% in the same period of 1998), net of reinsurance, from
LSSI, Vestax, DSI, and Multi-Financial of $121,900,000, $72,000,000,
$2,300,000, and $24,400,000, respectively ($92,700,000, $30,000,000,
$10,700,000, and $10,000,000, respectively, for the same period of 1998).
RECIPROCAL LOAN AGREEMENT: Golden American maintains a reciprocal loan
agreement with ING America Insurance Holdings, Inc. ("ING AIH"), a
Delaware corporation and affiliate, to facilitate the handling of unusual
and/or unanticipated short-term cash requirements. Under this agreement,
which became effective January 1, 1998 and expires December 31, 2007,
Golden American and ING AIH can borrow up to $65,000,000 from one
another. Prior to lending funds to ING AIH, Golden American must obtain
approval from the Department of Insurance of the State of Delaware.
Interest on any Golden American borrowings is charged at the rate of ING
AIH's cost of funds for the interest period plus 0.15%. Interest on any
ING AIH borrowings is charged at a rate based on the prevailing interest
rate of U.S. commercial paper available for purchase with a similar
duration. Under this agreement, Golden American incurred interest
expense of
72
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1999
4. RELATED PARTY TRANSACTIONS (continued)
$397,000 in the third quarter of 1999 and $633,000 for the
first nine months of 1999 ($505,000 and $1,269,000, respectively, for the
same periods of 1998). At September 30, 1999, Golden American did not
have any borrowings or receivables from ING AIH under this agreement.
LINE OF CREDIT: Golden American maintained a line of credit agreement
with Equitable to facilitate the handling of unusual and/or unanticipated
short-term cash requirements. Under this agreement, which became
effective December 1, 1996 and expired December 31, 1997, Golden American
could borrow up to $25,000,000. Interest on any borrowings was charged
at the rate of Equitable's monthly average aggregate cost of short-term
funds plus 1.00%. Under this agreement, Golden American incurred
interest expense of $211,000 for the first quarter of 1998. The
outstanding balance was paid by a capital contribution from the Parent
and with funds borrowed from ING AIH.
SURPLUS NOTES: On September 30, 1999, Golden American issued a 7.75%
surplus note in the amount of $75,000,000 to ING AIH. The note matures on
September 29, 2029. Payment of the note and related accrued interest is
subordinate to payments due to policyholders, claimant and beneficiary
claims, as well as debts owed to all other classes of debtors, other than
surplus note holders, of Golden American. Any payment of principal and/or
interest made is subject to the prior approval of the Delaware Insurance
Commissioner. Under this agreement, Golden American incurred no interest
expense in the third quarter of 1999.
On December 30, 1998, Golden American issued a 7.25% surplus note in the
amount of $60,000,000 to Equitable Life. The note matures on December
29, 2028. Payment of the note and related accrued interest is
subordinate to payments due to policyholders, claimant and beneficiary
claims, as well as debts owed to all other classes of debtors, other than
surplus note holders, of Golden American. Any payment of principal
and/or interest made is subject to the prior approval of the Delaware
Insurance Commissioner. Under this agreement, Golden American incurred
interest expense of $1,088,000 in the third quarter of 1999 and
$3,263,000 for the first nine months of 1999.
On December 17, 1996, Golden American issued an 8.25% surplus note in the
amount of $25,000,000 to Equitable. The note matures on December 17,
2026. Payment of the note and related accrued interest is subordinate to
payments due to policyholders, claimant and beneficiary claims, as well
as debts owed to all other classes of debtors of Golden American. Any
payment of principal made is subject to the prior approval of the
Delaware Insurance Commissioner. Golden American incurred interest
totaling $516,000 in the third quarter of 1999 and $1,547,000 for the
first nine months of 1999, unchanged from the same periods of 1998. As a
result of the merger, the surplus note is now payable to EIC.
STOCKHOLDER'S EQUITY: During the third quarter of 1999 and the first
nine months of 1999, Golden American received capital contributions from
its Parent of $20,000,000 and $100,000,000, respectively ($0 and
$72,500,000, respectively, for the same periods of 1998).
5. COMMITMENTS AND CONTINGENCIES
REINSURANCE: At September 30, 1999, Golden American had reinsurance
treaties with four unaffiliated reinsurers and one affiliated reinsurer
covering a significant portion of the mortality risks under its variable
contracts. Golden American remains liable to the extent its reinsurers do
not meet their obligations under the reinsurance agreements. At September
30, 1999 and 1998, the Companies had a net receivable of $14,041,000 and
$6,539,000, respectively, for reserve credits, reinsurance claims, or
other receivables from these reinsurers comprised of $2,268,000 and
$257,000, respectively, for claims recoverable from reinsurers, $918,000
and $451,000, respectively, for a payable for reinsurance premiums and
$12,691,000 and $6,733,000, respectively, for a receivable from an
unaffiliated reinsurer. Included in the accompanying financial
statements are net considerations to reinsurers of $2,638,000 in the
third quarter of 1999 and $6,656,000 for the first nine months of 1999
compared to $1,293,000 and $3,259,000, respectively, for the same periods
in 1998. Also included in the accompanying financial statements are net
policy benefits of
73
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1999
5. COMMITMENTS AND CONTINGENCIES (continued)
$2,569,000 in the third quarter of 1999 and $4,008,000 for the first
nine months of 1999 compared to $1,272,000 and $2,096,000, respectively,
for the same periods in 1998.
Effective June 1, 1994, Golden American entered into a modified
coinsurance agreement with an unaffiliated reinsurer. The accompanying
financial statements are presented net of the effects of the treaty.
GUARANTY FUND ASSESSMENTS: Assessments are levied on the Companies by
life and health guaranty associations in most states in which the
Companies are licensed to cover losses of policyholders of insolvent or
rehabilitated insurers. In some states, these assessments can be
partially recovered through a reduction in future premium taxes. The
Companies cannot predict whether and to what extent legislative
initiatives may affect the right to offset. The associated cost for a
particular insurance company can vary significantly based upon its fixed
account premium volume by line of business and state premiums as well as
its potential for premium tax offset. The Companies have established an
undiscounted reserve to cover such assessments, review information
regarding known failures, and revise estimates of future guaranty fund
assessments. Accordingly, the Companies accrued and charged to expense
an additional $208,000 and $598,000 in the third quarter and first nine
months of 1998, respectively. At September 30, 1999, the Companies have
an undiscounted reserve of $2,444,000 to cover estimated future
assessments (net of related anticipated premium tax credits) and have
established an asset totaling $586,000 for assessments paid which may be
recoverable through future premium tax offsets. The Companies believe
this reserve is sufficient to cover expected future guaranty fund
assessments based upon previous premiums and known insolvencies at this
time.
LITIGATION: The Companies, like other insurance companies, may be named
or otherwise involved in lawsuits, including class action lawsuits and
arbitrations. In some class action and other actions involving insurers,
substantial damages have been sought and/or material settlement or award
payments have been made. The Companies currently believe no pending or
threatened lawsuits or actions exist that are reasonably likely to have a
material adverse impact on the Companies.
VULNERABILITY FROM CONCENTRATIONS: The Companies have various
concentrations in the investment portfolio. The Companies' asset growth,
net investment income, and cash flow are primarily generated from the
sale of variable products and associated future policy benefits and
separate account liabilities. Substantial changes in tax laws that would
make these products less attractive to consumers and extreme fluctuations
in interest rates or stock market returns, which may result in higher
lapse experience than assumed, could cause a severe impact on the
Companies' financial condition. Two broker/dealers, each having at least
ten percent of total sales, generated 29% of the Companies' sales during
the first nine months of 1999 (10% by one broker/dealer in the same
period of 1998). The Premium Plus variable annuity product generated 78%
of the Companies' sales during the first nine months of 1999 (59% in the
same period of 1998).
REVOLVING NOTE PAYABLE: To enhance short-term liquidity, the Companies
established a revolving note payable effective July 27, 1998 and expiring
July 31, 1999 with SunTrust Bank, Atlanta (the "Bank"). The note was
approved by the Boards of Directors of Golden American and First Golden
on August 5, 1998 and September 29, 1998, respectively. As of July 31,
1999, the SunTrust Bank, Atlanta revolving note facility was extended to
July 31, 2000. The total amount the Companies may have outstanding is
$85,000,000, of which Golden American and First Golden have individual
credit sublimits of $75,000,000 and $10,000,000, respectively. The note
accrues interest at an annual rate equal to: (1) the cost of funds for
the Bank for the period applicable for the advance plus 0.25% or (2) a
rate quoted by the Bank to the Companies for the advance. The terms of
the agreement require the Companies to maintain the minimum level of
Company Action Level Risk Based Capital as established by applicable
state law or regulation. During the quarter and nine months ended
September 30, 1999, the Companies paid interest expense of $55,000 and
$109,000, respectively ($6,000 for the same periods of 1998). At
September 30, 1999, the Companies did not have any borrowings under this
agreement.
74
<PAGE>
<PAGE>
[Shaded Section Header]
- --------------------------------------------------------------------------
FINANCIAL STATEMENTS OF GOLDEN AMERICAN LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholder
Golden American Life Insurance Company
We have audited the accompanying consolidated balance sheets of
Golden American Life Insurance Company as of December 31, 1998 and
1997, and the related consolidated statements of operations,
changes in stockholder's equity, and cash flows for the year ended
December 31, 1998 and for the periods from October 25, 1997
through December 31, 1997, January 1, 1997 through October 24,
1997, August 14, 1996 through December 31, 1996 and January 1,
1996 through August 13, 1996. These financials are the
responsibility of the Companies' management. Our responsibility
is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. 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. 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 consolidated financial
position of Golden American Life Insurance Company at December 31,
1998 and 1997, and the consolidated results of its operations and
its cash flows for the year ended December 31, 1998 and for the
periods from October 25, 1997 through December 31, 1997, January
1, 1997 through October 24, 1997, August 14, 1996 through December
31, 1996 and January 1, 1996 through August 13, 1996 in conformity
with generally accepted accounting principles.
/s/Ernst & Young LLP
Des Moines, Iowa
February 12, 1999
75
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
<TABLE>
POST-MERGER
------------------------------------
December 31, 1998 December 31, 1997
----------------- -----------------
<S> <C> <C>
ASSETS
Investments:
Fixed maturities, available for
sale, at fair value (cost:
1998 - $739,772; 1997 -
$413,288)...................... $ 741,985 $ 414,401
Equity securities, at fair value
(cost: 1998 - $14,437; 1997 -
$4,437)........................ 11,514 3,904
Mortgage loans on real estate.... 97,322 85,093
Policy loans..................... 11,772 8,832
Short-term investments........... 41,152 14,460
---------- ----------
Total investments.................. 903,745 526,690
Cash and cash equivalents.......... 6,679 21,039
Due from affiliates................ 2,983 827
Accrued investment income.......... 9,645 6,423
Deferred policy acquisition costs.. 204,979 12,752
Value of purchased insurance in
force............................ 35,977 43,174
Current income taxes recoverable... 628 272
Deferred income tax asset.......... 31,477 36,230
Property and equipment, less
allowances for depreciation
of $801 in 1998 and $97 in 1997.. 7,348 1,567
Goodwill, less accumulated
amortization of $4,408 in 1998
and $630 in 1997................. 146,719 150,497
Other assets....................... 6,239 755
Separate account assets............ 3,396,114 1,646,169
---------- ----------
Total assets....................... $4,752,533 $2,446,395
========== ==========
</TABLE>
See accompanying notes.
76
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(Dollars in thousands, except per share data)
<TABLE>
POST-MERGER
------------------------------------
December 31, 1998 December 31, 1997
----------------- -----------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDER'S EQUITY
Policy liabilities and accruals:
Future policy benefits:
Annuity and interest sensitive life
products......................... $ 881,112 $ 505,304
Unearned revenue reserve........... 3,840 1,189
Other policy claims and benefits... -- 10
---------- ----------
884,952 506,503
Line of credit with affiliate....... -- 24,059
Surplus notes....................... 85,000 25,000
Due to affiliates................... -- 80
Other liabilities................... 32,573 17,271
Separate account liabilities........ 3,396,114 1,646,169
---------- ----------
4,398,639 2,219,082
Commitments and contingencies
Stockholder's equity:
Common stock, par value $10 per share,
authorized,issued and outstanding
250,000 shares................... 2,500 2,500
Additional paid-in capital......... 347,640 224,997
Accumulated other comprehensive
income (loss).................... (895) 241
Retained earnings (deficit)........ 4,649 (425)
---------- ----------
Total stockholder's equity.......... 353,894 227,313
---------- ----------
Total liabilities and stockholder's
equity............................ $4,752,533 $2,446,395
========== ==========
</TABLE>
See accompanying notes.
77
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
<TABLE>
POST-MERGER | POST-ACQUISITION | PRE-ACQUISITION
------------------------------------ | ----------------------------------- | ---------------
For the period | For the period For the period | For the period
For the year October 25,1997 | January 1,1997 August 14, 1996 | January 1, 1996
ended through | through through | through
December 31, 1998 December 31, 1997 | October 24, 1997 December 31, 1996 | August 13, 1996
----------------- ----------------- | ---------------- ----------------- | ---------------
<S> <C> <C> | <C> <C> | <C>
REVENUES: | |
Annuity and interest sensitive | |
life product charges........ $ 39,119 $ 3,834 | $ 18,288 $ 8,768 | $12,259
Management fee revenue....... 4,771 508 | 2,262 877 | 1,390
Net investment income........ 42,485 5,127 | 21,656 5,795 | 4,990
Realized gains (losses) on | |
investments................. (1,491) 15 | 151 42 | (420)
Other income................. 5,569 236 | 426 486 | 70
--------- -------- | -------- ------- | -------
90,453 9,720 | 42,783 15,968 | 18,289
| |
| |
INSURANCE BENEFITS AND EXPENSES: | |
Annuity and interest sensitive | |
life benefits: | |
Interest credited to account | |
balances..................... 94,845 7,413 | 19,276 5,741 | 4,355
Benefit claims incurred in | |
excess of account balances... 2,123 -- | 125 1,262 | 915
Underwriting, acquisition | |
and insurance expenses: | |
Commissions.................. 121,171 9,437 | 26,818 9,866 | 16,549
General expenses............. 37,577 3,350 | 13,907 5,906 | 9,422
Insurance taxes.............. 4,140 450 | 1,889 672 | 1,225
Policy acquisition costs | |
deferred................... (197,796) (13,678) | (29,003) (11,712) | (19,300)
Amortization: | |
Deferred policy acquisition | |
costs..................... 5,148 892 | 1,674 244 | 2,436
Value of purchased insurance | |
in force.................. 4,724 948 | 5,225 2,745 | 951
Goodwill.................... 3,778 630 | 1,398 589 | --
--------- --------- | -------- ------ | -------
75,710 9,442 | 41,309 15,313 | 16,553
| |
Interest expense............... 4,390 557 | 2,082 85 | --
--------- --------- | -------- ------ | -------
80,100 9,999 | 43,391 15,398 | 16,553
--------- --------- | -------- ------ | -------
Income (loss) before income | |
taxes........................ 10,353 (279) | (608) 570 | 1,736
| |
Income taxes................... 5,279 146 | (1,337) 220 | (1,463)
--------- --------- | -------- ------ | -------
Net income (loss).............. $ 5,074 $ (425) | $ 729 $ 350 | $ 3,199
========= ========= | ======== ======= | ========
</TABLE>
See accompanying notes.
78
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
(Dollars in thousands)
<TABLE>
Accumulated
Redeemable Additional Other Retained Total
Common Preferred Paid-in Comprehensive Earnings Stockholder's
Stock Stock Capital Income (Loss) (Deficit) Equity
------------------------------------------------------------------------------
PRE-ACQUISITION
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1996........ $2,500 $50,000 $ 45,030 $ 658 $ (63) $ 98,125
Comprehensive income:
Net income...................... -- -- -- -- 3,199 3,199
Change in net unrealized
investment gains (losses)..... -- -- -- (1,175) -- (1,175)
---------
Comprehensive income............. 2,024
Preferred stock dividends........ -- -- -- -- (719) (719)
------ ------- -------- ------- ------ ---------
Balance at August 13, 1996........ $2,500 $50,000 $ 45,030 $ (517) $2,417 $ 99,430
====== ======= ======== ======== ====== =========
</TABLE>
<TABLE>
------------------------------------------------------------------------------
POST-ACQUISITION
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at August 14, 1996........ $2,500 $50,000 $ 87,372 -- -- $139,872
Comprehensive income:
Net income...................... -- -- -- -- $ 350 350
Change in net unrealized
investment gains (losses)...... -- -- -- $ 262 -- 262
--------
Comprehensive income............. 612
Contribution of preferred stock
to additional paid-in capital... -- (50,000) 50,000 -- -- --
------ ------- -------- ------- ------ --------
Balance at December 31, 1996...... 2,500 -- 137,372 262 350 140,484
Comprehensive income:
Net income...................... -- -- -- -- 729 729
Change in net unrealized
investment gains (losses)...... -- -- -- 1,543 -- 1,543
--------
Comprehensive income............. 2,272
Contribution of capital.......... -- -- 1,121 -- -- 1,121
------ ------- -------- ------- ------ --------
Balance at October 24, 1997 $2,500 -- $138,493 $1,805 $1,079 $143,877
====== ======= ======== ====== ====== ========
</TABLE>
<TABLE>
------------------------------------------------------------------------------
POST-MERGER
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at October 25, 1997....... $2,500 -- $224,997 -- -- $227,497
Comprehensive loss:
Net loss....................... -- -- -- -- $ (425) (425)
Change in net unrealized
investment gains (losses)...... -- -- -- $ 241 -- 241
--------
Comprehensive loss............... (184)
------ ------- -------- ------- ------ --------
Balance at December 31, 1997...... 2,500 -- 224,997 241 (425) 227,313
Comprehensive income:
Net income...................... -- -- -- -- 5,074 5,074
Change in net unrealized
investment gains (losses)...... -- -- -- (1,136) -- (1,136)
--------
Comprehensive income............. 3,938
Contribution of capital.......... -- -- 122,500 -- -- 122,500
Other............................ -- -- 143 -- -- 143
------ ------- -------- ------- ------ --------
Balance at December 31, 1998...... $2,500 -- $347,640 $ (895) $4,649 $353,894
====== ======= ======== ======= ====== ========
</TABLE>
See accompanying notes.
79
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
POST-MERGER | POST-ACQUISITION | PRE-ACQUISITION
------------------------------------ | ----------------------------------- | ---------------
For the period | For the period For the period | For the period
For the year October 25,1997 | January 1,1997 August 14, 1996 | January 1, 1996
ended through | through through | through
December 31, 1998 December 31, 1997 | October 24, 1997 December 31, 1996 | August 13, 1996
----------------- ----------------- | ---------------- ----------------- | ---------------
<S> <C> <C> | <C> <C> | <C>
OPERATING ACTIVITIES | |
Net income (loss)............ $ 5,074 $ (425) | $ 729 $ 350 | $ 3,199
Adjustments to reconcile net | |
income (loss) to net cash | |
provided by (used in) | |
operations: | |
Adjustments related to annuity | |
and interest sensitive life | |
products: | |
Interest credited and other | |
charges on interest | |
sensitive products........ 94,690 7,361 | 19,177 5,106 | 4,472
Change in unearned | |
revenues.................. 2,651 1,189 | 3,292 2,063 | 2,084
Decrease (increase) in | |
accrued investment income.. (3,222) 1,205 | (3,489) (877) | (2,494)
Policy acquisition costs | |
deferred................... (197,796) (13,678) | (29,003) (11,712) | (19,300)
Amortization of deferred | |
policy acquisition costs... 5,148 892 | 1,674 244 | 2,436
Amortization of value of | |
purchased insurance in | |
force...................... 4,724 948 | 5,225 2,745 | 951
Change in other assets, | |
other liabilities and | |
accrued income taxes....... 9,891 4,205 | (8,944) (96) | 4,672
Provision for depreciation | |
and amortization........... 8,147 1,299 | 3,203 1,242 | 703
Provision for deferred | |
income taxes............... 5,279 146 | 316 220 | (1,463)
Realized (gains) losses on | |
investments................ 1,491 (15) | (151) (42) | 420
--------- -------- | -------- -------- | ---------
Net cash provided by (used | |
in)operating activities..... (63,923) 3,127 | (7,971) (757) | (4,320)
| |
INVESTING ACTIVITIES | |
Sale, maturity or repayment | |
of investments: | |
Fixed maturities - available | |
for sale 145,253 9,871 | 39,622 47,453 | 55,091
Mortgage loans on real | |
estate..................... 3,791 1,644 | 5,828 40 | --
Short-term investments-net.. -- -- | 11,415 2,629 | 354
--------- -------- | -------- -------- | ---------
149,044 11,515 | 56,865 50,122 | 55,445
Acquisition of investments: | |
Fixed maturities - available | |
for sale................... (476,523) (29,596) | (155,173) (147,170) | (184,589)
Equity securities........... (10,000) (1) | (4,865) (5) | --
Mortgage loans on real | |
estate..................... (16,390) (14,209) | (44,481) (31,499) | --
Policy loans - net.......... (2,940) (328) | (3,870) (637) | (1,977)
Short-term investments-net.. (26,692) (13,244) | -- -- | --
--------- -------- | -------- -------- | ---------
(532,545) (57,378) | (208,389) (179,311) | (186,566)
Purchase of property and | |
equipment................... (6,485) (252) | (875) (137) | --
--------- -------- | -------- -------- | ---------
Net cash used in investing | |
activities.................. (389,986) (46,115) | (152,399) (129,326) | (131,121)
</TABLE>
See accompanying notes.
80
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Dollars in thousands)
<TABLE>
POST-MERGER | POST-ACQUISITION | PRE-ACQUISITION
------------------------------------ | ----------------------------------- | ---------------
For the period | For the period For the period | For the period
For the year October 25,1997 | January 1,1997 August 14, 1996 | January 1, 1996
ended through | through through | through
December 31, 1998 December 31, 1997 | October 24, 1997 December 31, 1996 | August 13, 1996
----------------- ----------------- | ---------------- ----------------- | ---------------
<S> <C> <C> | <C> <C> | <C>
FINANCING ACTIVITIES | |
Proceeds from issuance of | |
surplus note................ $ 60,000 -- | -- $ 25,000 | --
Proceeds from reciprocal loan | |
agreement borrowings........ 500,722 -- | -- -- | --
Repayment of reciprocal loan | |
agreement borrowings........ (500,722) -- | -- -- | --
Proceeds from revolving | |
note payable................ 108,495 -- | -- -- | --
Repayment of revolving note | |
payable..................... (108,495) -- | -- -- | --
Proceeds from line of credit | |
borrowings.................. -- $10,119 | $ 97,124 -- | --
Repayment of line of credit | |
borrowings................... -- (2,207) | (80,977) -- | --
Receipts from annuity and | |
interest sensitive life | |
policies credited to | |
account balances............ 593,428 62,306 | 261,549 116,819 | $149,750
Return of account balances | |
on annuity and interest | |
sensitive life policies..... (72,649) (6,350) | (13,931) (3,315) | (2,695)
Net reallocations to Separate | |
Accounts (239,671) (17,017) | (93,069) (10,237) | (8,286)
Contributions of capital by | |
parent...................... 98,441 -- | 1,011 -- | --
Dividends paid on preferred | |
stock....................... -- -- | -- -- | (719)
Net cash provided by | |
financing activities........ 439,549 46,851 | 171,707 128,267 | 138,050
| |
Increase (decrease) in cash | |
and cash equivalents........ (14,360) 3,863 | 11,337 (1,816) | 2,609
Cash and cash equivalents at | |
beginning of period......... 21,039 17,176 | 5,839 7,655 | 5,046
Cash and cash equivalents at | |
end of period............... $ 6,679 $21,039 | $ 17,176 $ 5,839 | $ 7,655
| |
SUPPLEMENTAL DISCLOSURE | |
OF CASH FLOW INFORMATION | |
Cash paid during the period | |
for: | |
Interest.................... $ 4,305 $ 295 | $ 1,912 -- | --
Income taxes................ 99 -- | 283 -- | --
Non-cash financing activities: | |
Non-cash adjustment to | |
additional paid-in capital | |
for adjusted merger costs.. 143 -- | -- -- | --
Contribution of property and | |
equipment from EIC Variable, | |
Inc. net of $353 of | |
accumulated depreciation... -- -- | 110 -- | --
Contribution of capital from | |
parent to repay line of | |
credit borrowings.......... 24,059 -- | -- -- | --
</TABLE>
See accompanying notes.
81
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES
CONSOLIDATION
The consolidated financial statements include Golden American Life
Insurance Company ("Golden American") and its wholly owned
subsidiary, First Golden American Life Insurance Company of New
York ("First Golden," and with Golden American, collectively, the
"Companies"). All significant intercompany accounts and
transactions have been eliminated.
ORGANIZATION
Golden American, a wholly owned subsidiary of Equitable of Iowa
Companies, Inc., offers variable insurance products and is
licensed as a life insurance company in the District of Columbia
and all states except New York. On January 2, 1997 and December
23, 1997, First Golden became licensed to sell insurance products
in New York and Delaware, respectively. The Companies' products
are marketed by broker/dealers, financial institutions and
insurance agents. The Companies' primary customers are consumers
and corporations.
On October 24, 1997, PFHI Holding, Inc. ("PFHI"), a Delaware
corporation, acquired all of the outstanding capital stock of
Equitable of Iowa Companies ("Equitable") according to the terms
of an Agreement and Plan of Merger ("Merger Agreement") dated July
7, 1997 among Equitable, PFHI and ING Groep N.V. ("ING"). PFHI is
a wholly owned subsidiary of ING, a global financial services
holding company based in The Netherlands. As a result of this
transaction, Equitable was merged into PFHI, which was
simultaneously renamed Equitable of Iowa Companies, Inc. ("EIC" or
the "Parent"), a Delaware corporation. See Note 6 for additional
information regarding the merger.
On August 13, 1996, Equitable acquired all of the outstanding
capital stock of BT Variable, Inc. (subsequently known as EIC
Variable, Inc.) and its wholly owned subsidiaries, Golden American
and Directed Services, Inc. ("DSI") from Whitewood Properties
Corporation ("Whitewood"). See Note 7 for additional information
regarding the acquisition.
For financial statement purposes, the ING merger was accounted for
as a purchase effective October 25, 1997 and the change in control
of Golden American through the acquisition of BT Variable, Inc.
was accounted for as a purchase effective August 14, 1996. The
merger and acquisition resulted in new bases of accounting
reflecting estimated fair values of assets and liabilities at
their respective dates. As a result, the Companies' financial
statements for the periods after October 24, 1997 are presented on
the Post-Merger new basis of accounting, for the period August 14,
1996 through October 24, 1997 are presented on the Post-
Acquisition basis of accounting, and for August 13, 1996 and prior
periods are presented on the Pre-Acquisition basis of accounting.
INVESTMENTS
Fixed Maturities: The Companies account for their investments
under the Statement of Financial Accounting Standards ("SFAS") No.
115, "Accounting for Certain Investments in Debt and Equity
Securities," which requires fixed maturities to be designated as
either "available for sale," "held for investment" or "trading."
Sales of fixed maturities designated as "available for sale" are
not restricted by SFAS No. 115. Available for sale securities are
reported at fair value and unrealized gains and losses on these
securities are included directly in stockholder's equity, after
adjustment for related changes in value
82
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
of purchased insurance in force ("VPIF"), deferred policy acquisition
costs ("DPAC") and deferred income taxes. At December 31, 1998 and 1997,
all of the Companies' fixed maturities are designated as available
for sale, although the Companies are not precluded from designating
fixed maturities as held for investment or trading at some future date.
Securities determined to have a decline in value that is other
than temporary are written down to estimated fair value, which
becomes the new cost basis by a charge to realized losses in the
Companies' Statements of Operations. Premiums and discounts are
amortized/accrued utilizing a method which results in a constant
yield over the securities' expected lives. Amortization/accrual of
premiums and discounts on mortgage and other asset-backed
securities incorporates a prepayment assumption to estimate the
securities' expected lives.
Equity Securities: Equity securities are reported at estimated
fair value if readily marketable. The change in unrealized
appreciation and depreciation of marketable equity securities (net
of related deferred income taxes, if any) is included directly in
stockholder's equity. Equity securities determined to have a
decline in value that is other than temporary are written down to
estimated fair value, which then becomes the new cost basis by a
charge to realized losses in the Companies' Statements of
Operations.
Mortgage Loans: Mortgage loans on real estate are reported at cost
adjusted for amortization of premiums and accrual of discounts. If
the value of any mortgage loan is determined to be impaired (i.e.,
when it is probable the Companies will be unable to collect all
amounts due according to the contractual terms of the loan
agreement), the carrying value of the mortgage loan is reduced to
the present value of expected future cash flows from the loan
discounted at the loan's effective interest rate, or to the loan's
observable market price, or the fair value of the underlying
collateral. The carrying value of impaired loans is reduced by the
establishment of a valuation allowance which is adjusted at each
reporting date for significant changes in the calculated value of
the loan. Changes in this valuation allowance are charged or
credited to income.
Other Investments: Policy loans are reported at unpaid principal.
Short-term investments are reported at cost, adjusted for
amortization of premiums and accrual of discounts.
Realized Gains and Losses: Realized gains and losses are
determined on the basis of specific identification and average
cost methods for manager initiated and issuer initiated disposals,
respectively.
Fair Values: Estimated fair values, as reported herein, of
conventional mortgage-backed securities not actively traded in a
liquid market and publicly traded fixed maturities are estimated
using a third party pricing system. This pricing system uses a
matrix calculation assuming a spread over U.S. Treasury bonds
based upon the expected average lives of the securities. Fair
values of private placement bonds are estimated using a matrix
that assumes a spread (based on interest rates and a risk
assessment of the bonds) over U.S. Treasury bonds. Estimated fair
values of equity securities which consist of the Companies'
investment in its registered separate accounts are based upon the
quoted fair value of the securities comprising the individual
portfolios underlying the separate accounts.
83
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
CASH AND CASH EQUIVALENTS
For purposes of the accompanying Statements of Cash Flows, the
Companies consider all demand deposits and interest-bearing
accounts not related to the investment function to be cash
equivalents. All interest-bearing accounts classified as cash
equivalents have original maturities of three months or less.
DEFERRED POLICY ACQUISITION COSTS
Certain costs of acquiring new insurance business, principally
first year commissions and interest bonuses, extra credit bonuses
and other expenses related to the production of new business, have
been deferred. Acquisition costs for variable annuity and variable
life products are being amortized generally in proportion to the
present value (using the assumed crediting rate) of expected
future gross profits. This amortization is adjusted
retrospectively when the Companies revise their estimate of
current or future gross profits to be realized from a group of
products. DPAC is adjusted to reflect the pro forma impact of
unrealized gains and losses on fixed maturities the Companies have
designated as "available for sale" under SFAS No. 115.
VALUE OF PURCHASED INSURANCE IN FORCE
As a result of the merger and the acquisition, a portion of the
purchase price related to each transaction was allocated to the
right to receive future cash flows from existing insurance
contracts. This allocated cost represents VPIF which reflects the
value of those purchased policies calculated by discounting
actuarially determined expected future cash flows at the discount
rate determined by the purchaser. Amortization of VPIF is charged
to expense in proportion to expected gross profits of the
underlying business. This amortization is adjusted retrospectively
when the Companies revise the estimate of current or future gross
profits to be realized from the insurance contracts acquired. VPIF
is adjusted to reflect the pro forma impact of unrealized gains
and losses on available for sale fixed maturities. See Notes 6 and
7 for additional information on VPIF resulting from the merger and
acquisition.
PROPERTY AND EQUIPMENT
Property and equipment primarily represent leasehold improvements,
office furniture, certain other equipment and capitalized computer
software and are not considered to be significant to the
Companies' overall operations. Property and equipment are reported
at cost less allowances for depreciation. Depreciation expense is
computed primarily on the basis of the straight-line method over
the estimated useful lives of the assets.
GOODWILL
Goodwill was established as a result of the merger and is being
amortized over 40 years on a straight-line basis. Goodwill
established as a result of the acquisition was being amortized
over 25 years on a straight-line basis. See Notes 6 and 7 for
additional information on the merger and acquisition.
FUTURE POLICY BENEFITS
Future policy benefits for divisions with fixed interest
guarantees of the variable products are established utilizing the
retrospective deposit accounting method. Policy reserves represent
the premiums received plus accumulated interest, less mortality
and administration charges. Interest credited to these policies
ranged from 3.00% to 10.00% during 1998, 3.30% to 8.25% during
1997 and 4.00% to 7.25% during 1996. The unearned revenue reserve
represents unearned distribution fees. These distribution fees
have been deferred and are amortized over the life of the
contracts in proportion to expected gross profits.
84
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
SEPARATE ACCOUNTS
Assets and liabilities of the separate accounts reported in the
accompanying Balance Sheets represent funds separately
administered principally for variable annuity and variable life
contracts. Contractholders, rather than the Companies, bear the
investment risk for the variable products. At the direction of the
contractholders, the separate accounts invest the premiums from
the sale of variable products in shares of specified mutual funds.
The assets and liabilities of the separate accounts are clearly
identified and segregated from other assets and liabilities of the
Companies. The portion of the separate account assets equal to the
reserves and other liabilities of variable annuity and variable
life contracts cannot be charged with liabilities arising out of
any other business the Companies may conduct.
Variable separate account assets are carried at fair value of the
underlying investments and generally represent contractholder
investment values maintained in the accounts. Variable separate
account liabilities represent account balances for the variable
annuity and variable life contracts invested in the separate
accounts; the fair value of these liabilities is equal to their
carrying amount. Net investment income and realized and unrealized
capital gains and losses related to separate account assets are
not reflected in the accompanying Statements of Operations.
Product charges recorded by the Companies from variable products
consist of charges applicable to each contract for mortality and
expense risk, cost of insurance, contract administration and
surrender charges. In addition, some variable annuity and all
variable life contracts provide for a distribution fee collected
for a limited number of years after each premium deposit. Revenue
recognition of collected distribution fees is amortized over the
life of the contract in proportion to its expected gross profits.
The balance of unrecognized revenue related to the distribution
fees is reported as an unearned revenue reserve.
DEFERRED INCOME TAXES
Deferred tax assets or liabilities are computed based on the
difference between the financial statement and income tax bases of
assets and liabilities using the enacted marginal tax rate.
Deferred tax assets or liabilities are adjusted to reflect the pro
forma impact of unrealized gains and losses on equity securities
and fixed maturities the Companies have designated as available
for sale under SFAS No. 115. Changes in deferred tax assets or
liabilities resulting from this SFAS No. 115 adjustment are
charged or credited directly to stockholder's equity. Deferred
income tax expenses or credits reflected in the Companies'
Statements of Operations are based on the changes in the deferred
tax asset or liability from period to period (excluding the SFAS
No. 115 adjustment).
DIVIDEND RESTRICTIONS
Golden American's ability to pay dividends to its Parent is
restricted. Prior approval of insurance regulatory authorities is
required for payment of dividends to the stockholder which exceed
an annual limit. During 1999, Golden American cannot pay dividends
to its Parent without prior approval of statutory authorities.
Under the provisions of the insurance laws of the State of New
York, First Golden cannot distribute any dividends to its
stockholder unless a notice of its intent to declare a dividend
and the amount of the dividend has been filed at least thirty days
in advance of the proposed declaration. If the Superintendent
finds the financial condition of First Golden does not warrant the
distribution, the Superintendent may disapprove the distribution
by giving written notice to First Golden within thirty days after
the filing.
85
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
SEGMENT REPORTING
As of December 31, 1998, the Companies adopted the SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related
Information." SFAS No. 131 superseded SFAS No. 14, "Financial
Reporting for Segments of a Business Enterprise." SFAS No. 131
establishes standards for the way public business enterprises
report information about operating segments in annual financial
statements and requires enterprises to report selected information
about operating segments in interim financial reports. SFAS No.
131 also establishes standards for related disclosures about
products and services, geographic areas and major customers.
The Companies manage their business as one segment, the sale of
variable products designed to meet customer needs for tax-
advantaged methods of saving for retirement and protection from
unexpected death. Variable products are sold to consumers and
corporations throughout the United States. The adoption of SFAS
No. 131 did not affect the results of operations or financial
position of the Companies.
USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions affecting the amounts reported in
the financial statements and accompanying notes. Actual results
could differ from those estimates.
Management is required to utilize historical experience and
assumptions about future events and circumstances in order to
develop estimates of material reported amounts and disclosures.
Included among the material (or potentially material) reported
amounts and disclosures that require extensive use of estimates
and assumptions are (1) estimates of fair values of investments in
securities and other financial instruments, as well as fair values
of policyholder liabilities, (2) policyholder liabilities, (3)
deferred policy acquisition costs and value of purchased insurance
in force, (4) fair values of assets and liabilities recorded as a
result of merger and acquisition transactions, (5) asset valuation
allowances, (6) guaranty fund assessment accruals, (7) deferred
tax benefits (liabilities) and (8) estimates for commitments and
contingencies including legal matters, if a liability is
anticipated and can be reasonably estimated. Estimates and
assumptions regarding all of the proceeding are inherently subject
to change and are reassessed periodically. Changes in estimates
and assumptions could materially impact the financial statements.
RECLASSIFICATIONS
Certain amounts in the financial statements for the periods ended
within the years ended December 31, 1997 and 1996 have been
reclassified to conform to the December 31, 1998 financial
statement presentation.
2. BASIS OF FINANCIAL REPORTING
The financial statements of the Companies differ from related
statutory-basis financial statements principally as follows: (1)
acquisition costs of acquiring new business are deferred and
amortized over the life of the policies rather than charged to
operations as incurred; (2) an asset representing the present
value of future cash flows from insurance contracts acquired was
established as a result of the merger/acquisition and is amortized
and charged to expense; (3) future policy benefit reserves for
divisions with fixed interest guarantees of the variable products
are based on full account values, rather than the greater of cash
surrender value or amounts derived from discounting methodologies
utilizing statutory interest rates; (4) reserves are reported
before reduction for reserve credits related to
86
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
2. BASIS OF FINANCIAL REPORTING (continued)
reinsurance ceded and a receivable is established, net of an allowance
for uncollectible amounts, for these credits rather than presented net
of these credits; (5) fixed maturity investments are designated as
"available for sale" and valued at fair value with unrealized
appreciation/depreciation, net of adjustments to value of
purchased insurance in force, deferred policy acquisition costs
and deferred income taxes (if applicable), credited/charged
directly to stockholder's equity rather than valued at amortized
cost; (6) the carrying value of fixed maturities is reduced to
fair value by a charge to realized losses in the Statements of
Operations when declines in carrying value are judged to be other
than temporary, rather than through the establishment of a formula-
determined statutory investment reserve (carried as a liability),
changes in which are charged directly to surplus; (7) deferred
income taxes are provided for the difference between the financial
statement and income tax bases of assets and liabilities; (8) net
realized gains or losses attributed to changes in the level of
interest rates in the market are recognized when the sale is
completed rather than deferred and amortized over the remaining
life of the fixed maturity security; (9) a liability is
established for anticipated guaranty fund assessments, net of
related anticipated premium tax credits, rather than capitalized
when assessed and amortized in accordance with procedures
permitted by insurance regulatory authorities; (10) revenues for
variable products consist of policy charges applicable to each
contract for the cost of insurance, policy administration charges,
amortization of policy initiation fees and surrender charges
assessed rather than premiums received; (11) the financial
statements of Golden American's wholly owned subsidiary are
consolidated rather than recorded at the equity in net assets;
(12) surplus notes are reported as liabilities rather than as
surplus; and (13) assets and liabilities are restated to fair
values when a change in ownership occurs, with provisions for
goodwill and other intangible assets, rather than continuing to be
presented at historical cost.
The net loss for Golden American as determined in accordance with
statutory accounting practices was $68,002,000 in 1998, $428,000
in 1997 and $9,188,000 in 1996. Total statutory capital and
surplus was $183,045,000 at December 31, 1998 and $76,914,000 at
December 31, 1997.
87
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
3. INVESTMENT OPERATIONS
INVESTMENT RESULTS
Major categories of net investment income are summarized below:
<TABLE>
POST-MERGER | POST-ACQUISITION | PRE-ACQUISITION
------------------------------------ | ----------------------------------- | ---------------
For the period | For the period For the period | For the period
For the year October 25,1997 | January 1,1997 August 14, 1996 | January 1, 1996
ended through | through through | through
December 31, 1998 December 31, 1997 | October 24, 1997 December 31, 1996 | August 13, 1996
----------------- ----------------- | ---------------- ----------------- | ---------------
| (Dollars in thousands) |
<S> <C> <C> | <C> <C> | <C>
Fixed maturities............. $35,224 $4,443 | $18,488 $5,083 | $4,507
Equity securities............ -- 3 | -- 103 | --
Mortgage loans on | |
real estate................. 6,616 879 | 3,070 203 | --
Policy loans................. 619 59 | 482 78 | 73
Short-term | |
investments................. 1,311 129 | 443 441 | 341
Other, net................... 246 (154) | 24 2 | 22
Funds held in | |
escrow...................... -- -- | -- -- | 145
------- ------ | ------- ------ | ------
Gross investment | |
income...................... 44,016 5,359 | 22,507 5,910 | 5,088
Less investment | |
expenses.................... (1,531) (232) | (851) (115) | (98)
------- ------ | ------- ------ | ------
Net investment | |
income...................... $42,485 $5,127 | $21,656 $5,795 | $4,990
======= ====== | ======= ====== | ======
</TABLE>
Realized gains (losses) on investments are as follows:
<TABLE>
POST-MERGER | POST-ACQUISITION | PRE-ACQUISITION
------------------------------------ | ----------------------------------- | ---------------
For the period | For the period For the period | For the period
For the year October 25,1997 | January 1,1997 August 14, 1996 | January 1, 1996
ended through | through through | through
December 31, 1998 December 31, 1997 | October 24, 1997 December 31, 1996 | August 13, 1996
----------------- ----------------- | ---------------- ----------------- | ---------------
| (Dollars in thousands) |
<S> <C> <C> | <C> <C> | <C>
Fixed maturities: | |
available for sale.......... $(1,428) $25 | $151 $42 | $(420)
Mortgage loans............... (63) (10) | -- -- | --
------- --- | ---- --- | -----
Realized gains (losses) | |
on investments.............. $(1,491) $15 | $151 $42 | $(420)
======= === | ==== === | =====
</TABLE>
88
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
3. INVESTMENT OPERATIONS (continued)
The change in unrealized appreciation (depreciation) of securities
at fair value is as follows:
<TABLE>
POST-MERGER | POST-ACQUISITION | PRE-ACQUISITION
------------------------------------ | ----------------------------------- | ---------------
For the period | For the period For the period | For the period
For the year October 25,1997 | January 1,1997 August 14, 1996 | January 1, 1996
ended through | through through | through
December 31, 1998 December 31, 1997 | October 24, 1997 December 31, 1996 | August 13, 1996
----------------- ----------------- | ---------------- ----------------- | ---------------
| (Dollars in thousands) |
<S> <C> <C> | <C> <C> | <C>
Fixed maturities: | |
Available for sale.......... $1,100 $(3,494) | $4,197 $2,497 | $(3,045)
Held for investment......... -- -- | -- -- | (90)
Equity securities............ (2,390) (68) | (462) (4) | (2)
------ ------- | ------ ------ | -------
Unrealized appreciation | |
(depreciation) of | |
securities.................. $(1,290) $(3,562) | $3,735 $2,493 | $(3,137)
======= ======= | ====== ====== | =======
</TABLE>
At December 31, 1998 and December 31, 1997, amortized cost, gross
unrealized gains and losses and estimated fair values of fixed
maturities, all of which are designated as available for sale, are
as follows:
<TABLE>
POST-MERGER
---------------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- ---------
(Dollars in thousands)
<S> <C> <C> <C> <C>
DECEMBER 31, 1998
U.S. government and governmental
agencies and authorities............. $ 13,568 $ 182 $ (8) $ 13,742
Foreign governments................... 2,028 8 -- 2,036
Public utilities...................... 67,710 546 (447) 67,809
Corporate securities.................. 365,569 4,578 (2,658) 367,489
Other asset-backed securities......... 99,877 281 (1,046) 99,112
Mortgage-backed securities............ 191,020 1,147 (370) 191,797
-------- ------ ------- --------
Total................................. $739,772 $6,742 $(4,529) $741,985
======== ====== ======= ========
DECEMBER 31, 1997
U.S. government and governmental
agencies and authorities............ $ 5,705 $ 5 $ (1) $ 5,709
Foreign governments................... 2,062 -- (9) 2,053
Public utilities...................... 26,983 55 (4) 27,034
Corporate securities.................. 259,798 1,105 (242) 260,661
Other asset-backed securities......... 3,155 32 -- 3,187
Mortgage-backed securities............ 115,585 202 (30) 115,757
-------- ------ ------- --------
Total................................. $413,288 $1,399 $ (286) $414,401
======== ====== ======= ========
</TABLE>
89
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
3. INVESTMENT OPERATIONS (continued)
At December 31, 1998, net unrealized investment gains on fixed
maturities designated as available for sale totaled $2,213,000.
Appreciation of $1,005,000 was included in stockholder's equity at
December 31, 1998 (net of an adjustment of $203,000 to VPIF, an
adjustment of $455,000 to DPAC and deferred income taxes of
$550,000). Short-term investments with maturities of 30 days or
less have been excluded from the above schedules. Amortized cost
approximates fair value for these securities.
Amortized cost and estimated fair value of fixed maturities
designated as available for sale, by contractual maturity, at
December 31, 1998 are shown below. Expected maturities will differ
from contractual maturities because borrowers may have the right
to call or prepay obligations with or without call or prepayment
penalties.
POST-MERGER
---------------------------
Amortized Estimated
December 31, 1998 Cost Fair Value
- ----------------------------------------------------------------------
(Dollars in thousands)
Due within one year...................... $ 50,208 $ 50,361
Due after one year through five years.... 310,291 311,943
Due after five years through ten years... 78,264 78,541
Due after ten years...................... 10,112 10,231
448,875 451,076
Other asset-backed securities............ 99,877 99,112
Mortgage-backed securities............... 191,020 191,797
-------- --------
Total.................................... $739,772 $741,985
======== ========
An analysis of sales, maturities and principal repayments of the
Companies' fixed maturities portfolio is as follows:
<TABLE>
Gross Gross Proceeds
Amortized Realized Realized from
Cost Gains Losses Sale
--------- -------- -------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C>
POST-MERGER
For the year ended December 31, 1998:
Scheduled principal repayments,
calls and tenders...................... $102,504 $ 60 $ (3) $102,561
Sales................................... 43,204 518 (1,030) 42,692
-------- ---- ------- --------
Total................................... $145,708 $578 $(1,033) $145,253
======== ==== ======= ========
For the period October 25, 1997 through
December 31, 1997:
Scheduled principal repayments,
calls and tenders..................... $ 6,708 $ 2 -- $ 6,710
Sales.................................. 3,138 23 -- 3,161
-------- ---- ------- --------
Total.................................. $ 9,846 $ 25 -- $ 9,871
======== ==== ======= ========
</TABLE>
90
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
3. INVESTMENT OPERATIONS (continued)
<TABLE>
Gross Gross Proceeds
Amortized Realized Realized from
Cost Gains Losses Sale
--------- -------- -------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C>
POST- ACQUISITION
For the period January 1, 1997 through
October 24, 1997:
Scheduled principal repayments,
calls and tenders..................... $25,419 -- -- $25,419
Sales.................................. 14,052 $153 $ (2) 14,203
------- ---- ---- -------
Total.................................. $39,471 $153 $ (2) $39,622
======= ==== ==== =======
For the period August 14, 1996 through
December 31, 1996:
Scheduled principal repayments,
calls and tenders.................... $ 1,612 -- -- $ 1,612
Sales................................. 45,799 $115 $(73) 45,841
------- ---- ---- -------
Total................................. $47,411 $115 $(73) $47,453
======= ==== ==== =======
PRE-ACQUISITION
For the period January 1, 1996 through
August 13, 1996:
Scheduled principal repayments,
calls and tenders.................... $ 1,801 -- -- $ 1,801
Sales................................. 53,710 $152 $(572) 53,290
------- ---- ----- -------
Total................................. $55,511 $152 $(572) $55,091
======= ==== ===== =======
</TABLE>
Investment Valuation Analysis: The Companies analyze the
investment portfolio at least quarterly in order to determine if
the carrying value of any investment has been impaired. The
carrying value of debt and equity securities is written down to
fair value by a charge to realized losses when an impairment in
value appears to be other than temporary. During the year ended
December 31, 1998, Golden American recognized a loss on two fixed
maturity investments of $973,000. During 1997 and 1996, no
investments were identified as having an other than temporary
impairment.
Investments on Deposit: At December 31, 1998 and 1997, affidavits
of deposits covering bonds with a par value of $6,470,000 and
$6,605,000, respectively, were on deposit with regulatory
authorities pursuant to certain statutory requirements.
Investment Diversifications: The Companies' investment policies
related to the investment portfolio require diversification by
asset type, company and industry and set limits on the amount
which can be invested in an individual issuer. Such policies are
at least as restrictive as those set forth by regulatory
authorities. The following percentages relate to holdings at
December 31, 1998 and December 31, 1997. Fixed maturities included
investments in basic industrials (26% in 1998, 30% in 1997),
conventional mortgage-backed securities (25% in 1998, 13% in
1997), financial companies (19% in 1998, 24% in 1997), other asset-
backed securities (11% in 1998) and various government bonds and
government or agency mortgage-backed securities (5% in 1998, 17%
in 1997). Mortgage loans on real estate have been analyzed
91
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
3. INVESTMENT OPERATIONS (continued)
by geographical location with concentrations by state identified as
California (12% in 1998 and 1997), Utah (11% in 1998, 13% in 1997)
and Georgia (10% in 1998, 11% in 1997). There are no other
concentrations of mortgage loans in any state exceeding ten
percent at December 31, 1998 and 1997. Mortgage loans on real
estate have also been analyzed by collateral type with significant
concentrations identified in office buildings (36% in 1998, 43% in
1997), industrial buildings (32% in 1998, 33% in 1997) and retail
facilities (20% in 1998, 15% in 1997). Equity securities are not
significant to the Companies' overall investment portfolio.
No investment in any person or its affiliates (other than bonds
issued by agencies of the United States government) exceeded ten
percent of stockholder's equity at December 31, 1998.
4. COMPREHENSIVE INCOME
As of January 1, 1998, the Companies adopted the SFAS No. 130,
"Reporting Comprehensive Income." SFAS No. 130 establishes new
rules for the reporting and display of comprehensive income and
its components; however, the adoption of this statement had no
impact on the Companies' net income or stockholder's equity. SFAS
No. 130 requires unrealized gains or losses on the Companies'
available for sale securities (net of VPIF, DPAC and deferred
income taxes) to be included in other comprehensive income. Prior
to the adoption of SFAS No. 130, unrealized gains (losses) were
reported separately in stockholder's equity. Prior year financial
statements have been reclassified to conform to the requirements
of SFAS No. 130.
Total comprehensive income (loss) for the Companies includes
$1,015,000 for the year ended December 31, 1998 for First Golden
($159,000, $536,000 and $(57,000), respectively, for the periods
October 25, 1997 through December 31, 1997, January 1, 1997
through October 24, 1997 and December 17, 1996 through December
31, 1996). Other comprehensive income excludes net investment
gains (losses) included in net income which merely represent
transfers from unrealized to realized gains and losses. These
amounts total $(2,133,000) in 1998. Such amounts, which have been
measured through the date of sale, are net of income taxes and
adjustments to VPIF and DPAC totaling $705,000 in 1998.
5. FAIR VALUES OF FINANCIAL INSTRUMENTS
SFAS No. 107, "Disclosures about Fair Value of Financial
Instruments," requires disclosure of estimated fair value of all
financial instruments, including both assets and liabilities
recognized and not recognized in a company's balance sheet, unless
specifically exempted. SFAS No. 119, "Disclosure about Derivative
Financial Instruments and Fair Value of Financial Instruments,"
requires additional disclosures about derivative financial
instruments. Most of the Companies' investments, investment
contracts and debt fall within the standards' definition of a
financial instrument. Fair values for the Companies' insurance
contracts other than investment contracts are not required to be
disclosed. In cases where quoted market prices are not available,
estimated fair values are based on estimates using present value
or other valuation techniques. Those techniques are significantly
affected by the assumptions used, including the discount rate and
estimates of future cash flows. Accounting, actuarial and
regulatory bodies are continuing to study the methodologies to be
used in developing fair value information, particularly as it
relates to such things as liabilities for insurance contracts.
Accordingly, care should be exercised in deriving conclusions
about the Companies' business or financial condition based on the
information presented herein.
The Companies closely monitor the composition and yield of
invested assets, the duration and interest credited on insurance
liabilities and resulting interest spreads and timing of cash
flows. These amounts
92
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
5. FAIR VALUES OF FINANCIAL INSTRUMENTS (continued)
are taken into consideration in the Companies' overall management
of interest rate risk, which attempts to minimize exposure to changing
interest rates through the matching of investment cash flows with amounts
expected to be due under insurance contracts. These assumptions may not
result in values consistent with those obtained through an actuarial
appraisal of the Companies' business or values that might arise in
a negotiated transaction.
The following compares carrying values as shown for financial
reporting purposes with estimated fair values:
<TABLE>
POST-MERGER
-----------------------------------------------
December 31, 1998 December 31, 1997
---------------------- -----------------------
Estimated Estimated
Carrying Fair Carrying Fair
Value Value Value Value
----------- --------- ---------- -----------
(Dollars in thousands)
<S> <C> <C> <C> <C>
ASSETS
Fixed maturities, available
for sale...................... $ 741,985 $ 741,985 $ 414,401 $ 414,401
Equity securities.............. 11,514 11,514 3,904 3,904
Mortgage loans on real estate.. 97,322 99,762 85,093 86,348
Policy loans................... 11,772 11,772 8,832 8,832
Short-term investments......... 41,152 41,152 14,460 14,460
Cash and cash equivalents...... 6,679 6,679 21,039 21,039
Separate account assets........ $3,396,114 $3,396,114 $1,646,169 $1,646,169
LIABILITIES
Annuity products............... 869,009 827,597 493,181 469,714
Surplus notes.................. 85,000 90,654 25,000 28,837
Line of credit with affiliate.. -- -- 24,059 24,059
Separate account liabilities... 3,396,114 3,396,114 1,646,169 1,646,169
</TABLE>
The following methods and assumptions were used by the Companies
in estimating fair values.
Fixed Maturities: Estimated fair values of conventional mortgage-
backed securities not actively traded in a liquid market and
publicly traded securities are estimated using a third party
pricing system. This pricing system uses a matrix calculation
assuming a spread over U.S. Treasury bonds based upon the expected
average lives of the securities.
Equity Securities: Estimated fair values of equity securities,
which consist of the Companies' investment in the portfolios
underlying its separate accounts, are based upon the quoted fair
value of individual securities comprising the individual
portfolios. For equity securities not actively traded, estimated
fair values are based upon values of issues of comparable returns
and quality.
Mortgage Loans on Real Estate: Fair values are estimated by
discounting expected cash flows, using interest rates currently
offered for similar loans.
Policy Loans: Carrying values approximate the estimated fair value
for policy loans.
93
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
5. FAIR VALUES OF FINANCIAL INSTRUMENTS (continued)
Short-Term Investments and Cash and Cash Equivalents: Carrying
values reported in the Companies' historical cost basis balance
sheet approximate estimated fair value for these instruments due
to their short-term nature.
Separate Account Assets: Separate account assets are reported at
the quoted fair values of the individual securities in the
separate accounts.
Annuity Products: Estimated fair values of the Companies'
liabilities for future policy benefits for the divisions of the
variable annuity products with fixed interest guarantees and for
supplemental contracts without life contingencies are stated at
cash surrender value, the cost the Companies would incur to
extinguish the liability.
Surplus Notes: Estimated fair value of the Companies' surplus
notes were based upon discounted future cash flows using a
discount rate approximating the Companies' return on invested
assets.
Line Of Credit With Affiliate: Carrying value reported in the
Companies' historical cost basis balance sheet approximates
estimated fair value for this instrument.
Separate Account Liabilities: Separate account liabilities are
reported at full account value in the Companies' historical cost
balance sheet. Estimated fair values of separate account
liabilities are equal to their carrying amount.
6. MERGER
Transaction: On October 23, 1997, Equitable's shareholders
approved the Merger Agreement dated July 7, 1997 among Equitable,
PFHI and ING. On October 24, 1997, PFHI, a Delaware corporation,
acquired all of the outstanding capital stock of Equitable
according to the Merger Agreement. PFHI is a wholly owned
subsidiary of ING, a global financial services holding company
based in The Netherlands. Equitable, an Iowa corporation, in turn,
owned all the outstanding capital stock of Equitable Life
Insurance Company of Iowa ("Equitable Life") and Golden American
and their wholly owned subsidiaries. In addition, Equitable owned
all the outstanding capital stock of Locust Street Securities,
Inc. ("LSSI"), Equitable Investment Services, Inc. (subsequently
dissolved), DSI, Equitable of Iowa Companies Capital Trust,
Equitable of Iowa Companies Capital Trust II and Equitable of Iowa
Securities Network, Inc. (subsequently renamed ING Funds
Distributor, Inc.). In exchange for the outstanding capital stock
of Equitable, ING paid total consideration of approximately $2.1
billion in cash and stock and assumed approximately $400 million
in debt. As a result of this transaction, Equitable was merged
into PFHI, which was simultaneously renamed Equitable of Iowa
Companies, Inc. ("EIC" or the "Parent"), a Delaware corporation.
All costs of the merger, including expenses to terminate certain
benefit plans, were paid by the Parent.
Accounting Treatment: The merger was accounted for as a purchase
resulting in a new basis of accounting, reflecting estimated fair
values for assets and liabilities at October 24, 1997. The
purchase price was allocated to EIC and its subsidiaries with
$227,497,000 allocated to the Companies. Goodwill was established
for the excess of the merger cost over the fair value of the net
assets and attributed to EIC and its subsidiaries including Golden
American and First Golden. The amount of goodwill allocated to the
Companies relating to the merger was $151,127,000 at the merger
date and is being amortized over 40 years on a straight-line
basis. The carrying value of goodwill will be reviewed
periodically for any indication of impairment in value. The
Companies' DPAC, previous balance of VPIF and unearned revenue
reserve, as of the merger date, were eliminated and a new asset of
$44,297,000 representing VPIF was established for all policies in
force at the merger date.
94
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
6. Merger (continued)
Value of Purchased Insurance In Force: As part of the merger, a
portion of the acquisition cost was allocated to the right to
receive future cash flows from insurance contracts existing with
the Companies at the merger date. This allocated cost represents
VPIF reflecting the value of those purchased policies calculated
by discounting the actuarially determined expected future cash
flow at the discount rate determined by ING.
An analysis of the VPIF asset is as follows:
POST-MERGER
-------------------------------------
For the period
For the year October 25, 1997
ended through
December 31, 1998 December 31, 1997
----------------- -----------------
(Dollars in thousands)
Beginning balance................. $43,174 $44,297
-------- --------
Imputed interest.................. 2,802 1,004
Amortization...................... (7,753) (1,952)
Changes in assumptions of
timing of gross profits.......... 227 --
-------- --------
Net amortization.................. (4,724) (948)
Adjustment for unrealized gains
on available for sale
securities....................... (28) (175)
Adjustment for other receivables
and merger costs................. (2,445) --
-------- --------
Ending balance.................... $35,977 $43,174
======= =======
Interest is imputed on the unamortized balance of VPIF at a rate
of 7.38% for the year ended December 31, 1998 and 7.03% for the
period October 25, 1997 through December 31, 1997. The
amortization of VPIF, net of imputed interest, is charged to
expense. VPIF decreased $2,664,000 in the second quarter of 1998
to adjust the value of other receivables at merger date and
increased $219,000 in the first quarter of 1998 as a result of an
adjustment to the merger costs. VPIF is adjusted for the
unrealized gains (losses) on available for sale securities; such
changes are included directly in stockholder's equity. Based on
current conditions and assumptions as to the impact of future
events on acquired policies in force, the expected approximate net
amortization relating to VPIF as of December 31, 1998 is
$4,300,000 in 1999, $4,000,000 in 2000, $3,900,000 in 2001,
$3,700,000 in 2002 and $3,300,000 in 2003. Actual amortization may
vary based upon changes in assumptions and experience.
7. ACQUISITION
Transaction: On August 13, 1996, Equitable acquired all of the
outstanding capital stock of BT Variable from Whitewood, a wholly
owned subsidiary of Bankers Trust Company ("Bankers Trust"),
according to the terms of the Purchase Agreement dated May 3, 1996
between Equitable and Whitewood. In exchange for the outstanding
capital stock of BT Variable, Equitable paid the sum of
$93,000,000 in cash to Whitewood in accordance with the terms of
the Purchase Agreement. Equitable also paid the sum of $51,000,000
in cash to Bankers Trust to retire certain debt owed by BT
Variable to Bankers Trust pursuant to a revolving credit arrangement.
After the acquisition, the BT Variable, Inc. name was changed to EIC
Variable, Inc. On April 30, 1997, EIC Variable, Inc. was liquidated
and its investments in
95
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
7. Acquisition (continued)
Golden American and DSI were transferred to Equitable, while the
remainder of its net assets were contributed to Golden American.
On December 30, 1997, EIC Variable, Inc. was dissolved.
Accounting Treatment: The acquisition was accounted for as a
purchase resulting in a new basis of accounting, which reflected
estimated fair values for assets and liabilities at August 13,
1996. The purchase price was allocated to the three companies
purchased - BT Variable, DSI and Golden American. The allocation
of the purchase price to Golden American was approximately
$139,872,000. Goodwill was established for the excess of the
purchase price over the fair value of the net assets acquired and
attributed to Golden American. The amount of goodwill relating to
the acquisition was $41,113,000 and was amortized over 25 years on
a straight-line basis until the October 24, 1997 merger with ING.
Golden American's DPAC, previous balance of VPIF and unearned
revenue reserve, as of the acquisition date, were eliminated and
an asset of $85,796,000 representing VPIF was established for all
policies in force at the acquisition date.
Value of Purchased Insurance In Force: As part of the
acquisition, a portion of the acquisition cost was allocated to
the right to receive future cash flows from the insurance
contracts existing with Golden American at the date of
acquisition. This allocated cost represents VPIF reflecting the
value of those purchased policies calculated by discounting the
actuarially determined expected future cash flows at the discount
rate determined by Equitable.
An analysis of the VPIF asset is as follows:
<TABLE>
POST-ACQUISITION | PRE-ACQUISITION
------------------------------------|----------------
For the period For the period | For the period
January 1, 1997 August 14,1996 | January 1, 1996
through through | through
October 24, 1997 December 31, 1996 | August 13, 1996
---------------- ----------------- | ---------------
(Dollars in thousands)
<S> <C> <C> | <C>
Beginning balance................ $83,051 $85,796 | $6,057
------- ------- | ------
Imputed interest................. 5,138 2,465 | 273
Amortization..................... (12,656) (5,210) | (1,224)
Changes in assumption of | ------
timing of gross profits......... 2,293 -- | --
------- ------- |
Net amortization................. (5,225) (2,745) | (951)
Adjustment for unrealized gains |
(losses) on available for sale |
securities...................... (373) -- | 11
------- ------- | ------
Ending balance $77,453 $83,051 | $5,117
======= ======= | ======
</TABLE>
Pre-Acquisition VPIF represents the remaining value assigned to in
force contracts when Bankers Trust purchased Golden American from
Mutual Benefit Life Insurance Company in Rehabilitation ("Mutual
Benefit") on September 30, 1992.
Interest was imputed on the unamortized balance of VPIF at rates
of 7.70% to 7.80% for the period August 14, 1996 through October
24, 1997. The amortization of VPIF net of imputed interest was
charged to expense. VPIF was also adjusted for the unrealized
gains (losses) on available for sale securities; such changes were
included directly in stockholder's equity.
8. INCOME TAXES
Golden American files a consolidated federal income tax return.
Under the Internal Revenue Code, a newly acquired insurance
company cannot file as part of its parent's consolidated tax
return for 5 years.
96
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
8. INCOME TAXES(continued)
At December 31, 1998, the Companies have net operating loss
("NOL") carryforwards for federal income tax purposes of
approximately $50,917,000. Approximately $5,094,000, $3,354,000
and $42,469,000 of these NOL carryforwards are available to offset
future taxable income of the Companies through the years 2011,
2012 and 2013, respectively.
INCOME TAX EXPENSE
Income tax expense (benefit) included in the consolidated
financial statements is as follows:
<TABLE>
POST-MERGER | POST-ACQUISITION | PRE-ACQUISITION
------------------------------------ | ----------------------------------- | ---------------
For the period | For the period For the period | For the period
For the year October 25,1997 | January 1,1997 August 14, 1996 | January 1, 1996
ended through | through through | through
December 31, 1998 December 31, 1997 | October 24, 1997 December 31, 1996 | August 13, 1996
----------------- ----------------- | ---------------- ----------------- | ---------------
| (Dollars in thousands) |
<S> <C> <C> | <C> <C> | <C>
Current..................... -- -- | $ 12 -- | --
Deferred.................... $5,279 $146 | (1,349) $220 | $(1,463)
------ ---- | |
$5,279 $146 | $(1,337) $220 | $(1,463)
====== ==== | ======= ==== | =======
</TABLE>
The effective tax rate on income (loss) before income taxes is
different from the prevailing federal income tax rate. A
reconciliation of this difference is as follows:
<TABLE>
POST-MERGER | POST-ACQUISITION | PRE-ACQUISITION
------------------------------------ | ----------------------------------- | ---------------
For the period | For the period For the period | For the period
For the year October 25,1997 | January 1,1997 August 14, 1996 | January 1, 1996
ended through | through through | through
December 31, 1998 December 31, 1997 | October 24, 1997 December 31, 1996 | August 13, 1996
----------------- ----------------- | ---------------- ----------------- | ---------------
| (Dollars in thousands) |
<S> <C> <C> | <C> <C> | <C>
| |
Income (loss) before | |
income taxes.............. $10,353 $(279) | $ ( 608) $570 | $1,736
======= ===== | ======= ==== | ======
Income tax (benefit) at | |
federal statutory rate.... $ 3,624 $ (98) | $ (213) $200 | $ 607
Tax effect (decrease) of: | |
Realization of NOL | |
carryforwards........... -- -- | -- -- | (1,214)
Goodwill amortization..... 1,322 220 | -- -- | --
Compensatory stock | |
option and restricted | |
stock expense............ -- -- | (1,011) -- | --
Meals and | |
entertainment............ 157 23 | 53 20 | --
Other items............... 176 1 | (166) -- | --
Change in valuation | |
allowance................. -- -- | -- -- | (856)
=------ ----- | ------- ---- | -------
Income tax expense | |
(benefit)................. $ 5,279 $ 146 | $(1,337) $220 | $(1,463)
======= ===== | ======= ==== | =======
</TABLE>
97
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
8. INCOME TAXES (continued)
DEFERRED INCOME TAXES
The tax effect of temporary differences giving rise to the
Companies' deferred income tax assets and liabilities at December
31, 1998 and 1997 is as follows:
POST-MERGER
------------------------------------
December 31, 1998 December 31, 1997
----------------- -----------------
(Dollars in thousands)
Deferred tax assets:
Net unrealized depreciation of
securities at fair value.......... $ 691 --
Future policy benefits............. 66,273 $27,399
Deferred policy acquisition costs.. -- 4,558
Goodwill........................... 16,323 17,620
Net operating loss carryforwards... 17,821 3,044
Other.............................. 1,272 1,548
-------- -------
102,380 54,169
Deferred tax liabilities:
Net unrealized appreciation of
securities at fair value.......... -- (130)
Fixed maturity securities.......... (1,034) (1,665)
Deferred policy acquisition costs.. (55,520) --
Mortgage loans on real estate...... (845) (845)
Value of purchased insurance in
force............................. (12,592) (15,172)
Other.............................. (912) (127)
-------- --------
(70,903) (17,939)
-------- --------
Deferred income tax asset........... $ 31,477 $ 36,230
======== ========
The Companies are required to establish a "valuation allowance"
for any portion of the deferred tax assets management believes
will not be realized. In the opinion of management, it is more
likely than not the Companies will realize the benefit of the
deferred tax assets; therefore, no such valuation allowance has
been established.
9. RETIREMENT PLANS
Defined Benefit Plans: In 1998 and 1997, the Companies were
allocated their share of the pension liability associated with
their employees. The Companies' employees are covered by the
employee retirement plan of an affiliate, Equitable Life. Further,
Equitable Life sponsors a defined contribution plan that is
qualified under Internal Revenue Code Section 401(k). The
following tables summarize the benefit obligations and the funded
status for pension benefits over the two-year period ended
December 31, 1998:
98
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
9. RETIREMENT PLANS (continued)
1998 1997
-------- ------
(Dollars in thousands)
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at January 1............ $ 956 $192
Service cost............................... 1,138 682
Interest cost.............................. 97 25
Actuarial loss............................. 2,266 57
Benefit payments........................... (3) --
------ ----
Benefit obligation at December 31.......... $4,454 $956
====== ====
1998 1997
-------- ------
(Dollars in thousands)
FUNDED STATUS
Funded status at December 31............... $(4,454) $(956)
Unrecognized net loss...................... 2,266 --
------- -----
Net amount recognized...................... $(2,188) $(956)
======= =====
During 1998 and 1997, the Companies' plan assets were held by
Equitable Life, an affiliate.
The weighted-average assumptions used in the measurement of the
Companies' benefit obligation are as follows:
1998 1997
------ ------
DECEMBER 31
Discount rate................................ 6.75% 7.25%
Expected return on plan assets............... 9.50 9.00
Rate of compensation increase................ 4.00 5.00
The following table provides the net periodic benefit cost for the
fiscal years 1998 and 1997:
<TABLE>
POST-MERGER | POST-ACQUISITION
------------------------------------ | ----------------
For the period | For the period
For the year October 25,1997 | January 1,1997
ended through | through
December 31, 1998 December 31, 1997 | October 24, 1997
----------------- ----------------- | ----------------
(Dollars in thousands)
<S> <C> <C> | <C>
Service cost................ $1,138 $114 | $568
Interest cost............... 97 10 | 15
Amortization of net loss.... -- -- | 1
------ ---- | ----
Net periodic benefit cost... $1,235 $124 | $584
====== ==== | ====
</TABLE>
There were no gains or losses resulting from curtailments or settlements
during 1998 or 1997.
99
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
9. RETIREMENT PLANS (continued)
The projected benefit obligation, accumulated benefit obligation
and fair value of plan assets for pension plans with accumulated
benefit obligations in excess of plan assets were $4,454,000,
$3,142,000 and $0, respectively, as of December 31, 1998 and
$956,000, $579,000 and $0, respectively, as of December 31, 1997.
10. RELATED PARTY TRANSACTIONS
Operating Agreements: DSI acts as the principal underwriter (as
defined in the Securities Act of 1933 and the Investment Company
Act of 1940, as amended) and distributor of the variable insurance
products issued by the Companies. DSI is authorized to enter into
agreements with broker/dealers to distribute the Companies'
variable insurance products and appoint representatives of the
broker/dealers as agents. For the year ended December 31, 1998 and
for the periods October 25, 1997 through December 31, 1997 and
January 1, 1997 through October 24, 1997, the Companies paid
commissions to DSI totaling $117,470,000, $9,931,000 and
$26,419,000, respectively ($9,995,000 for the period August 14,
1996 through December 31, 1996 and $17,070,000 for the period
January 1, 1996 through August 13, 1996).
Golden American provides certain managerial and supervisory
services to DSI. The fee paid by DSI for these services is
calculated as a percentage of average assets in the variable
separate accounts. For the year ended December 31, 1998 and for
the periods October 25, 1997 through December 31, 1997 and January
1, 1997 through October 24, 1997, the fee was $4,771,000, $508,000
and $2,262,000, respectively. For the periods August 14, 1996
through December 31, 1996 and January 1, 1996 through August 13,
1996 the fee was $877,000 and $1,390,000, respectively.
Effective January 1, 1998, the Companies have an asset management
agreement with ING Investment Management LLC ("ING IM"), an
affiliate, in which ING IM provides asset management services.
Under the agreement, the Companies record a fee based on the value
of the assets under management. The fee is payable quarterly. For
the year ended December 31, 1998, the Companies incurred fees of
$1,504,000 under this agreement.
Prior to 1998, the Companies had a service agreement with
Equitable Investment Services, Inc. ("EISI"), an affiliate, in
which EISI provided investment management services. Payments for
these services totaled $200,000, $768,000 and $72,000 for the
periods October 25, 1997 through December 31, 1997, January 1,
1997 through October 24, 1997 and August 14, 1996 through December
31, 1996, respectively.
Golden American has a guaranty agreement with Equitable Life, an
affiliate. In consideration of an annual fee, payable June 30,
Equitable Life guarantees to Golden American that it will make
funds available, if needed, to Golden American to pay the
contractual claims made under the provisions of Golden American's
life insurance and annuity contracts. The agreement is not, and
nothing contained therein or done pursuant thereto by Equitable
Life shall be deemed to constitute, a direct or indirect guaranty
by Equitable Life of the payment of any debt or other obligation,
indebtedness or liability, of any kind or character whatsoever, of
Golden American. The agreement does not guarantee the value of the
underlying assets held in separate accounts in which funds of
variable life insurance and variable annuity policies have been
invested. The calculation of the annual fee is based on risk based
capital. As Golden American's risk based capital level was above
required amounts, no annual fee was payable in 1998 or in 1997.
Golden American provides certain advisory, computer and other
resources and services to Equitable Life. Revenues for these
services, which reduced general expenses incurred by Golden
American, totaled $5,833,000 for the year ended December 31, 1998
($1,338,000 and $2,992,000 for the periods October 25,
100
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
10. RELATED PARTY TRANSACTIONS (continued)
1997 through December 31, 1997 and January 1, 1997 through October
24, 1997, respectively). No services were provided by Golden American
in 1996.
The Companies have a service agreement with Equitable Life in
which Equitable Life provides administrative and financial related
services. Under this agreement, the Companies incurred expenses of
$1,058,000 for the year ended December 31, 1998 ($13,000 and
$16,000 for the periods October 25, 1997 through December 31, 1997
and January 1, 1997 through October 24, 1997, respectively).
First Golden provides resources and services to DSI. Revenues for
these services, which reduce general expenses incurred by the
Companies, totaled $75,000 in 1998.
For the year ended December 31, 1998, the Companies had premiums,
net of reinsurance, for variable products from four affiliates,
Locust Street Securities, Inc., Vestax Securities Corporation, DSI
and Multi-Financial Securities Corporation of $122,900,000,
$44,900,000, $13,600,000 and $13,400,000, respectively. The
Companies had premiums, net reinsurance, for variable products
from three affiliates, Locust Street Securities, Inc., Vestax
Securities Corporation and DSI of $9,300,000, $1,900,000 and
$2,100,000 respectively, for the period October 25, 1997 through
December 31, 1997 ($16,900,000, $1,200,000 and $400,000 for the
period January 1, 1997 through October 24, 1997, respectively).
Reciprocal Loan Agreement: Golden American maintains a reciprocal
loan agreement with ING America Insurance Holdings, Inc. ("ING
AIH"), a Delaware corporation and affiliate, to facilitate the
handling of unusual and/or unanticipated short-term cash
requirements. Under this agreement which became effective January
1, 1998 and expires December 31, 2007, Golden American and ING AIH
can borrow up to $65,000,000 from one another. Prior to lending
funds to ING AIH, Golden American must obtain the approval of the
State of Delaware Department of Insurance. Interest on any Golden
American borrowings is charged at the rate of ING AIH's cost of
funds for the interest period plus 0.15%. Interest on any ING AIH
borrowings is charged at a rate based on the prevailing interest
rate of U.S. commercial paper available for purchase with a
similar duration. Under this agreement, Golden American incurred
interest expense of $1,765,000 in 1998. At December 31, 1998,
Golden American did not have any borrowings or receivables from
ING AIH under this agreement.
Line of Credit: Golden American maintained a line of credit
agreement with Equitable to facilitate the handling of unusual
and/or unanticipated short-term cash requirements. Under this
agreement which became effective December 1, 1996 and expired
December 31, 1997, Golden American could borrow up to $25,000,000.
Interest on any borrowings was charged at the rate of Equitable's
monthly average aggregate cost of short-term funds plus 1.00%.
Under this agreement, Golden American incurred interest expense of
$211,000 for the year ended December 31, 1998 ($213,000 for the
period October 25, 1997 through December 31, 1997, $362,000 for
the period January 1, 1997 through October 24, 1997 and $85,000
for the period August 14, 1996 through December 31, 1996). The
outstanding balance was paid by a capital contribution.
Surplus Notes: On December 30, 1998, Golden American issued a
7.25% surplus note in the amount of $60,000,000 to Equitable Life.
The note matures on December 29, 2028. The note and related
accrued interest is subordinate to payments due to policyholders,
claimant and beneficiary claims, as well as debts owed to all
other classes of debtors, other than surplus note holders, of
Golden American. Any payment of principal and/or interest made is
subject to the prior approval of the Delaware Insurance
Commissioner. Golden American incurred no interest in 1998.
101
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
10. RELATED PARTY TRANSACTIONS (continued)
On December 17, 1996, Golden American issued an 8.25% surplus note
in the amount of $25,000,000 to Equitable. The note matures on
December 17, 2026. The note and related accrued interest is
subordinate to payments due to policyholders, claimant and
beneficiary claims, as well as debts owed to all other classes of
debtors of Golden American. Any payment of principal made is
subject to the prior approval of the Delaware Insurance
Commissioner. Golden American incurred interest totaling
$2,063,000 in 1998 ($344,000 and $1,720,000 for the periods
October 25, 1997 through December 31, 1997 and January 1, 1997
through October 24, 1997, respectively). On December 17, 1996,
Golden American contributed the $25,000,000 to First Golden
acquiring 200,000 shares of common stock (100% of outstanding
stock) of First Golden.
Stockholder's Equity: On September 23, 1996, EIC Variable, Inc.
contributed $50,000,000 of Preferred Stock to the Companies'
additional paid-in capital. During 1998, Golden American received
$122,500,000 of capital contributions from its Parent.
11. COMMITMENTS AND CONTINGENCIES
Contingent Liability: In a transaction that closed on September
30, 1992, Bankers Trust acquired from Mutual Benefit, in
accordance with the terms of an Exchange Agreement, all of the
issued and outstanding capital stock of Golden American and DSI
and certain related assets for consideration with an aggregate
value of $13,200,000 and contributed them to BT Variable. The
transaction involved settlement of pre-existing claims of Bankers
Trust against Mutual Benefit. The ultimate value of these claims
has not yet been determined by the Superior Court of New Jersey
and, prior to August 13, 1996, was contingently supported by a
$5,000,000 note payable from Golden American and a $6,000,000
letter of credit from Bankers Trust. Bankers Trust estimated the
contingent liability due from Golden American amounted to $439,000
at August 13, 1996. At August 13, 1996, the balance of the escrow
account established to fund the contingent liability was
$4,293,000.
On August 13, 1996, Bankers Trust made a cash payment to Golden
American in an amount equal to the balance of the escrow account
less the $439,000 contingent liability discussed above. In
exchange, Golden American irrevocably assigned to Bankers Trust
all of Golden American's rights to receive any amounts to be
disbursed from the escrow account in accordance with the terms of
the Exchange Agreement. Bankers Trust also irrevocably agreed to
make all payments becoming due under the Golden American note and
to indemnify Golden American for any liability arising from the
note.
Reinsurance: At December 31, 1998, the Companies had reinsurance
treaties with four unaffiliated reinsurers and one affiliated
reinsurer covering a significant portion of the mortality risks
under variable contracts. The Companies remain liable to the
extent reinsurers do not meet their obligations under the
reinsurance agreements. Reinsurance ceded in force for life
mortality risks were $111,552,000 and $96,686,000 at December 31,
1998 and 1997, respectively. At December 31, 1998, the Companies
have a net receivable of $7,470,000 for reserve credits,
reinsurance claims or other receivables from these reinsurers
comprised of $439,000 for claims recoverable from reinsurers,
$543,000 for a payable for reinsurance premiums and $7,574,000 for
a receivable from an unaffiliated reinsurer. Included in the
accompanying financial statements are net considerations to
reinsurers of $4,797,000, $326,000, $1,871,000, $875,000 and
$600,000 and net policy benefits recoveries of $2,170,000,
$461,000, $1,021,000, $654,000 and $1,267,000 for the year ended
December 31, 1998 and for the periods October 25, 1997 through
December 31, 1997, January 1, 1997 through October 24, 1997,
August 14, 1996 through December 31, 1996 and January 1, 1996
through August 13, 1996, respectively.
102
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
11. COMMITMENTS AND CONTINGENCIES (continued)
Effective June 1, 1994, Golden American entered into a modified
coinsurance agreement with an unaffiliated reinsurer. The
accompanying financial statements are presented net of the effects
of the treaty which increased income by $1,022,000, $265,000,
$335,000, $10,000 and $56,000 for the year ended December 31, 1998
and for the periods October 25, 1997 through December 31, 1997,
January 1, 1997 through October 24, 1997, August 14, 1996 through
December 31, 1996 and January 1, 1996 through August 13, 1996,
respectively.
Guaranty Fund Assessments: Assessments are levied against the
Companies by life and health guaranty associations in most states
in which the Companies are licensed to cover losses of
policyholders of insolvent or rehabilitated insurers. In some
states, these assessments can be partially recovered through a
reduction in future premium taxes. The Companies cannot predict
whether and to what extent legislative initiatives may affect the
right to offset. The associated cost for a particular insurance
company can vary significantly based upon its fixed account
premium volume by line of business and state premiums as well as
its potential for premium tax offset. The Companies have
established an undiscounted reserve to cover such assessments and
regularly reviews information regarding known failures and revises
its estimates of future guaranty fund assessments. Accordingly,
the Companies accrued and charged to expense an additional
$1,123,000 for the year ended December 31, 1998, $141,000 for the
period October 25, 1997 through December 31, 1997, $446,000 for
the period January 1, 1997 through October 24, 1997, $291,000 for
the period August 14, 1996 through December 31, 1996 and $480,000
for the period January 1, 1996 through August 13, 1996. At
December 31, 1998, the Companies have an undiscounted reserve of
$2,446,000 to cover estimated future assessments (net of related
anticipated premium tax credits) and has established an asset
totaling $586,000 for assessments paid which may be recoverable
through future premium tax offsets. The Companies believe this
reserve is sufficient to cover expected future guaranty fund
assessments, based upon previous premiums, and known insolvencies
at this time.
Litigation: The Companies, like other insurance companies, may be
named or otherwise 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. The Companies currently
believe no pending or threatened lawsuits exist that are
reasonably likely to have a material adverse impact on the
Companies.
Vulnerability from Concentrations: The Companies have various
concentrations in its investment portfolio (see Note 3 for further
information). The Companies' asset growth, net investment income
and cash flow are primarily generated from the sale of variable
products and associated future policy benefits and separate
account liabilities. Substantial changes in tax laws that would
make these products less attractive to consumers and extreme
fluctuations in interest rates or stock market returns which may
result in higher lapse experience than assumed could cause a
severe impact to the Companies' financial condition. Two
broker/dealers generated 27% of the Companies' sales (53% by two
broker/dealers during 1997).
Leases: The Companies lease their home office space, certain
other equipment and capitalized computer software under operating
leases which expire through 2018. During the year ended December
31, 1998 and for the periods October 25, 1997 through December 31,
1997, January 1, 1997 through October 24, 1997, August 14, 1996
through December 31, 1996 and January 1, 1996 through August 13,
1996, rent expense totaled $1,241,000, $39,000, $331,000, $147,000
and $247,000, respectively. At December 31, 1998, minimum rental
payments due under all non-cancelable operating leases with
initial terms of one
103
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
11. COMMITMENTS AND CONTINGENCIES (continued)
year or more are: 1999 - $1,528,000; 2000 - $1,429,000; 2001 - $1,240,000;
2002 - $1,007,000; 2003 - $991,000 and 2004 and thereafter - $5,363,000.
Revolving Note Payable: To enhance short-term liquidity, the
Companies have established a revolving note payable effective July
27, 1998 and expiring July 31, 1999 with SunTrust Bank, Atlanta
(the "Bank"). The note was approved by the Boards of Directors of
Golden American and First Golden on August 5, 1998 and September
29, 1998, respectively. The total amount the Companies may have
outstanding is $85,000,000, of which Golden American and First
Golden have individual credit sublimits of $75,000,000 and
$10,000,000, respectively. The note accrues interest at an annual
rate equal to: (1) the cost of funds for the Bank for the period
applicable for the advance plus 0.25% or (2) a rate quoted by the
Bank to the Companies for the advance. The terms of the agreement
require the Companies to maintain the minimum level of Company
Action Level Risk Based Capital as established by applicable state
law or regulation. During the year ended December 31, 1998, the
Companies incurred interest expense of $352,000. At December 31,
1998, the Companies did not have any borrowings under this
agreement.
104
<PAGE>
<PAGE>
- -----------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
- -----------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM PAGE
----
<S> <C>
Introduction............................................ 1
Description of Golden American Life Insurance Company... 1
Safekeeping of Assets................................... 1
The Administrator....................................... 1
Independent Auditors.................................... 2
Distribution of Contracts............................... 2
Performance Information................................. 3
IRA Withdrawal Option................................... 9
Other Information....................................... 9
Financial Statements of Separate Account................ 10
Appendix -- Description of Bond Ratings................. A-1
</TABLE>
- -----------------------------------------------------------------------
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 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
Unprinted VALUE 02/01/00
91
<PAGE>
<PAGE>
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
92
<PAGE>
<PAGE>
APPENDIX A
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
guarantee 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 partial 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 $124,230
( $100,000 X 1.075 ^ 3 )
2. N = 2,555 ( 365 X 7 )
3. Market Value Adjustment = $124,230 X
(( 1.07 / 1.0850 ) ^ ( 2,555 / 365 ) - 1 ) = $11,535
Therefore, the amount paid to you on full surrender ignoring any
surrender charge is $112,695 ( $124,230 - $11,535 ).
EXAMPLE #2: FULL SURRENDER -- EXAMPLE OF A POSITIVE MARKET VALUE
ADJUSTMENT
Assume $100,000 was allocated to a Fixed Interest Allocation with a
guaranteed interest period of 10 years, a guaranteed interest rate of 7.5%,
an initial Index Rate ("I") of 7%; that a full surrender is
requested 3 years into the guaranteed interest period; that the then Index
Rate for a 7 year guaranteed interest period ("J") is 6%; and that no
prior transfers or partial 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 $124,230
( $100,000 X 1.075 ^ 3 )
2. N = 2,555 ( 365 X 7 )
3. Market Value Adjustment = $124,230 X
(( 1.07 / 1.0650 ) ^ ( 2,555 / 365 ) - 1 ) = $4,141
Therefore, the amount paid to you on full surrender ignoring any
surrender charge is $128,371 ( $124,230 + $4,141 ).
EXAMPLE #3: WITHDRAWAL -- EXAMPLE OF A NEGATIVE MARKET VALUE
ADJUSTMENT
Assume $200,000 was allocated to a Fixed Interest Allocation with a
guaranteed interest period of 10 years, a guaranteed interest rate of 7.5%,
an initial Index Rate ("I") of 7%; that a partial withdrawal of
$112,695 is requested 3 years into the guaranteed interest period; that
the then Index Rate ("J") for a 7 year guaranteed interest period is 8%;
and that no prior transfers or partial withdrawals affecting this
Fixed Interest Allocation have been made.
First calculate the amount that must be withdrawn from the Fixed
Interest Allocation to provide the amount requested.
1. The contract value of the Fixed Interest Allocation on the date of
withdrawal is $248,459
( $200,000 X 1.075 ^ 3 )
2. N = 2,555 ( 365 X 7 )
3. Amount that must be withdrawn =
(( $112,695 / ( 1.07 / 1.0850 ) ^ ( 2,555 / 365 )) = $124,230
A1
<PAGE>
<PAGE>
Then calculate the Market Value Adjustment on that amount
4. Market Value Adjustment = $124,230 X
(( 1.07 / 1.0850 ) ^ ( 2,555 / 365 ) - 1 ) = $11,535
Therefore, the amount of the withdrawal paid to you is
$112,695, as requested. The Fixed Interest Allocation will be reduced
by the amount of the withdrawal, $112,695, and also reduced by the
Market Value Adjustment of $11,535, for a total reduction in the
Fixed Interest Allocation of $124,230.
EXAMPLE #4: WITHDRAWAL -- EXAMPLE OF A POSITIVE MARKET VALUE
ADJUSTMENT
Assume $200,000 was allocated to a Fixed Interest Allocation with a
guaranteed interest period of 10 years, a guaranteed interest rate of 7.5%,
an initial Index Rate of 7%; that a partial withdrawal of $128,371
requested 3 years into the guaranteed interest period; that the then Index
Rate ("J") for a 7 year guaranteed interest period is 6%; and that no
prior transfers or withdrawals affecting this Fixed Interest
Allocation have been made.
First calculate the amount that must be withdrawn from the Fixed
Interest Allocation to provide the amount requested.
1. The contract value of Fixed Interest Allocation on the date of
surrender is $248,459
( $200,000 X 1.075 ^ 3 )
2. N = 2,555 ( 365 X 7 )
3. Amount that must be withdrawn =
(( $128,371 / ( 1.07 / 1.0650 ) ^ ( 2,555 / 365 )) = $124,230
Then calculate the Market Value Adjustment on that amount
4. Market Value Adjustment = $124,230 X
(( 1.07 / 1.0650 ) ^ ( 2,555 / 365 ) - 1 ) = $4,141
Therefore, the amount of the partial withdrawal paid to you is
$128,371, as requested. The Fixed Interest Allocation will be reduced
by the amount of the partial withdrawal, $128,371, but increased by the
Market Value Adjustment of $4,141, for a total reduction in the
Fixed Interest Allocation of $124,230.
A2
<PAGE>
<PAGE>
APPENDIX B
SURRENDER CHARGE FOR EXCESS WITHDRAWALS EXAMPLE
The following assumes you made an initial premium payment of $25,000
and additional premium payments of $25,000 in each of the second and
third contract years, for total premium payments under the Contract of
$75,000. It also assumes a withdrawal at the beginning of the fifth
contract year of 30% of the contract value of $90,000.
In this example, $15,000 (maximum of $15,000 or $75,000 x .10) is the
maximum free withdrawal amount that you may withdraw during the
contract year without a surrender charge. The total withdrawal would
be $27,000 ($90,000 x .30). Therefore, $12,000 ($27,000 - $15,000) is
considered an excess withdrawal of a part of the initial premium
payment of $25,000 and would be subject to a 4% surrender charge of
$480 ($12,000 x .04). This example does not take into account any
Market Value Adjustment or deduction of any premium taxes.
B1
<PAGE>
<PAGE>
ING VARIABLE ANNUITIES
GOLDEN AMERICAN LIFE INSURANCE COMPANY
Golden American Life Insurance Company is a stock company
domiciled in Delaware
Unprinted VALUE 02/01/00
<PAGE>
PART B
<PAGE>
VERSION 1
<PAGE>
<PAGE>
Statement of Additional Information
GOLDENSELECT VALUE
DEFERRED COMBINATION VARIABLE
AND FIXED ANNUITY CONTRACT
ISSUED BY
SEPARATE ACCOUNT B
("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:
[FEBRUARY 1, 2000]
<PAGE>
TABLE OF CONTENTS
ITEM PAGE
Introduction............................................. 1
Description of Golden American Life Insurance Company.... 1
Safekeeping of Assets.................................... 1
The Administrator........................................ 1
Independent Auditors..................................... 1
Distribution of Contracts................................ 1
Performance Information.................................. 2
IRA Partial Withdrawal Option............................ 5
Other Information........................................ 6
Financial Statements of Account B........................ 6
i
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<PAGE>
INTRODUCTION
This Statement of Additional Information provides background
information regarding 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 over $461.8 billion in
assets as of December 31, 1998.
As of December 31, 1998, Golden American had approximately $353.9
million in stockholder's equity and approximately $4.8 billion in
total assets, including approximately $3.4 billion of separate
account assets. Golden American is authorized to do business in all
jurisdictions except New York. Golden American offers variable
annuities and variable life insurance. Golden American formed a
subsidiary, First Golden American Life Insurance Company of New York
("First Golden"), who 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 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 $892,903 pursuant to the service
agreement in 1998.
INDEPENDENT AUDITORS
Ernst & Young LLP, independent auditors, performs annual audits of
Golden American and 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, 1996, through two broker/dealer institutions, during the
year ended December 31, 1997 and through two broker/dealer
institutions during the year ended December 1998. For the years
ended 1998, 1997 and 1996 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 $117,470,000, $36,350,000 and $27,065,000, 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.
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. In 1995, the service agreement
between Directed Services, Inc. and Golden American was amended to
provide for a management
1
<PAGE>
<PAGE>
fee from Directed Services, Inc. to Golden American for managerial and
supervisory services provided by Golden American. This fee, calculated
as a percentage of average assets in the variable separate accounts,
was $4,771,000, $2,770,000 and $2,267,000 for the years ended 1998, 1997
and 1996, respectively.
PERFORMANCE INFORMATION
Performance information for the subaccounts of 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, three death benefit options are
available. The following performance values reflect the election at
issue of the 7% Solution Enhanced Death Benefit Option providing
values reflecting the highest aggregate contract charges. If one of
the other death benefit options 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
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, 1998 to December 31, 1998 were
3.30% and 3.35%, respectively.
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 [ ( a - b +1)(6) - 1]
cd
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 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:
2
<PAGE>
<PAGE>
P(1+T)(n)=ERV
Where:
(1) [P] equals a hypothetical initial premium payment
of $1,000
(2) [T] equals an average annual total return
(3) [n] equals the number of years
(4) [ERV] equals the ending redeemable value of a
hypothetical $1,000 initial premium payment made at the
beginning of the period (or fractional portion thereof)
All total return figures reflect the deduction of the maximum sales
load, the administrative charges, and the mortality and expense risk
charges. 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.
Except for the All Cap, Investors, Large Cap Value, and Managed
Global subaccounts which had not commenced as of December 31, 1998,
Average Annual Total Return for the subaccounts is presented on a
standardized basis, which includes deductions for the maximum
mortality and expense risk charge of 1.20%, administrative charges
of 0.15%, contract administration charge at 0.05%, and applicable
surrender charges of 6% for the one year period and 3% for the five
year period for the year ending December 31, 1998 were as follows:
Average Annual Total Return for Periods Ending 12/31/98 -Standardized
- ---------------------------------------------------------------------
One Year Five Year Inception
Period Period to
Ending Ending Ending Inception
Subaccount 12/31/98 12/31/98 12/31/98 Date
- ---------- -------- -------- -------- -------
THE GCG TRUST
Liquid Asset -2.37% 2.78% 3.72%* 1/25/89
Limited Maturity -0.58% 3.47% 5.37%* 1/25/89
Bond
Global Fixed 4.34%* n/a 5.83%* 10/7/94
Income
Total Return 4.09%* n/a 13.89%* 10/7/94
Fully Managed -1.54% 7.42% 7.55%* 1/25/89
Equity Income 0.80% 7.86% 8.26%* 1/25/89
Rising Dividends 6.60% 16.77% 16.56% 10/4/93
Capital Growth 4.46% n/a 20.11% 4/1/96
Growth 19.11% n/a 18.19%* 4/1/96
Value Equity -5.82% n/a 15.72% 1/1/95
Research 15.39% n/a 21.14%* 10/7/94
Capital 5.16% 14.76% 14.34%* 5/4/92
Appreciation
Mid-Cap Growth 15.15% n/a 20.59%* 10/7/94
Strategic Equity -6.52% n/a 10.26%* 10/2/95
Small Cap 13.35% n/a 14.21% 1/2/96
Real Estate -20.62% 9.81% 8.17%* 1/25/89
Hard Assets -36.53% -0.49% 3.69%* 1/25/89
Developing World n/a n/a -37.27%# 2/18/98
THE PIMCO TRUST
High Yield Bond n/a n/a -7.61%*# 5/1/98
StocksPLUS n/a n/a 7.80%*# 5/1/98
Growth and Income
THE WARBURG PINCUS TRUST
International -2.09% n/a -0.09% 4/1/96
Equity
_________________________
* Total return calculation reflects partial waiver of fees and expenses.
# Non-annualized.
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:
3
<PAGE>
<PAGE>
P(1+T)(n)]=ERV
Where:
(1) [P] equals a hypothetical initial premium payment
of $1,000
(2) [T] equals an average annual total return
(3) [n] equals the number of years
(4) [ERV] equals the ending redeemable value of a
hypothetical $1,000 initial premium payment made at the
beginning of the period (or fractional portion thereof)
assuming certain loading and charges are zero.
All total return figures reflect the deduction of the mortality and
expense risk charge and the administrative charges, but not the
deduction of the maximum sales load and the annual contract fee.
Except for the All Cap, Investors, Large Cap Value, and Managed
Global subaccounts which had not commenced as of December 31, 1998,
Average Annual Total Return for the subaccounts is presented on a
standardized basis, which includes deductions for the maximum
mortality and expense risk charge of 1.20%, administrative charges
of 0.15%, and contract administration charge at 0.05%, for the year
ending December 31, 1998 were as follows:
Average Annual Total Return for Periods Ending 12/31/98 - Non-Standardized
- --------------------------------------------------------------------------
One Year Five Year Inception
Period Period to
Ending Ending Ending Inception
Subaccount 12/31/98 12/31/98 12/31/98 Date
- ---------- -------- -------- -------- -------
THE GCG TRUST
Liquid Asset 3.63% 3.45% 3.72%* 1/25/89
Limited Maturity 5.42% 4.16% 5.37%* 1/25/89
Bond
Global Fixed 10.34% n/a 6.61%* 10/7/94
Income
Total Return 10.08%* n/a 14.51%* 10/7/94
Fully Managed 4.46% 8.25% 7.55%* 1/25/89
Equity Income 6.80% 8.71% 8.26%* 1/25/89
Rising Dividends 12.59% 17.09% 16.86% 10/4/93
Capital Growth 10.46% n/a 21.36%* 4/1/96
Growth 25.11% n/a 19.48%* 4/1/96
Value Equity 0.18% n/a 16.36% 1/1/95
Research 21.39% n/a 21.64%* 10/7/94
Capital 11.16% 15.89% 14.41%* 5/4/92
Appreciation
Mid-Cap Growth 21.15% n/a 21.11%* 10/7/94
Strategic Equity -0.52% n/a 11.48%* 10/2/95
Small Cap 19.35% n/a 15.49% 1/2/96
Real Estate -14.62% 10.73% 8.17%* 1/25/89
Hard Assets -30.53% 1.10% 3.69%* 1/25/89
Developing World n/a n/a -30.62%# 2/18/98
THE PIMCO TRUST
High Yield Bond n/a n/a 1.27%*# 5/1/98
StocksPLUS n/a n/a 17.13%*# 5/1/98
Growth and Income
THE WARBURG PINCUS TRUST
International 3.93% n/a 1.35%* 4/1/96
Equity
_________________________
* Total return calculation reflects partial waiver of fees and expenses.
# Non-annualized.
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
4
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<PAGE>
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.
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 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
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......... 0.00003308
6. Less asset based administrative charge.......... 0.00000411
7. Net investment return [(4) minus (5) minus (6)]. 0.00995309
8. Net investment factor [(1.000000) plus (7)]..... 1.00995309
9. AUV, end of period [(1) multiplied by (8)]......$10.0995309
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)...................................$10.0995309
5. Contract Value in account for valuation date
following purchase [(3) multiplied by (4)].......$ 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
5
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<PAGE>
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 not withdrawn, 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.
FINANCIAL STATEMENTS OF SEPARATE ACCOUNT B
The unaudited financial statements of Separate Account B are listed below and
are included in this Statement of Additional Information:
Unaudited Financial Statements
Statement of Assets and Liability as of September 30, 1999
Statement of Operations for the period ended
September 30, 1999
Statements of Changes in Net Assets for the periods
ended September 30, 1999 and December 31, 1998
Notes to Financial Statements
The audited financial statements of Account B are listed below and
are included in this Statement of Additional Information:
Report of Independent Auditors
Audited Financial Statements
Statement of Assets and Liability as of December 31, 1998
Statement of Operations for the year ended December 31, 1998
Statements of Changes in Net Assets for the years ended
December 31, 1998 and 1997
Notes to Financial Statements
6
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<PAGE>
FINANCIAL STATEMENTS
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B (UNAUDITED)
PERIODS ENDED SEPTEMBER 30, 1999
AND DECEMBER 31, 1998
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
FINANCIAL STATEMENTS
PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
TABLE OF CONTENTS
Financial Statements
Statement of Assets and Liability
Statement of Operations
Statements of Changes in Net Assets
Notes to Financial Statements
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF ASSETS AND LIABILITY (UNAUDITED)
SEPTEMBER 30, 1999
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COMBINED
____________
<S> <C>
ASSETS
Investments at net asset value:
The GCG Trust:
Liquid Asset Series,
434,250,156 shares (cost - $434,250) $434,250
Limited Maturity Bond Series,
13,546,860 shares (cost - $145,162) 145,900
Hard Assets Series,
3,491,625 shares (cost - $38,384) 41,061
All-Growth Series,
4,995,445 shares (cost - $71,636) 100,009
Real Estate Series,
4,482,928 shares (cost - $71,082) 58,323
Fully Managed Series,
15,919,709 shares (cost - $236,970) 261,402
Equity Income Series,
21,636,504 shares (cost - $270,041) 270,240
Capital Appreciation Series,
15,991,068 shares (cost - $267,597) 306,868
Rising Dividends Series,
29,752,243 shares (cost - $598,998) 689,657
Emerging Markets Series,
2,961,088 shares (cost - $27,835) 25,939
Market Manager Series,
358,354 shares (cost - $3,711) 7,099
Value Equity Series,
8,286,304 shares (cost - $134,218) 128,023
Strategic Equity Series,
7,866,644 shares (cost - $105,758) 113,201
Small Cap Series,
11,379,126 shares (cost - $187,468) 205,166
Managed Global Series,
8,262,783 shares (cost - $117,917) 129,643
Mid-Cap Growth Series,
12,725,459 shares (cost - $250,096) 291,922
Capital Growth Series,
19,634,861 shares (cost - $308,027) 307,875
Research Series,
23,040,830 shares (cost - $460,222) 477,637
Total Return Series,
26,123,116 shares (cost - $415,811) 415,096
Growth Series,
32,064,511 shares (cost - $578,416) 631,350
Global Fixed Income Series,
2,062,733 shares (cost - $21,889) 21,556
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF ASSETS AND LIABILITY (UNAUDITED)
SEPTEMBER 30, 1999
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COMBINED
____________
<S> <C>
ASSETS - CONTINUED
Investments at net asset value:
The GCG Trust:
Developing World Series,
2,476,871 shares (cost - $23,140) $22,440
Growth Opportunities Series,
604,270 shares (cost - $6,235) 6,357
PIMCO Variable Insurance Trust:
PIMCO High Yield Bond Portfolio,
13,936,073 shares (cost - $133,272) 128,351
PIMCO StocksPLUS Growth and Income Portfolio,
12,458,844 shares (cost - $161,862) 160,096
Greenwich Street Series Fund Inc.:
Appreciation Portfolio,
44,430 shares (cost - $909) 955
Travelers Series Fund Inc.:
Smith Barney High Income Portfolio,
53,221 shares (cost - $711) 624
Smith Barney Large Cap Value Portfolio,
40,029 shares (cost - $811) 763
Smith Barney International Equity Portfolio,
25,696 shares (cost - $361) 401
Smith Barney Money Market Portfolio,
134,305 shares (cost - $134) 134
Warburg Pincus Trust:
International Equity Portfolio,
9,414,330 shares (cost - $116,363) 120,221
____________
TOTAL ASSETS (cost - $5,189,286) 5,502,559
LIABILITY
Payable to Golden American Life Insurance Company
for charges and fees 230
____________
TOTAL NET ASSETS $5,502,329
============
NET ASSETS
For variable annuity insurance contracts $5,507,112
Retained in Separate Account B by Golden American
Life Insurance Company 4,783
____________
TOTAL NET ASSETS $5,502,329
============
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Limited
Liquid Maturity Hard
Asset Bond Assets
Division Division Division
_________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $9,548 -- --
Capital gains distributions -- -- --
_________________________________
TOTAL INVESTMENT INCOME 9,548 -- --
Expenses:
Mortality and expense risk and other charges 3,044 $1,171 $351
Annual administrative charges 62 27 12
Minimum death benefit guarantee charges 6 1 1
Contingent deferred sales charges 1,599 116 111
Other contract charges 5 2 2
Amortization of deferred charges related to:
Deferred sales load 408 231 71
Premium taxes 15 1 --
_________________________________
TOTAL EXPENSES 5,139 1,549 548
_________________________________
NET INVESTMENT INCOME (LOSS) 4,409 (1,549) (548)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments -- (333) (10,585)
Net unrealized appreciation
(depreciation) of investments -- 1,454 17,031
_________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $4,409 ($428) $5,898
=================================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Capital
Equity Apprecia- Rising
Income tion Dividends
Division Division Division
_________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- -- --
Capital gains distributions -- -- --
_________________________________
TOTAL INVESTMENT INCOME -- -- --
Expenses:
Mortality and expense risk and other charges $2,375 $2,697 $6,565
Annual administrative charges 112 86 154
Minimum death benefit guarantee charges 5 1 1
Contingent deferred sales charges 120 200 597
Other contract charges 8 7 10
Amortization of deferred charges related to:
Deferred sales load 974 611 619
Premium taxes 2 2 1
_________________________________
TOTAL EXPENSES 3,596 3,604 7,947
_________________________________
NET INVESTMENT INCOME (LOSS) (3,596) (3,604) (7,947)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 818 10,813 10,795
Net unrealized appreciation
(depreciation) of investments (4,918) 4,291 11,828
_________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($7,696) $11,500 $14,676
=================================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
All- Real Fully
Growth Estate Managed
Division Division Division
_________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- -- --
Capital gains distributions -- -- --
_________________________________
TOTAL INVESTMENT INCOME -- -- --
Expenses:
Mortality and expense risk and other charges $904 $628 $2,351
Annual administrative charges 34 22 77
Minimum death benefit guarantee charges 1 -- 1
Contingent deferred sales charges 67 102 134
Other contract charges 1 1 5
Amortization of deferred charges related to:
Deferred sales load 256 137 474
Premium taxes 1 1 2
_________________________________
TOTAL EXPENSES 1,264 891 3,044
_________________________________
NET INVESTMENT INCOME (LOSS) (1,264) (891) (3,044)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 8,308 1,744 3,482
Net unrealized appreciation
(depreciation) of investments 19,140 (4,476) 14,210
_________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $26,184 ($3,623) $14,648
=================================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Emerging Market Value
Markets Manager Equity
Division Division Division
_________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- -- --
Capital gains distributions -- -- --
_________________________________
TOTAL INVESTMENT INCOME -- -- --
Expenses:
Mortality and expense risk and other charges $228 -- $1,370
Annual administrative charges 10 $1 42
Minimum death benefit guarantee charges 1 -- --
Contingent deferred sales charges 17 -- 111
Other contract charges 1 -- 1
Amortization of deferred charges related to:
Deferred sales load 73 32 125
Premium taxes -- -- --
_________________________________
TOTAL EXPENSES 330 33 1,649
_________________________________
NET INVESTMENT INCOME (LOSS) (330) (33) (1,649)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (1,054) 861 4,323
Net unrealized appreciation
(depreciation) of investments 7,613 (17) (9,587)
_________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $6,229 $811 ($6,913)
=================================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Strategic Small Managed
Equity Cap Global
Division Division Division
_________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- -- --
Capital gains distributions -- -- --
_________________________________
TOTAL INVESTMENT INCOME -- -- --
Expenses:
Mortality and expense risk and other charges $871 $1,718 $1,174
Annual administrative charges 21 42 40
Minimum death benefit guarantee charges -- -- 1
Contingent deferred sales charges 173 106 158
Other contract charges 1 2 3
Amortization of deferred charges related to:
Deferred sales load 65 70 319
Premium taxes -- 1 1
_________________________________
TOTAL EXPENSES 1,131 1,939 1,696
_________________________________
NET INVESTMENT INCOME (LOSS) (1,131) (1,939) (1,696)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 3,305 19,972 21,629
Net unrealized appreciation
(depreciation) of investments 5,999 (3,471) (8,421)
_________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $8,173 $14,562 $11,512
=================================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Mid-Cap Capital
Growth Growth Research
Division Division Division
_________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- -- --
Capital gains distributions -- -- --
_________________________________
TOTAL INVESTMENT INCOME -- -- --
Expenses:
Mortality and expense risk and other charges $2,034 $2,762 $4,440
Annual administrative charges 40 69 85
Minimum death benefit guarantee charges -- -- --
Contingent deferred sales charges 131 265 298
Other contract charges 1 1 2
Amortization of deferred charges related to:
Deferred sales load 53 58 92
Premium taxes 1 -- 1
_________________________________
TOTAL EXPENSES 2,260 3,155 4,918
_________________________________
NET INVESTMENT INCOME (LOSS) (2,260) (3,155) (4,918)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 12,779 3,544 2,224
Net unrealized appreciation
(depreciation) of investments 34,465 (9,080) 149
_________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $44,984 ($8,691) ($2,545)
=================================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Global
Total Fixed
Return Growth Income
Division Division Division
_________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- -- --
Capital gains distributions -- -- --
_________________________________
TOTAL INVESTMENT INCOME -- -- --
Expenses:
Mortality and expense risk and other charges $3,706 $3,831 $157
Annual administrative charges 76 67 2
Minimum death benefit guarantee charges -- 1 --
Contingent deferred sales charges 238 229 14
Other contract charges 1 2 --
Amortization of deferred charges related to:
Deferred sales load 73 66 2
Premium taxes 1 1 --
_________________________________
TOTAL EXPENSES 4,095 4,197 175
_________________________________
NET INVESTMENT INCOME (LOSS) (4,095) (4,197) (175)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 125 24,458 (416)
Net unrealized appreciation
(depreciation) of investments (2,155) 38,947 (323)
_________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($6,125) $59,208 ($914)
=================================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
Growth High
Developing Oppor- Yield
World tunities Bond
Division Division Division
_________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- -- $5,343
Capital gains distributions -- -- --
_________________________________
TOTAL INVESTMENT INCOME -- -- 5,343
Expenses:
Mortality and expense risk and other charges $139 $71 1,007
Annual administrative charges 2 1 12
Minimum death benefit guarantee charges -- -- --
Contingent deferred sales charges 6 2 56
Other contract charges -- -- --
Amortization of deferred charges related to:
Deferred sales load -- 1 11
Premium taxes -- -- --
_________________________________
TOTAL EXPENSES 147 75 1,086
_________________________________
NET INVESTMENT INCOME (LOSS) (147) (75) 4,257
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 2,092 689 (399)
Net unrealized appreciation
(depreciation) of investments (849) (227) (4,903)
_________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $1,096 $387 ($1,045)
=================================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
StocksPLUS Smith
Growth Barney
and Appre- High
Income ciation Income
Division Division Division
_________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $3,524 $7 $53
Capital gains distributions -- 17 --
_________________________________
TOTAL INVESTMENT INCOME 3,524 24 53
Expenses:
Mortality and expense risk and other charges 1,302 10 7
Annual administrative charges 13 1 --
Minimum death benefit guarantee charges -- -- --
Contingent deferred sales charges 80 -- --
Other contract charges -- -- --
Amortization of deferred charges related to:
Deferred sales load 14 -- --
Premium taxes -- -- --
_________________________________
TOTAL EXPENSES 1,409 11 7
_________________________________
NET INVESTMENT INCOME (LOSS) 2,115 13 46
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 3,448 14 (32)
Net unrealized appreciation
(depreciation) of investments (6,021) 3 (24)
_________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($458) $30 ($10)
=================================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith Smith
Barney Barney Smith
Large Inter- Barney
Cap national Money
Value Equity Market
Division Division Division
_________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $10 $1 $6
Capital gains distributions 21 -- --
_________________________________
TOTAL INVESTMENT INCOME 31 1 6
Expenses:
Mortality and expense risk and other charges 8 4 2
Annual administrative charges 1 -- --
Minimum death benefit guarantee charges -- -- --
Contingent deferred sales charges -- -- --
Other contract charges -- -- --
Amortization of deferred charges related to:
Deferred sales load -- -- --
Premium taxes -- -- --
_________________________________
TOTAL EXPENSES 9 4 2
_________________________________
NET INVESTMENT INCOME (LOSS) 22 (3) 4
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 4 -- --
Net unrealized appreciation
(depreciation) of investments (58) 47 --
_________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($32) $44 $4
=================================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Inter-
national
Equity
Division Combined
______________________
<S> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- $18,492
Capital gains distributions -- 38
______________________
TOTAL INVESTMENT INCOME -- 18,530
Expenses:
Mortality and expense risk and other charges $845 45,772
Annual administrative charges 14 1,125
Minimum death benefit guarantee charges -- 20
Contingent deferred sales charges 70 5,000
Other contract charges -- 56
Amortization of deferred charges related to:
Deferred sales load -- 4,835
Premium taxes -- 31
______________________
TOTAL EXPENSES 929 56,839
______________________
NET INVESTMENT INCOME (LOSS) (929) (38,309)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 14,543 137,151
Net unrealized appreciation
(depreciation) of investments 2,304 102,951
______________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $15,918 $201,793
======================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Liquid
Asset
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $57,254
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 3,131
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
__________
Net increase (decrease) in net assets resulting from operations 3,131
Changes from principal transactions:
Purchase payments 227,924
Contract distributions and terminations (38,803)
Transfer payments from (to) Fixed Accounts and other Divisions (73,759)
Addition to assets retained in the Account by Golden American Life
Insurance Company 12
__________
Increase (decrease) in net assets derived from principal
transactions 115,374
__________
Total increase (decrease) 118,505
__________
NET ASSETS AT DECEMBER 31, 1998 175,759
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Liquid
Asset
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $4,409
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
__________
Net increase (decrease) in net assets resulting from operations 4,409
Changes from principal transactions:
Purchase payments 320,550
Contract distributions and terminations (71,046)
Transfer payments from (to) Fixed Accounts and other Divisions 4,343
Addition to assets retained in the Account by Golden American Life
Insurance Company 4
__________
Increase (decrease) in net assets derived from principal
transactions 253,851
__________
Total increase (decrease) 258,260
__________
NET ASSETS AT SEPTEMBER 30, 1999 $434,019
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Limited
Maturity
Bond
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $52,467
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 1,782
Net realized gain (loss) on investments 872
Net unrealized appreciation (depreciation) of investments 739
__________
Net increase (decrease) in net assets resulting from operations 3,393
Changes from principal transactions:
Purchase payments 42,180
Contract distributions and terminations (9,265)
Transfer payments from (to) Fixed Accounts and other Divisions 14,051
Addition to assets retained in the Account by Golden American Life
Insurance Company 6
__________
Increase (decrease) in net assets derived from principal
transactions 46,972
__________
Total increase (decrease) 50,365
__________
NET ASSETS AT DECEMBER 31, 1998 102,832
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Limited
Maturity
Bond
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($1,549)
Net realized gain (loss) on investments (333)
Net unrealized appreciation (depreciation) of investments 1,454
__________
Net increase (decrease) in net assets resulting from operations (428)
Changes from principal transactions:
Purchase payments 52,316
Contract distributions and terminations (11,770)
Transfer payments from (to) Fixed Accounts and other Divisions 2,949
Addition to assets retained in the Account by Golden American Life
Insurance Company 1
__________
Increase (decrease) in net assets derived from principal
transactions 43,496
__________
Total increase (decrease) 43,068
__________
NET ASSETS AT SEPTEMBER 30, 1999 $145,900
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Hard
Assets
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $45,503
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 2,033
Net realized gain (loss) on investments (6,941)
Net unrealized appreciation (depreciation) of investments (8,620)
__________
Net increase (decrease) in net assets resulting from operations (13,528)
Changes from principal transactions:
Purchase payments 7,508
Contract distributions and terminations (4,524)
Transfer payments from (to) Fixed Accounts and other Divisions (5,266)
Addition to assets retained in the Account by Golden American Life
Insurance Company 10
__________
Increase (decrease) in net assets derived from principal
transactions (2,272)
__________
Total increase (decrease) (15,800)
__________
NET ASSETS AT DECEMBER 31, 1998 29,703
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Hard
Assets
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($548)
Net realized gain (loss) on investments (10,585)
Net unrealized appreciation (depreciation) of investments 17,031
__________
Net increase (decrease) in net assets resulting from operations 5,898
Changes from principal transactions:
Purchase payments 5,318
Contract distributions and terminations (4,096)
Transfer payments from (to) Fixed Accounts and other Divisions 4,254
Addition to assets retained in the Account by Golden American Life
Insurance Company 1
__________
Increase (decrease) in net assets derived from principal
transactions 5,477
__________
Total increase (decrease) 11,375
__________
NET ASSETS AT SEPTEMBER 30, 1999 $41,078
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
All-Growth
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $71,738
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) (905)
Net realized gain (loss) on investments 330
Net unrealized appreciation (depreciation) of investments 6,240
__________
Net increase (decrease) in net assets resulting from operations 5,665
Changes from principal transactions:
Purchase payments 15,762
Contract distributions and terminations (9,206)
Transfer payments from (to) Fixed Accounts and other Divisions (2,159)
Addition to assets retained in the Account by Golden American Life
Insurance Company 7
__________
Increase (decrease) in net assets derived from principal
transactions 4,404
__________
Total increase (decrease) 10,069
__________
NET ASSETS AT DECEMBER 31, 1998 81,807
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
All-Growth
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($1,264)
Net realized gain (loss) on investments 8,308
Net unrealized appreciation (depreciation) of investments 19,140
__________
Net increase (decrease) in net assets resulting from operations 26,184
Changes from principal transactions:
Purchase payments 9,484
Contract distributions and terminations (10,612)
Transfer payments from (to) Fixed Accounts and other Divisions (6,834)
Addition to assets retained in the Account by Golden American Life
Insurance Company 3
__________
Increase (decrease) in net assets derived from principal
transactions (7,959)
__________
Total increase (decrease) 18,225
__________
NET ASSETS AT SEPTEMBER 30, 1999 $100,032
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Real
Estate
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $74,700
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 8,244
Net realized gain (loss) on investments 3,708
Net unrealized appreciation (depreciation) of investments (24,689)
__________
Net increase (decrease) in net assets resulting from operations (12,737)
Changes from principal transactions:
Purchase payments 24,639
Contract distributions and terminations (6,988)
Transfer payments from (to) Fixed Accounts and other Divisions (10,631)
Addition to assets retained in the Account by Golden American Life
Insurance Company 12
__________
Increase (decrease) in net assets derived from principal
transactions 7,032
__________
Total increase (decrease) (5,705)
__________
NET ASSETS AT DECEMBER 31, 1998 68,995
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Real
Estate
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($891)
Net realized gain (loss) on investments 1,744
Net unrealized appreciation (depreciation) of investments (4,476)
__________
Net increase (decrease) in net assets resulting from operations (3,623)
Changes from principal transactions:
Purchase payments 7,553
Contract distributions and terminations (7,329)
Transfer payments from (to) Fixed Accounts and other Divisions (7,248)
Addition to assets retained in the Account by Golden American Life
Insurance Company 1
__________
Increase (decrease) in net assets derived from principal
transactions (7,023)
__________
Total increase (decrease) (10,646)
__________
NET ASSETS AT SEPTEMBER 30, 1999 $58,349
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Fully
Managed
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $158,650
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 15,626
Net realized gain (loss) on investments 1,704
Net unrealized appreciation (depreciation) of investments (10,501)
__________
Net increase (decrease) in net assets resulting from operations 6,829
Changes from principal transactions:
Purchase payments 74,467
Contract distributions and terminations (19,367)
Transfer payments from (to) Fixed Accounts and other Divisions 5,756
Addition to assets retained in the Account by Golden American Life
Insurance Company 31
__________
Increase (decrease) in net assets derived from principal
transactions 60,887
__________
Total increase (decrease) 67,716
__________
NET ASSETS AT DECEMBER 31, 1998 226,366
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Fully
Managed
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($3,044)
Net realized gain (loss) on investments 3,482
Net unrealized appreciation (depreciation) of investments 14,210
__________
Net increase (decrease) in net assets resulting from operations 14,648
Changes from principal transactions:
Purchase payments 46,925
Contract distributions and terminations (23,061)
Transfer payments from (to) Fixed Accounts and other Divisions (3,474)
Addition to assets retained in the Account by Golden American Life
Insurance Company 5
__________
Increase (decrease) in net assets derived from principal
transactions 20,395
__________
Total increase (decrease) 35,043
__________
NET ASSETS AT SEPTEMBER 30, 1999 $261,409
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Equity
Income
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $261,869
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 23,815
Net realized gain (loss) on investments 2,288
Net unrealized appreciation (depreciation) of investments (10,125)
__________
Net increase (decrease) in net assets resulting from operations 15,978
Changes from principal transactions:
Purchase payments 34,793
Contract distributions and terminations (39,339)
Transfer payments from (to) Fixed Accounts and other Divisions 581
Addition to assets retained in the Account by Golden American Life
Insurance Company 28
__________
Increase (decrease) in net assets derived from principal
transactions (3,937)
__________
Total increase (decrease) 12,041
__________
NET ASSETS AT DECEMBER 31, 1998 273,910
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Equity
Income
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($3,596)
Net realized gain (loss) on investments 818
Net unrealized appreciation (depreciation) of investments (4,918)
__________
Net increase (decrease) in net assets resulting from operations (7,696)
Changes from principal transactions:
Purchase payments 45,531
Contract distributions and terminations (43,023)
Transfer payments from (to) Fixed Accounts and other Divisions 1,502
Addition to assets retained in the Account by Golden American Life
Insurance Company 11
__________
Increase (decrease) in net assets derived from principal
transactions 4,021
__________
Total increase (decrease) (3,675)
__________
NET ASSETS AT SEPTEMBER 30, 1999 $270,235
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Capital
Appre-
ciation
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $187,817
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 18,956
Net realized gain (loss) on investments 6,551
Net unrealized appreciation (depreciation) of investments (3,987)
__________
Net increase (decrease) in net assets resulting from operations 21,520
Changes from principal transactions:
Purchase payments 63,892
Contract distributions and terminations (26,711)
Transfer payments from (to) Fixed Accounts and other Divisions 10,035
Addition to assets retained in the Account by Golden American Life
Insurance Company 25
__________
Increase (decrease) in net assets derived from principal
transactions 47,241
__________
Total increase (decrease) 68,761
__________
NET ASSETS AT DECEMBER 31, 1998 256,578
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Capital
Appre-
ciation
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($3,604)
Net realized gain (loss) on investments 10,813
Net unrealized appreciation (depreciation) of investments 4,291
__________
Net increase (decrease) in net assets resulting from operations 11,500
Changes from principal transactions:
Purchase payments 66,219
Contract distributions and terminations (32,566)
Transfer payments from (to) Fixed Accounts and other Divisions 5,139
Addition to assets retained in the Account by Golden American Life
Insurance Company 9
__________
Increase (decrease) in net assets derived from principal
transactions 38,801
__________
Total increase (decrease) 50,301
__________
NET ASSETS AT SEPTEMBER 30, 1999 $306,879
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Rising
Dividends
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $215,943
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 12,920
Net realized gain (loss) on investments 3,842
Net unrealized appreciation (depreciation) of investments 17,344
__________
Net increase (decrease) in net assets resulting from operations 34,106
Changes from principal transactions:
Purchase payments 216,682
Contract distributions and terminations (26,449)
Transfer payments from (to) Fixed Accounts and other Divisions 60,274
Addition to assets retained in the Account by Golden American Life
Insurance Company 60
__________
Increase (decrease) in net assets derived from principal
transactions 250,567
__________
Total increase (decrease) 284,673
__________
NET ASSETS AT DECEMBER 31, 1998 500,616
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Rising
Dividends
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($7,947)
Net realized gain (loss) on investments 10,795
Net unrealized appreciation (depreciation) of investments 11,828
__________
Net increase (decrease) in net assets resulting from operations 14,676
Changes from principal transactions:
Purchase payments 185,783
Contract distributions and terminations (44,097)
Transfer payments from (to) Fixed Accounts and other Divisions 32,703
Addition to assets retained in the Account by Golden American Life
Insurance Company 13
__________
Increase (decrease) in net assets derived from principal
transactions 174,402
__________
Total increase (decrease) 189,078
__________
NET ASSETS AT SEPTEMBER 30, 1999 $689,694
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Emerging
Markets
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $34,501
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) (524)
Net realized gain (loss) on investments (3,524)
Net unrealized appreciation (depreciation) of investments (4,266)
__________
Net increase (decrease) in net assets resulting from operations (8,314)
Changes from principal transactions:
Purchase payments 2,520
Contract distributions and terminations (2,973)
Transfer payments from (to) Fixed Accounts and other Divisions (3,483)
Addition to assets retained in the Account by Golden American Life
Insurance Company 3
__________
Increase (decrease) in net assets derived from principal
transactions (3,933)
__________
Total increase (decrease) (12,247)
__________
NET ASSETS AT DECEMBER 31, 1998 22,254
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Emerging
Markets
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($330)
Net realized gain (loss) on investments (1,054)
Net unrealized appreciation (depreciation) of investments 7,613
__________
Net increase (decrease) in net assets resulting from operations 6,229
Changes from principal transactions:
Purchase payments 914
Contract distributions and terminations (2,462)
Transfer payments from (to) Fixed Accounts and other Divisions (971)
Addition to assets retained in the Account by Golden American Life
Insurance Company 1
__________
Increase (decrease) in net assets derived from principal
transactions (2,518)
__________
Total increase (decrease) 3,711
__________
NET ASSETS AT SEPTEMBER 30, 1999 $25,965
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Market
Manager
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $6,716
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 299
Net realized gain (loss) on investments 135
Net unrealized appreciation (depreciation) of investments 1,090
__________
Net increase (decrease) in net assets resulting from operations 1,524
Changes from principal transactions:
Purchase payments (36)
Contract distributions and terminations (188)
Transfer payments from (to) Fixed Accounts and other Divisions (309)
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions (533)
__________
Total increase (decrease) 991
__________
NET ASSETS AT DECEMBER 31, 1998 7,707
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Market
Manager
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($33)
Net realized gain (loss) on investments 861
Net unrealized appreciation (depreciation) of investments (17)
__________
Net increase (decrease) in net assets resulting from operations 811
Changes from principal transactions:
Purchase payments 66
Contract distributions and terminations (1,346)
Transfer payments from (to) Fixed Accounts and other Divisions (324)
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions (1,604)
__________
Total increase (decrease) (793)
__________
NET ASSETS AT SEPTEMBER 30, 1999 $6,914
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Value
Equity
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $77,025
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 1,994
Net realized gain (loss) on investments 1,237
Net unrealized appreciation (depreciation) of investments (4,208)
__________
Net increase (decrease) in net assets resulting from operations (977)
Changes from principal transactions:
Purchase payments 51,484
Contract distributions and terminations (7,869)
Transfer payments from (to) Fixed Accounts and other Divisions 6,521
Addition to assets retained in the Account by Golden American Life
Insurance Company 10
__________
Increase (decrease) in net assets derived from principal
transactions 50,146
__________
Total increase (decrease) 49,169
__________
NET ASSETS AT DECEMBER 31, 1998 126,194
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Value
Equity
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($1,649)
Net realized gain (loss) on investments 4,323
Net unrealized appreciation (depreciation) of investments (9,587)
__________
Net increase (decrease) in net assets resulting from operations (6,913)
Changes from principal transactions:
Purchase payments 25,285
Contract distributions and terminations (10,550)
Transfer payments from (to) Fixed Accounts and other Divisions (5,998)
Addition to assets retained in the Account by Golden American Life
Insurance Company 1
__________
Increase (decrease) in net assets derived from principal
transactions 8,738
__________
Total increase (decrease) 1,825
__________
NET ASSETS AT SEPTEMBER 30, 1999 $128,019
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Strategic
Equity
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $50,437
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 3,586
Net realized gain (loss) on investments 1,365
Net unrealized appreciation (depreciation) of investments (6,078)
__________
Net increase (decrease) in net assets resulting from operations (1,127)
Changes from principal transactions:
Purchase payments 25,972
Contract distributions and terminations (5,201)
Transfer payments from (to) Fixed Accounts and other Divisions 1,265
Addition to assets retained in the Account by Golden American Life
Insurance Company 2
__________
Increase (decrease) in net assets derived from principal
transactions 22,038
__________
Total increase (decrease) 20,911
__________
NET ASSETS AT DECEMBER 31, 1998 71,348
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Strategic
Equity
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($1,131)
Net realized gain (loss) on investments 3,305
Net unrealized appreciation (depreciation) of investments 5,999
__________
Net increase (decrease) in net assets resulting from operations 8,173
Changes from principal transactions:
Purchase payments 35,618
Contract distributions and terminations (7,743)
Transfer payments from (to) Fixed Accounts and other Divisions 5,803
Addition to assets retained in the Account by Golden American Life
Insurance Company 2
__________
Increase (decrease) in net assets derived from principal
transactions 33,680
__________
Total increase (decrease) 41,853
__________
NET ASSETS AT SEPTEMBER 30, 1999 $113,201
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Small Cap
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $52,725
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) (1,343)
Net realized gain (loss) on investments 2,148
Net unrealized appreciation (depreciation) of investments 15,952
__________
Net increase (decrease) in net assets resulting from operations 16,757
Changes from principal transactions:
Purchase payments 44,851
Contract distributions and terminations (6,104)
Transfer payments from (to) Fixed Accounts and other Divisions 16,010
Addition to assets retained in the Account by Golden American Life
Insurance Company 6
__________
Increase (decrease) in net assets derived from principal
transactions 54,763
__________
Total increase (decrease) 71,520
__________
NET ASSETS AT DECEMBER 31, 1998 124,245
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Small Cap
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($1,939)
Net realized gain (loss) on investments 19,972
Net unrealized appreciation (depreciation) of investments (3,471)
__________
Net increase (decrease) in net assets resulting from operations 14,562
Changes from principal transactions:
Purchase payments 61,536
Contract distributions and terminations (8,069)
Transfer payments from (to) Fixed Accounts and other Divisions 12,882
Addition to assets retained in the Account by Golden American Life
Insurance Company 2
__________
Increase (decrease) in net assets derived from principal
transactions 66,351
__________
Total increase (decrease) 80,913
__________
NET ASSETS AT SEPTEMBER 30, 1999 $205,158
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Managed
Global
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $104,681
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 3,296
Net realized gain (loss) on investments 7,634
Net unrealized appreciation (depreciation) of investments 16,611
__________
Net increase (decrease) in net assets resulting from operations 27,541
Changes from principal transactions:
Purchase payments 11,958
Contract distributions and terminations (13,329)
Transfer payments from (to) Fixed Accounts and other Divisions (176)
Addition to assets retained in the Account by Golden American Life
Insurance Company 9
__________
Increase (decrease) in net assets derived from principal
transactions (1,538)
__________
Total increase (decrease) 26,003
__________
NET ASSETS AT DECEMBER 31, 1998 130,684
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Managed
Global
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($1,696)
Net realized gain (loss) on investments 21,629
Net unrealized appreciation (depreciation) of investments (8,421)
__________
Net increase (decrease) in net assets resulting from operations 11,512
Changes from principal transactions:
Purchase payments 5,337
Contract distributions and terminations (16,521)
Transfer payments from (to) Fixed Accounts and other Divisions (1,348)
Addition to assets retained in the Account by Golden American Life
Insurance Company 2
__________
Increase (decrease) in net assets derived from principal
transactions (12,530)
__________
Total increase (decrease) (1,018)
__________
NET ASSETS AT SEPTEMBER 30, 1999 $129,666
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Mid-Cap
Growth
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $20,361
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 3,991
Net realized gain (loss) on investments 899
Net unrealized appreciation (depreciation) of investments 6,574
__________
Net increase (decrease) in net assets resulting from operations 11,464
Changes from principal transactions:
Purchase payments 66,121
Contract distributions and terminations (3,065)
Transfer payments from (to) Fixed Accounts and other Divisions 21,962
Addition to assets retained in the Account by Golden American Life
Insurance Company 1
__________
Increase (decrease) in net assets derived from principal
transactions 85,019
__________
Total increase (decrease) 96,483
__________
NET ASSETS AT DECEMBER 31, 1998 116,844
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Mid-Cap
Growth
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($2,260)
Net realized gain (loss) on investments 12,779
Net unrealized appreciation (depreciation) of investments 34,465
__________
Net increase (decrease) in net assets resulting from operations 44,984
Changes from principal transactions:
Purchase payments 105,122
Contract distributions and terminations (8,408)
Transfer payments from (to) Fixed Accounts and other Divisions 33,395
Addition to assets retained in the Account by Golden American Life
Insurance Company 4
__________
Increase (decrease) in net assets derived from principal
transactions 130,113
__________
Total increase (decrease) 175,097
__________
NET ASSETS AT SEPTEMBER 30, 1999 $291,941
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Capital
Growth
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $44,922
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 2,904
Net realized gain (loss) on investments 911
Net unrealized appreciation (depreciation) of investments 7,679
__________
Net increase (decrease) in net assets resulting from operations 11,494
Changes from principal transactions:
Purchase payments 105,760
Contract distributions and terminations (7,503)
Transfer payments from (to) Fixed Accounts and other Divisions 24,270
Addition to assets retained in the Account by Golden American Life
Insurance Company 7
__________
Increase (decrease) in net assets derived from principal
transactions 122,534
__________
Total increase (decrease) 134,028
__________
NET ASSETS AT DECEMBER 31, 1998 178,950
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Capital
Growth
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($3,155)
Net realized gain (loss) on investments 3,544
Net unrealized appreciation (depreciation) of investments (9,080)
__________
Net increase (decrease) in net assets resulting from operations (8,691)
Changes from principal transactions:
Purchase payments 118,536
Contract distributions and terminations (12,868)
Transfer payments from (to) Fixed Accounts and other Divisions 31,944
Addition to assets retained in the Account by Golden American Life
Insurance Company 2
__________
Increase (decrease) in net assets derived from principal
transactions 137,614
__________
Total increase (decrease) 128,923
__________
NET ASSETS AT SEPTEMBER 30, 1999 $307,873
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Research
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $34,402
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 10,068
Net realized gain (loss) on investments 972
Net unrealized appreciation (depreciation) of investments 16,878
__________
Net increase (decrease) in net assets resulting from operations 27,918
Changes from principal transactions:
Purchase payments 167,295
Contract distributions and terminations (6,740)
Transfer payments from (to) Fixed Accounts and other Divisions 60,643
Addition to assets retained in the Account by Golden American Life
Insurance Company 11
__________
Increase (decrease) in net assets derived from principal
transactions 221,209
__________
Total increase (decrease) 249,127
__________
NET ASSETS AT DECEMBER 31, 1998 283,529
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Research
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($4,918)
Net realized gain (loss) on investments 2,224
Net unrealized appreciation (depreciation) of investments 149
__________
Net increase (decrease) in net assets resulting from operations (2,545)
Changes from principal transactions:
Purchase payments 185,397
Contract distributions and terminations (18,467)
Transfer payments from (to) Fixed Accounts and other Divisions 29,742
Addition to assets retained in the Account by Golden American Life
Insurance Company 6
__________
Increase (decrease) in net assets derived from principal
transactions 196,678
__________
Total increase (decrease) 194,133
__________
NET ASSETS AT SEPTEMBER 30, 1999 $477,662
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Total
Return
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $26,231
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 9,099
Net realized gain (loss) on investments 185
Net unrealized appreciation (depreciation) of investments 1,028
__________
Net increase (decrease) in net assets resulting from operations 10,312
Changes from principal transactions:
Purchase payments 156,492
Contract distributions and terminations (7,889)
Transfer payments from (to) Fixed Accounts and other Divisions 42,666
Addition to assets retained in the Account by Golden American Life
Insurance Company 23
__________
Increase (decrease) in net assets derived from principal
transactions 191,292
__________
Total increase (decrease) 201,604
__________
NET ASSETS AT DECEMBER 31, 1998 227,835
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Total
Return
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($4,095)
Net realized gain (loss) on investments 125
Net unrealized appreciation (depreciation) of investments (2,155)
__________
Net increase (decrease) in net assets resulting from operations (6,125)
Changes from principal transactions:
Purchase payments 158,461
Contract distributions and terminations (15,803)
Transfer payments from (to) Fixed Accounts and other Divisions 50,725
Addition to assets retained in the Account by Golden American Life
Insurance Company 8
__________
Increase (decrease) in net assets derived from principal
transactions 193,391
__________
Total increase (decrease) 187,266
__________
NET ASSETS AT SEPTEMBER 30, 1999 $415,101
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Growth
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $23,178
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 4,697
Net realized gain (loss) on investments (807)
Net unrealized appreciation (depreciation) of investments 15,417
__________
Net increase (decrease) in net assets resulting from operations 19,307
Changes from principal transactions:
Purchase payments 77,977
Contract distributions and terminations (3,834)
Transfer payments from (to) Fixed Accounts and other Divisions 26,430
Addition to assets retained in the Account by Golden American Life
Insurance Company 10
__________
Increase (decrease) in net assets derived from principal
transactions 100,583
__________
Total increase (decrease) 119,890
__________
NET ASSETS AT DECEMBER 31, 1998 143,068
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Growth
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($4,197)
Net realized gain (loss) on investments 24,458
Net unrealized appreciation (depreciation) of investments 38,947
__________
Net increase (decrease) in net assets resulting from operations 59,208
Changes from principal transactions:
Purchase payments 277,629
Contract distributions and terminations (13,651)
Transfer payments from (to) Fixed Accounts and other Divisions 165,092
Addition to assets retained in the Account by Golden American Life
Insurance Company 3
__________
Increase (decrease) in net assets derived from principal
transactions 429,073
__________
Total increase (decrease) 488,281
__________
NET ASSETS AT SEPTEMBER 30, 1999 $631,349
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Global
Fixed
Income
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $206
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 174
Net realized gain (loss) on investments 216
Net unrealized appreciation (depreciation) of investments --
__________
Net increase (decrease) in net assets resulting from operations 390
Changes from principal transactions:
Purchase payments 5,820
Contract distributions and terminations (219)
Transfer payments from (to) Fixed Accounts and other Divisions 3,331
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 8,932
__________
Total increase (decrease) 9,322
__________
NET ASSETS AT DECEMBER 31, 1998 9,528
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Global
Fixed
Income
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($175)
Net realized gain (loss) on investments (416)
Net unrealized appreciation (depreciation) of investments (323)
__________
Net increase (decrease) in net assets resulting from operations (914)
Changes from principal transactions:
Purchase payments 8,574
Contract distributions and terminations (786)
Transfer payments from (to) Fixed Accounts and other Divisions 5,154
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 12,942
__________
Total increase (decrease) 12,028
__________
NET ASSETS AT SEPTEMBER 30, 1999 $21,556
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Develop-
ing
World
Division
(a)
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($22)
Net realized gain (loss) on investments (266)
Net unrealized appreciation (depreciation) of investments 149
__________
Net increase (decrease) in net assets resulting from operations (139)
Changes from principal transactions:
Purchase payments 2,757
Contract distributions and terminations (34)
Transfer payments from (to) Fixed Accounts and other Divisions 1,928
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 4,651
__________
Total increase (decrease) 4,512
__________
NET ASSETS AT DECEMBER 31, 1998 4,512
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Develop-
ing
World
Division
(a)
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($147)
Net realized gain (loss) on investments 2,092
Net unrealized appreciation (depreciation) of investments (849)
__________
Net increase (decrease) in net assets resulting from operations 1,096
Changes from principal transactions:
Purchase payments 7,579
Contract distributions and terminations (358)
Transfer payments from (to) Fixed Accounts and other Divisions 9,611
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 16,832
__________
Total increase (decrease) 17,928
__________
NET ASSETS AT SEPTEMBER 30, 1999 $22,440
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Growth
Oppor-
tunities
Division
(a)
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($8)
Net realized gain (loss) on investments (235)
Net unrealized appreciation (depreciation) of investments 349
__________
Net increase (decrease) in net assets resulting from operations 106
Changes from principal transactions:
Purchase payments 4,097
Contract distributions and terminations (45)
Transfer payments from (to) Fixed Accounts and other Divisions (27)
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 4,025
__________
Total increase (decrease) 4,131
__________
NET ASSETS AT DECEMBER 31, 1998 4,131
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Growth
Oppor-
tunities
Division
(a)
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($75)
Net realized gain (loss) on investments 689
Net unrealized appreciation (depreciation) of investments (227)
__________
Net increase (decrease) in net assets resulting from operations 387
Changes from principal transactions:
Purchase payments 1,830
Contract distributions and terminations (142)
Transfer payments from (to) Fixed Accounts and other Divisions 151
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 1,839
__________
Total increase (decrease) 2,226
__________
NET ASSETS AT SEPTEMBER 30, 1999 $6,357
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
High
Yield
Bond
Division
(c)
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $817
Net realized gain (loss) on investments (318)
Net unrealized appreciation (depreciation) of investments (18)
__________
Net increase (decrease) in net assets resulting from operations 481
Changes from principal transactions:
Purchase payments 32,399
Contract distributions and terminations (912)
Transfer payments from (to) Fixed Accounts and other Divisions 14,150
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 45,637
__________
Total increase (decrease) 46,118
__________
NET ASSETS AT DECEMBER 31, 1998 46,118
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
High
Yield
Bond
Division
(c)
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $4,257
Net realized gain (loss) on investments (399)
Net unrealized appreciation (depreciation) of investments (4,903)
__________
Net increase (decrease) in net assets resulting from operations (1,045)
Changes from principal transactions:
Purchase payments 61,793
Contract distributions and terminations (3,502)
Transfer payments from (to) Fixed Accounts and other Divisions 24,988
Addition to assets retained in the Account by Golden American Life
Insurance Company 1
__________
Increase (decrease) in net assets derived from principal
transactions 83,280
__________
Total increase (decrease) 82,235
__________
NET ASSETS AT SEPTEMBER 30, 1999 $128,353
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
StocksPLUS
Growth
and
Income
Division
(b)
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $814
Net realized gain (loss) on investments (97)
Net unrealized appreciation (depreciation) of investments 4,255
__________
Net increase (decrease) in net assets resulting from operations 4,972
Changes from principal transactions:
Purchase payments 29,368
Contract distributions and terminations (361)
Transfer payments from (to) Fixed Accounts and other Divisions 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 46,830
__________
Total increase (decrease) 51,802
__________
NET ASSETS AT DECEMBER 31, 1998 51,802
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION> PIMCO
StocksPLUS
Growth
and
Income
Division
(b)
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $2,115
Net realized gain (loss) on investments 3,448
Net unrealized appreciation (depreciation) of investments (6,021)
__________
Net increase (decrease) in net assets resulting from operations (458)
Changes from principal transactions:
Purchase payments 92,078
Contract distributions and terminations (3,384)
Transfer payments from (to) Fixed Accounts and other Divisions 20,050
Addition to assets retained in the Account by Golden American Life
Insurance Company 2
__________
Increase (decrease) in net assets derived from principal
transactions 108,746
__________
Total increase (decrease) 108,288
__________
NET ASSETS AT SEPTEMBER 30, 1999 $160,090
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Appre-
ciation
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $263
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 30
Net realized gain (loss) on investments 3
Net unrealized appreciation (depreciation) of investments 52
__________
Net increase (decrease) in net assets resulting from operations 85
Changes from principal transactions:
Purchase payments 595
Contract distributions and terminations (21)
Transfer payments from (to) Fixed Accounts and other Divisions 52
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 626
__________
Total increase (decrease) 711
__________
NET ASSETS AT DECEMBER 31, 1998 974
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Appre-
ciation
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $13
Net realized gain (loss) on investments 14
Net unrealized appreciation (depreciation) of investments 3
__________
Net increase (decrease) in net assets resulting from operations 30
Changes from principal transactions:
Purchase payments 28
Contract distributions and terminations (126)
Transfer payments from (to) Fixed Accounts and other Divisions 49
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions (49)
__________
Total increase (decrease) (19)
__________
NET ASSETS AT SEPTEMBER 30, 1999 $955
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
High
Income
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $209
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 36
Net realized gain (loss) on investments 8
Net unrealized appreciation (depreciation) of investments (66)
__________
Net increase (decrease) in net assets resulting from operations (22)
Changes from principal transactions:
Purchase payments 530
Contract distributions and terminations (15)
Transfer payments from (to) Fixed Accounts and other Divisions 104
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 619
__________
Total increase (decrease) 597
__________
NET ASSETS AT DECEMBER 31, 1998 806
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
High
Income
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $46
Net realized gain (loss) on investments (32)
Net unrealized appreciation (depreciation) of investments (24)
__________
Net increase (decrease) in net assets resulting from operations (10)
Changes from principal transactions:
Purchase payments 2
Contract distributions and terminations (75)
Transfer payments from (to) Fixed Accounts and other Divisions (99)
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions (172)
__________
Total increase (decrease) (182)
__________
NET ASSETS AT SEPTEMBER 30, 1999 $624
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Large Cap
Value
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $215
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 14
Net realized gain (loss) on investments 2
Net unrealized appreciation (depreciation) of investments 3
__________
Net increase (decrease) in net assets resulting from operations 19
Changes from principal transactions:
Purchase payments 429
Contract distributions and terminations (5)
Transfer payments from (to) Fixed Accounts and other Divisions 43
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 467
__________
Total increase (decrease) 486
__________
NET ASSETS AT DECEMBER 31, 1998 701
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Large Cap
Value
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $22
Net realized gain (loss) on investments 4
Net unrealized appreciation (depreciation) of investments (58)
__________
Net increase (decrease) in net assets resulting from operations (32)
Changes from principal transactions:
Purchase payments 41
Contract distributions and terminations (39)
Transfer payments from (to) Fixed Accounts and other Divisions 92
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 94
__________
Total increase (decrease) 62
__________
NET ASSETS AT SEPTEMBER 30, 1999 $763
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Inter-
national
Equity
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $96
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) (3)
Net realized gain (loss) on investments (1)
Net unrealized appreciation (depreciation) of investments (2)
__________
Net increase (decrease) in net assets resulting from operations (6)
Changes from principal transactions:
Purchase payments 178
Contract distributions and terminations (4)
Transfer payments from (to) Fixed Accounts and other Divisions 62
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 236
__________
Total increase (decrease) 230
__________
NET ASSETS AT DECEMBER 31, 1998 326
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Inter-
national
Equity
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($3)
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments 47
__________
Net increase (decrease) in net assets resulting from operations 44
Changes from principal transactions:
Purchase payments 11
Contract distributions and terminations (3)
Transfer payments from (to) Fixed Accounts and other Divisions 23
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 31
__________
Total increase (decrease) 75
__________
NET ASSETS AT SEPTEMBER 30, 1999 $401
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Money
Market
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $181
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 14
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
__________
Net increase (decrease) in net assets resulting from operations 14
Changes from principal transactions:
Purchase payments 565
Contract distributions and terminations (25)
Transfer payments from (to) Fixed Accounts and other Divisions (417)
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 123
__________
Total increase (decrease) 137
__________
NET ASSETS AT DECEMBER 31, 1998 318
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Money
Market
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $4
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
__________
Net increase (decrease) in net assets resulting from operations 4
Changes from principal transactions:
Purchase payments 25
Contract distributions and terminations (9)
Transfer payments from (to) Fixed Accounts and other Divisions (204)
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions (188)
__________
Total increase (decrease) (184)
__________
NET ASSETS AT SEPTEMBER 30, 1999 $134
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Inter-
national
Equity
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $1,981
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) (179)
Net realized gain (loss) on investments (556)
Net unrealized appreciation (depreciation) of investments 1,647
__________
Net increase (decrease) in net assets resulting from operations 912
Changes from principal transactions:
Purchase payments 41,775
Contract distributions and terminations (940)
Transfer payments from (to) Fixed Accounts and other Divisions 6,037
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 46,872
__________
Total increase (decrease) 47,784
__________
NET ASSETS AT DECEMBER 31, 1998 49,765
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Inter-
national
Equity
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($929)
Net realized gain (loss) on investments 14,543
Net unrealized appreciation (depreciation) of investments 2,304
__________
Net increase (decrease) in net assets resulting from operations 15,918
Changes from principal transactions:
Purchase payments 35,909
Contract distributions and terminations (2,396)
Transfer payments from (to) Fixed Accounts and other Divisions 21,016
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 54,529
__________
Total increase (decrease) 70,447
__________
NET ASSETS AT SEPTEMBER 30, 1999 $120,212
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Combined
_____________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $1,604,271
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 125,356
Net realized gain (loss) on investments 22,265
Net unrealized appreciation (depreciation) of investments 39,447
_____________
Net increase (decrease) in net assets resulting from operation 187,068
Changes from principal transactions:
Purchase payments 1,536,754
Contract distributions and terminations (247,928)
Transfer payments from (to) Fixed Accounts and other Divisions 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 1,526,866
_____________
Total increase (decrease) 1,713,934
_____________
NET ASSETS AT DECEMBER 31, 1998 3,318,205
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Combined
_____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($38,309)
Net realized gain (loss) on investments 137,151
Net unrealized appreciation (depreciation) of investments 102,951
_____________
Net increase (decrease) in net assets resulting from operation 201,793
Changes from principal transactions:
Purchase payments 1,921,450
Contract distributions and terminations (374,308)
Transfer payments from (to) Fixed Accounts and other Divisions 435,107
Addition to assets retained in the Account by Golden American Life
Insurance Company 82
_____________
Increase (decrease) in net assets derived from principal
transactions 1,982,331
_____________
Total increase (decrease) 2,184,124
_____________
NET ASSETS AT SEPTEMBER 30, 1999 $5,502,329
=============
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 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.
During 1999, the Account began selling GoldenSelect Value Contracts. The
Value Contracts have daily mortality and expense risk charges deducted at an
annual rate of 0.75%. A daily charge for an asset based administrative
charge is deducted from assets attributable to the contract at an annual rate
of 0.15%. Currently, there is no administrative charge for Value Contracts.
Premium taxes, where applicable, are deducted from the accumulation value of
the Value Contracts. The amount and timing of the deduction depend on the
annuitant's state of residence and currently ranges up to 3.5%. The
contingent deferred sales charges for the Value Contract is imposed as a
percentage of each premium payment if the Contract is surrendered or a
partial withdrawal in excess of stated allowable partial withdrawals is
taken. The surrender charge is imposed at a rate of 6% during the first
three complete years after purchase declining to 5%, 4%, 3%, and 1% after the
third, fourth, fifth, and sixth years, respectively.
At September 30, 1999, the Account had, under GoldenSelect Contracts, twenty-
six 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, and International Equity 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, the Travelers Series Fund Inc., the Greenwich
Street Series Fund Inc., the Warburg Pincus Trust or the PIMCO Variable
Insurance Trust (the "Trusts"). The Account also includes The Fund For Life
Division, which is not included in the accompanying financial statements, and
ceased to accept new Contracts effective December 31, 1994.
Golden American has requested permission from the Securities and Exchange
Commission ("SEC") to substitute shares of the All-Growth Series and the
Growth Opportunities Series with shares of the Mid-Cap Growth Series. These
requests are still pending. As of May 1, 1999, new allocations to the All-
Growth Series and the Growth Opportunities Series are no longer being
accepted.
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 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:
<TABLE>
<CAPTION>
Equi-Select Series Trust The GCG Trust
Investment Division Investment Division
___________________________ _________________________________________
<S> <S>
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)
</TABLE>
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 - BASIS OF PRESENTATION
The accompanying condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the nine months ended
September 30, 1999 are not necessarily indicative of the results that may be
expected for the year ended December 31, 1999. For further information,
refer to the financial statements and footnotes thereto for the year ended
December 31, 1998 included in this amendment to the separate account
registration statement.
NOTE 3 - NET ASSETS
Investments at net asset value less the payable to Golden American Life
Insurance Company for charges and fees at September 30, 1999 consisted of
the following:
<TABLE>
<CAPTION>
Limited
Liquid Maturity Hard All-
Asset Bond Assets Growth
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $420,471 $129,159 $32,533 $56,210
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 13,548 16,003 5,868 15,449
Net unrealized appreciation
(depreciation) of
investments -- 738 2,677 28,373
_____________________________________________________
$434,019 $145,900 $41,078 $100,032
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Real Fully Equity Capital
Estate Managed Income Appreciation
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $44,239 $187,984 $138,612 $185,675
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 26,869 48,993 131,424 81,933
Net unrealized appreciation
(depreciation) of
investments (12,759) 24,432 199 39,271
_____________________________________________________
$58,349 $261,409 $270,235 $306,879
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Rising Emerging Market Value
Dividends Markets Manager Equity
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $569,355 $44,157 $638 $117,980
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 29,680 (16,296) 2,888 16,234
Net unrealized appreciation
(depreciation) of
investments 90,659 (1,896) 3,388 (6,195)
_____________________________________________________
$689,694 $25,965 $6,914 $128,019
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Strategic Small Managed Mid-Cap
Equity Cap Global Growth
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $95,258 $169,894 $77,830 $233,832
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 10,500 17,566 40,110 16,283
Net unrealized appreciation
(depreciation) of
investments 7,443 17,698 11,726 41,826
_____________________________________________________
$113,201 $205,158 $129,666 $291,941
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Capital Total
Growth Research Return Growth
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $300,586 $451,081 $409,797 $553,886
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 7,439 9,166 6,019 24,529
Net unrealized appreciation
(depreciation) of
investments (152) 17,415 (715) 52,934
_____________________________________________________
$307,873 $477,662 $415,101 $631,349
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Global Growth PIMCO
Fixed Developing Oppor- High Yield
Income World tunities Bond
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $22,082 $21,483 $5,864 $128,917
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments (193) 1,657 371 4,357
Net unrealized appreciation
(depreciation) of
investments (333) (700) 122 (4,921)
_____________________________________________________
$21,556 $22,440 $6,357 $128,353
=====================================================
</TABLE>
<TABLE>
<CAPTION>
PIMCO Smith Smith
StocksPLUS Barney Barney
Growth and Appre- High Large Cap
Income ciation Income Value
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $155,576 $833 $653 $770
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 6,280 76 58 41
Net unrealized appreciation
(depreciation) of
investments (1,766) 46 (87) (48)
_____________________________________________________
$160,090 $955 $624 $763
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Smith
Barney Smith
Inter- Barney Inter-
national Money national
Equity Market Equity
Division Division Division Combined
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $368 $116 $103,406 $4,659,245
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments (7) 18 12,948 529,811
Net unrealized appreciation
(depreciation) of
investments 40 -- 3,858 313,273
_____________________________________________________
$401 $134 $120,212 $5,502,329
=====================================================
</TABLE>
NOTE 4 - UNIT VALUES
Accumulation unit value information (which is based on total assets) for
units outstanding by Contract type as of September 30, 1999 were as follows:
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
LIQUID ASSET
Currently payable annuity products:
DVA 80 2,484 $15.61 $39
DVA 100 3,808 15.28 58
Contracts in accumulation period:
DVA 80 480,573 15.61 7,504
DVA 100 1,975,262 15.28 30,187
DVA DIVISION/CONTRACT 100 59,274 14.71 872
DVA Plus - Standard 782,343 14.90 11,653
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 10,366,938 14.66 151,957
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 6,969,910 14.42 100,531
Access - 7% Solution,
Premium Plus - 7% Solution 9,275,343 14.17 131,429
Value 1,296 15.45 20
____________
434,250
LIMITED MATURITY BOND
Currently payable annuity products:
DVA 80 6,084 17.81 109
DVA 100 14,244 17.43 248
Contracts in accumulation period:
DVA 80 55,500 17.81 988
DVA 100 1,655,177 17.43 28,851
DVA DIVISION/CONTRACT 100 18,808 16.78 316
DVA Plus - Standard 310,272 17.00 5,276
DVA Plus - Annual Ratchet & 5.5% Solution,
Access- Standard, Premium Plus - Standard,
ES II 3,194,141 16.73 53,447
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 1,552,715 16.47 25,566
Access - 7% Solution,
Premium Plus - 7% Solution 1,921,743 16.18 31,086
Value 720 17.64 13
____________
145,900
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
HARD ASSETS
Currently payable annuity products:
DVA 80 71 $18.44 $1
DVA 100 7,147 18.05 129
Contracts in accumulation period:
DVA 80 51,074 18.44 942
DVA 100 525,251 18.05 9,481
DVA DIVISION/CONTRACT 100 22,713 17.38 395
DVA Plus - Standard 108,635 17.59 1,911
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 499,870 17.31 8,654
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 643,959 17.04 10,970
Access - 7% Solution,
Premium Plus - 7% Solution 512,114 16.74 8,571
Value 368 18.25 7
____________
41,061
ALL-GROWTH
Currently payable annuity products:
DVA 100 10,400 21.25 221
Contracts in accumulation period:
DVA 80 32,946 21.72 716
DVA 100 1,817,288 21.25 38,626
DVA DIVISION/CONTRACT 100 20,550 20.46 421
DVA Plus - Standard 185,822 20.72 3,850
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 713,050 20.39 14,536
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 1,460,549 20.06 29,298
Access - 7% Solution,
Premium Plus - 7% Solution 626,209 19.71 12,341
____________
100,009
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
REAL ESTATE
Currently payable annuity products:
DVA 80 353 $21.96 $8
DVA 100 7,069 21.49 152
Contracts in accumulation period:
DVA 80 22,665 21.96 497
DVA 100 800,668 21.49 17,206
DVA DIVISION/CONTRACT 100 8,108 20.69 168
DVA Plus - Standard 148,548 20.95 3,111
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 510,629 20.61 10,525
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 795,034 20.28 16,125
Access - 7% Solution,
Premium Plus - 7% Solution 528,500 19.93 10,531
____________
58,323
FULLY MANAGED
Currently payable annuity products:
DVA 80 1,073 23.34 25
DVA 100 46,446 22.84 1,061
Contracts in accumulation period:
DVA 80 58,820 23.34 1,373
DVA 100 3,075,079 22.84 70,232
DVA DIVISION/CONTRACT 100 33,047 21.99 727
DVA Plus - Standard 532,576 22.26 11,855
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 2,243,995 21.91 49,156
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 3,157,986 21.56 68,071
Access - 7% Solution,
Premium Plus - 7% Solution 2,781,025 21.18 58,893
Value 398 23.09 9
____________
261,402
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
EQUITY INCOME
Currently payable annuity products:
DVA 80 11,017 $22.80 $250
DVA 100 67,950 22.31 1,515
Contracts in accumulation period:
DVA 80 241,877 22.80 5,514
DVA 100 5,734,857 22.31 127,950
DVA DIVISION/CONTRACT 100 57,610 21.48 1,237
DVA Plus - Standard 383,234 21.75 8,333
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 1,647,882 21.40 35,263
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 2,427,728 21.06 51,120
Access - 7% Solution,
Premium Plus - 7% Solution 1,885,767 20.69 39,011
Value 2,083 22.55 47
____________
270,240
CAPITAL APPRECIATION
Currently payable annuity products:
DVA 100 32,576 26.46 862
Contracts in accumulation period:
DVA 80 54,927 26.86 1,475
DVA 100 3,447,230 26.46 91,223
DVA DIVISION/CONTRACT 100 36,489 25.78 941
DVA Plus - Standard 433,138 26.00 11,264
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 1,990,268 25.72 51,185
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 3,312,127 25.43 84,235
Access - 7% Solution,
Premium Plus - 7% Solution 2,611,894 25.11 65,585
Value 3,669 26.66 98
____________
306,868
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
RISING DIVIDENDS
Currently payable annuity products:
DVA 80 2,864 $24.40 $70
DVA 100 11,272 24.11 271
Contracts in accumulation period:
DVA 80 65,206 24.40 1,591
DVA 100 3,559,543 24.11 85,806
DVA DIVISION/CONTRACT 100 78,539 23.60 1,853
DVA Plus - Standard 1,247,307 23.77 29,653
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 6,834,082 23.56 161,024
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 9,513,935 23.35 222,164
Access - 7% Solution,
Premium Plus - 7% Solution 8,098,168 23.11 187,116
Value 4,492 24.25 109
____________
689,657
EMERGING MARKETS
Currently payable annuity products:
DVA 100 22,610 8.64 195
Contracts in accumulation period:
DVA 80 66,076 8.75 578
DVA 100 1,252,234 8.64 10,825
DVA DIVISION/CONTRACT 100 19,649 8.46 167
DVA Plus - Standard 273,503 8.53 2,332
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 299,951 8.45 2,535
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 1,070,965 8.37 8,968
Access - 7% Solution,
Premium Plus - 7% Solution 40,937 8.29 339
____________
25,939
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
MARKET MANAGER
Contracts in accumulation period:
DVA 100 296,162 $23.97 $7,099
____________
7,099
VALUE EQUITY
Currently payable annuity products:
DVA 80 367 18.11 7
DVA 100 8,847 17.94 159
Contracts in accumulation period:
DVA 80 18,778 18.11 340
DVA 100 742,247 17.94 13,315
DVA DIVISION/CONTRACT 100 14,270 17.64 252
DVA Plus - Standard 435,601 17.75 7,731
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 1,694,917 17.62 29,871
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 2,677,427 17.50 46,855
Access - 7% Solution,
Premium Plus - 7% Solution 1,698,775 17.34 29,464
Value 1,634 18.02 29
____________
128,023
STRATEGIC EQUITY
Currently payable annuity products:
DVA 100 26,685 16.04 428
Contracts in accumulation period:
DVA 80 18,291 16.17 296
DVA 100 387,147 16.04 6,211
DVA DIVISION/CONTRACT 100 7,160 15.82 113
DVA Plus - Standard 433,546 15.90 6,893
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 1,786,161 15.80 28,229
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 2,282,316 15.71 35,857
Access - 7% Solution,
Premium Plus - 7% Solution 2,254,744 15.59 35,162
Value 767 16.11 12
____________
113,201
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
SMALL CAP
Currently payable annuity products:
DVA 100 4,783 $17.36 $83
Contracts in accumulation period:
DVA 80 19,937 17.50 349
DVA 100 524,063 17.36 9,100
DVA DIVISION/CONTRACT 100 15,193 17.14 260
DVA Plus - Standard 448,759 17.20 7,719
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 4,287,381 17.10 73,332
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 3,944,346 17.01 67,081
Access - 7% Solution,
Premium Plus - 7% Solution 2,784,712 16.91 47,093
Value 8,547 17.43 149
____________
205,166
MANAGED GLOBAL
Currently payable annuity products:
DVA 100 14,368 16.76 241
Contracts in accumulation period:
DVA 80 29,959 16.99 509
DVA 100 2,980,836 16.76 49,947
DVA DIVISION/CONTRACT 100 39,282 16.36 643
DVA Plus - Standard 614,599 16.46 10,113
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 783,946 16.29 12,767
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 3,315,995 16.12 53,441
Access - 7% Solution,
Premium Plus - 7% Solution 124,499 15.92 1,982
____________
129,643
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
MID-CAP GROWTH
Contracts in accumulation period:
DVA 80 24,541 $29.03 $712
DVA 100 283,261 28.74 8,140
DVA DIVISION/CONTRACT 100 10,366 28.23 293
DVA Plus - Standard 255,815 28.38 7,260
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 3,508,143 28.13 98,669
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 2,932,667 27.95 81,975
Granite PrimElite - Standard 3,805 28.38 108
Granite PrimElite - Annual Ratchet 24,221 28.13 681
Access - 7% Solution,
Premium Plus - 7% Solution 3,384,554 27.74 93,891
Value 6,687 28.88 193
____________
291,922
CAPITAL GROWTH
Contracts in accumulation period:
DVA 80 4,318 17.26 75
DVA 100 435,503 17.14 7,462
DVA DIVISION/CONTRACT 100 14,456 16.92 245
DVA Plus - Standard 620,752 16.99 10,544
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 5,246,868 16.90 88,656
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 5,579,453 16.81 93,767
Access - 7% Solution,
Premium Plus - 7% Solution 6,406,836 16.72 107,101
Value 1,461 17.20 25
____________
307,875
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
RESEARCH
Contracts in accumulation period:
DVA 80 6,657 $23.82 $159
DVA 100 454,552 23.58 10,717
DVA DIVISION/CONTRACT 100 17,333 23.16 402
DVA Plus - Standard 563,325 23.28 13,117
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 5,920,313 23.12 136,871
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 6,655,121 22.93 152,631
Granite PrimElite - Standard 2,481 23.28 58
Granite PrimElite - Annual Ratchet 39,213 23.12 906
Access - 7% Solution,
Premium Plus - 7% Solution 7,144,676 22.76 162,621
Value 6,536 23.70 155
____________
477,637
TOTAL RETURN
Contracts in accumulation period:
DVA 80 9,144 18.17 166
DVA 100 419,948 17.98 7,552
DVA DIVISION/CONTRACT 100 4,918 17.67 87
DVA Plus - Standard 805,233 17.76 14,302
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 7,686,511 17.63 135,529
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 6,534,820 17.49 114,321
Granite PrimElite - Standard 5,973 17.76 106
Granite PrimElite - Annual Ratchet 34,842 17.63 614
Access - 7% Solution,
Premium Plus - 7% Solution 8,200,030 17.36 142,368
Value 2,841 18.08 51
____________
415,096
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
GROWTH
Contracts in accumulation period:
DVA 80 53,970 $20.76 $1,120
DVA 100 702,103 20.61 14,472
DVA DIVISION/CONTRACT 100 27,280 20.36 555
DVA Plus - Standard 602,631 20.43 12,313
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 10,757,752 20.33 218,657
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 8,121,303 20.22 164,177
Access - 7% Solution,
Premium Plus - 7% Solution 10,929,111 20.11 219,765
Value 14,091 20.69 291
____________
631,350
GLOBAL FIXED INCOME
Contracts in accumulation period:
DVA 100 19,437 12.36 240
DVA DIVISION/CONTRACT 100 330 12.14 4
DVA Plus - Standard 21,496 12.21 262
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 910,594 12.12 11,033
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 344,748 12.02 4,145
Access - 7% Solution,
Premium Plus - 7% Solution 492,124 11.93 5,872
____________
21,556
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
DEVELOPING WORLD
Contracts in accumulation period:
DVA 80 513 $8.95 $5
DVA 100 18,896 8.92 168
DVA DIVISION/CONTRACT 100 683 8.87 6
DVA Plus - Standard 10,154 8.88 90
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 1,402,520 8.86 12,426
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 438,213 8.84 3,873
Access - 7% Solution,
Premium Plus - 7% Solution 664,597 8.82 5,860
Value 1,342 8.93 12
____________
22,440
GROWTH OPPORTUNITIES
Contracts in accumulation period:
DVA 80 423 10.45 4
DVA 100 12,750 10.42 133
DVA Plus - Standard 9,752 10.37 101
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 228,188 10.35 2,362
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 156,870 10.32 1,620
Access - 7% Solution,
Premium Plus - 7% Solution 207,530 10.30 2,137
____________
6,357
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
PIMCO HIGH YIELD BOND
Contracts in accumulation period:
DVA 80 1,150 $10.17 $12
DVA 100 181,673 10.14 1,843
DVA DIVISION/CONTRACT 100 951 10.10 10
DVA Plus - Standard 339,021 10.11 3,426
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 4,412,449 10.09 44,502
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 2,715,099 10.06 27,324
Access - 7% Solution,
Premium Plus - 7% Solution 5,101,916 10.04 51,234
____________
128,351
PIMCO STOCKSPLUS GROWTH AND INCOME
Contracts in accumulation period:
DVA 80 1,606 11.65 19
DVA 100 110,890 11.61 1,288
DVA Plus - Standard 255,112 11.57 2,952
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 4,269,129 11.55 49,293
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 3,550,063 11.52 40,902
Access - 7% Solution,
Premium Plus - 7% Solution 5,708,728 11.50 65,632
Value 879 11.63 10
____________
160,096
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
APPRECIATION
Contracts in accumulation period:
Granite PrimElite - Standard 1,258 $17.03 $21
Granite PrimElite - Annual Ratchet 55,133 16.94 934
____________
955
SMITH BARNEY HIGH INCOME
Contracts in accumulation period:
Granite PrimElite - Standard 7,534 13.48 101
Granite PrimElite - Annual Ratchet 39,047 13.39 523
____________
624
SMITH BARNEY LARGE CAP VALUE
Contracts in accumulation period:
Granite PrimElite - Standard 5,217 18.72 98
Granite PrimElite - Annual Ratchet 35,761 18.59 665
____________
763
SMITH BARNEY INTERNATIONAL EQUITY
Contracts in accumulation period:
Granite PrimElite - Standard 2,648 16.18 43
Granite PrimElite - Annual Ratchet 22,244 16.07 358
____________
401
SMITH BARNEY MONEY MARKET
Contracts in accumulation period:
Granite PrimElite - Standard 1,919 11.71 23
Granite PrimElite - Annual Ratchet 9,581 11.63 111
____________
134
INTERNATIONAL EQUITY
Contracts in accumulation period:
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 5,182,818 11.83 61,312
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 1,488,334 11.85 17,636
Access - 7% Solution,
Premium Plus - 7% Solution 3,500,208 11.79 41,256
Value 1,484 12.13 17
____________
120,221
_____________ ____________
COMBINED 298,616,800 $5,502,559
============= ============
</TABLE>
<PAGE>
FINANCIAL STATEMENTS
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
YEARS ENDED DECEMBER 31, 1998 AND 1997
WITH REPORT OF INDEPENDENT AUDITORS
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997
TABLE OF CONTENTS
Report of Independent Auditors
Audited Financial Statements
Statement of Assets and Liability
Statement of Operations
Statements of Changes in Net Assets
Notes to Financial Statements
Report of Independent Auditors
The Board of Directors
Golden American Life Insurance Company
We have audited the accompanying statement of assets and liability of Golden
American Life Insurance Company Separate Account B as of December 31, 1998,
and the related statements of operations for the year then ended and the
changes in net assets for each of the two years in the period then ended.
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 generally accepted auditing
standards. 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,
1998, by correspondence with the custodian. 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, 1998, and the results of
its operations for the year then ended and the changes in its net assets for
each of the two years in the period then ended in conformity with generally
accepted accounting principles.
/S/ Ernst & Young LLP
Des Moines, Iowa
February 25, 1999
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF ASSETS AND LIABILITY
DECEMBER 31, 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COMBINED
____________
<S> <C>
ASSETS
Investments at net asset value:
The GCG Trust:
Liquid Asset Series,
175,698,298 shares (cost - $175,698) $175,698
Limited Maturity Bond Series,
9,632,216 shares (cost - $103,588) 102,872
Hard Assets Series,
3,095,761 shares (cost - $44,073) 29,719
All-Growth Series,
5,460,140 shares (cost - $72,614) 81,847
Real Estate Series,
5,082,757 shares (cost - $77,307) 69,024
Fully Managed Series,
14,869,764 shares (cost - $216,245) 226,467
Multiple Allocation Series,
21,629,600 shares (cost - $268,930) 274,047
Capital Appreciation Series,
14,189,481 shares (cost - $221,707) 256,687
Rising Dividends Series,
22,754,116 shares (cost - $421,987) 500,818
Emerging Markets Series,
3,333,290 shares (cost - $31,776) 22,267
Market Manager Series,
414,851 shares (cost - $4,663) 8,068
Value Equity Series,
7,950,210 shares (cost - $122,857) 126,249
Strategic Equity Series,
5,567,699 shares (cost - $69,933) 71,377
Small Cap Series,
7,754,062 shares (cost - $103,129) 124,298
Managed Global Series,
9,213,401 shares (cost - $110,591) 130,738
Mid-Cap Growth Series,
6,458,180 shares (cost - $109,532) 116,893
Growth & Income Series,
11,461,829 shares (cost - $170,105) 179,033
Research Series,
13,965,668 shares (cost - $266,377) 283,643
Total Return Series,
14,425,794 shares (cost - $226,488) 227,928
Value + Growth Series,
9,163,078 shares (cost - $129,140) 143,127
Global Fixed Income Series,
853,224 shares (cost - $9,541) 9,531
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF ASSETS AND LIABILITY
DECEMBER 31, 1998
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COMBINED
____________
<S> <C>
ASSETS - CONTINUED
Investments at net asset value:
The GCG Trust:
Developing World Series,
612,452 shares (cost - $4,365) $4,514
Growth Opportunities Series,
425,552 shares (cost - $3,783) 4,132
PIMCO Variable Insurance Trust:
PIMCO High Yield Bond Portfolio,
4,770,792 shares (cost - $46,152) 46,134
PIMCO StocksPLUS Growth and Income Portfolio,
4,119,171 shares (cost - $47,564) 51,819
Greenwich Street Series Fund Inc.:
Appreciation Portfolio,
46,082 shares (cost - $932) 975
Travelers Series Fund Inc.:
Smith Barney High Income Portfolio,
63,707 shares (cost - $870) 807
Smith Barney Large Cap Value Portfolio,
34,717 shares (cost - $692) 702
Smith Barney International Equity Portfolio,
23,707 shares (cost - $333) 326
Smith Barney Money Market Portfolio,
317,907 shares (cost - $318) 318
Warburg Pincus Trust:
International Equity Portfolio,
4,529,941 shares (cost - $48,231) 49,785
____________
TOTAL ASSETS (cost - $3,109,521) 3,319,843
LIABILITY
Payable to Golden American Life Insurance Company
for charges and fees 1,638
____________
TOTAL NET ASSETS $3,318,205
============
NET ASSETS
For variable annuity insurance contracts $3,309,202
Retained in Separate Account B by Golden American
Life Insurance Company 9,003
____________
TOTAL NET ASSETS $3,318,205
============
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Limited
Liquid Maturity Hard
Asset Bond Assets
Division Division Division
______________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $5,783 $3,217 $1,662
Capital gains distributions -- -- 1,065
______________________________
TOTAL INVESTMENT INCOME 5,783 3,217 2,727
Expenses:
Mortality and expense risk and other charges 1,619 939 461
Annual administrative charges 62 41 13
Minimum death benefit guarantee charges 7 1 2
Contingent deferred sales charges 342 65 53
Other contract charges 9 3 2
Amortization of deferred charges related to:
Deferred sales load 615 389 164
Premium taxes 3 6 3
______________________________
TOTAL EXPENSES BEFORE WAIVER 2,657 1,444 698
Fees waived by Golden American Life
Insurance Company 5 9 4
______________________________
NET EXPENSES 2,652 1,435 694
______________________________
NET INVESTMENT INCOME (LOSS) 3,131 1,782 2,033
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments -- 872 (6,941)
Net unrealized appreciation
(depreciation) of investments -- 739 (8,620)
______________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $3,131 $3,393 ($13,528)
==============================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
All- Real Fully
Growth Estate Managed
Division Division Division
______________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- $3,321 $6,674
Capital gains distributions $470 6,244 12,408
______________________________
TOTAL INVESTMENT INCOME 470 9,565 19,082
Expenses:
Mortality and expense risk and other charges 879 964 2,417
Annual administrative charges 41 28 105
Minimum death benefit guarantee charges 1 1 2
Contingent deferred sales charges 46 38 64
Other contract charges 2 1 5
Amortization of deferred charges related to:
Deferred sales load 409 290 866
Premium taxes 7 5 16
______________________________
TOTAL EXPENSES BEFORE WAIVER 1,385 1,327 3,475
Fees waived by Golden American Life
Insurance Company 10 6 19
______________________________
NET EXPENSES 1,375 1,321 3,456
______________________________
NET INVESTMENT INCOME (LOSS) (905) 8,244 15,626
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 330 3,708 1,704
Net unrealized appreciation
(depreciation) of investments 6,240 (24,689) (10,501)
______________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $5,665 ($12,737) $6,829
==============================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Multiple Capital
Alloca- Apprecia- Rising
tion tion Dividends
Division Division Division
______________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $13,875 $3,355 $2,240
Capital gains distributions 14,968 19,519 16,632
______________________________
TOTAL INVESTMENT INCOME 28,843 22,874 18,872
Expenses:
Mortality and expense risk and other charges 2,985 2,656 4,670
Annual administrative charges 144 110 212
Minimum death benefit guarantee charges 10 2 4
Contingent deferred sales charges 89 59 128
Other contract charges 9 9 13
Amortization of deferred charges related to:
Deferred sales load 1,784 1,083 934
Premium taxes 33 25 11
______________________________
TOTAL EXPENSES BEFORE WAIVER 5,054 3,944 5,972
Fees waived by Golden American Life
Insurance Company 26 26 20
______________________________
NET EXPENSES 5,028 3,918 5,952
______________________________
NET INVESTMENT INCOME (LOSS) 23,815 18,956 12,920
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 2,288 6,551 3,842
Net unrealized appreciation
(depreciation) of investments (10,125) (3,987) 17,344
______________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $15,978 $21,520 $34,106
==============================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Emerging Market Value
Markets Manager Equity
Division Division Division
______________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- $129 $2,766
Capital gains distributions -- 214 1,018
______________________________
TOTAL INVESTMENT INCOME -- 343 3,784
Expenses:
Mortality and expense risk and other charges $336 -- 1,442
Annual administrative charges 10 1 57
Minimum death benefit guarantee charges 1 -- 1
Contingent deferred sales charges 16 -- 57
Other contract charges 1 -- 2
Amortization of deferred charges related to:
Deferred sales load 160 43 231
Premium taxes 2 -- 3
______________________________
TOTAL EXPENSES BEFORE WAIVER 526 44 1,793
Fees waived by Golden American Life
Insurance Company 2 -- 3
______________________________
NET EXPENSES 524 44 1,790
______________________________
NET INVESTMENT INCOME (LOSS) (524) 299 1,994
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (3,524) 135 1,237
Net unrealized appreciation
(depreciation) of investments (4,266) 1,090 (4,208)
______________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($8,314) $1,524 ($977)
==============================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Strategic Small Managed
Equity Cap Global
Division Division Division
______________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $1,941 -- $1,806
Capital gains distributions 2,711 -- 3,627
______________________________
TOTAL INVESTMENT INCOME 4,652 -- 5,433
Expenses:
Mortality and expense risk and other charges 851 $1,114 1,445
Annual administrative charges 29 55 59
Minimum death benefit guarantee charges 1 1 1
Contingent deferred sales charges 52 59 50
Other contract charges 1 3 4
Amortization of deferred charges related to:
Deferred sales load 135 112 579
Premium taxes 1 1 8
______________________________
TOTAL EXPENSES BEFORE WAIVER 1,070 1,345 2,146
Fees waived by Golden American Life
Insurance Company 4 2 9
______________________________
NET EXPENSES 1,066 1,343 2,137
______________________________
NET INVESTMENT INCOME (LOSS) 3,586 (1,343) 3,296
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 1,365 2,148 7,634
Net unrealized appreciation
(depreciation) of investments (6,078) 15,952 16,611
______________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($1,127) $16,757 $27,541
==============================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Mid-Cap Growth &
Growth Income Research
Division Division Division
______________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $4,999 $4,745 $12,283
Capital gains distributions -- -- --
______________________________
TOTAL INVESTMENT INCOME 4,999 4,745 12,283
Expenses:
Mortality and expense risk and other charges 880 1,599 1,941
Annual administrative charges 51 88 120
Minimum death benefit guarantee charges 1 -- --
Contingent deferred sales charges 20 62 71
Other contract charges 2 1 4
Amortization of deferred charges related to:
Deferred sales load 55 92 79
Premium taxes -- 2 1
______________________________
TOTAL EXPENSES BEFORE WAIVER 1,009 1,844 2,216
Fees waived by Golden American Life
Insurance Company 1 3 1
______________________________
NET EXPENSES 1,008 1,841 2,215
______________________________
NET INVESTMENT INCOME (LOSS) 3,991 2,904 10,068
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 899 911 972
Net unrealized appreciation
(depreciation) of investments 6,574 7,679 16,878
______________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $11,464 $11,494 $27,918
==============================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Global
Total Value + Fixed
Return Growth Income
Division Division Division
______________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $11,048 $5,950 $237
Capital gains distributions -- -- --
______________________________
TOTAL INVESTMENT INCOME 11,048 5,950 237
Expenses:
Mortality and expense risk and other charges 1,714 1,099 57
Annual administrative charges 98 62 4
Minimum death benefit guarantee charges -- 1 --
Contingent deferred sales charges 62 42 2
Other contract charges 1 1 --
Amortization of deferred charges related to:
Deferred sales load 75 49 --
Premium taxes 1 1 --
______________________________
TOTAL EXPENSES BEFORE WAIVER 1,951 1,255 63
Fees waived by Golden American Life
Insurance Company 2 2 --
______________________________
NET EXPENSES 1,949 1,253 63
______________________________
NET INVESTMENT INCOME (LOSS) 9,099 4,697 174
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 185 (807) 216
Net unrealized appreciation
(depreciation) of investments 1,028 15,417 --
______________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $10,312 $19,307 $390
==============================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
Growth High
Developing Oppor- Yield
World tunities Bond
Division Division Division
(a) (a) (c)
______________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $2 $25 $1,050
Capital gains distributions -- -- --
______________________________
TOTAL INVESTMENT INCOME 2 25 1,050
Expenses:
Mortality and expense risk and other charges 22 31 197
Annual administrative charges 2 1 17
Minimum death benefit guarantee charges -- -- --
Contingent deferred sales charges -- 1 15
Other contract charges -- -- --
Amortization of deferred charges related to:
Deferred sales load -- -- 4
Premium taxes -- -- --
______________________________
TOTAL EXPENSES BEFORE WAIVER 24 33 233
Fees waived by Golden American Life
Insurance Company -- -- --
______________________________
NET EXPENSES 24 33 233
______________________________
NET INVESTMENT INCOME (LOSS) (22) (8) 817
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (266) (235) (318)
Net unrealized appreciation
(depreciation) of investments 149 349 (18)
______________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($139) $106 $481
==============================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
StocksPLUS Smith
Growth Barney
and Appre- High
Income ciation Income
Division Division Division
(b)
______________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $1,005 $8 $37
Capital gains distributions -- 33 8
______________________________
TOTAL INVESTMENT INCOME 1,005 41 45
Expenses:
Mortality and expense risk and other charges 162 10 8
Annual administrative charges 18 1 1
Minimum death benefit guarantee charges -- -- --
Contingent deferred sales charges 9 -- --
Other contract charges -- -- --
Amortization of deferred charges related to:
Deferred sales load 2 -- --
Premium taxes -- -- --
______________________________
TOTAL EXPENSES BEFORE WAIVER 191 11 9
Fees waived by Golden American Life
Insurance Company -- -- --
______________________________
NET EXPENSES 191 11 9
______________________________
NET INVESTMENT INCOME (LOSS) 814 30 36
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (97) 3 8
Net unrealized appreciation
(depreciation) of investments 4,255 52 (66)
______________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $4,972 $85 ($22)
==============================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Smith Barney Smith
Barney Inter- Barney
Large Cap national Money
Value Equity Market
Division Division Division
______________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $6 -- $20
Capital gains distributions 16 -- --
______________________________
TOTAL INVESTMENT INCOME 22 -- 20
Expenses:
Mortality and expense risk and other charges 7 $3 6
Annual administrative charges 1 -- --
Minimum death benefit guarantee charges -- -- --
Contingent deferred sales charges -- -- --
Other contract charges -- -- --
Amortization of deferred charges related to:
Deferred sales load -- -- --
Premium taxes -- -- --
______________________________
TOTAL EXPENSES BEFORE WAIVER 8 3 6
Fees waived by Golden American Life
Insurance Company -- -- --
______________________________
NET EXPENSES 8 3 6
______________________________
NET INVESTMENT INCOME (LOSS) 14 (3) 14
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 2 (1) --
Net unrealized appreciation
(depreciation) of investments 3 (2) --
______________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $19 ($6) $14
==============================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Inter-
national
Equity
Division Combined
____________________
<S> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $251 $88,435
Capital gains distributions -- 78,933
____________________
TOTAL INVESTMENT INCOME 251 167,368
Expenses:
Mortality and expense risk and other charges 398 30,912
Annual administrative charges 20 1,451
Minimum death benefit guarantee charges -- 37
Contingent deferred sales charges 12 1,414
Other contract charges -- 73
Amortization of deferred charges related to:
Deferred sales load -- 8,150
Premium taxes -- 129
____________________
TOTAL EXPENSES BEFORE WAIVER 430 42,166
Fees waived by Golden American Life
Insurance Company -- 154
____________________
NET EXPENSES 430 42,012
____________________
NET INVESTMENT INCOME (LOSS) (179) 125,356
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
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
====================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Liquid
Asset
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $37,476
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 970
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
____________
Net increase (decrease) in net assets resulting from operations 970
Changes from principal transactions:
Purchase payments 29,455
Contract distributions and terminations (18,096)
Transfer payments from (to) Fixed Accounts and other Divisions 7,253
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 196
____________
Increase (decrease) in net assets derived from principal
transactions 18,808
____________
Total increase (decrease) 19,778
____________
NET ASSETS AT DECEMBER 31, 1997 57,254
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Liquid
Asset
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $3,131
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
____________
Net increase (decrease) in net assets resulting from operations 3,131
Changes from principal transactions:
Purchase payments 227,924
Contract distributions and terminations (38,803)
Transfer payments from (to) Fixed Accounts and other Divisions (73,759)
Addition to assets retained in the Account
by Golden American Life Insurance Company 12
____________
Increase (decrease) in net assets derived from principal
transactions 115,374
____________
Total increase (decrease) 118,505
____________
NET ASSETS AT DECEMBER 31, 1998 $175,759
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Limited
Maturity
Bond
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $54,334
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 2,703
Net realized gain (loss) on investments 139
Net unrealized appreciation (depreciation) of investments (690)
____________
Net increase (decrease) in net assets resulting from operations 2,152
Changes from principal transactions:
Purchase payments 5,847
Contract distributions and terminations (8,648)
Transfer payments from (to) Fixed Accounts and other Divisions (1,150)
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company (68)
____________
Increase (decrease) in net assets derived from principal
transactions (4,019)
____________
Total increase (decrease) (1,867)
____________
NET ASSETS AT DECEMBER 31, 1997 52,467
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Limited
Maturity
Bond
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $1,782
Net realized gain (loss) on investments 872
Net unrealized appreciation (depreciation) of investments 739
____________
Net increase (decrease) in net assets resulting from operations 3,393
Changes from principal transactions:
Purchase payments 42,180
Contract distributions and terminations (9,265)
Transfer payments from (to) Fixed Accounts and other Divisions 14,051
Addition to assets retained in the Account
by Golden American Life Insurance Company 6
____________
Increase (decrease) in net assets derived from principal
transactions 46,972
____________
Total increase (decrease) 50,365
____________
NET ASSETS AT DECEMBER 31, 1998 $102,832
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Hard
Assets
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $43,301
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 8,570
Net realized gain (loss) on investments 3,106
Net unrealized appreciation (depreciation) of investments (9,738)
____________
Net increase (decrease) in net assets resulting from operations 1,938
Changes from principal transactions:
Purchase payments 6,936
Contract distributions and terminations (5,699)
Transfer payments from (to) Fixed Accounts and other Divisions (886)
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company (87)
____________
Increase (decrease) in net assets derived from principal
transactions 264
____________
Total increase (decrease) 2,202
____________
NET ASSETS AT DECEMBER 31, 1997 45,503
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Hard
Assets
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $2,033
Net realized gain (loss) on investments (6,941)
Net unrealized appreciation (depreciation) of investments (8,620)
____________
Net increase (decrease) in net assets resulting from operations (13,528)
Changes from principal transactions:
Purchase payments 7,508
Contract distributions and terminations (4,524)
Transfer payments from (to) Fixed Accounts and other Divisions (5,266)
Addition to assets retained in the Account
by Golden American Life Insurance Company 10
____________
Increase (decrease) in net assets derived from principal
transactions (2,272)
____________
Total increase (decrease) (15,800)
____________
NET ASSETS AT DECEMBER 31, 1998 $29,703
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
All-Growth
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $76,842
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 490
Net realized gain (loss) on investments 556
Net unrealized appreciation (depreciation) of investments 1,550
____________
Net increase (decrease) in net assets resulting from operations 2,596
Changes from principal transactions:
Purchase payments 7,441
Contract distributions and terminations (10,832)
Transfer payments from (to) Fixed Accounts and other Divisions (4,053)
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company (256)
____________
Increase (decrease) in net assets derived from principal
transactions (7,700)
____________
Total increase (decrease) (5,104)
____________
NET ASSETS AT DECEMBER 31, 1997 71,738
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
All-Growth
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($905)
Net realized gain (loss) on investments 330
Net unrealized appreciation (depreciation) of investments 6,240
____________
Net increase (decrease) in net assets resulting from operations 5,665
Changes from principal transactions:
Purchase payments 15,762
Contract distributions and terminations (9,206)
Transfer payments from (to) Fixed Accounts and other Divisions (2,159)
Addition to assets retained in the Account
by Golden American Life Insurance Company 7
____________
Increase (decrease) in net assets derived from principal
transactions 4,404
____________
Total increase (decrease) 10,069
____________
NET ASSETS AT DECEMBER 31, 1998 $81,807
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Real
Estate
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $50,681
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 3,901
Net realized gain (loss) on investments 2,621
Net unrealized appreciation (depreciation) of investments 5,391
____________
Net increase (decrease) in net assets resulting from operations 11,913
Changes from principal transactions:
Purchase payments 14,095
Contract distributions and terminations (5,798)
Transfer payments from (to) Fixed Accounts and other Divisions 3,766
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 43
____________
Increase (decrease) in net assets derived from principal
transactions 12,106
____________
Total increase (decrease) 24,019
____________
NET ASSETS AT DECEMBER 31, 1997 74,700
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Real
Estate
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $8,244
Net realized gain (loss) on investments 3,708
Net unrealized appreciation (depreciation) of investments (24,689)
____________
Net increase (decrease) in net assets resulting from operations (12,737)
Changes from principal transactions:
Purchase payments 24,639
Contract distributions and terminations (6,988)
Transfer payments from (to) Fixed Accounts and other Divisions (10,631)
Addition to assets retained in the Account
by Golden American Life Insurance Company 12
____________
Increase (decrease) in net assets derived from principal
transactions 7,032
____________
Total increase (decrease) (5,705)
____________
NET ASSETS AT DECEMBER 31, 1998 $68,995
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Fully
Managed
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $134,431
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 9,632
Net realized gain (loss) on investments 2,407
Net unrealized appreciation (depreciation) of investments 5,898
____________
Net increase (decrease) in net assets resulting from operations 17,937
Changes from principal transactions:
Purchase payments 19,633
Contract distributions and terminations (17,687)
Transfer payments from (to) Fixed Accounts and other Divisions 4,389
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company (53)
____________
Increase (decrease) in net assets derived from principal
transactions 6,282
____________
Total increase (decrease) 24,219
____________
NET ASSETS AT DECEMBER 31, 1997 158,650
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Fully
Managed
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $15,626
Net realized gain (loss) on investments 1,704
Net unrealized appreciation (depreciation) of investments (10,501)
____________
Net increase (decrease) in net assets resulting from operations 6,829
Changes from principal transactions:
Purchase payments 74,467
Contract distributions and terminations (19,367)
Transfer payments from (to) Fixed Accounts and other Divisions 5,756
Addition to assets retained in the Account
by Golden American Life Insurance Company 31
____________
Increase (decrease) in net assets derived from principal
transactions 60,887
____________
Total increase (decrease) 67,716
____________
NET ASSETS AT DECEMBER 31, 1998 $226,366
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Multiple
Allocation
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $270,427
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 21,419
Net realized gain (loss) on investments 5,773
Net unrealized appreciation (depreciation) of investments 9,866
____________
Net increase (decrease) in net assets resulting from operations 37,058
Changes from principal transactions:
Purchase payments 9,404
Contract distributions and terminations (45,162)
Transfer payments from (to) Fixed Accounts and other Divisions (9,649)
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company (209)
____________
Increase (decrease) in net assets derived from principal
transactions (45,616)
____________
Total increase (decrease) (8,558)
____________
NET ASSETS AT DECEMBER 31, 1997 261,869
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Multiple
Allocation
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $23,815
Net realized gain (loss) on investments 2,288
Net unrealized appreciation (depreciation) of investments (10,125)
____________
Net increase (decrease) in net assets resulting from operations 15,978
Changes from principal transactions:
Purchase payments 34,793
Contract distributions and terminations (39,339)
Transfer payments from (to) Fixed Accounts and other Divisions 581
Addition to assets retained in the Account
by Golden American Life Insurance Company 28
____________
Increase (decrease) in net assets derived from principal
transactions (3,937)
____________
Total increase (decrease) 12,041
____________
NET ASSETS AT DECEMBER 31, 1998 $273,910
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Capital
Appreciation
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $145,989
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 13,819
Net realized gain (loss) on investments 8,242
Net unrealized appreciation (depreciation) of investments 16,323
____________
Net increase (decrease) in net assets resulting from operations 38,384
Changes from principal transactions:
Purchase payments 17,440
Contract distributions and terminations (20,143)
Transfer payments from (to) Fixed Accounts and other Divisions 5,915
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 232
____________
Increase (decrease) in net assets derived from principal
transactions 3,444
____________
Total increase (decrease) 41,828
____________
NET ASSETS AT DECEMBER 31, 1997 187,817
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Capital
Appreciation
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $18,956
Net realized gain (loss) on investments 6,551
Net unrealized appreciation (depreciation) of investments (3,987)
____________
Net increase (decrease) in net assets resulting from operations 21,520
Changes from principal transactions:
Purchase payments 63,892
Contract distributions and terminations (26,711)
Transfer payments from (to) Fixed Accounts and other Divisions 10,035
Addition to assets retained in the Account
by Golden American Life Insurance Company 25
____________
Increase (decrease) in net assets derived from principal
transactions 47,241
____________
Total increase (decrease) 68,761
____________
NET ASSETS AT DECEMBER 31, 1998 $256,578
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Rising
Dividends
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $123,573
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 1,726
Net realized gain (loss) on investments 3,602
Net unrealized appreciation (depreciation) of investments 33,738
____________
Net increase (decrease) in net assets resulting from operations 39,066
Changes from principal transactions:
Purchase payments 45,995
Contract distributions and terminations (18,620)
Transfer payments from (to) Fixed Accounts and other Divisions 25,458
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 471
____________
Increase (decrease) in net assets derived from principal
transactions 53,304
____________
Total increase (decrease) 92,370
____________
NET ASSETS AT DECEMBER 31, 1997 215,943
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Rising
Dividends
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $12,920
Net realized gain (loss) on investments 3,842
Net unrealized appreciation (depreciation) of investments 17,344
____________
Net increase (decrease) in net assets resulting from operations 34,106
Changes from principal transactions:
Purchase payments 216,682
Contract distributions and terminations (26,449)
Transfer payments from (to) Fixed Accounts and other Divisions 60,274
Addition to assets retained in the Account
by Golden American Life Insurance Company 60
____________
Increase (decrease) in net assets derived from principal
transactions 250,567
____________
Total increase (decrease) 284,673
____________
NET ASSETS AT DECEMBER 31, 1998 $500,616
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Emerging
Markets
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $37,153
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) (826)
Net realized gain (loss) on investments (1,134)
Net unrealized appreciation (depreciation) of investments (2,698)
____________
Net increase (decrease) in net assets resulting from operations (4,658)
Changes from principal transactions:
Purchase payments 5,427
Contract distributions and terminations (5,304)
Transfer payments from (to) Fixed Accounts and other Divisions 2,002
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company (119)
____________
Increase (decrease) in net assets derived from principal
transactions 2,006
____________
Total increase (decrease) (2,652)
____________
NET ASSETS AT DECEMBER 31, 1997 34,501
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Emerging
Markets
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($524)
Net realized gain (loss) on investments (3,524)
Net unrealized appreciation (depreciation) of investments (4,266)
____________
Net increase (decrease) in net assets resulting from operations (8,314)
Changes from principal transactions:
Purchase payments 2,520
Contract distributions and terminations (2,973)
Transfer payments from (to) Fixed Accounts and other Divisions (3,483)
Addition to assets retained in the Account
by Golden American Life Insurance Company 3
____________
Increase (decrease) in net assets derived from principal
transactions (3,933)
____________
Total increase (decrease) (12,247)
____________
NET ASSETS AT DECEMBER 31, 1998 $22,254
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Market
Manager
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $5,479
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 424
Net realized gain (loss) on investments 238
Net unrealized appreciation (depreciation) of investments 1,127
____________
Net increase (decrease) in net assets resulting from operations 1,789
Changes from principal transactions:
Purchase payments (59)
Contract distributions and terminations (189)
Transfer payments from (to) Fixed Accounts and other Divisions (303)
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company (1)
____________
Increase (decrease) in net assets derived from principal
transactions (552)
____________
Total increase (decrease) 1,237
____________
NET ASSETS AT DECEMBER 31, 1997 6,716
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Market
Manager
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $299
Net realized gain (loss) on investments 135
Net unrealized appreciation (depreciation) of investments 1,090
____________
Net increase (decrease) in net assets resulting from operations 1,524
Changes from principal transactions:
Purchase payments (36)
Contract distributions and terminations (188)
Transfer payments from (to) Fixed Accounts and other Divisions (309)
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions (533)
____________
Total increase (decrease) 991
____________
NET ASSETS AT DECEMBER 31, 1998 $7,707
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Value
Equity
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $42,861
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 5,696
Net realized gain (loss) on investments 898
Net unrealized appreciation (depreciation) of investments 5,129
____________
Net increase (decrease) in net assets resulting from operations 11,723
Changes from principal transactions:
Purchase payments 16,881
Contract distributions and terminations (5,181)
Transfer payments from (to) Fixed Accounts and other Divisions 10,573
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 168
____________
Increase (decrease) in net assets derived from principal
transactions 22,441
____________
Total increase (decrease) 34,164
____________
NET ASSETS AT DECEMBER 31, 1997 77,025
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Value
Equity
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $1,994
Net realized gain (loss) on investments 1,237
Net unrealized appreciation (depreciation) of investments (4,208)
____________
Net increase (decrease) in net assets resulting from operations (977)
Changes from principal transactions:
Purchase payments 51,484
Contract distributions and terminations (7,869)
Transfer payments from (to) Fixed Accounts and other Divisions 6,521
Addition to assets retained in the Account
by Golden American Life Insurance Company 10
____________
Increase (decrease) in net assets derived from principal
transactions 50,146
____________
Total increase (decrease) 49,169
____________
NET ASSETS AT DECEMBER 31, 1998 $126,194
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Strategic
Equity
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $29,858
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 1,752
Net realized gain (loss) on investments 1,180
Net unrealized appreciation (depreciation) of investments 4,847
____________
Net increase (decrease) in net assets resulting from operations 7,779
Changes from principal transactions:
Purchase payments 9,853
Contract distributions and terminations (4,107)
Transfer payments from (to) Fixed Accounts and other Divisions 6,920
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 134
____________
Increase (decrease) in net assets derived from principal
transactions 12,800
____________
Total increase (decrease) 20,579
____________
NET ASSETS AT DECEMBER 31, 1997 50,437
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Strategic
Equity
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $3,586
Net realized gain (loss) on investments 1,365
Net unrealized appreciation (depreciation) of investments (6,078)
____________
Net increase (decrease) in net assets resulting from operations (1,127)
Changes from principal transactions:
Purchase payments 25,972
Contract distributions and terminations (5,201)
Transfer payments from (to) Fixed Accounts and other Divisions 1,265
Addition to assets retained in the Account
by Golden American Life Insurance Company 2
____________
Increase (decrease) in net assets derived from principal
transactions 22,038
____________
Total increase (decrease) 20,911
____________
NET ASSETS AT DECEMBER 31, 1998 $71,348
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Small Cap
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $33,056
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) (754)
Net realized gain (loss) on investments (174)
Net unrealized appreciation (depreciation) of investments 4,543
____________
Net increase (decrease) in net assets resulting from operations 3,615
Changes from principal transactions:
Purchase payments 13,691
Contract distributions and terminations (3,143)
Transfer payments from (to) Fixed Accounts and other Divisions 5,487
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 19
____________
Increase (decrease) in net assets derived from principal
transactions 16,054
____________
Total increase (decrease) 19,669
____________
NET ASSETS AT DECEMBER 31, 1997 52,725
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Small Cap
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($1,343)
Net realized gain (loss) on investments 2,148
Net unrealized appreciation (depreciation) of investments 15,952
____________
Net increase (decrease) in net assets resulting from operations 16,757
Changes from principal transactions:
Purchase payments 44,851
Contract distributions and terminations (6,104)
Transfer payments from (to) Fixed Accounts and other Divisions 16,010
Addition to assets retained in the Account
by Golden American Life Insurance Company 6
____________
Increase (decrease) in net assets derived from principal
transactions 54,763
____________
Total increase (decrease) 71,520
____________
NET ASSETS AT DECEMBER 31, 1998 $124,245
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Managed
Global
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $86,266
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 6,640
Net realized gain (loss) on investments 2,841
Net unrealized appreciation (depreciation) of investments (883)
____________
Net increase (decrease) in net assets resulting from operations 8,598
Changes from principal transactions:
Purchase payments 17,472
Contract distributions and terminations (12,081)
Transfer payments from (to) Fixed Accounts and other Divisions 4,438
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company (12)
____________
Increase (decrease) in net assets derived from principal
transactions 9,817
____________
Total increase (decrease) 18,415
____________
NET ASSETS AT DECEMBER 31, 1997 104,681
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Managed
Global
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $3,296
Net realized gain (loss) on investments 7,634
Net unrealized appreciation (depreciation) of investments 16,611
____________
Net increase (decrease) in net assets resulting from operations 27,541
Changes from principal transactions:
Purchase payments 11,958
Contract distributions and terminations (13,329)
Transfer payments from (to) Fixed Accounts and other Divisions (176)
Addition to assets retained in the Account
by Golden American Life Insurance Company 9
____________
Increase (decrease) in net assets derived from principal
transactions (1,538)
____________
Total increase (decrease) 26,003
____________
NET ASSETS AT DECEMBER 31, 1998 $130,684
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Mid-Cap
Growth
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $4,571
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 612
Net realized gain (loss) on investments 57
Net unrealized appreciation (depreciation) of investments 912
____________
Net increase (decrease) in net assets resulting from operations 1,581
Changes from principal transactions:
Purchase payments 8,980
Contract distributions and terminations (580)
Transfer payments from (to) Fixed Accounts and other Divisions 5,763
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 46
____________
Increase (decrease) in net assets derived from principal
transactions 14,209
____________
Total increase (decrease) 15,790
____________
NET ASSETS AT DECEMBER 31, 1997 20,361
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Mid-Cap
Growth
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $3,991
Net realized gain (loss) on investments 899
Net unrealized appreciation (depreciation) of investments 6,574
____________
Net increase (decrease) in net assets resulting from operations 11,464
Changes from principal transactions:
Purchase payments 66,121
Contract distributions and terminations (3,065)
Transfer payments from (to) Fixed Accounts and other Divisions 21,962
Addition to assets retained in the Account
by Golden American Life Insurance Company 1
____________
Increase (decrease) in net assets derived from principal
transactions 85,019
____________
Total increase (decrease) 96,483
____________
NET ASSETS AT DECEMBER 31, 1998 $116,844
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Growth &
Income
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $8,275
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 3,057
Net realized gain (loss) on investments 177
Net unrealized appreciation (depreciation) of investments 980
____________
Net increase (decrease) in net assets resulting from operations 4,214
Changes from principal transactions:
Purchase payments 22,706
Contract distributions and terminations (1,861)
Transfer payments from (to) Fixed Accounts and other Divisions 11,481
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 107
____________
Increase (decrease) in net assets derived from principal
transactions 32,433
____________
Total increase (decrease) 36,647
____________
NET ASSETS AT DECEMBER 31, 1997 44,922
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Growth &
Income
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $2,904
Net realized gain (loss) on investments 911
Net unrealized appreciation (depreciation) of investments 7,679
____________
Net increase (decrease) in net assets resulting from operations 11,494
Changes from principal transactions:
Purchase payments 105,760
Contract distributions and terminations (7,503)
Transfer payments from (to) Fixed Accounts and other Divisions 24,270
Addition to assets retained in the Account
by Golden American Life Insurance Company 7
____________
Increase (decrease) in net assets derived from principal
transactions 122,534
____________
Total increase (decrease) 134,028
____________
NET ASSETS AT DECEMBER 31, 1998 $178,950
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Research
Division
(b)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $801
Net realized gain (loss) on investments 19
Net unrealized appreciation (depreciation) of investments 388
____________
Net increase (decrease) in net assets resulting from operations 1,208
Changes from principal transactions:
Purchase payments 19,514
Contract distributions and terminations (534)
Transfer payments from (to) Fixed Accounts and other Divisions 14,044
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 170
____________
Increase (decrease) in net assets derived from principal
transactions 33,194
____________
Total increase (decrease) 34,402
____________
NET ASSETS AT DECEMBER 31, 1997 34,402
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Research
Division
(b)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $10,068
Net realized gain (loss) on investments 972
Net unrealized appreciation (depreciation) of investments 16,878
____________
Net increase (decrease) in net assets resulting from operations 27,918
Changes from principal transactions:
Purchase payments 167,295
Contract distributions and terminations (6,740)
Transfer payments from (to) Fixed Accounts and other Divisions 60,643
Addition to assets retained in the Account
by Golden American Life Insurance Company 11
____________
Increase (decrease) in net assets derived from principal
transactions 221,209
____________
Total increase (decrease) 249,127
____________
NET ASSETS AT DECEMBER 31, 1998 $283,529
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Total
Return
Division
(a)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $687
Net realized gain (loss) on investments 18
Net unrealized appreciation (depreciation) of investments 412
____________
Net increase (decrease) in net assets resulting from operations 1,117
Changes from principal transactions:
Purchase payments 15,427
Contract distributions and terminations (602)
Transfer payments from (to) Fixed Accounts and other Divisions 10,193
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 96
____________
Increase (decrease) in net assets derived from principal
transactions 25,114
____________
Total increase (decrease) 26,231
____________
NET ASSETS AT DECEMBER 31, 1997 26,231
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Total
Return
Division
(a)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $9,099
Net realized gain (loss) on investments 185
Net unrealized appreciation (depreciation) of investments 1,028
____________
Net increase (decrease) in net assets resulting from operations 10,312
Changes from principal transactions:
Purchase payments 156,492
Contract distributions and terminations (7,889)
Transfer payments from (to) Fixed Accounts and other Divisions 42,666
Addition to assets retained in the Account
by Golden American Life Insurance Company 23
____________
Increase (decrease) in net assets derived from principal
transactions 191,292
____________
Total increase (decrease) 201,604
____________
NET ASSETS AT DECEMBER 31, 1998 $227,835
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Value +
Growth
Division
(b)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($137)
Net realized gain (loss) on investments 515
Net unrealized appreciation (depreciation) of investments (1,430)
____________
Net increase (decrease) in net assets resulting from operations (1,052)
Changes from principal transactions:
Purchase payments 15,158
Contract distributions and terminations (431)
Transfer payments from (to) Fixed Accounts and other Divisions 9,404
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 99
____________
Increase (decrease) in net assets derived from principal
transactions 24,230
____________
Total increase (decrease) 23,178
____________
NET ASSETS AT DECEMBER 31, 1997 23,178
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Value +
Growth
Division
(b)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $4,697
Net realized gain (loss) on investments (807)
Net unrealized appreciation (depreciation) of investments 15,417
____________
Net increase (decrease) in net assets resulting from operations 19,307
Changes from principal transactions:
Purchase payments 77,977
Contract distributions and terminations (3,834)
Transfer payments from (to) Fixed Accounts and other Divisions 26,430
Addition to assets retained in the Account
by Golden American Life Insurance Company 10
____________
Increase (decrease) in net assets derived from principal
transactions 100,583
____________
Total increase (decrease) 119,890
____________
NET ASSETS AT DECEMBER 31, 1998 $143,068
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Global
Fixed
Income
Division
(g)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $9
Net realized gain (loss) on investments (1)
Net unrealized appreciation (depreciation) of investments (10)
____________
Net increase (decrease) in net assets resulting from operations (2)
Changes from principal transactions:
Purchase payments 190
Contract distributions and terminations --
Transfer payments from (to) Fixed Accounts and other Divisions 18
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 208
____________
Total increase (decrease) 206
____________
NET ASSETS AT DECEMBER 31, 1997 206
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Global
Fixed
Income
Division
(g)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $174
Net realized gain (loss) on investments 216
Net unrealized appreciation (depreciation) of investments --
____________
Net increase (decrease) in net assets resulting from operations 390
Changes from principal transactions:
Purchase payments 5,820
Contract distributions and terminations (219)
Transfer payments from (to) Fixed Accounts and other Divisions 3,331
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 8,932
____________
Total increase (decrease) 9,322
____________
NET ASSETS AT DECEMBER 31, 1998 $9,528
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Develop-
ing
World
Division
(h)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) --
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
____________
Net increase (decrease) in net assets resulting from operations --
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from (to) Fixed Accounts and other Divisions --
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions --
____________
Total increase (decrease) --
____________
NET ASSETS AT DECEMBER 31, 1997 --
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Develop-
ing
World
Division
(h)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($22)
Net realized gain (loss) on investments (266)
Net unrealized appreciation (depreciation) of investments 149
____________
Net increase (decrease) in net assets resulting from operations (139)
Changes from principal transactions:
Purchase payments 2,757
Contract distributions and terminations (34)
Transfer payments from (to) Fixed Accounts and other Divisions 1,928
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 4,651
____________
Total increase (decrease) 4,512
____________
NET ASSETS AT DECEMBER 31, 1998 $4,512
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Growth
Oppor-
tunities
Division
(h)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) --
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
____________
Net increase (decrease) in net assets resulting from operations --
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from (to) Fixed Accounts and other Divisions --
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions --
____________
Total increase (decrease) --
____________
NET ASSETS AT DECEMBER 31, 1997 --
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Growth
Oppor-
tunities
Division
(h)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($8)
Net realized gain (loss) on investments (235)
Net unrealized appreciation (depreciation) of investments 349
____________
Net increase (decrease) in net assets resulting from operations 106
Changes from principal transactions:
Purchase payments 4,097
Contract distributions and terminations (45)
Transfer payments from (to) Fixed Accounts and other Divisions (27)
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 4,025
____________
Total increase (decrease) 4,131
____________
NET ASSETS AT DECEMBER 31, 1998 $4,131
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
High
Yield
Bond
Division
(j)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) --
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
____________
Net increase (decrease) in net assets resulting from operations --
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from (to) Fixed Accounts and other Divisions --
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions --
____________
Total increase (decrease) --
____________
NET ASSETS AT DECEMBER 31, 1997 --
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
High
Yield
Bond
Division
(j)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $817
Net realized gain (loss) on investments (318)
Net unrealized appreciation (depreciation) of investments (18)
____________
Net increase (decrease) in net assets resulting from operations 481
Changes from principal transactions:
Purchase payments 32,399
Contract distributions and terminations (912)
Transfer payments from (to) Fixed Accounts and other Divisions 14,150
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 45,637
____________
Total increase (decrease) 46,118
____________
NET ASSETS AT DECEMBER 31, 1998 $46,118
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
StocksPLUS
Growth
and
Income
Division
(i)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) --
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
____________
Net increase (decrease) in net assets resulting from operations --
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from (to) Fixed Accounts and other Divisions --
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions --
____________
Total increase (decrease) --
____________
NET ASSETS AT DECEMBER 31, 1997 --
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
StocksPLUS
Growth
and
Income
Division
(i)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $814
Net realized gain (loss) on investments (97)
Net unrealized appreciation (depreciation) of investments 4,255
____________
Net increase (decrease) in net assets resulting from operations 4,972
Changes from principal transactions:
Purchase payments 29,368
Contract distributions and terminations (361)
Transfer payments from (to) Fixed Accounts and other Divisions 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 46,830
____________
Total increase (decrease) 51,802
____________
NET ASSETS AT DECEMBER 31, 1998 $51,802
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Appre-
ciation
Division
(c)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $15
Net realized gain (loss) on investments 1
Net unrealized appreciation (depreciation) of investments (9)
____________
Net increase (decrease) in net assets resulting from operations 7
Changes from principal transactions:
Purchase payments 256
Contract distributions and terminations --
Transfer payments from (to) Fixed Accounts and other Divisions --
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 256
____________
Total increase (decrease) 263
____________
NET ASSETS AT DECEMBER 31, 1997 263
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Appre-
ciation
Division
(c)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $30
Net realized gain (loss) on investments 3
Net unrealized appreciation (depreciation) of investments 52
____________
Net increase (decrease) in net assets resulting from operations 85
Changes from principal transactions:
Purchase payments 595
Contract distributions and terminations (21)
Transfer payments from (to) Fixed Accounts and other Divisions 52
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 626
____________
Total increase (decrease) 711
____________
NET ASSETS AT DECEMBER 31, 1998 $974
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
High
Income
Division
(c)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($1)
Net realized gain (loss) on investments 1
Net unrealized appreciation (depreciation) of investments 3
____________
Net increase (decrease) in net assets resulting from operations 3
Changes from principal transactions:
Purchase payments 206
Contract distributions and terminations --
Transfer payments from (to) Fixed Accounts and other Divisions --
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 206
____________
Total increase (decrease) 209
____________
NET ASSETS AT DECEMBER 31, 1997 209
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
High
Income
Division
(c)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $36
Net realized gain (loss) on investments 8
Net unrealized appreciation (depreciation) of investments (66)
____________
Net increase (decrease) in net assets resulting from operations (22)
Changes from principal transactions:
Purchase payments 530
Contract distributions and terminations (15)
Transfer payments from (to) Fixed Accounts and other Divisions 104
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 619
____________
Total increase (decrease) 597
____________
NET ASSETS AT DECEMBER 31, 1998 $806
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Large Cap
Value
Division
(c)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($1)
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments 7
____________
Net increase (decrease) in net assets resulting from operations 6
Changes from principal transactions:
Purchase payments 204
Contract distributions and terminations --
Transfer payments from (to) Fixed Accounts and other Divisions 5
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 209
____________
Total increase (decrease) 215
____________
NET ASSETS AT DECEMBER 31, 1997 215
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Large Cap
Value
Division
(c)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $14
Net realized gain (loss) on investments 2
Net unrealized appreciation (depreciation) of investments 3
____________
Net increase (decrease) in net assets resulting from operations 19
Changes from principal transactions:
Purchase payments 429
Contract distributions and terminations (5)
Transfer payments from (to) Fixed Accounts and other Divisions 43
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 467
____________
Total increase (decrease) 486
____________
NET ASSETS AT DECEMBER 31, 1998 $701
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Inter-
national
Equity
Division
(d)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) --
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments ($5)
____________
Net increase (decrease) in net assets resulting from operations (5)
Changes from principal transactions:
Purchase payments 99
Contract distributions and terminations --
Transfer payments from (to) Fixed Accounts and other Divisions 2
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 101
____________
Total increase (decrease) 96
____________
NET ASSETS AT DECEMBER 31, 1997 96
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Inter-
national
Equity
Division
(d)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($3)
Net realized gain (loss) on investments (1)
Net unrealized appreciation (depreciation) of investments (2)
____________
Net increase (decrease) in net assets resulting from operations (6)
Changes from principal transactions:
Purchase payments 178
Contract distributions and terminations (4)
Transfer payments from (to) Fixed Accounts and other Divisions 62
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 236
____________
Total increase (decrease) 230
____________
NET ASSETS AT DECEMBER 31, 1998 $326
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Money
Market
Division
(e)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) --
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
____________
Net increase (decrease) in net assets resulting from operations --
Changes from principal transactions:
Purchase payments $183
Contract distributions and terminations (1)
Transfer payments from (to) Fixed Accounts and other Divisions (1)
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 181
____________
Total increase (decrease) 181
____________
NET ASSETS AT DECEMBER 31, 1997 181
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Money
Market
Division
(e)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $14
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
____________
Net increase (decrease) in net assets resulting from operations 14
Changes from principal transactions:
Purchase payments 565
Contract distributions and terminations (25)
Transfer payments from (to) Fixed Accounts and other Divisions (417)
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 123
____________
Total increase (decrease) 137
____________
NET ASSETS AT DECEMBER 31, 1998 $318
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Inter-
national
Equity
Division
(f)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $81
Net realized gain (loss) on investments (12)
Net unrealized appreciation (depreciation) of investments (93)
____________
Net increase (decrease) in net assets resulting from operations (24)
Changes from principal transactions:
Purchase payments 1,825
Contract distributions and terminations (2)
Transfer payments from (to) Fixed Accounts and other Divisions 182
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 2,005
____________
Total increase (decrease) 1,981
____________
NET ASSETS AT DECEMBER 31, 1997 1,981
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Inter-
national
Equity
Division
(f)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($179)
Net realized gain (loss) on investments (556)
Net unrealized appreciation (depreciation) of investments 1,647
____________
Net increase (decrease) in net assets resulting from operations 912
Changes from principal transactions:
Purchase payments 41,775
Contract distributions and terminations (940)
Transfer payments from (to) Fixed Accounts and other Divisions 6,037
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 46,872
____________
Total increase (decrease) 47,784
____________
NET ASSETS AT DECEMBER 31, 1998 $49,765
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Combined
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $1,184,573
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 81,285
Net realized gain (loss) on investments 31,070
Net unrealized appreciation (depreciation) of investments 75,558
____________
Net increase (decrease) in net assets resulting from operations 187,913
Changes from principal transactions:
Purchase payments 304,259
Contract distributions and terminations (184,701)
Transfer payments from (to) Fixed Accounts and other Divisions 111,251
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 976
____________
Increase (decrease) in net assets derived from principal
transactions 231,785
____________
Total increase (decrease) 419,698
____________
NET ASSETS AT DECEMBER 31, 1997 1,604,271
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Combined
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $125,356
Net realized gain (loss) on investments 22,265
Net unrealized appreciation (depreciation) of investments 39,447
____________
Net increase (decrease) in net assets resulting from operations 187,068
Changes from principal transactions:
Purchase payments 1,536,754
Contract distributions and terminations (247,928)
Transfer payments from (to) Fixed Accounts and other Divisions 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 1,526,866
____________
Total increase (decrease) 1,713,934
____________
NET ASSETS AT DECEMBER 31, 1998 $3,318,205
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
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 1998, the Account had GoldenSelect Contracts and Granite PrimElite
Contracts. GoldenSelect Contracts sold by Golden American during 1998
include DVA 100, DVA Series 100, DVA PLUS, ACCESS, PREMIUM PLUS and ESII.
During 1998, the Account had GoldenSelect Contracts (DVA 80) which were no
longer being sold.
At December 31, 1998, the Account had, under GoldenSelect Contracts, twenty-
six investment divisions: Liquid Asset, Limited Maturity Bond, Hard Assets,
All-Growth, Real Estate, Fully Managed, Multiple Allocation, Capital
Appreciation, Rising Dividends, Emerging Markets, Market Manager, Value
Equity, Strategic Equity, Small Cap, Managed Global, Mid-Cap Growth (formerly
OTC), Growth & Income, Research, Total Return, Value + Growth, Global Fixed
Income, Developing World, Growth Opportunities, PIMCO High Yield Bond, PIMCO
StocksPLUS Growth and Income and International Equity Divisions
("Divisions"). The Account also had, under Granite PrimElite Contracts,
eight investment divisions: Mid-Cap Growth (formerly OTC), Research, Total
Return, Appreciation, Smith Barney High Income, Smith Barney Large Cap Value
(formerly Smith Barney Income and Growth), 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, the Travelers Series Fund Inc.,
the Greenwich Street Series Fund Inc. (formerly the Smith Barney Series Fund
Inc.), the Warburg Pincus Trust or the PIMCO Variable Insurance Trust (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:
<TABLE>
<CAPTION>
Equi-Select Series Trust The GCG Trust
Investment Division Investment Division
___________________________ ___________________________
<S> <S>
International Fixed Income Global Fixed Income
OTC Mid-Cap Growth
Research Research
Total Return Total Return
Value + Growth Value + Growth
Growth & Income Growth & Income
</TABLE>
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
The 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. In December 1995, Golden American also discontinued
external sales of DVA 100, however, the DVA 100 contracts continue to be
available to Golden American employees and agents. Under the terms of the
Contracts, 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 are as
follows:
<TABLE>
<CAPTION>
Series Annual Rates
__________________________________ __________________
<S> <C>
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
ES II 1.25
Granite PrimElite - Standard 1.10
Granite PrimElite - Annual Ratchet 1.25
</TABLE>
ASSET BASED ADMINISTRATIVE CHARGES: A daily charge at an annual rate of .10%
is deducted from assets attributable to DVA 100 and DVA Series 100 Contracts.
A daily charge at an annual rate of .15% is deducted from the assets
attributable to the DVA PLUS, ACCESS, PREMIUM PLUS, ESII 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
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 has 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 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
_____________________ _______________________________________________________
PREMIUM Granite
DVA PLUS PLUS ES II PrimElite
_____________ _____________ _____________ _____________
<S> <C> <C> <C> <C>
0 7% 8% 8% 7%
1 7 8 7 7
2 6 8 6 6
3 5 8 5 5
4 4 7 4 4
5 3 6 3 3
6 1 5 2 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 by Golden
American. 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.
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
___________________________________
1998 1997
_______________ _________________
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Balance at beginning of year $17,009 $26,612
Sales load advanced 274 616
Premium tax advanced -- 7
Net transfer from Fixed Account
and other Divisions -- 353
Amortization of deferred sales load
and premium tax (8,280) (10,579)
_______________ _________________
Balance at end of year $9,003 $17,009
=============== =================
</TABLE>
NOTE 4 - PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments were
as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
_________________________
1998
_________________________
PURCHASES SALES
_________________________
(DOLLARS IN THOUSANDS)
<S> <C> <C>
The GCG Trust:
Liquid Asset Series $570,537 $452,115
Limited Maturity Bond Series 71,742 22,970
Hard Assets Series 17,730 17,975
All-Growth Series 16,647 13,146
Real Estate Series 29,007 13,733
Fully Managed Series 83,688 7,148
Multiple Allocation Series 52,037 32,159
Capital Appreciation Series 83,259 17,034
Rising Dividends Series 270,955 7,361
Emerging Markets Series 2,644 7,107
Market Manager Series 342 292
Value Equity Series 58,297 6,136
Strategic Equity Series 31,008 5,375
Small Cap Series 63,182 9,735
Managed Global Series 41,119 39,355
Mid-Cap Growth Series 97,494 8,444
Growth & Income Series 132,350 6,850
Research Series 237,915 6,540
Total Return Series 202,032 1,560
Value + Growth Series 119,241 13,912
Global Fixed Income Series 14,270 5,161
Developing World Series 7,293 2,662
Growth Opportunities Series 7,214 3,196
PIMCO Variable Insurance Trust:
PIMCO High Yield Bond Portfolio 52,726 6,256
PIMCO StocksPLUS Growth and Income Portfolio 49,898 2,237
Greenwich Street Series Fund Inc.:
Appreciation Portfolio 739 82
Travelers Series Fund Inc.:
Smith Barney High Income Portfolio 878 222
Smith Barney Large Cap Value Porfolio 513 32
Smith Barney International Equity Portfolio 245 12
Smith Barney Money Market Portfolio 630 494
Warburg Pincus Trust:
International Equity Portfolio 370,938 324,226
_________________________
COMBINED $2,686,570 $1,033,527
=========================
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
_________________________
1997
_________________________
PURCHASES SALES
_________________________
(DOLLARS IN THOUSANDS)
<S> <C> <C>
The GCG Trust:
Liquid Asset Series $94,848 $75,062
Limited Maturity Bond Series 12,572 13,891
Hard Assets Series 21,526 12,693
All-Growth Series 7,468 14,683
Real Estate Series 24,254 8,239
Fully Managed Series 27,691 11,768
Multiple Allocation Series 30,819 55,031
Capital Appreciation Series 41,409 24,135
Rising Dividends Series 63,949 8,887
Emerging Markets Series 8,023 6,846
Market Manager Series 467 623
Value Equity Series 32,557 4,409
Strategic Equity Series 19,475 4,918
Small Cap Series 25,870 10,563
Managed Global Series 37,985 21,524
Mid-Cap Growth Series 18,373 3,328
Growth & Income Series 37,291 1,763
Research Series 34,430 419
Total Return Series 26,167 354
Value + Growth Series 30,053 5,950
Global Fixed Income Series 224 7
Developing World Series -- --
Growth Opportunities Series -- --
PIMCO Variable Insurance Trust:
PIMCO High Yield Bond Portfolio -- --
PIMCO StocksPLUS Growth and Income Portfolio -- --
Greenwich Street Series Fund Inc.:
Appreciation Portfolio 283 12
Travelers Series Fund Inc.:
Smith Barney High Income Portfolio 216 11
Smith Barney Large Cap Value Porfolio 210 1
Smith Barney International Equity Portfolio 103 2
Smith Barney Money Market Portfolio 194 12
Warburg Pincus Trust:
International Equity Portfolio 2,146 59
_________________________
COMBINED $598,603 $285,190
=========================
</TABLE>
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 purchase transactions for the Market Manager
Division resulted from such updates.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
_________________________
1998
_________________________
PURCHASES SALES
_________________________
<S> <C> <C>
Liquid Asset Division 46,713,872 38,496,936
Limited Maturity Bond Division 5,263,273 2,390,944
Hard Assets Division 1,390,271 1,503,254
All-Growth Division 1,876,296 1,557,867
Real Estate Division 1,269,259 1,003,769
Fully Managed Division 4,432,536 1,393,191
Multiple Allocation Division 2,439,316 2,628,892
Capital Appreciation Division 3,704,327 1,712,022
Rising Dividends Division 13,285,423 1,798,264
Emerging Markets Division 737,697 1,279,884
Market Manager Division 16,579 26,443
Value Equity Division 3,639,566 936,377
Strategic Equity Division 2,329,825 828,876
Small Cap Division 5,737,867 1,727,666
Managed Global Division 3,637,963 3,808,355
Mid-Cap Growth Division 5,201,859 1,073,702
Growth & Income Division 8,700,243 1,061,928
Research Division 11,776,149 1,145,700
Total Return Division 11,841,572 542,519
Value + Growth Division 8,862,606 1,834,396
Global Fixed Income Division 1,199,981 486,199
Developing World Division 1,034,819 414,729
Growth Opportunities Division 801,993 373,469
PIMCO High Yield Bond Division 5,575,890 995,489
PIMCO StocksPLUS Growth and Income Division 5,235,676 567,893
Appreciation Division 45,518 5,062
Smith Barney High Income Division 59,777 15,706
Smith Barney Large Cap Value Division 25,818 1,496
Smith Barney International Equity Division 13,627 659
Smith Barney Money Market Division 55,074 43,687
International Equity Division 34,755,360 31,779,305
_________________________
COMBINED 191,660,032 101,434,679
=========================
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
_________________________
1997
_________________________
PURCHASES SALES
_________________________
<S> <C> <C>
Liquid Asset Division 8,859,035 7,508,736
Limited Maturity Bond Division 814,102 1,099,923
Hard Assets Division 955,532 934,748
All-Growth Division 902,597 1,467,510
Real Estate Division 1,165,038 633,059
Fully Managed Division 1,588,523 1,271,492
Multiple Allocation Division 858,882 3,296,283
Capital Appreciation Division 1,899,517 1,801,059
Rising Dividends Division 4,263,972 1,391,248
Emerging Markets Division 1,231,916 1,082,071
Market Manager Division -- 31,196
Value Equity Division 1,792,574 522,420
Strategic Equity Division 1,539,555 551,638
Small Cap Division 3,022,647 1,720,403
Managed Global Division 3,674,935 2,873,007
Mid-Cap Growth Division 1,166,129 357,910
Growth & Income Division 2,623,649 368,883
Research Division 1,962,393 137,427
Total Return Division 1,683,989 52,603
Value + Growth Division 2,598,824 818,375
Global Fixed Income Division 18,902 1,482
Developing World Division -- --
Growth Opportunities Division -- --
PIMCO High Yield Bond Division -- --
PIMCO StocksPLUS Growth and Income Division -- --
Appreciation Division 19,581 822
Smith Barney High Income Division 15,972 739
Smith Barney Large Cap Value Division 12,176 39
Smith Barney International Equity Division 7,216 138
Smith Barney Money Market Division 17,685 1,114
International Equity Division 208,851 9,015
_________________________
COMBINED 42,904,192 27,933,340
=========================
</TABLE>
NOTE 6 - NET ASSETS
Investments at net asset value less the payable to Golden American Life
Insurance Company for charges and fees at December 31, 1998 consisted of the
following:
<TABLE>
<CAPTION>
Limited
Liquid Maturity Hard All-
Asset Bond Assets Growth
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $166,620 $85,663 $27,056 $64,169
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 9,139 17,885 17,001 8,405
Net unrealized appreciation
(depreciation) of
investments -- (716) (14,354) 9,233
_____________________________________________________
$175,759 $102,832 $29,703 $81,807
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Real Fully Multiple Capital
Estate Managed Allocation Appreciation
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $51,262 $167,589 $134,591 $146,874
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 26,016 48,555 134,202 74,724
Net unrealized appreciation
(depreciation) of
investments (8,283) 10,222 5,117 34,980
_____________________________________________________
$68,995 $226,366 $273,910 $256,578
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Rising Emerging Market Value
Dividends Markets Manager Equity
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $394,953 $46,675 $2,242 $109,242
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 26,832 (14,912) 2,060 13,560
Net unrealized appreciation
(depreciation) of
investments 78,831 (9,509) 3,405 3,392
_____________________________________________________
$500,616 $22,254 $7,707 $126,194
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Strategic Small Managed Mid-Cap
Equity Cap Global Growth
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $61,578 $103,543 $90,360 $103,719
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 8,326 (467) 20,177 5,764
Net unrealized appreciation
(depreciation) of
investments 1,444 21,169 20,147 7,361
_____________________________________________________
$71,348 $124,245 $130,684 $116,844
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Growth & Total Value +
Income Research Return Growth
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $162,972 $254,403 $216,406 $124,813
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 7,050 11,860 9,989 4,268
Net unrealized appreciation
(depreciation) of
investments 8,928 17,266 1,440 13,987
_____________________________________________________
$178,950 $283,529 $227,835 $143,068
=====================================================
</TABLE>
<TABLE>
<CAPTION>
PIMCO
Global Growth High
Fixed Developing Oppor- Yield
Income World tunities Bond
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $9,140 $4,651 $4,025 $45,637
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 398 (288) (243) 499
Net unrealized appreciation
(depreciation) of
investments (10) 149 349 (18)
_____________________________________________________
$9,528 $4,512 $4,131 $46,118
=====================================================
</TABLE>
<TABLE>
<CAPTION>
PIMCO Smith Smith
StocksPLUS Barney Barney
Growth and Appre- High Large Cap
Income ciation Income Value
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $46,830 $882 $825 $676
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 717 49 44 15
Net unrealized appreciation
(depreciation) of
investments 4,255 43 (63) 10
_____________________________________________________
$51,802 $974 $806 $701
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Smith
Barney Smith
Inter- Barney Inter-
national Money national
Equity Market Equity
Division Division Division Combined
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $337 $304 $48,877 $2,676,914
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments (4) 14 (666) 430,969
Net unrealized appreciation
(depreciation) of
investments (7) -- 1,554 210,322
_____________________________________________________
$326 $318 $49,765 $3,318,205
=====================================================
</TABLE>
NOTE 7 - UNIT VALUES
Accumulation unit value information (which is based on total assets) for
units outstanding by Contract type as of December 31, 1998 were as
follows:
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
LIQUID ASSET
Currently payable annuity products:
DVA 80 2,728 $15.19 $41
DVA 100 2,657 14.89 40
Contracts in accumulation period:
DVA 80 371,896 15.19 5,650
DVA 100 1,765,308 14.89 26,288
DVA Series 100 50,601 14.38 727
DVA PLUS - Standard 489,531 14.54 7,118
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 3,587,645 14.33 51,394
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 2,964,038 14.11 41,830
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 3,069,965 13.88 42,610
____________
175,698
LIMITED MATURITY BOND
Currently payable annuity products:
DVA 80 8,126 17.77 144
DVA 100 17,655 17.42 307
Contracts in accumulation period:
DVA 80 91,829 17.77 1,632
DVA 100 2,069,663 17.42 36,045
DVA Series 100 22,995 16.81 387
DVA PLUS - Standard 263,074 17.02 4,478
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 1,557,946 16.77 26,124
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 1,121,400 16.52 18,525
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 937,378 16.25 15,230
____________
102,872
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
HARD ASSETS
Currently payable annuity products:
DVA 80 365 $15.15 $6
DVA 100 8,649 14.85 128
Contracts in accumulation period:
DVA 80 58,984 15.15 893
DVA 100 744,236 14.85 11,050
DVA Series 100 23,997 14.33 344
DVA PLUS - Standard 146,678 14.50 2,126
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 258,034 14.28 3,685
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 609,087 14.07 8,570
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 210,821 13.84 2,917
____________
29,719
ALL-GROWTH
Currently payable annuity products:
DVA 80 474 16.36 8
DVA 100 11,790 16.03 189
Contracts in accumulation period:
DVA 80 72,780 16.36 1,191
DVA 100 2,382,762 16.03 38,207
DVA Series 100 23,147 15.48 358
DVA PLUS - Standard 208,260 15.66 3,261
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 645,591 15.43 9,958
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 1,471,156 15.20 22,355
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 422,889 14.95 6,320
____________
81,847
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
REAL ESTATE
Currently payable annuity products:
DVA 80 1,101 $23.06 $25
DVA 100 21,684 22.60 490
Contracts in accumulation period:
DVA 80 33,563 23.06 774
DVA 100 1,136,778 22.60 25,692
DVA Series 100 9,562 21.82 209
DVA PLUS - Standard 170,494 22.07 3,763
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 436,867 21.74 9,498
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 914,501 21.42 19,588
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 426,516 21.07 8,985
____________
69,024
FULLY MANAGED
Currently payable annuity products:
DVA 80 2,737 21.78 60
DVA 100 60,779 21.34 1,297
Contracts in accumulation period:
DVA 80 96,116 21.78 2,093
DVA 100 4,072,871 21.34 86,930
DVA Series 100 33,313 20.61 686
DVA PLUS - Standard 544,623 20.84 11,351
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 1,628,157 20.53 33,431
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 2,780,652 20.23 56,246
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 1,727,706 19.90 34,373
____________
226,467
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
MULTIPLE ALLOCATION
Currently payable annuity products:
DVA 80 14,541 $23.26 $338
DVA 100 90,029 22.80 2,053
Contracts in accumulation period:
DVA 80 405,816 23.26 9,440
DVA 100 7,709,073 22.80 175,791
DVA Series 100 64,749 22.01 1,425
DVA PLUS - Standard 395,764 22.27 8,812
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 800,489 21.94 17,560
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 1,980,779 21.61 42,806
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 744,366 21.26 15,822
____________
274,047
CAPITAL APPRECIATION
Currently payable annuity products:
DVA 80 7,669 25.47 195
DVA 100 44,548 25.13 1,119
Contracts in accumulation period:
DVA 80 83,297 25.47 2,122
DVA 100 4,645,391 25.13 116,756
DVA Series 100 49,076 24.55 1,205
DVA PLUS - Standard 413,115 24.75 10,223
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 1,342,757 24.50 32,897
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 2,787,732 24.26 67,619
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 1,023,964 23.98 24,551
____________
256,687
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
RISING DIVIDENDS
Currently payable annuity products:
DVA 80 12,379 $23.31 $289
DVA 100 15,367 23.06 355
Contracts in accumulation period:
DVA 80 127,116 23.31 2,962
DVA 100 4,450,237 23.06 102,628
DVA Series 100 92,161 22.64 2,086
DVA PLUS - Standard 1,199,087 22.79 27,323
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 4,591,470 22.61 103,810
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 7,386,288 22.43 165,696
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 4,305,084 22.22 95,669
____________
500,818
EMERGING MARKETS
Currently payable annuity products:
DVA 80 304 6.71 2
DVA 100 9,591 6.64 64
Contracts in accumulation period:
DVA 80 68,213 6.71 458
DVA 100 1,539,408 6.64 10,224
DVA Series 100 23,813 6.52 155
DVA PLUS - Standard 266,800 6.56 1,751
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 271,025 6.51 1,765
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 1,177,915 6.46 7,610
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 37,134 6.40 238
____________
22,267
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
MARKET MANAGER
Contracts in accumulation period:
DVA 100 332,519 $23.71 $7,884
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 7,958 23.14 184
____________
8,068
VALUE EQUITY
Currently payable annuity products:
DVA 80 409 18.73 8
DVA 100 2,145 18.58 40
Contracts in accumulation period:
DVA 80 29,033 18.73 544
DVA 100 1,049,863 18.58 19,502
DVA Series 100 20,539 18.32 376
DVA PLUS - Standard 454,942 18.41 8,377
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 1,415,540 18.31 25,913
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 2,736,310 18.20 49,797
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 1,201,314 18.06 21,692
____________
126,249
STRATEGIC EQUITY
Currently payable annuity products:
DVA 100 34,850 14.40 502
Contracts in accumulation period:
DVA 80 53,353 14.49 773
DVA 100 737,255 14.40 10,615
DVA Series 100 22,096 14.23 315
DVA PLUS - Standard 508,588 14.30 7,272
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 1,105,850 14.23 15,735
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 1,731,615 14.16 24,521
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 827,477 14.07 11,644
____________
71,377
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
SMALL CAP
Currently payable annuity products:
DVA 100 6,856 $15.55 $107
Contracts in accumulation period:
DVA 80 46,417 15.65 726
DVA 100 694,347 15.55 10,801
DVA Series 100 18,405 15.39 283
DVA PLUS - Standard 446,934 15.44 6,900
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 2,476,498 15.37 38,058
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 3,086,639 15.30 47,219
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 1,326,706 15.23 20,204
____________
124,298
MANAGED GLOBAL
Currently payable annuity products:
DVA 80 295 15.46 5
DVA 100 16,286 15.27 249
Contracts in accumulation period:
DVA 80 31,668 15.46 489
DVA 100 3,928,543 15.27 59,981
DVA Series 100 47,894 14.95 716
DVA PLUS - Standard 649,216 15.02 9,753
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 610,300 14.88 9,084
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 3,354,682 14.75 49,469
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 67,979 14.59 992
____________
130,738
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
MID-CAP GROWTH
Contracts in accumulation period:
DVA 80 31,935 $23.04 $736
DVA 100 315,603 22.84 7,210
DVA Series 100 12,309 22.50 277
DVA PLUS - Standard 173,070 22.60 3,912
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 1,905,008 22.43 42,722
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 1,527,664 22.31 34,087
Granite PrimElite - Standard 981 22.60 22
Granite PrimElite - Annual Ratchet 23,659 22.43 531
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 1,235,724 22.17 27,396
____________
116,893
GROWTH & INCOME
Contracts in accumulation period:
DVA 80 9,045 17.29 156
DVA 100 486,360 17.20 8,365
DVA Series 100 9,399 17.03 160
DVA PLUS - Standard 537,480 17.08 9,180
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 3,297,314 17.01 56,089
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 3,474,459 16.94 58,850
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 2,741,015 16.87 46,233
____________
179,033
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
RESEARCH
Contracts in accumulation period:
DVA 80 14,054 $23.47 $330
DVA 100 488,822 23.27 11,377
DVA Series 100 20,718 22.93 475
DVA PLUS - Standard 437,189 23.03 10,068
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 3,902,974 22.89 89,339
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 3,875,695 22.73 88,107
Granite PrimElite - Standard 3,070 23.03 71
Granite PrimElite - Annual Ratchet 38,692 22.89 886
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 3,674,201 22.59 82,990
____________
283,643
TOTAL RETURN
Contracts in accumulation period:
DVA 80 2,035 18.17 37
DVA 100 431,678 18.02 7,778
DVA Series 100 6,695 17.75 119
DVA PLUS - Standard 616,433 17.83 10,989
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 3,982,960 17.72 70,569
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 3,973,034 17.60 69,922
Granite PrimElite - Standard 10,098 17.83 180
Granite PrimElite - Annual Ratchet 32,769 17.72 581
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 3,874,737 17.49 67,753
____________
227,928
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
VALUE + GROWTH
Contracts in accumulation period:
DVA 80 35,295 $16.57 $585
DVA 100 299,829 16.47 4,940
DVA Series 100 11,112 16.31 181
DVA PLUS - Standard 362,210 16.36 5,926
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 3,293,704 16.29 53,670
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 2,452,149 16.22 39,786
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 2,354,360 16.16 38,039
____________
143,127
GLOBAL FIXED INCOME
Contracts in accumulation period:
DVA 80 1,419 13.42 19
DVA 100 13,446 13.31 179
DVA PLUS - Standard 6,337 13.17 83
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 396,068 13.09 5,184
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 119,924 13.00 1,560
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 194,008 12.92 2,506
____________
9,531
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
DEVELOPING WORLD
Contracts in accumulation period:
DVA 80 3,368 $7.32 $25
DVA 100 4,598 7.31 34
DVA PLUS - Standard 617 7.29 5
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 417,221 7.28 3,039
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 82,414 7.27 599
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 111,872 7.26 812
____________
4,514
GROWTH OPPORTUNITIES
Contracts in accumulation period:
DVA 100 13,050 9.69 126
DVA PLUS - Standard 5,235 9.67 51
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 141,597 9.65 1,367
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 126,683 9.64 1,221
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 141,959 9.63 1,367
____________
4,132
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
PIMCO HIGH YIELD BOND
Contracts in accumulation period:
DVA 80 2,973 $10.12 $30
DVA 100 107,998 10.11 1,092
DVA PLUS - Standard 213,774 10.09 2,157
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 1,630,971 10.08 16,440
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 1,066,219 10.07 10,737
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 1,558,466 10.06 15,678
____________
46,134
PIMCO STOCKSPLUS GROWTH AND INCOME
Contracts in accumulation period:
DVA 80 13,664 11.16 152
DVA 100 160,283 11.14 1,786
DVA PLUS - Standard 112,706 11.12 1,253
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 1,527,697 11.11 16,975
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 942,738 11.10 10,465
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 1,910,695 11.09 21,188
____________
51,819
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
APPRECIATION
Contracts in accumulation period:
Granite PrimElite - Standard 1,108 $16.53 $18
Granite PrimElite - Annual Ratchet 58,107 16.47 957
____________
975
SMITH BARNEY HIGH INCOME
Contracts in accumulation period:
Granite PrimElite - Standard 12,711 13.66 174
Granite PrimElite - Annual Ratchet 46,593 13.58 633
____________
807
SMITH BARNEY LARGE CAP VALUE
Contracts in accumulation period:
Granite PrimElite - Standard 1,600 19.35 31
Granite PrimElite - Annual Ratchet 34,859 19.24 671
____________
702
SMITH BARNEY INTERNATIONAL EQUITY
Contracts in accumulation period:
Granite PrimElite - Standard 2,885 14.35 41
Granite PrimElite - Annual Ratchet 19,916 14.28 285
____________
326
SMITH BARNEY MONEY MARKET
Contracts in accumulation period:
Granite PrimElite - Standard 2,017 11.43 23
Granite PrimElite - Annual Ratchet 25,941 11.37 295
____________
318
INTERNATIONAL EQUITY
Contracts in accumulation period:
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 2,422,075 10.29 24,919
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 680,861 10.32 7,025
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 1,736,713 10.27 17,841
____________
49,785
_____________ ____________
COMBINED 183,098,947 $3,319,843
============= ============
</TABLE>
<PAGE>
VERSION 2
<PAGE>
<PAGE>
Statement of Additional Information
GOLDENSELECT VALUE
DEFERRED COMBINATION VARIABLE
AND FIXED ANNUITY CONTRACT
ISSUED BY
SEPARATE ACCOUNT B
("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:
FEBRUARY 1, 2000
<PAGE>
TABLE OF CONTENTS
ITEM PAGE
Introduction............................................. 1
Description of Golden American Life Insurance Company.... 1
Safekeeping of Assets.................................... 1
The Administrator........................................ 1
Independent Auditors..................................... 1
Distribution of Contracts................................ 1
Performance Information.................................. 2
IRA Partial Withdrawal Option............................ 5
Other Information........................................ 6
Financial Statements of Account B........................ 6
i
<PAGE>
<PAGE>
INTRODUCTION
This Statement of Additional Information provides background
information regarding 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 over $461.8 billion in
assets as of December 31, 1998.
As of December 31, 1998, Golden American had approximately $353.9
million in stockholder's equity and approximately $4.8 billion in
total assets, including approximately $3.4 billion of separate
account assets. Golden American is authorized to do business in all
jurisdictions except New York. Golden American offers variable
annuities and variable life insurance. Golden American formed a
subsidiary, First Golden American Life Insurance Company of New York
("First Golden"), who 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 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 $892,903 pursuant to the service
agreement in 1998.
INDEPENDENT AUDITORS
Ernst & Young LLP, independent auditors, performs annual audits of
Golden American and 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, 1996, through two broker/dealer institutions, during the
year ended December 31, 1997 and through two broker/dealer
institutions during the year ended December 1998. For the years
ended 1998, 1997 and 1996 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 $117,470,000, $36,350,000 and $27,065,000, 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.
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. In 1995, the service agreement
between Directed Services, Inc. and Golden American was amended to
provide for a management
1
<PAGE>
<PAGE>
fee from Directed Services, Inc. to Golden American for managerial and
supervisory services provided by Golden American. This fee, calculated
as a percentage of average assets in the variable separate accounts,
was $4,771,000, $2,770,000 and $2,267,000 for the years ended 1998, 1997
and 1996, respectively.
PERFORMANCE INFORMATION
Performance information for the subaccounts of 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, three death benefit options are
available. The following performance values reflect the election at
issue of the 7% Solution Enhanced Death Benefit Option providing
values reflecting the highest aggregate contract charges. If one of
the other death benefit options 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
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, 1998 to December 31, 1998 were
3.30% and 3.35%, respectively.
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 [ ( a - b +1)(6) - 1]
cd
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 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:
2
<PAGE>
<PAGE>
P(1+T)(n)=ERV
Where:
(1) [P] equals a hypothetical initial premium payment
of $1,000
(2) [T] equals an average annual total return
(3) [n] equals the number of years
(4) [ERV] equals the ending redeemable value of a
hypothetical $1,000 initial premium payment made at the
beginning of the period (or fractional portion thereof)
All total return figures reflect the deduction of the maximum sales
load, the administrative charges, and the mortality and expense risk
charges. 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.
Except for the All Cap, Investors, Large Cap Value, and Managed
Global subaccounts which had not commenced as of December 31, 1998,
Average Annual Total Return for the subaccounts is presented on a
standardized basis, which includes deductions for the maximum
mortality and expense risk charge of 1.20%, administrative charges
of 0.15%, contract administration charge at 0.05%, and applicable
surrender charges of 6% for the one year period and 3% for the five
year period for the year ending December 31, 1998 were as follows:
Average Annual Total Return for Periods Ending 12/31/98 - Standardized
- ----------------------------------------------------------------------
One Year Five Year Inception
Period Period to
Ending Ending Ending Inception
Subaccount 12/31/98 12/31/98 12/31/98 Date
- ---------- -------- -------- -------- -------
Equity Income 1.29% 8.34% 8.76%* 1/25/89
Fully Managed -1.06% 7.90% 8.04%* 1/25/89
Capital 5.66% 15.26% 14.86%* 5/4/92
Appreciation
Rising Dividends 7.11% 17.31% 17.10% 10/4/93
Real Estate -20.23% 10.30% 8.66%* 1/25/89
Hard Assets -36.22% 0.94% 4.16%* 1/25/89
Value Equity -5.36% n/a 16.25% 1/1/95
Strategic Equity -6.07% n/a 10.78%* 10/2/95
Small Cap 13.89% n/a 14.74% 1/2/96
Developing World n/a n/a -36.96%# 2/19/98
Growth & Income 4.96% n/a 20.68% 4/1/96
Growth 19.68% n/a 18.74%* 4/1/96
Mid-Cap Growth 15.71% n/a 21.16%* 10/7/94
Total Return 4.59%* n/a 14.42%* 10/7/94
Research 15.94% n/a 21.70%* 10/7/94
Global Fixed 4.85%* n/a 6.33%* 10/7/94
Income
High Yield Bond n/a n/a -7.10%*# 5/1/98
StocksPLUS n/a n/a 8.32%*# 5/1/98
Growth and Income
International -1.59% n/a 0.38%* 4/1/96
Equity
Limited Maturity -0.10% 3.93% 5.86%* 1/25/89
Bond
Liquid Asset -1.90% 3.24% 4.19%* 1/25/89
_________________________
* Total return calculation reflects partial waiver of fees and expenses.
# Non-annualized.
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:
3
<PAGE>
<PAGE>
P(1+T)(n)]=ERV
Where:
(1) [P] equals a hypothetical initial premium payment
of $1,000
(2) [T] equals an average annual total return
(3) [n] equals the number of years
(4) [ERV] equals the ending redeemable value of a
hypothetical $1,000 initial premium payment made at the
beginning of the period (or fractional portion thereof)
assuming certain loading and charges are zero.
All total return figures reflect the deduction of the mortality and
expense risk charge and the administrative charges, but not the
deduction of the maximum sales load and the annual contract fee.
Except for the All Cap, Investors, Large Cap Value, and Managed
Global subaccounts which had not commenced as of December 31, 1998,
Average Annual Total Return for the subaccounts is presented on a
standardized basis, which includes deductions for the maximum
mortality and expense risk charge of 1.20%, administrative charges
of 0.15%, and contract administration charge at 0.05%, for the year
ending December 31, 1998 were as follows:
Average Annual Total Return for Periods Ending 12/31/98 - Non- Standardized
- ---------------------------------------------------------------------------
One Year Five Year Inception
Period Period to
Ending Ending Ending Inception
Subaccount 12/31/98 12/31/98 12/31/98 Date
- ---------- -------- -------- -------- -------
Equity Income 7.29% 8.75% 8.76%* 1/25/89
Fully Managed 4.94% 8.31% 8.04%* 1/25/89
Capital 11.66% 15.57% 14.93%* 5/4/92
Appreciation
Rising Dividends 13.11% 17.63% 17.39% 10/4/93
Real Estate -14.23% 10.67% 8.66%* 1/25/89
Hard Assets -30.22% 1.49% 4.16%* 1/25/89
Value Equity 0.64% n/a 16.88% 1/1/95
Strategic Equity -0.07% n/a 11.98%* 10/2/95
Small Cap 19.89% n/a 15.99% 1/2/96
Developing World n/a n/a -30.39%# 2/19/98
Growth & Income 10.96% n/a 21.98% 4/1/96
Growth 25.68% n/a 20.08%* 4/1/96
Mid-Cap Growth 21.71% n/a 21.66%* 10/7/94
Total Return 10.59%* n/a 15.03%* 10/7/94
Research 21.94% n/a 22.20%* 10/7/94
Global Fixed 10.85% n/a 7.09%* 10/7/94
Income
High Yield Bond n/a n/a 1.80%*# 5/1/98
StocksPLUS n/a n/a 17.67%*# 5/1/98
Growth and Income
International 4.41% n/a 1.81%* 4/1/96
Equity
Limited Maturity 5.90% 4.41% 5.86%* 1/25/89
Bond
Liquid Asset 4.10% 3.73% 4.19%* 1/25/89
_________________________
* Total return calculation reflects partial waiver of fees and expenses.
# Non-annualized.
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
4
<PAGE>
<PAGE>
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.
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 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
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......... 0.002063
6. Less asset based administrative charge.......... 0.00000411
7. Net investment return [(4) minus (5) minus (6)]. 0.00997526
8. Net investment factor [(1.000000) plus (7)]..... 1.00997526
9. AUV, end of period [(1) multiplied by (8)]......$10.00997526
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)...................................$10.00997526
5. Contract Value in account for valuation date
following purchase [(3) multiplied by (4)].......$ 1,009.78
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
5
<PAGE>
<PAGE>
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 not withdrawn, 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.
FINANCIAL STATEMENTS OF SEPARATE ACCOUNT B
The unaudited financial statements of Separate Account B are listed below and
are included in this Statement of Additional Information:
Unaudited Financial Statements
Statement of Assets and Liability as of September 30, 1999
Statement of Operations for the period ended
September 30, 1999
Statements of Changes in Net Assets for the periods ended
September 30, 1999 and December 31, 1998
Notes to Financial Statements
The audited financial statements of Account B are listed below and
are included in this Statement of Additional Information:
Report of Independent Auditors
Audited Financial Statements
Statement of Assets and Liability as of December 31, 1998
Statement of Operations for the year ended December 31, 1998
Statements of Changes in Net Assets for the years ended
December 31, 1998 and 1997
Notes to Financial Statements
6
<PAGE>
<PAGE>
FINANCIAL STATEMENTS
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B (UNAUDITED)
PERIODS ENDED SEPTEMBER 30, 1999
AND DECEMBER 31, 1998
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
FINANCIAL STATEMENTS
PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
TABLE OF CONTENTS
Financial Statements
Statement of Assets and Liability
Statement of Operations
Statements of Changes in Net Assets
Notes to Financial Statements
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF ASSETS AND LIABILITY (UNAUDITED)
SEPTEMBER 30, 1999
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COMBINED
____________
<S> <C>
ASSETS
Investments at net asset value:
The GCG Trust:
Liquid Asset Series,
434,250,156 shares (cost - $434,250) $434,250
Limited Maturity Bond Series,
13,546,860 shares (cost - $145,162) 145,900
Hard Assets Series,
3,491,625 shares (cost - $38,384) 41,061
All-Growth Series,
4,995,445 shares (cost - $71,636) 100,009
Real Estate Series,
4,482,928 shares (cost - $71,082) 58,323
Fully Managed Series,
15,919,709 shares (cost - $236,970) 261,402
Equity Income Series,
21,636,504 shares (cost - $270,041) 270,240
Capital Appreciation Series,
15,991,068 shares (cost - $267,597) 306,868
Rising Dividends Series,
29,752,243 shares (cost - $598,998) 689,657
Emerging Markets Series,
2,961,088 shares (cost - $27,835) 25,939
Market Manager Series,
358,354 shares (cost - $3,711) 7,099
Value Equity Series,
8,286,304 shares (cost - $134,218) 128,023
Strategic Equity Series,
7,866,644 shares (cost - $105,758) 113,201
Small Cap Series,
11,379,126 shares (cost - $187,468) 205,166
Managed Global Series,
8,262,783 shares (cost - $117,917) 129,643
Mid-Cap Growth Series,
12,725,459 shares (cost - $250,096) 291,922
Capital Growth Series,
19,634,861 shares (cost - $308,027) 307,875
Research Series,
23,040,830 shares (cost - $460,222) 477,637
Total Return Series,
26,123,116 shares (cost - $415,811) 415,096
Growth Series,
32,064,511 shares (cost - $578,416) 631,350
Global Fixed Income Series,
2,062,733 shares (cost - $21,889) 21,556
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF ASSETS AND LIABILITY (UNAUDITED)
SEPTEMBER 30, 1999
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COMBINED
____________
<S> <C>
ASSETS - CONTINUED
Investments at net asset value:
The GCG Trust:
Developing World Series,
2,476,871 shares (cost - $23,140) $22,440
Growth Opportunities Series,
604,270 shares (cost - $6,235) 6,357
PIMCO Variable Insurance Trust:
PIMCO High Yield Bond Portfolio,
13,936,073 shares (cost - $133,272) 128,351
PIMCO StocksPLUS Growth and Income Portfolio,
12,458,844 shares (cost - $161,862) 160,096
Greenwich Street Series Fund Inc.:
Appreciation Portfolio,
44,430 shares (cost - $909) 955
Travelers Series Fund Inc.:
Smith Barney High Income Portfolio,
53,221 shares (cost - $711) 624
Smith Barney Large Cap Value Portfolio,
40,029 shares (cost - $811) 763
Smith Barney International Equity Portfolio,
25,696 shares (cost - $361) 401
Smith Barney Money Market Portfolio,
134,305 shares (cost - $134) 134
Warburg Pincus Trust:
International Equity Portfolio,
9,414,330 shares (cost - $116,363) 120,221
____________
TOTAL ASSETS (cost - $5,189,286) 5,502,559
LIABILITY
Payable to Golden American Life Insurance Company
for charges and fees 230
____________
TOTAL NET ASSETS $5,502,329
============
NET ASSETS
For variable annuity insurance contracts $5,507,112
Retained in Separate Account B by Golden American
Life Insurance Company 4,783
____________
TOTAL NET ASSETS $5,502,329
============
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Limited
Liquid Maturity Hard
Asset Bond Assets
Division Division Division
_________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $9,548 -- --
Capital gains distributions -- -- --
_________________________________
TOTAL INVESTMENT INCOME 9,548 -- --
Expenses:
Mortality and expense risk and other charges 3,044 $1,171 $351
Annual administrative charges 62 27 12
Minimum death benefit guarantee charges 6 1 1
Contingent deferred sales charges 1,599 116 111
Other contract charges 5 2 2
Amortization of deferred charges related to:
Deferred sales load 408 231 71
Premium taxes 15 1 --
_________________________________
TOTAL EXPENSES 5,139 1,549 548
_________________________________
NET INVESTMENT INCOME (LOSS) 4,409 (1,549) (548)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments -- (333) (10,585)
Net unrealized appreciation
(depreciation) of investments -- 1,454 17,031
_________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $4,409 ($428) $5,898
=================================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Capital
Equity Apprecia- Rising
Income tion Dividends
Division Division Division
_________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- -- --
Capital gains distributions -- -- --
_________________________________
TOTAL INVESTMENT INCOME -- -- --
Expenses:
Mortality and expense risk and other charges $2,375 $2,697 $6,565
Annual administrative charges 112 86 154
Minimum death benefit guarantee charges 5 1 1
Contingent deferred sales charges 120 200 597
Other contract charges 8 7 10
Amortization of deferred charges related to:
Deferred sales load 974 611 619
Premium taxes 2 2 1
_________________________________
TOTAL EXPENSES 3,596 3,604 7,947
_________________________________
NET INVESTMENT INCOME (LOSS) (3,596) (3,604) (7,947)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 818 10,813 10,795
Net unrealized appreciation
(depreciation) of investments (4,918) 4,291 11,828
_________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($7,696) $11,500 $14,676
=================================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
All- Real Fully
Growth Estate Managed
Division Division Division
_________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- -- --
Capital gains distributions -- -- --
_________________________________
TOTAL INVESTMENT INCOME -- -- --
Expenses:
Mortality and expense risk and other charges $904 $628 $2,351
Annual administrative charges 34 22 77
Minimum death benefit guarantee charges 1 -- 1
Contingent deferred sales charges 67 102 134
Other contract charges 1 1 5
Amortization of deferred charges related to:
Deferred sales load 256 137 474
Premium taxes 1 1 2
_________________________________
TOTAL EXPENSES 1,264 891 3,044
_________________________________
NET INVESTMENT INCOME (LOSS) (1,264) (891) (3,044)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 8,308 1,744 3,482
Net unrealized appreciation
(depreciation) of investments 19,140 (4,476) 14,210
_________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $26,184 ($3,623) $14,648
=================================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Emerging Market Value
Markets Manager Equity
Division Division Division
_________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- -- --
Capital gains distributions -- -- --
_________________________________
TOTAL INVESTMENT INCOME -- -- --
Expenses:
Mortality and expense risk and other charges $228 -- $1,370
Annual administrative charges 10 $1 42
Minimum death benefit guarantee charges 1 -- --
Contingent deferred sales charges 17 -- 111
Other contract charges 1 -- 1
Amortization of deferred charges related to:
Deferred sales load 73 32 125
Premium taxes -- -- --
_________________________________
TOTAL EXPENSES 330 33 1,649
_________________________________
NET INVESTMENT INCOME (LOSS) (330) (33) (1,649)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (1,054) 861 4,323
Net unrealized appreciation
(depreciation) of investments 7,613 (17) (9,587)
_________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $6,229 $811 ($6,913)
=================================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Strategic Small Managed
Equity Cap Global
Division Division Division
_________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- -- --
Capital gains distributions -- -- --
_________________________________
TOTAL INVESTMENT INCOME -- -- --
Expenses:
Mortality and expense risk and other charges $871 $1,718 $1,174
Annual administrative charges 21 42 40
Minimum death benefit guarantee charges -- -- 1
Contingent deferred sales charges 173 106 158
Other contract charges 1 2 3
Amortization of deferred charges related to:
Deferred sales load 65 70 319
Premium taxes -- 1 1
_________________________________
TOTAL EXPENSES 1,131 1,939 1,696
_________________________________
NET INVESTMENT INCOME (LOSS) (1,131) (1,939) (1,696)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 3,305 19,972 21,629
Net unrealized appreciation
(depreciation) of investments 5,999 (3,471) (8,421)
_________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $8,173 $14,562 $11,512
=================================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Mid-Cap Capital
Growth Growth Research
Division Division Division
_________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- -- --
Capital gains distributions -- -- --
_________________________________
TOTAL INVESTMENT INCOME -- -- --
Expenses:
Mortality and expense risk and other charges $2,034 $2,762 $4,440
Annual administrative charges 40 69 85
Minimum death benefit guarantee charges -- -- --
Contingent deferred sales charges 131 265 298
Other contract charges 1 1 2
Amortization of deferred charges related to:
Deferred sales load 53 58 92
Premium taxes 1 -- 1
_________________________________
TOTAL EXPENSES 2,260 3,155 4,918
_________________________________
NET INVESTMENT INCOME (LOSS) (2,260) (3,155) (4,918)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 12,779 3,544 2,224
Net unrealized appreciation
(depreciation) of investments 34,465 (9,080) 149
_________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $44,984 ($8,691) ($2,545)
=================================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Global
Total Fixed
Return Growth Income
Division Division Division
_________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- -- --
Capital gains distributions -- -- --
_________________________________
TOTAL INVESTMENT INCOME -- -- --
Expenses:
Mortality and expense risk and other charges $3,706 $3,831 $157
Annual administrative charges 76 67 2
Minimum death benefit guarantee charges -- 1 --
Contingent deferred sales charges 238 229 14
Other contract charges 1 2 --
Amortization of deferred charges related to:
Deferred sales load 73 66 2
Premium taxes 1 1 --
_________________________________
TOTAL EXPENSES 4,095 4,197 175
_________________________________
NET INVESTMENT INCOME (LOSS) (4,095) (4,197) (175)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 125 24,458 (416)
Net unrealized appreciation
(depreciation) of investments (2,155) 38,947 (323)
_________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($6,125) $59,208 ($914)
=================================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
Growth High
Developing Oppor- Yield
World tunities Bond
Division Division Division
_________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- -- $5,343
Capital gains distributions -- -- --
_________________________________
TOTAL INVESTMENT INCOME -- -- 5,343
Expenses:
Mortality and expense risk and other charges $139 $71 1,007
Annual administrative charges 2 1 12
Minimum death benefit guarantee charges -- -- --
Contingent deferred sales charges 6 2 56
Other contract charges -- -- --
Amortization of deferred charges related to:
Deferred sales load -- 1 11
Premium taxes -- -- --
_________________________________
TOTAL EXPENSES 147 75 1,086
_________________________________
NET INVESTMENT INCOME (LOSS) (147) (75) 4,257
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 2,092 689 (399)
Net unrealized appreciation
(depreciation) of investments (849) (227) (4,903)
_________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $1,096 $387 ($1,045)
=================================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
StocksPLUS Smith
Growth Barney
and Appre- High
Income ciation Income
Division Division Division
_________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $3,524 $7 $53
Capital gains distributions -- 17 --
_________________________________
TOTAL INVESTMENT INCOME 3,524 24 53
Expenses:
Mortality and expense risk and other charges 1,302 10 7
Annual administrative charges 13 1 --
Minimum death benefit guarantee charges -- -- --
Contingent deferred sales charges 80 -- --
Other contract charges -- -- --
Amortization of deferred charges related to:
Deferred sales load 14 -- --
Premium taxes -- -- --
_________________________________
TOTAL EXPENSES 1,409 11 7
_________________________________
NET INVESTMENT INCOME (LOSS) 2,115 13 46
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 3,448 14 (32)
Net unrealized appreciation
(depreciation) of investments (6,021) 3 (24)
_________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($458) $30 ($10)
=================================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith Smith
Barney Barney Smith
Large Inter- Barney
Cap national Money
Value Equity Market
Division Division Division
_________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $10 $1 $6
Capital gains distributions 21 -- --
_________________________________
TOTAL INVESTMENT INCOME 31 1 6
Expenses:
Mortality and expense risk and other charges 8 4 2
Annual administrative charges 1 -- --
Minimum death benefit guarantee charges -- -- --
Contingent deferred sales charges -- -- --
Other contract charges -- -- --
Amortization of deferred charges related to:
Deferred sales load -- -- --
Premium taxes -- -- --
_________________________________
TOTAL EXPENSES 9 4 2
_________________________________
NET INVESTMENT INCOME (LOSS) 22 (3) 4
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 4 -- --
Net unrealized appreciation
(depreciation) of investments (58) 47 --
_________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($32) $44 $4
=================================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Inter-
national
Equity
Division Combined
______________________
<S> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- $18,492
Capital gains distributions -- 38
______________________
TOTAL INVESTMENT INCOME -- 18,530
Expenses:
Mortality and expense risk and other charges $845 45,772
Annual administrative charges 14 1,125
Minimum death benefit guarantee charges -- 20
Contingent deferred sales charges 70 5,000
Other contract charges -- 56
Amortization of deferred charges related to:
Deferred sales load -- 4,835
Premium taxes -- 31
______________________
TOTAL EXPENSES 929 56,839
______________________
NET INVESTMENT INCOME (LOSS) (929) (38,309)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 14,543 137,151
Net unrealized appreciation
(depreciation) of investments 2,304 102,951
______________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $15,918 $201,793
======================
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Liquid
Asset
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $57,254
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 3,131
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
__________
Net increase (decrease) in net assets resulting from operations 3,131
Changes from principal transactions:
Purchase payments 227,924
Contract distributions and terminations (38,803)
Transfer payments from (to) Fixed Accounts and other Divisions (73,759)
Addition to assets retained in the Account by Golden American Life
Insurance Company 12
__________
Increase (decrease) in net assets derived from principal
transactions 115,374
__________
Total increase (decrease) 118,505
__________
NET ASSETS AT DECEMBER 31, 1998 175,759
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Liquid
Asset
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $4,409
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
__________
Net increase (decrease) in net assets resulting from operations 4,409
Changes from principal transactions:
Purchase payments 320,550
Contract distributions and terminations (71,046)
Transfer payments from (to) Fixed Accounts and other Divisions 4,343
Addition to assets retained in the Account by Golden American Life
Insurance Company 4
__________
Increase (decrease) in net assets derived from principal
transactions 253,851
__________
Total increase (decrease) 258,260
__________
NET ASSETS AT SEPTEMBER 30, 1999 $434,019
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Limited
Maturity
Bond
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $52,467
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 1,782
Net realized gain (loss) on investments 872
Net unrealized appreciation (depreciation) of investments 739
__________
Net increase (decrease) in net assets resulting from operations 3,393
Changes from principal transactions:
Purchase payments 42,180
Contract distributions and terminations (9,265)
Transfer payments from (to) Fixed Accounts and other Divisions 14,051
Addition to assets retained in the Account by Golden American Life
Insurance Company 6
__________
Increase (decrease) in net assets derived from principal
transactions 46,972
__________
Total increase (decrease) 50,365
__________
NET ASSETS AT DECEMBER 31, 1998 102,832
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Limited
Maturity
Bond
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($1,549)
Net realized gain (loss) on investments (333)
Net unrealized appreciation (depreciation) of investments 1,454
__________
Net increase (decrease) in net assets resulting from operations (428)
Changes from principal transactions:
Purchase payments 52,316
Contract distributions and terminations (11,770)
Transfer payments from (to) Fixed Accounts and other Divisions 2,949
Addition to assets retained in the Account by Golden American Life
Insurance Company 1
__________
Increase (decrease) in net assets derived from principal
transactions 43,496
__________
Total increase (decrease) 43,068
__________
NET ASSETS AT SEPTEMBER 30, 1999 $145,900
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Hard
Assets
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $45,503
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 2,033
Net realized gain (loss) on investments (6,941)
Net unrealized appreciation (depreciation) of investments (8,620)
__________
Net increase (decrease) in net assets resulting from operations (13,528)
Changes from principal transactions:
Purchase payments 7,508
Contract distributions and terminations (4,524)
Transfer payments from (to) Fixed Accounts and other Divisions (5,266)
Addition to assets retained in the Account by Golden American Life
Insurance Company 10
__________
Increase (decrease) in net assets derived from principal
transactions (2,272)
__________
Total increase (decrease) (15,800)
__________
NET ASSETS AT DECEMBER 31, 1998 29,703
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Hard
Assets
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($548)
Net realized gain (loss) on investments (10,585)
Net unrealized appreciation (depreciation) of investments 17,031
__________
Net increase (decrease) in net assets resulting from operations 5,898
Changes from principal transactions:
Purchase payments 5,318
Contract distributions and terminations (4,096)
Transfer payments from (to) Fixed Accounts and other Divisions 4,254
Addition to assets retained in the Account by Golden American Life
Insurance Company 1
__________
Increase (decrease) in net assets derived from principal
transactions 5,477
__________
Total increase (decrease) 11,375
__________
NET ASSETS AT SEPTEMBER 30, 1999 $41,078
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
All-Growth
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $71,738
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) (905)
Net realized gain (loss) on investments 330
Net unrealized appreciation (depreciation) of investments 6,240
__________
Net increase (decrease) in net assets resulting from operations 5,665
Changes from principal transactions:
Purchase payments 15,762
Contract distributions and terminations (9,206)
Transfer payments from (to) Fixed Accounts and other Divisions (2,159)
Addition to assets retained in the Account by Golden American Life
Insurance Company 7
__________
Increase (decrease) in net assets derived from principal
transactions 4,404
__________
Total increase (decrease) 10,069
__________
NET ASSETS AT DECEMBER 31, 1998 81,807
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
All-Growth
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($1,264)
Net realized gain (loss) on investments 8,308
Net unrealized appreciation (depreciation) of investments 19,140
__________
Net increase (decrease) in net assets resulting from operations 26,184
Changes from principal transactions:
Purchase payments 9,484
Contract distributions and terminations (10,612)
Transfer payments from (to) Fixed Accounts and other Divisions (6,834)
Addition to assets retained in the Account by Golden American Life
Insurance Company 3
__________
Increase (decrease) in net assets derived from principal
transactions (7,959)
__________
Total increase (decrease) 18,225
__________
NET ASSETS AT SEPTEMBER 30, 1999 $100,032
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Real
Estate
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $74,700
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 8,244
Net realized gain (loss) on investments 3,708
Net unrealized appreciation (depreciation) of investments (24,689)
__________
Net increase (decrease) in net assets resulting from operations (12,737)
Changes from principal transactions:
Purchase payments 24,639
Contract distributions and terminations (6,988)
Transfer payments from (to) Fixed Accounts and other Divisions (10,631)
Addition to assets retained in the Account by Golden American Life
Insurance Company 12
__________
Increase (decrease) in net assets derived from principal
transactions 7,032
__________
Total increase (decrease) (5,705)
__________
NET ASSETS AT DECEMBER 31, 1998 68,995
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Real
Estate
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($891)
Net realized gain (loss) on investments 1,744
Net unrealized appreciation (depreciation) of investments (4,476)
__________
Net increase (decrease) in net assets resulting from operations (3,623)
Changes from principal transactions:
Purchase payments 7,553
Contract distributions and terminations (7,329)
Transfer payments from (to) Fixed Accounts and other Divisions (7,248)
Addition to assets retained in the Account by Golden American Life
Insurance Company 1
__________
Increase (decrease) in net assets derived from principal
transactions (7,023)
__________
Total increase (decrease) (10,646)
__________
NET ASSETS AT SEPTEMBER 30, 1999 $58,349
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Fully
Managed
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $158,650
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 15,626
Net realized gain (loss) on investments 1,704
Net unrealized appreciation (depreciation) of investments (10,501)
__________
Net increase (decrease) in net assets resulting from operations 6,829
Changes from principal transactions:
Purchase payments 74,467
Contract distributions and terminations (19,367)
Transfer payments from (to) Fixed Accounts and other Divisions 5,756
Addition to assets retained in the Account by Golden American Life
Insurance Company 31
__________
Increase (decrease) in net assets derived from principal
transactions 60,887
__________
Total increase (decrease) 67,716
__________
NET ASSETS AT DECEMBER 31, 1998 226,366
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Fully
Managed
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($3,044)
Net realized gain (loss) on investments 3,482
Net unrealized appreciation (depreciation) of investments 14,210
__________
Net increase (decrease) in net assets resulting from operations 14,648
Changes from principal transactions:
Purchase payments 46,925
Contract distributions and terminations (23,061)
Transfer payments from (to) Fixed Accounts and other Divisions (3,474)
Addition to assets retained in the Account by Golden American Life
Insurance Company 5
__________
Increase (decrease) in net assets derived from principal
transactions 20,395
__________
Total increase (decrease) 35,043
__________
NET ASSETS AT SEPTEMBER 30, 1999 $261,409
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Equity
Income
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $261,869
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 23,815
Net realized gain (loss) on investments 2,288
Net unrealized appreciation (depreciation) of investments (10,125)
__________
Net increase (decrease) in net assets resulting from operations 15,978
Changes from principal transactions:
Purchase payments 34,793
Contract distributions and terminations (39,339)
Transfer payments from (to) Fixed Accounts and other Divisions 581
Addition to assets retained in the Account by Golden American Life
Insurance Company 28
__________
Increase (decrease) in net assets derived from principal
transactions (3,937)
__________
Total increase (decrease) 12,041
__________
NET ASSETS AT DECEMBER 31, 1998 273,910
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Equity
Income
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($3,596)
Net realized gain (loss) on investments 818
Net unrealized appreciation (depreciation) of investments (4,918)
__________
Net increase (decrease) in net assets resulting from operations (7,696)
Changes from principal transactions:
Purchase payments 45,531
Contract distributions and terminations (43,023)
Transfer payments from (to) Fixed Accounts and other Divisions 1,502
Addition to assets retained in the Account by Golden American Life
Insurance Company 11
__________
Increase (decrease) in net assets derived from principal
transactions 4,021
__________
Total increase (decrease) (3,675)
__________
NET ASSETS AT SEPTEMBER 30, 1999 $270,235
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Capital
Appre-
ciation
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $187,817
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 18,956
Net realized gain (loss) on investments 6,551
Net unrealized appreciation (depreciation) of investments (3,987)
__________
Net increase (decrease) in net assets resulting from operations 21,520
Changes from principal transactions:
Purchase payments 63,892
Contract distributions and terminations (26,711)
Transfer payments from (to) Fixed Accounts and other Divisions 10,035
Addition to assets retained in the Account by Golden American Life
Insurance Company 25
__________
Increase (decrease) in net assets derived from principal
transactions 47,241
__________
Total increase (decrease) 68,761
__________
NET ASSETS AT DECEMBER 31, 1998 256,578
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Capital
Appre-
ciation
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($3,604)
Net realized gain (loss) on investments 10,813
Net unrealized appreciation (depreciation) of investments 4,291
__________
Net increase (decrease) in net assets resulting from operations 11,500
Changes from principal transactions:
Purchase payments 66,219
Contract distributions and terminations (32,566)
Transfer payments from (to) Fixed Accounts and other Divisions 5,139
Addition to assets retained in the Account by Golden American Life
Insurance Company 9
__________
Increase (decrease) in net assets derived from principal
transactions 38,801
__________
Total increase (decrease) 50,301
__________
NET ASSETS AT SEPTEMBER 30, 1999 $306,879
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Rising
Dividends
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $215,943
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 12,920
Net realized gain (loss) on investments 3,842
Net unrealized appreciation (depreciation) of investments 17,344
__________
Net increase (decrease) in net assets resulting from operations 34,106
Changes from principal transactions:
Purchase payments 216,682
Contract distributions and terminations (26,449)
Transfer payments from (to) Fixed Accounts and other Divisions 60,274
Addition to assets retained in the Account by Golden American Life
Insurance Company 60
__________
Increase (decrease) in net assets derived from principal
transactions 250,567
__________
Total increase (decrease) 284,673
__________
NET ASSETS AT DECEMBER 31, 1998 500,616
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Rising
Dividends
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($7,947)
Net realized gain (loss) on investments 10,795
Net unrealized appreciation (depreciation) of investments 11,828
__________
Net increase (decrease) in net assets resulting from operations 14,676
Changes from principal transactions:
Purchase payments 185,783
Contract distributions and terminations (44,097)
Transfer payments from (to) Fixed Accounts and other Divisions 32,703
Addition to assets retained in the Account by Golden American Life
Insurance Company 13
__________
Increase (decrease) in net assets derived from principal
transactions 174,402
__________
Total increase (decrease) 189,078
__________
NET ASSETS AT SEPTEMBER 30, 1999 $689,694
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Emerging
Markets
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $34,501
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) (524)
Net realized gain (loss) on investments (3,524)
Net unrealized appreciation (depreciation) of investments (4,266)
__________
Net increase (decrease) in net assets resulting from operations (8,314)
Changes from principal transactions:
Purchase payments 2,520
Contract distributions and terminations (2,973)
Transfer payments from (to) Fixed Accounts and other Divisions (3,483)
Addition to assets retained in the Account by Golden American Life
Insurance Company 3
__________
Increase (decrease) in net assets derived from principal
transactions (3,933)
__________
Total increase (decrease) (12,247)
__________
NET ASSETS AT DECEMBER 31, 1998 22,254
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Emerging
Markets
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($330)
Net realized gain (loss) on investments (1,054)
Net unrealized appreciation (depreciation) of investments 7,613
__________
Net increase (decrease) in net assets resulting from operations 6,229
Changes from principal transactions:
Purchase payments 914
Contract distributions and terminations (2,462)
Transfer payments from (to) Fixed Accounts and other Divisions (971)
Addition to assets retained in the Account by Golden American Life
Insurance Company 1
__________
Increase (decrease) in net assets derived from principal
transactions (2,518)
__________
Total increase (decrease) 3,711
__________
NET ASSETS AT SEPTEMBER 30, 1999 $25,965
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Market
Manager
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $6,716
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 299
Net realized gain (loss) on investments 135
Net unrealized appreciation (depreciation) of investments 1,090
__________
Net increase (decrease) in net assets resulting from operations 1,524
Changes from principal transactions:
Purchase payments (36)
Contract distributions and terminations (188)
Transfer payments from (to) Fixed Accounts and other Divisions (309)
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions (533)
__________
Total increase (decrease) 991
__________
NET ASSETS AT DECEMBER 31, 1998 7,707
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Market
Manager
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($33)
Net realized gain (loss) on investments 861
Net unrealized appreciation (depreciation) of investments (17)
__________
Net increase (decrease) in net assets resulting from operations 811
Changes from principal transactions:
Purchase payments 66
Contract distributions and terminations (1,346)
Transfer payments from (to) Fixed Accounts and other Divisions (324)
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions (1,604)
__________
Total increase (decrease) (793)
__________
NET ASSETS AT SEPTEMBER 30, 1999 $6,914
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Value
Equity
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $77,025
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 1,994
Net realized gain (loss) on investments 1,237
Net unrealized appreciation (depreciation) of investments (4,208)
__________
Net increase (decrease) in net assets resulting from operations (977)
Changes from principal transactions:
Purchase payments 51,484
Contract distributions and terminations (7,869)
Transfer payments from (to) Fixed Accounts and other Divisions 6,521
Addition to assets retained in the Account by Golden American Life
Insurance Company 10
__________
Increase (decrease) in net assets derived from principal
transactions 50,146
__________
Total increase (decrease) 49,169
__________
NET ASSETS AT DECEMBER 31, 1998 126,194
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Value
Equity
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($1,649)
Net realized gain (loss) on investments 4,323
Net unrealized appreciation (depreciation) of investments (9,587)
__________
Net increase (decrease) in net assets resulting from operations (6,913)
Changes from principal transactions:
Purchase payments 25,285
Contract distributions and terminations (10,550)
Transfer payments from (to) Fixed Accounts and other Divisions (5,998)
Addition to assets retained in the Account by Golden American Life
Insurance Company 1
__________
Increase (decrease) in net assets derived from principal
transactions 8,738
__________
Total increase (decrease) 1,825
__________
NET ASSETS AT SEPTEMBER 30, 1999 $128,019
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Strategic
Equity
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $50,437
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 3,586
Net realized gain (loss) on investments 1,365
Net unrealized appreciation (depreciation) of investments (6,078)
__________
Net increase (decrease) in net assets resulting from operations (1,127)
Changes from principal transactions:
Purchase payments 25,972
Contract distributions and terminations (5,201)
Transfer payments from (to) Fixed Accounts and other Divisions 1,265
Addition to assets retained in the Account by Golden American Life
Insurance Company 2
__________
Increase (decrease) in net assets derived from principal
transactions 22,038
__________
Total increase (decrease) 20,911
__________
NET ASSETS AT DECEMBER 31, 1998 71,348
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Strategic
Equity
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($1,131)
Net realized gain (loss) on investments 3,305
Net unrealized appreciation (depreciation) of investments 5,999
__________
Net increase (decrease) in net assets resulting from operations 8,173
Changes from principal transactions:
Purchase payments 35,618
Contract distributions and terminations (7,743)
Transfer payments from (to) Fixed Accounts and other Divisions 5,803
Addition to assets retained in the Account by Golden American Life
Insurance Company 2
__________
Increase (decrease) in net assets derived from principal
transactions 33,680
__________
Total increase (decrease) 41,853
__________
NET ASSETS AT SEPTEMBER 30, 1999 $113,201
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Small Cap
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $52,725
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) (1,343)
Net realized gain (loss) on investments 2,148
Net unrealized appreciation (depreciation) of investments 15,952
__________
Net increase (decrease) in net assets resulting from operations 16,757
Changes from principal transactions:
Purchase payments 44,851
Contract distributions and terminations (6,104)
Transfer payments from (to) Fixed Accounts and other Divisions 16,010
Addition to assets retained in the Account by Golden American Life
Insurance Company 6
__________
Increase (decrease) in net assets derived from principal
transactions 54,763
__________
Total increase (decrease) 71,520
__________
NET ASSETS AT DECEMBER 31, 1998 124,245
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Small Cap
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($1,939)
Net realized gain (loss) on investments 19,972
Net unrealized appreciation (depreciation) of investments (3,471)
__________
Net increase (decrease) in net assets resulting from operations 14,562
Changes from principal transactions:
Purchase payments 61,536
Contract distributions and terminations (8,069)
Transfer payments from (to) Fixed Accounts and other Divisions 12,882
Addition to assets retained in the Account by Golden American Life
Insurance Company 2
__________
Increase (decrease) in net assets derived from principal
transactions 66,351
__________
Total increase (decrease) 80,913
__________
NET ASSETS AT SEPTEMBER 30, 1999 $205,158
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Managed
Global
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $104,681
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 3,296
Net realized gain (loss) on investments 7,634
Net unrealized appreciation (depreciation) of investments 16,611
__________
Net increase (decrease) in net assets resulting from operations 27,541
Changes from principal transactions:
Purchase payments 11,958
Contract distributions and terminations (13,329)
Transfer payments from (to) Fixed Accounts and other Divisions (176)
Addition to assets retained in the Account by Golden American Life
Insurance Company 9
__________
Increase (decrease) in net assets derived from principal
transactions (1,538)
__________
Total increase (decrease) 26,003
__________
NET ASSETS AT DECEMBER 31, 1998 130,684
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Managed
Global
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($1,696)
Net realized gain (loss) on investments 21,629
Net unrealized appreciation (depreciation) of investments (8,421)
__________
Net increase (decrease) in net assets resulting from operations 11,512
Changes from principal transactions:
Purchase payments 5,337
Contract distributions and terminations (16,521)
Transfer payments from (to) Fixed Accounts and other Divisions (1,348)
Addition to assets retained in the Account by Golden American Life
Insurance Company 2
__________
Increase (decrease) in net assets derived from principal
transactions (12,530)
__________
Total increase (decrease) (1,018)
__________
NET ASSETS AT SEPTEMBER 30, 1999 $129,666
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Mid-Cap
Growth
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $20,361
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 3,991
Net realized gain (loss) on investments 899
Net unrealized appreciation (depreciation) of investments 6,574
__________
Net increase (decrease) in net assets resulting from operations 11,464
Changes from principal transactions:
Purchase payments 66,121
Contract distributions and terminations (3,065)
Transfer payments from (to) Fixed Accounts and other Divisions 21,962
Addition to assets retained in the Account by Golden American Life
Insurance Company 1
__________
Increase (decrease) in net assets derived from principal
transactions 85,019
__________
Total increase (decrease) 96,483
__________
NET ASSETS AT DECEMBER 31, 1998 116,844
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Mid-Cap
Growth
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($2,260)
Net realized gain (loss) on investments 12,779
Net unrealized appreciation (depreciation) of investments 34,465
__________
Net increase (decrease) in net assets resulting from operations 44,984
Changes from principal transactions:
Purchase payments 105,122
Contract distributions and terminations (8,408)
Transfer payments from (to) Fixed Accounts and other Divisions 33,395
Addition to assets retained in the Account by Golden American Life
Insurance Company 4
__________
Increase (decrease) in net assets derived from principal
transactions 130,113
__________
Total increase (decrease) 175,097
__________
NET ASSETS AT SEPTEMBER 30, 1999 $291,941
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Capital
Growth
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $44,922
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 2,904
Net realized gain (loss) on investments 911
Net unrealized appreciation (depreciation) of investments 7,679
__________
Net increase (decrease) in net assets resulting from operations 11,494
Changes from principal transactions:
Purchase payments 105,760
Contract distributions and terminations (7,503)
Transfer payments from (to) Fixed Accounts and other Divisions 24,270
Addition to assets retained in the Account by Golden American Life
Insurance Company 7
__________
Increase (decrease) in net assets derived from principal
transactions 122,534
__________
Total increase (decrease) 134,028
__________
NET ASSETS AT DECEMBER 31, 1998 178,950
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Capital
Growth
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($3,155)
Net realized gain (loss) on investments 3,544
Net unrealized appreciation (depreciation) of investments (9,080)
__________
Net increase (decrease) in net assets resulting from operations (8,691)
Changes from principal transactions:
Purchase payments 118,536
Contract distributions and terminations (12,868)
Transfer payments from (to) Fixed Accounts and other Divisions 31,944
Addition to assets retained in the Account by Golden American Life
Insurance Company 2
__________
Increase (decrease) in net assets derived from principal
transactions 137,614
__________
Total increase (decrease) 128,923
__________
NET ASSETS AT SEPTEMBER 30, 1999 $307,873
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Research
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $34,402
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 10,068
Net realized gain (loss) on investments 972
Net unrealized appreciation (depreciation) of investments 16,878
__________
Net increase (decrease) in net assets resulting from operations 27,918
Changes from principal transactions:
Purchase payments 167,295
Contract distributions and terminations (6,740)
Transfer payments from (to) Fixed Accounts and other Divisions 60,643
Addition to assets retained in the Account by Golden American Life
Insurance Company 11
__________
Increase (decrease) in net assets derived from principal
transactions 221,209
__________
Total increase (decrease) 249,127
__________
NET ASSETS AT DECEMBER 31, 1998 283,529
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Research
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($4,918)
Net realized gain (loss) on investments 2,224
Net unrealized appreciation (depreciation) of investments 149
__________
Net increase (decrease) in net assets resulting from operations (2,545)
Changes from principal transactions:
Purchase payments 185,397
Contract distributions and terminations (18,467)
Transfer payments from (to) Fixed Accounts and other Divisions 29,742
Addition to assets retained in the Account by Golden American Life
Insurance Company 6
__________
Increase (decrease) in net assets derived from principal
transactions 196,678
__________
Total increase (decrease) 194,133
__________
NET ASSETS AT SEPTEMBER 30, 1999 $477,662
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Total
Return
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $26,231
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 9,099
Net realized gain (loss) on investments 185
Net unrealized appreciation (depreciation) of investments 1,028
__________
Net increase (decrease) in net assets resulting from operations 10,312
Changes from principal transactions:
Purchase payments 156,492
Contract distributions and terminations (7,889)
Transfer payments from (to) Fixed Accounts and other Divisions 42,666
Addition to assets retained in the Account by Golden American Life
Insurance Company 23
__________
Increase (decrease) in net assets derived from principal
transactions 191,292
__________
Total increase (decrease) 201,604
__________
NET ASSETS AT DECEMBER 31, 1998 227,835
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Total
Return
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($4,095)
Net realized gain (loss) on investments 125
Net unrealized appreciation (depreciation) of investments (2,155)
__________
Net increase (decrease) in net assets resulting from operations (6,125)
Changes from principal transactions:
Purchase payments 158,461
Contract distributions and terminations (15,803)
Transfer payments from (to) Fixed Accounts and other Divisions 50,725
Addition to assets retained in the Account by Golden American Life
Insurance Company 8
__________
Increase (decrease) in net assets derived from principal
transactions 193,391
__________
Total increase (decrease) 187,266
__________
NET ASSETS AT SEPTEMBER 30, 1999 $415,101
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Growth
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $23,178
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 4,697
Net realized gain (loss) on investments (807)
Net unrealized appreciation (depreciation) of investments 15,417
__________
Net increase (decrease) in net assets resulting from operations 19,307
Changes from principal transactions:
Purchase payments 77,977
Contract distributions and terminations (3,834)
Transfer payments from (to) Fixed Accounts and other Divisions 26,430
Addition to assets retained in the Account by Golden American Life
Insurance Company 10
__________
Increase (decrease) in net assets derived from principal
transactions 100,583
__________
Total increase (decrease) 119,890
__________
NET ASSETS AT DECEMBER 31, 1998 143,068
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Growth
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($4,197)
Net realized gain (loss) on investments 24,458
Net unrealized appreciation (depreciation) of investments 38,947
__________
Net increase (decrease) in net assets resulting from operations 59,208
Changes from principal transactions:
Purchase payments 277,629
Contract distributions and terminations (13,651)
Transfer payments from (to) Fixed Accounts and other Divisions 165,092
Addition to assets retained in the Account by Golden American Life
Insurance Company 3
__________
Increase (decrease) in net assets derived from principal
transactions 429,073
__________
Total increase (decrease) 488,281
__________
NET ASSETS AT SEPTEMBER 30, 1999 $631,349
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Global
Fixed
Income
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $206
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 174
Net realized gain (loss) on investments 216
Net unrealized appreciation (depreciation) of investments --
__________
Net increase (decrease) in net assets resulting from operations 390
Changes from principal transactions:
Purchase payments 5,820
Contract distributions and terminations (219)
Transfer payments from (to) Fixed Accounts and other Divisions 3,331
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 8,932
__________
Total increase (decrease) 9,322
__________
NET ASSETS AT DECEMBER 31, 1998 9,528
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Global
Fixed
Income
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($175)
Net realized gain (loss) on investments (416)
Net unrealized appreciation (depreciation) of investments (323)
__________
Net increase (decrease) in net assets resulting from operations (914)
Changes from principal transactions:
Purchase payments 8,574
Contract distributions and terminations (786)
Transfer payments from (to) Fixed Accounts and other Divisions 5,154
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 12,942
__________
Total increase (decrease) 12,028
__________
NET ASSETS AT SEPTEMBER 30, 1999 $21,556
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Develop-
ing
World
Division
(a)
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($22)
Net realized gain (loss) on investments (266)
Net unrealized appreciation (depreciation) of investments 149
__________
Net increase (decrease) in net assets resulting from operations (139)
Changes from principal transactions:
Purchase payments 2,757
Contract distributions and terminations (34)
Transfer payments from (to) Fixed Accounts and other Divisions 1,928
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 4,651
__________
Total increase (decrease) 4,512
__________
NET ASSETS AT DECEMBER 31, 1998 4,512
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Develop-
ing
World
Division
(a)
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($147)
Net realized gain (loss) on investments 2,092
Net unrealized appreciation (depreciation) of investments (849)
__________
Net increase (decrease) in net assets resulting from operations 1,096
Changes from principal transactions:
Purchase payments 7,579
Contract distributions and terminations (358)
Transfer payments from (to) Fixed Accounts and other Divisions 9,611
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 16,832
__________
Total increase (decrease) 17,928
__________
NET ASSETS AT SEPTEMBER 30, 1999 $22,440
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Growth
Oppor-
tunities
Division
(a)
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($8)
Net realized gain (loss) on investments (235)
Net unrealized appreciation (depreciation) of investments 349
__________
Net increase (decrease) in net assets resulting from operations 106
Changes from principal transactions:
Purchase payments 4,097
Contract distributions and terminations (45)
Transfer payments from (to) Fixed Accounts and other Divisions (27)
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 4,025
__________
Total increase (decrease) 4,131
__________
NET ASSETS AT DECEMBER 31, 1998 4,131
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Growth
Oppor-
tunities
Division
(a)
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($75)
Net realized gain (loss) on investments 689
Net unrealized appreciation (depreciation) of investments (227)
__________
Net increase (decrease) in net assets resulting from operations 387
Changes from principal transactions:
Purchase payments 1,830
Contract distributions and terminations (142)
Transfer payments from (to) Fixed Accounts and other Divisions 151
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 1,839
__________
Total increase (decrease) 2,226
__________
NET ASSETS AT SEPTEMBER 30, 1999 $6,357
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
High
Yield
Bond
Division
(c)
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $817
Net realized gain (loss) on investments (318)
Net unrealized appreciation (depreciation) of investments (18)
__________
Net increase (decrease) in net assets resulting from operations 481
Changes from principal transactions:
Purchase payments 32,399
Contract distributions and terminations (912)
Transfer payments from (to) Fixed Accounts and other Divisions 14,150
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 45,637
__________
Total increase (decrease) 46,118
__________
NET ASSETS AT DECEMBER 31, 1998 46,118
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
High
Yield
Bond
Division
(c)
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $4,257
Net realized gain (loss) on investments (399)
Net unrealized appreciation (depreciation) of investments (4,903)
__________
Net increase (decrease) in net assets resulting from operations (1,045)
Changes from principal transactions:
Purchase payments 61,793
Contract distributions and terminations (3,502)
Transfer payments from (to) Fixed Accounts and other Divisions 24,988
Addition to assets retained in the Account by Golden American Life
Insurance Company 1
__________
Increase (decrease) in net assets derived from principal
transactions 83,280
__________
Total increase (decrease) 82,235
__________
NET ASSETS AT SEPTEMBER 30, 1999 $128,353
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
StocksPLUS
Growth
and
Income
Division
(b)
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $814
Net realized gain (loss) on investments (97)
Net unrealized appreciation (depreciation) of investments 4,255
__________
Net increase (decrease) in net assets resulting from operations 4,972
Changes from principal transactions:
Purchase payments 29,368
Contract distributions and terminations (361)
Transfer payments from (to) Fixed Accounts and other Divisions 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 46,830
__________
Total increase (decrease) 51,802
__________
NET ASSETS AT DECEMBER 31, 1998 51,802
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION> PIMCO
StocksPLUS
Growth
and
Income
Division
(b)
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $2,115
Net realized gain (loss) on investments 3,448
Net unrealized appreciation (depreciation) of investments (6,021)
__________
Net increase (decrease) in net assets resulting from operations (458)
Changes from principal transactions:
Purchase payments 92,078
Contract distributions and terminations (3,384)
Transfer payments from (to) Fixed Accounts and other Divisions 20,050
Addition to assets retained in the Account by Golden American Life
Insurance Company 2
__________
Increase (decrease) in net assets derived from principal
transactions 108,746
__________
Total increase (decrease) 108,288
__________
NET ASSETS AT SEPTEMBER 30, 1999 $160,090
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Appre-
ciation
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $263
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 30
Net realized gain (loss) on investments 3
Net unrealized appreciation (depreciation) of investments 52
__________
Net increase (decrease) in net assets resulting from operations 85
Changes from principal transactions:
Purchase payments 595
Contract distributions and terminations (21)
Transfer payments from (to) Fixed Accounts and other Divisions 52
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 626
__________
Total increase (decrease) 711
__________
NET ASSETS AT DECEMBER 31, 1998 974
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Appre-
ciation
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $13
Net realized gain (loss) on investments 14
Net unrealized appreciation (depreciation) of investments 3
__________
Net increase (decrease) in net assets resulting from operations 30
Changes from principal transactions:
Purchase payments 28
Contract distributions and terminations (126)
Transfer payments from (to) Fixed Accounts and other Divisions 49
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions (49)
__________
Total increase (decrease) (19)
__________
NET ASSETS AT SEPTEMBER 30, 1999 $955
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
High
Income
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $209
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 36
Net realized gain (loss) on investments 8
Net unrealized appreciation (depreciation) of investments (66)
__________
Net increase (decrease) in net assets resulting from operations (22)
Changes from principal transactions:
Purchase payments 530
Contract distributions and terminations (15)
Transfer payments from (to) Fixed Accounts and other Divisions 104
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 619
__________
Total increase (decrease) 597
__________
NET ASSETS AT DECEMBER 31, 1998 806
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
High
Income
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $46
Net realized gain (loss) on investments (32)
Net unrealized appreciation (depreciation) of investments (24)
__________
Net increase (decrease) in net assets resulting from operations (10)
Changes from principal transactions:
Purchase payments 2
Contract distributions and terminations (75)
Transfer payments from (to) Fixed Accounts and other Divisions (99)
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions (172)
__________
Total increase (decrease) (182)
__________
NET ASSETS AT SEPTEMBER 30, 1999 $624
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Large Cap
Value
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $215
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 14
Net realized gain (loss) on investments 2
Net unrealized appreciation (depreciation) of investments 3
__________
Net increase (decrease) in net assets resulting from operations 19
Changes from principal transactions:
Purchase payments 429
Contract distributions and terminations (5)
Transfer payments from (to) Fixed Accounts and other Divisions 43
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 467
__________
Total increase (decrease) 486
__________
NET ASSETS AT DECEMBER 31, 1998 701
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Large Cap
Value
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $22
Net realized gain (loss) on investments 4
Net unrealized appreciation (depreciation) of investments (58)
__________
Net increase (decrease) in net assets resulting from operations (32)
Changes from principal transactions:
Purchase payments 41
Contract distributions and terminations (39)
Transfer payments from (to) Fixed Accounts and other Divisions 92
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 94
__________
Total increase (decrease) 62
__________
NET ASSETS AT SEPTEMBER 30, 1999 $763
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Inter-
national
Equity
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $96
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) (3)
Net realized gain (loss) on investments (1)
Net unrealized appreciation (depreciation) of investments (2)
__________
Net increase (decrease) in net assets resulting from operations (6)
Changes from principal transactions:
Purchase payments 178
Contract distributions and terminations (4)
Transfer payments from (to) Fixed Accounts and other Divisions 62
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 236
__________
Total increase (decrease) 230
__________
NET ASSETS AT DECEMBER 31, 1998 326
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Inter-
national
Equity
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($3)
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments 47
__________
Net increase (decrease) in net assets resulting from operations 44
Changes from principal transactions:
Purchase payments 11
Contract distributions and terminations (3)
Transfer payments from (to) Fixed Accounts and other Divisions 23
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 31
__________
Total increase (decrease) 75
__________
NET ASSETS AT SEPTEMBER 30, 1999 $401
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Money
Market
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $181
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 14
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
__________
Net increase (decrease) in net assets resulting from operations 14
Changes from principal transactions:
Purchase payments 565
Contract distributions and terminations (25)
Transfer payments from (to) Fixed Accounts and other Divisions (417)
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 123
__________
Total increase (decrease) 137
__________
NET ASSETS AT DECEMBER 31, 1998 318
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Money
Market
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $4
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
__________
Net increase (decrease) in net assets resulting from operations 4
Changes from principal transactions:
Purchase payments 25
Contract distributions and terminations (9)
Transfer payments from (to) Fixed Accounts and other Divisions (204)
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions (188)
__________
Total increase (decrease) (184)
__________
NET ASSETS AT SEPTEMBER 30, 1999 $134
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Inter-
national
Equity
Division
__________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $1,981
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) (179)
Net realized gain (loss) on investments (556)
Net unrealized appreciation (depreciation) of investments 1,647
__________
Net increase (decrease) in net assets resulting from operations 912
Changes from principal transactions:
Purchase payments 41,775
Contract distributions and terminations (940)
Transfer payments from (to) Fixed Accounts and other Divisions 6,037
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 46,872
__________
Total increase (decrease) 47,784
__________
NET ASSETS AT DECEMBER 31, 1998 49,765
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Inter-
national
Equity
Division
__________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($929)
Net realized gain (loss) on investments 14,543
Net unrealized appreciation (depreciation) of investments 2,304
__________
Net increase (decrease) in net assets resulting from operations 15,918
Changes from principal transactions:
Purchase payments 35,909
Contract distributions and terminations (2,396)
Transfer payments from (to) Fixed Accounts and other Divisions 21,016
Addition to assets retained in the Account by Golden American Life
Insurance Company --
__________
Increase (decrease) in net assets derived from principal
transactions 54,529
__________
Total increase (decrease) 70,447
__________
NET ASSETS AT SEPTEMBER 30, 1999 $120,212
==========
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Combined
_____________
<S> <C>
NET ASSETS AT JANUARY 1, 1998 $1,604,271
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 125,356
Net realized gain (loss) on investments 22,265
Net unrealized appreciation (depreciation) of investments 39,447
_____________
Net increase (decrease) in net assets resulting from operation 187,068
Changes from principal transactions:
Purchase payments 1,536,754
Contract distributions and terminations (247,928)
Transfer payments from (to) Fixed Accounts and other Divisions 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 1,526,866
_____________
Total increase (decrease) 1,713,934
_____________
NET ASSETS AT DECEMBER 31, 1998 3,318,205
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30, 1999 AND DECEMBER 31, 1998,
EXCEPT AS NOTED (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Combined
_____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($38,309)
Net realized gain (loss) on investments 137,151
Net unrealized appreciation (depreciation) of investments 102,951
_____________
Net increase (decrease) in net assets resulting from operation 201,793
Changes from principal transactions:
Purchase payments 1,921,450
Contract distributions and terminations (374,308)
Transfer payments from (to) Fixed Accounts and other Divisions 435,107
Addition to assets retained in the Account by Golden American Life
Insurance Company 82
_____________
Increase (decrease) in net assets derived from principal
transactions 1,982,331
_____________
Total increase (decrease) 2,184,124
_____________
NET ASSETS AT SEPTEMBER 30, 1999 $5,502,329
=============
<FN>
(a) Commencement of operations, March 2, 1998.
(b) Commencement of operations, May 8, 1998.
(c) Commencement of operations, May 11, 1998.
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 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.
During 1999, the Account began selling GoldenSelect Value Contracts. The
Value Contracts have daily mortality and expense risk charges deducted at an
annual rate of 0.75%. A daily charge for an asset based administrative
charge is deducted from assets attributable to the contract at an annual rate
of 0.15%. Currently, there is no administrative charge for Value Contracts.
Premium taxes, where applicable, are deducted from the accumulation value of
the Value Contracts. The amount and timing of the deduction depend on the
annuitant's state of residence and currently ranges up to 3.5%. The
contingent deferred sales charges for the Value Contract is imposed as a
percentage of each premium payment if the Contract is surrendered or a
partial withdrawal in excess of stated allowable partial withdrawals is
taken. The surrender charge is imposed at a rate of 6% during the first
three complete years after purchase declining to 5%, 4%, 3%, and 1% after the
third, fourth, fifth, and sixth years, respectively.
At September 30, 1999, the Account had, under GoldenSelect Contracts, twenty-
six 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, and International Equity 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, the Travelers Series Fund Inc., the Greenwich
Street Series Fund Inc., the Warburg Pincus Trust or the PIMCO Variable
Insurance Trust (the "Trusts"). The Account also includes The Fund For Life
Division, which is not included in the accompanying financial statements, and
ceased to accept new Contracts effective December 31, 1994.
Golden American has requested permission from the Securities and Exchange
Commission ("SEC") to substitute shares of the All-Growth Series and the
Growth Opportunities Series with shares of the Mid-Cap Growth Series. These
requests are still pending. As of May 1, 1999, new allocations to the All-
Growth Series and the Growth Opportunities Series are no longer being
accepted.
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 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:
<TABLE>
<CAPTION>
Equi-Select Series Trust The GCG Trust
Investment Division Investment Division
___________________________ _________________________________________
<S> <S>
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)
</TABLE>
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 - BASIS OF PRESENTATION
The accompanying condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the nine months ended
September 30, 1999 are not necessarily indicative of the results that may be
expected for the year ended December 31, 1999. For further information,
refer to the financial statements and footnotes thereto for the year ended
December 31, 1998 included in this amendment to the separate account
registration statement.
NOTE 3 - NET ASSETS
Investments at net asset value less the payable to Golden American Life
Insurance Company for charges and fees at September 30, 1999 consisted of
the following:
<TABLE>
<CAPTION>
Limited
Liquid Maturity Hard All-
Asset Bond Assets Growth
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $420,471 $129,159 $32,533 $56,210
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 13,548 16,003 5,868 15,449
Net unrealized appreciation
(depreciation) of
investments -- 738 2,677 28,373
_____________________________________________________
$434,019 $145,900 $41,078 $100,032
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Real Fully Equity Capital
Estate Managed Income Appreciation
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $44,239 $187,984 $138,612 $185,675
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 26,869 48,993 131,424 81,933
Net unrealized appreciation
(depreciation) of
investments (12,759) 24,432 199 39,271
_____________________________________________________
$58,349 $261,409 $270,235 $306,879
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Rising Emerging Market Value
Dividends Markets Manager Equity
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $569,355 $44,157 $638 $117,980
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 29,680 (16,296) 2,888 16,234
Net unrealized appreciation
(depreciation) of
investments 90,659 (1,896) 3,388 (6,195)
_____________________________________________________
$689,694 $25,965 $6,914 $128,019
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Strategic Small Managed Mid-Cap
Equity Cap Global Growth
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $95,258 $169,894 $77,830 $233,832
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 10,500 17,566 40,110 16,283
Net unrealized appreciation
(depreciation) of
investments 7,443 17,698 11,726 41,826
_____________________________________________________
$113,201 $205,158 $129,666 $291,941
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Capital Total
Growth Research Return Growth
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $300,586 $451,081 $409,797 $553,886
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 7,439 9,166 6,019 24,529
Net unrealized appreciation
(depreciation) of
investments (152) 17,415 (715) 52,934
_____________________________________________________
$307,873 $477,662 $415,101 $631,349
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Global Growth PIMCO
Fixed Developing Oppor- High Yield
Income World tunities Bond
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $22,082 $21,483 $5,864 $128,917
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments (193) 1,657 371 4,357
Net unrealized appreciation
(depreciation) of
investments (333) (700) 122 (4,921)
_____________________________________________________
$21,556 $22,440 $6,357 $128,353
=====================================================
</TABLE>
<TABLE>
<CAPTION>
PIMCO Smith Smith
StocksPLUS Barney Barney
Growth and Appre- High Large Cap
Income ciation Income Value
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $155,576 $833 $653 $770
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 6,280 76 58 41
Net unrealized appreciation
(depreciation) of
investments (1,766) 46 (87) (48)
_____________________________________________________
$160,090 $955 $624 $763
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Smith
Barney Smith
Inter- Barney Inter-
national Money national
Equity Market Equity
Division Division Division Combined
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $368 $116 $103,406 $4,659,245
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments (7) 18 12,948 529,811
Net unrealized appreciation
(depreciation) of
investments 40 -- 3,858 313,273
_____________________________________________________
$401 $134 $120,212 $5,502,329
=====================================================
</TABLE>
NOTE 4 - UNIT VALUES
Accumulation unit value information (which is based on total assets) for
units outstanding by Contract type as of September 30, 1999 were as follows:
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
LIQUID ASSET
Currently payable annuity products:
DVA 80 2,484 $15.61 $39
DVA 100 3,808 15.28 58
Contracts in accumulation period:
DVA 80 480,573 15.61 7,504
DVA 100 1,975,262 15.28 30,187
DVA DIVISION/CONTRACT 100 59,274 14.71 872
DVA Plus - Standard 782,343 14.90 11,653
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 10,366,938 14.66 151,957
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 6,969,910 14.42 100,531
Access - 7% Solution,
Premium Plus - 7% Solution 9,275,343 14.17 131,429
Value 1,296 15.45 20
____________
434,250
LIMITED MATURITY BOND
Currently payable annuity products:
DVA 80 6,084 17.81 109
DVA 100 14,244 17.43 248
Contracts in accumulation period:
DVA 80 55,500 17.81 988
DVA 100 1,655,177 17.43 28,851
DVA DIVISION/CONTRACT 100 18,808 16.78 316
DVA Plus - Standard 310,272 17.00 5,276
DVA Plus - Annual Ratchet & 5.5% Solution,
Access- Standard, Premium Plus - Standard,
ES II 3,194,141 16.73 53,447
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 1,552,715 16.47 25,566
Access - 7% Solution,
Premium Plus - 7% Solution 1,921,743 16.18 31,086
Value 720 17.64 13
____________
145,900
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
HARD ASSETS
Currently payable annuity products:
DVA 80 71 $18.44 $1
DVA 100 7,147 18.05 129
Contracts in accumulation period:
DVA 80 51,074 18.44 942
DVA 100 525,251 18.05 9,481
DVA DIVISION/CONTRACT 100 22,713 17.38 395
DVA Plus - Standard 108,635 17.59 1,911
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 499,870 17.31 8,654
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 643,959 17.04 10,970
Access - 7% Solution,
Premium Plus - 7% Solution 512,114 16.74 8,571
Value 368 18.25 7
____________
41,061
ALL-GROWTH
Currently payable annuity products:
DVA 100 10,400 21.25 221
Contracts in accumulation period:
DVA 80 32,946 21.72 716
DVA 100 1,817,288 21.25 38,626
DVA DIVISION/CONTRACT 100 20,550 20.46 421
DVA Plus - Standard 185,822 20.72 3,850
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 713,050 20.39 14,536
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 1,460,549 20.06 29,298
Access - 7% Solution,
Premium Plus - 7% Solution 626,209 19.71 12,341
____________
100,009
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
REAL ESTATE
Currently payable annuity products:
DVA 80 353 $21.96 $8
DVA 100 7,069 21.49 152
Contracts in accumulation period:
DVA 80 22,665 21.96 497
DVA 100 800,668 21.49 17,206
DVA DIVISION/CONTRACT 100 8,108 20.69 168
DVA Plus - Standard 148,548 20.95 3,111
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 510,629 20.61 10,525
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 795,034 20.28 16,125
Access - 7% Solution,
Premium Plus - 7% Solution 528,500 19.93 10,531
____________
58,323
FULLY MANAGED
Currently payable annuity products:
DVA 80 1,073 23.34 25
DVA 100 46,446 22.84 1,061
Contracts in accumulation period:
DVA 80 58,820 23.34 1,373
DVA 100 3,075,079 22.84 70,232
DVA DIVISION/CONTRACT 100 33,047 21.99 727
DVA Plus - Standard 532,576 22.26 11,855
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 2,243,995 21.91 49,156
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 3,157,986 21.56 68,071
Access - 7% Solution,
Premium Plus - 7% Solution 2,781,025 21.18 58,893
Value 398 23.09 9
____________
261,402
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
EQUITY INCOME
Currently payable annuity products:
DVA 80 11,017 $22.80 $250
DVA 100 67,950 22.31 1,515
Contracts in accumulation period:
DVA 80 241,877 22.80 5,514
DVA 100 5,734,857 22.31 127,950
DVA DIVISION/CONTRACT 100 57,610 21.48 1,237
DVA Plus - Standard 383,234 21.75 8,333
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 1,647,882 21.40 35,263
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 2,427,728 21.06 51,120
Access - 7% Solution,
Premium Plus - 7% Solution 1,885,767 20.69 39,011
Value 2,083 22.55 47
____________
270,240
CAPITAL APPRECIATION
Currently payable annuity products:
DVA 100 32,576 26.46 862
Contracts in accumulation period:
DVA 80 54,927 26.86 1,475
DVA 100 3,447,230 26.46 91,223
DVA DIVISION/CONTRACT 100 36,489 25.78 941
DVA Plus - Standard 433,138 26.00 11,264
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 1,990,268 25.72 51,185
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 3,312,127 25.43 84,235
Access - 7% Solution,
Premium Plus - 7% Solution 2,611,894 25.11 65,585
Value 3,669 26.66 98
____________
306,868
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
RISING DIVIDENDS
Currently payable annuity products:
DVA 80 2,864 $24.40 $70
DVA 100 11,272 24.11 271
Contracts in accumulation period:
DVA 80 65,206 24.40 1,591
DVA 100 3,559,543 24.11 85,806
DVA DIVISION/CONTRACT 100 78,539 23.60 1,853
DVA Plus - Standard 1,247,307 23.77 29,653
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 6,834,082 23.56 161,024
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 9,513,935 23.35 222,164
Access - 7% Solution,
Premium Plus - 7% Solution 8,098,168 23.11 187,116
Value 4,492 24.25 109
____________
689,657
EMERGING MARKETS
Currently payable annuity products:
DVA 100 22,610 8.64 195
Contracts in accumulation period:
DVA 80 66,076 8.75 578
DVA 100 1,252,234 8.64 10,825
DVA DIVISION/CONTRACT 100 19,649 8.46 167
DVA Plus - Standard 273,503 8.53 2,332
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 299,951 8.45 2,535
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 1,070,965 8.37 8,968
Access - 7% Solution,
Premium Plus - 7% Solution 40,937 8.29 339
____________
25,939
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
MARKET MANAGER
Contracts in accumulation period:
DVA 100 296,162 $23.97 $7,099
____________
7,099
VALUE EQUITY
Currently payable annuity products:
DVA 80 367 18.11 7
DVA 100 8,847 17.94 159
Contracts in accumulation period:
DVA 80 18,778 18.11 340
DVA 100 742,247 17.94 13,315
DVA DIVISION/CONTRACT 100 14,270 17.64 252
DVA Plus - Standard 435,601 17.75 7,731
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 1,694,917 17.62 29,871
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 2,677,427 17.50 46,855
Access - 7% Solution,
Premium Plus - 7% Solution 1,698,775 17.34 29,464
Value 1,634 18.02 29
____________
128,023
STRATEGIC EQUITY
Currently payable annuity products:
DVA 100 26,685 16.04 428
Contracts in accumulation period:
DVA 80 18,291 16.17 296
DVA 100 387,147 16.04 6,211
DVA DIVISION/CONTRACT 100 7,160 15.82 113
DVA Plus - Standard 433,546 15.90 6,893
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 1,786,161 15.80 28,229
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 2,282,316 15.71 35,857
Access - 7% Solution,
Premium Plus - 7% Solution 2,254,744 15.59 35,162
Value 767 16.11 12
____________
113,201
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
SMALL CAP
Currently payable annuity products:
DVA 100 4,783 $17.36 $83
Contracts in accumulation period:
DVA 80 19,937 17.50 349
DVA 100 524,063 17.36 9,100
DVA DIVISION/CONTRACT 100 15,193 17.14 260
DVA Plus - Standard 448,759 17.20 7,719
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 4,287,381 17.10 73,332
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 3,944,346 17.01 67,081
Access - 7% Solution,
Premium Plus - 7% Solution 2,784,712 16.91 47,093
Value 8,547 17.43 149
____________
205,166
MANAGED GLOBAL
Currently payable annuity products:
DVA 100 14,368 16.76 241
Contracts in accumulation period:
DVA 80 29,959 16.99 509
DVA 100 2,980,836 16.76 49,947
DVA DIVISION/CONTRACT 100 39,282 16.36 643
DVA Plus - Standard 614,599 16.46 10,113
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 783,946 16.29 12,767
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 3,315,995 16.12 53,441
Access - 7% Solution,
Premium Plus - 7% Solution 124,499 15.92 1,982
____________
129,643
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
MID-CAP GROWTH
Contracts in accumulation period:
DVA 80 24,541 $29.03 $712
DVA 100 283,261 28.74 8,140
DVA DIVISION/CONTRACT 100 10,366 28.23 293
DVA Plus - Standard 255,815 28.38 7,260
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 3,508,143 28.13 98,669
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 2,932,667 27.95 81,975
Granite PrimElite - Standard 3,805 28.38 108
Granite PrimElite - Annual Ratchet 24,221 28.13 681
Access - 7% Solution,
Premium Plus - 7% Solution 3,384,554 27.74 93,891
Value 6,687 28.88 193
____________
291,922
CAPITAL GROWTH
Contracts in accumulation period:
DVA 80 4,318 17.26 75
DVA 100 435,503 17.14 7,462
DVA DIVISION/CONTRACT 100 14,456 16.92 245
DVA Plus - Standard 620,752 16.99 10,544
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 5,246,868 16.90 88,656
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 5,579,453 16.81 93,767
Access - 7% Solution,
Premium Plus - 7% Solution 6,406,836 16.72 107,101
Value 1,461 17.20 25
____________
307,875
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
RESEARCH
Contracts in accumulation period:
DVA 80 6,657 $23.82 $159
DVA 100 454,552 23.58 10,717
DVA DIVISION/CONTRACT 100 17,333 23.16 402
DVA Plus - Standard 563,325 23.28 13,117
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 5,920,313 23.12 136,871
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 6,655,121 22.93 152,631
Granite PrimElite - Standard 2,481 23.28 58
Granite PrimElite - Annual Ratchet 39,213 23.12 906
Access - 7% Solution,
Premium Plus - 7% Solution 7,144,676 22.76 162,621
Value 6,536 23.70 155
____________
477,637
TOTAL RETURN
Contracts in accumulation period:
DVA 80 9,144 18.17 166
DVA 100 419,948 17.98 7,552
DVA DIVISION/CONTRACT 100 4,918 17.67 87
DVA Plus - Standard 805,233 17.76 14,302
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 7,686,511 17.63 135,529
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 6,534,820 17.49 114,321
Granite PrimElite - Standard 5,973 17.76 106
Granite PrimElite - Annual Ratchet 34,842 17.63 614
Access - 7% Solution,
Premium Plus - 7% Solution 8,200,030 17.36 142,368
Value 2,841 18.08 51
____________
415,096
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
GROWTH
Contracts in accumulation period:
DVA 80 53,970 $20.76 $1,120
DVA 100 702,103 20.61 14,472
DVA DIVISION/CONTRACT 100 27,280 20.36 555
DVA Plus - Standard 602,631 20.43 12,313
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 10,757,752 20.33 218,657
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 8,121,303 20.22 164,177
Access - 7% Solution,
Premium Plus - 7% Solution 10,929,111 20.11 219,765
Value 14,091 20.69 291
____________
631,350
GLOBAL FIXED INCOME
Contracts in accumulation period:
DVA 100 19,437 12.36 240
DVA DIVISION/CONTRACT 100 330 12.14 4
DVA Plus - Standard 21,496 12.21 262
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 910,594 12.12 11,033
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 344,748 12.02 4,145
Access - 7% Solution,
Premium Plus - 7% Solution 492,124 11.93 5,872
____________
21,556
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
DEVELOPING WORLD
Contracts in accumulation period:
DVA 80 513 $8.95 $5
DVA 100 18,896 8.92 168
DVA DIVISION/CONTRACT 100 683 8.87 6
DVA Plus - Standard 10,154 8.88 90
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 1,402,520 8.86 12,426
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 438,213 8.84 3,873
Access - 7% Solution,
Premium Plus - 7% Solution 664,597 8.82 5,860
Value 1,342 8.93 12
____________
22,440
GROWTH OPPORTUNITIES
Contracts in accumulation period:
DVA 80 423 10.45 4
DVA 100 12,750 10.42 133
DVA Plus - Standard 9,752 10.37 101
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 228,188 10.35 2,362
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 156,870 10.32 1,620
Access - 7% Solution,
Premium Plus - 7% Solution 207,530 10.30 2,137
____________
6,357
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
PIMCO HIGH YIELD BOND
Contracts in accumulation period:
DVA 80 1,150 $10.17 $12
DVA 100 181,673 10.14 1,843
DVA DIVISION/CONTRACT 100 951 10.10 10
DVA Plus - Standard 339,021 10.11 3,426
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 4,412,449 10.09 44,502
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 2,715,099 10.06 27,324
Access - 7% Solution,
Premium Plus - 7% Solution 5,101,916 10.04 51,234
____________
128,351
PIMCO STOCKSPLUS GROWTH AND INCOME
Contracts in accumulation period:
DVA 80 1,606 11.65 19
DVA 100 110,890 11.61 1,288
DVA Plus - Standard 255,112 11.57 2,952
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 4,269,129 11.55 49,293
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 3,550,063 11.52 40,902
Access - 7% Solution,
Premium Plus - 7% Solution 5,708,728 11.50 65,632
Value 879 11.63 10
____________
160,096
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
_______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
APPRECIATION
Contracts in accumulation period:
Granite PrimElite - Standard 1,258 $17.03 $21
Granite PrimElite - Annual Ratchet 55,133 16.94 934
____________
955
SMITH BARNEY HIGH INCOME
Contracts in accumulation period:
Granite PrimElite - Standard 7,534 13.48 101
Granite PrimElite - Annual Ratchet 39,047 13.39 523
____________
624
SMITH BARNEY LARGE CAP VALUE
Contracts in accumulation period:
Granite PrimElite - Standard 5,217 18.72 98
Granite PrimElite - Annual Ratchet 35,761 18.59 665
____________
763
SMITH BARNEY INTERNATIONAL EQUITY
Contracts in accumulation period:
Granite PrimElite - Standard 2,648 16.18 43
Granite PrimElite - Annual Ratchet 22,244 16.07 358
____________
401
SMITH BARNEY MONEY MARKET
Contracts in accumulation period:
Granite PrimElite - Standard 1,919 11.71 23
Granite PrimElite - Annual Ratchet 9,581 11.63 111
____________
134
INTERNATIONAL EQUITY
Contracts in accumulation period:
DVA Plus - Annual Ratchet & 5.5% Solution,
Access - Standard, Premium Plus - Standard,
ES II 5,182,818 11.83 61,312
DVA Plus - 7% Solution,
Access - Annual Ratchet & 5.5% Solution,
Premium Plus - Annual Ratchet &
5.5% Solution 1,488,334 11.85 17,636
Access - 7% Solution,
Premium Plus - 7% Solution 3,500,208 11.79 41,256
Value 1,484 12.13 17
____________
120,221
_____________ ____________
COMBINED 298,616,800 $5,502,559
============= ============
</TABLE>
<PAGE>
FINANCIAL STATEMENTS
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
YEARS ENDED DECEMBER 31, 1998 AND 1997
WITH REPORT OF INDEPENDENT AUDITORS
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997
TABLE OF CONTENTS
Report of Independent Auditors
Audited Financial Statements
Statement of Assets and Liability
Statement of Operations
Statements of Changes in Net Assets
Notes to Financial Statements
Report of Independent Auditors
The Board of Directors
Golden American Life Insurance Company
We have audited the accompanying statement of assets and liability of Golden
American Life Insurance Company Separate Account B as of December 31, 1998,
and the related statements of operations for the year then ended and the
changes in net assets for each of the two years in the period then ended.
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 generally accepted auditing
standards. 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,
1998, by correspondence with the custodian. 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, 1998, and the results of
its operations for the year then ended and the changes in its net assets for
each of the two years in the period then ended in conformity with generally
accepted accounting principles.
/S/ Ernst & Young LLP
Des Moines, Iowa
February 25, 1999
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF ASSETS AND LIABILITY
DECEMBER 31, 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COMBINED
____________
<S> <C>
ASSETS
Investments at net asset value:
The GCG Trust:
Liquid Asset Series,
175,698,298 shares (cost - $175,698) $175,698
Limited Maturity Bond Series,
9,632,216 shares (cost - $103,588) 102,872
Hard Assets Series,
3,095,761 shares (cost - $44,073) 29,719
All-Growth Series,
5,460,140 shares (cost - $72,614) 81,847
Real Estate Series,
5,082,757 shares (cost - $77,307) 69,024
Fully Managed Series,
14,869,764 shares (cost - $216,245) 226,467
Multiple Allocation Series,
21,629,600 shares (cost - $268,930) 274,047
Capital Appreciation Series,
14,189,481 shares (cost - $221,707) 256,687
Rising Dividends Series,
22,754,116 shares (cost - $421,987) 500,818
Emerging Markets Series,
3,333,290 shares (cost - $31,776) 22,267
Market Manager Series,
414,851 shares (cost - $4,663) 8,068
Value Equity Series,
7,950,210 shares (cost - $122,857) 126,249
Strategic Equity Series,
5,567,699 shares (cost - $69,933) 71,377
Small Cap Series,
7,754,062 shares (cost - $103,129) 124,298
Managed Global Series,
9,213,401 shares (cost - $110,591) 130,738
Mid-Cap Growth Series,
6,458,180 shares (cost - $109,532) 116,893
Growth & Income Series,
11,461,829 shares (cost - $170,105) 179,033
Research Series,
13,965,668 shares (cost - $266,377) 283,643
Total Return Series,
14,425,794 shares (cost - $226,488) 227,928
Value + Growth Series,
9,163,078 shares (cost - $129,140) 143,127
Global Fixed Income Series,
853,224 shares (cost - $9,541) 9,531
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF ASSETS AND LIABILITY
DECEMBER 31, 1998
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COMBINED
____________
<S> <C>
ASSETS - CONTINUED
Investments at net asset value:
The GCG Trust:
Developing World Series,
612,452 shares (cost - $4,365) $4,514
Growth Opportunities Series,
425,552 shares (cost - $3,783) 4,132
PIMCO Variable Insurance Trust:
PIMCO High Yield Bond Portfolio,
4,770,792 shares (cost - $46,152) 46,134
PIMCO StocksPLUS Growth and Income Portfolio,
4,119,171 shares (cost - $47,564) 51,819
Greenwich Street Series Fund Inc.:
Appreciation Portfolio,
46,082 shares (cost - $932) 975
Travelers Series Fund Inc.:
Smith Barney High Income Portfolio,
63,707 shares (cost - $870) 807
Smith Barney Large Cap Value Portfolio,
34,717 shares (cost - $692) 702
Smith Barney International Equity Portfolio,
23,707 shares (cost - $333) 326
Smith Barney Money Market Portfolio,
317,907 shares (cost - $318) 318
Warburg Pincus Trust:
International Equity Portfolio,
4,529,941 shares (cost - $48,231) 49,785
____________
TOTAL ASSETS (cost - $3,109,521) 3,319,843
LIABILITY
Payable to Golden American Life Insurance Company
for charges and fees 1,638
____________
TOTAL NET ASSETS $3,318,205
============
NET ASSETS
For variable annuity insurance contracts $3,309,202
Retained in Separate Account B by Golden American
Life Insurance Company 9,003
____________
TOTAL NET ASSETS $3,318,205
============
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Limited
Liquid Maturity Hard
Asset Bond Assets
Division Division Division
______________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $5,783 $3,217 $1,662
Capital gains distributions -- -- 1,065
______________________________
TOTAL INVESTMENT INCOME 5,783 3,217 2,727
Expenses:
Mortality and expense risk and other charges 1,619 939 461
Annual administrative charges 62 41 13
Minimum death benefit guarantee charges 7 1 2
Contingent deferred sales charges 342 65 53
Other contract charges 9 3 2
Amortization of deferred charges related to:
Deferred sales load 615 389 164
Premium taxes 3 6 3
______________________________
TOTAL EXPENSES BEFORE WAIVER 2,657 1,444 698
Fees waived by Golden American Life
Insurance Company 5 9 4
______________________________
NET EXPENSES 2,652 1,435 694
______________________________
NET INVESTMENT INCOME (LOSS) 3,131 1,782 2,033
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments -- 872 (6,941)
Net unrealized appreciation
(depreciation) of investments -- 739 (8,620)
______________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $3,131 $3,393 ($13,528)
==============================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
All- Real Fully
Growth Estate Managed
Division Division Division
______________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- $3,321 $6,674
Capital gains distributions $470 6,244 12,408
______________________________
TOTAL INVESTMENT INCOME 470 9,565 19,082
Expenses:
Mortality and expense risk and other charges 879 964 2,417
Annual administrative charges 41 28 105
Minimum death benefit guarantee charges 1 1 2
Contingent deferred sales charges 46 38 64
Other contract charges 2 1 5
Amortization of deferred charges related to:
Deferred sales load 409 290 866
Premium taxes 7 5 16
______________________________
TOTAL EXPENSES BEFORE WAIVER 1,385 1,327 3,475
Fees waived by Golden American Life
Insurance Company 10 6 19
______________________________
NET EXPENSES 1,375 1,321 3,456
______________________________
NET INVESTMENT INCOME (LOSS) (905) 8,244 15,626
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 330 3,708 1,704
Net unrealized appreciation
(depreciation) of investments 6,240 (24,689) (10,501)
______________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $5,665 ($12,737) $6,829
==============================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Multiple Capital
Alloca- Apprecia- Rising
tion tion Dividends
Division Division Division
______________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $13,875 $3,355 $2,240
Capital gains distributions 14,968 19,519 16,632
______________________________
TOTAL INVESTMENT INCOME 28,843 22,874 18,872
Expenses:
Mortality and expense risk and other charges 2,985 2,656 4,670
Annual administrative charges 144 110 212
Minimum death benefit guarantee charges 10 2 4
Contingent deferred sales charges 89 59 128
Other contract charges 9 9 13
Amortization of deferred charges related to:
Deferred sales load 1,784 1,083 934
Premium taxes 33 25 11
______________________________
TOTAL EXPENSES BEFORE WAIVER 5,054 3,944 5,972
Fees waived by Golden American Life
Insurance Company 26 26 20
______________________________
NET EXPENSES 5,028 3,918 5,952
______________________________
NET INVESTMENT INCOME (LOSS) 23,815 18,956 12,920
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 2,288 6,551 3,842
Net unrealized appreciation
(depreciation) of investments (10,125) (3,987) 17,344
______________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $15,978 $21,520 $34,106
==============================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Emerging Market Value
Markets Manager Equity
Division Division Division
______________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- $129 $2,766
Capital gains distributions -- 214 1,018
______________________________
TOTAL INVESTMENT INCOME -- 343 3,784
Expenses:
Mortality and expense risk and other charges $336 -- 1,442
Annual administrative charges 10 1 57
Minimum death benefit guarantee charges 1 -- 1
Contingent deferred sales charges 16 -- 57
Other contract charges 1 -- 2
Amortization of deferred charges related to:
Deferred sales load 160 43 231
Premium taxes 2 -- 3
______________________________
TOTAL EXPENSES BEFORE WAIVER 526 44 1,793
Fees waived by Golden American Life
Insurance Company 2 -- 3
______________________________
NET EXPENSES 524 44 1,790
______________________________
NET INVESTMENT INCOME (LOSS) (524) 299 1,994
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (3,524) 135 1,237
Net unrealized appreciation
(depreciation) of investments (4,266) 1,090 (4,208)
______________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($8,314) $1,524 ($977)
==============================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Strategic Small Managed
Equity Cap Global
Division Division Division
______________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $1,941 -- $1,806
Capital gains distributions 2,711 -- 3,627
______________________________
TOTAL INVESTMENT INCOME 4,652 -- 5,433
Expenses:
Mortality and expense risk and other charges 851 $1,114 1,445
Annual administrative charges 29 55 59
Minimum death benefit guarantee charges 1 1 1
Contingent deferred sales charges 52 59 50
Other contract charges 1 3 4
Amortization of deferred charges related to:
Deferred sales load 135 112 579
Premium taxes 1 1 8
______________________________
TOTAL EXPENSES BEFORE WAIVER 1,070 1,345 2,146
Fees waived by Golden American Life
Insurance Company 4 2 9
______________________________
NET EXPENSES 1,066 1,343 2,137
______________________________
NET INVESTMENT INCOME (LOSS) 3,586 (1,343) 3,296
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 1,365 2,148 7,634
Net unrealized appreciation
(depreciation) of investments (6,078) 15,952 16,611
______________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($1,127) $16,757 $27,541
==============================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Mid-Cap Growth &
Growth Income Research
Division Division Division
______________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $4,999 $4,745 $12,283
Capital gains distributions -- -- --
______________________________
TOTAL INVESTMENT INCOME 4,999 4,745 12,283
Expenses:
Mortality and expense risk and other charges 880 1,599 1,941
Annual administrative charges 51 88 120
Minimum death benefit guarantee charges 1 -- --
Contingent deferred sales charges 20 62 71
Other contract charges 2 1 4
Amortization of deferred charges related to:
Deferred sales load 55 92 79
Premium taxes -- 2 1
______________________________
TOTAL EXPENSES BEFORE WAIVER 1,009 1,844 2,216
Fees waived by Golden American Life
Insurance Company 1 3 1
______________________________
NET EXPENSES 1,008 1,841 2,215
______________________________
NET INVESTMENT INCOME (LOSS) 3,991 2,904 10,068
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 899 911 972
Net unrealized appreciation
(depreciation) of investments 6,574 7,679 16,878
______________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $11,464 $11,494 $27,918
==============================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Global
Total Value + Fixed
Return Growth Income
Division Division Division
______________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $11,048 $5,950 $237
Capital gains distributions -- -- --
______________________________
TOTAL INVESTMENT INCOME 11,048 5,950 237
Expenses:
Mortality and expense risk and other charges 1,714 1,099 57
Annual administrative charges 98 62 4
Minimum death benefit guarantee charges -- 1 --
Contingent deferred sales charges 62 42 2
Other contract charges 1 1 --
Amortization of deferred charges related to:
Deferred sales load 75 49 --
Premium taxes 1 1 --
______________________________
TOTAL EXPENSES BEFORE WAIVER 1,951 1,255 63
Fees waived by Golden American Life
Insurance Company 2 2 --
______________________________
NET EXPENSES 1,949 1,253 63
______________________________
NET INVESTMENT INCOME (LOSS) 9,099 4,697 174
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 185 (807) 216
Net unrealized appreciation
(depreciation) of investments 1,028 15,417 --
______________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $10,312 $19,307 $390
==============================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
Growth High
Developing Oppor- Yield
World tunities Bond
Division Division Division
(a) (a) (c)
______________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $2 $25 $1,050
Capital gains distributions -- -- --
______________________________
TOTAL INVESTMENT INCOME 2 25 1,050
Expenses:
Mortality and expense risk and other charges 22 31 197
Annual administrative charges 2 1 17
Minimum death benefit guarantee charges -- -- --
Contingent deferred sales charges -- 1 15
Other contract charges -- -- --
Amortization of deferred charges related to:
Deferred sales load -- -- 4
Premium taxes -- -- --
______________________________
TOTAL EXPENSES BEFORE WAIVER 24 33 233
Fees waived by Golden American Life
Insurance Company -- -- --
______________________________
NET EXPENSES 24 33 233
______________________________
NET INVESTMENT INCOME (LOSS) (22) (8) 817
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (266) (235) (318)
Net unrealized appreciation
(depreciation) of investments 149 349 (18)
______________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($139) $106 $481
==============================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
StocksPLUS Smith
Growth Barney
and Appre- High
Income ciation Income
Division Division Division
(b)
______________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $1,005 $8 $37
Capital gains distributions -- 33 8
______________________________
TOTAL INVESTMENT INCOME 1,005 41 45
Expenses:
Mortality and expense risk and other charges 162 10 8
Annual administrative charges 18 1 1
Minimum death benefit guarantee charges -- -- --
Contingent deferred sales charges 9 -- --
Other contract charges -- -- --
Amortization of deferred charges related to:
Deferred sales load 2 -- --
Premium taxes -- -- --
______________________________
TOTAL EXPENSES BEFORE WAIVER 191 11 9
Fees waived by Golden American Life
Insurance Company -- -- --
______________________________
NET EXPENSES 191 11 9
______________________________
NET INVESTMENT INCOME (LOSS) 814 30 36
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (97) 3 8
Net unrealized appreciation
(depreciation) of investments 4,255 52 (66)
______________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $4,972 $85 ($22)
==============================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Smith Barney Smith
Barney Inter- Barney
Large Cap national Money
Value Equity Market
Division Division Division
______________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $6 -- $20
Capital gains distributions 16 -- --
______________________________
TOTAL INVESTMENT INCOME 22 -- 20
Expenses:
Mortality and expense risk and other charges 7 $3 6
Annual administrative charges 1 -- --
Minimum death benefit guarantee charges -- -- --
Contingent deferred sales charges -- -- --
Other contract charges -- -- --
Amortization of deferred charges related to:
Deferred sales load -- -- --
Premium taxes -- -- --
______________________________
TOTAL EXPENSES BEFORE WAIVER 8 3 6
Fees waived by Golden American Life
Insurance Company -- -- --
______________________________
NET EXPENSES 8 3 6
______________________________
NET INVESTMENT INCOME (LOSS) 14 (3) 14
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 2 (1) --
Net unrealized appreciation
(depreciation) of investments 3 (2) --
______________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $19 ($6) $14
==============================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Inter-
national
Equity
Division Combined
____________________
<S> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $251 $88,435
Capital gains distributions -- 78,933
____________________
TOTAL INVESTMENT INCOME 251 167,368
Expenses:
Mortality and expense risk and other charges 398 30,912
Annual administrative charges 20 1,451
Minimum death benefit guarantee charges -- 37
Contingent deferred sales charges 12 1,414
Other contract charges -- 73
Amortization of deferred charges related to:
Deferred sales load -- 8,150
Premium taxes -- 129
____________________
TOTAL EXPENSES BEFORE WAIVER 430 42,166
Fees waived by Golden American Life
Insurance Company -- 154
____________________
NET EXPENSES 430 42,012
____________________
NET INVESTMENT INCOME (LOSS) (179) 125,356
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
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
====================
<FN>
(a) Commencement of operations, March 2, 1998
(b) Commencement of operations, May 8, 1998
(c) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Liquid
Asset
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $37,476
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 970
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
____________
Net increase (decrease) in net assets resulting from operations 970
Changes from principal transactions:
Purchase payments 29,455
Contract distributions and terminations (18,096)
Transfer payments from (to) Fixed Accounts and other Divisions 7,253
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 196
____________
Increase (decrease) in net assets derived from principal
transactions 18,808
____________
Total increase (decrease) 19,778
____________
NET ASSETS AT DECEMBER 31, 1997 57,254
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Liquid
Asset
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $3,131
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
____________
Net increase (decrease) in net assets resulting from operations 3,131
Changes from principal transactions:
Purchase payments 227,924
Contract distributions and terminations (38,803)
Transfer payments from (to) Fixed Accounts and other Divisions (73,759)
Addition to assets retained in the Account
by Golden American Life Insurance Company 12
____________
Increase (decrease) in net assets derived from principal
transactions 115,374
____________
Total increase (decrease) 118,505
____________
NET ASSETS AT DECEMBER 31, 1998 $175,759
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Limited
Maturity
Bond
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $54,334
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 2,703
Net realized gain (loss) on investments 139
Net unrealized appreciation (depreciation) of investments (690)
____________
Net increase (decrease) in net assets resulting from operations 2,152
Changes from principal transactions:
Purchase payments 5,847
Contract distributions and terminations (8,648)
Transfer payments from (to) Fixed Accounts and other Divisions (1,150)
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company (68)
____________
Increase (decrease) in net assets derived from principal
transactions (4,019)
____________
Total increase (decrease) (1,867)
____________
NET ASSETS AT DECEMBER 31, 1997 52,467
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Limited
Maturity
Bond
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $1,782
Net realized gain (loss) on investments 872
Net unrealized appreciation (depreciation) of investments 739
____________
Net increase (decrease) in net assets resulting from operations 3,393
Changes from principal transactions:
Purchase payments 42,180
Contract distributions and terminations (9,265)
Transfer payments from (to) Fixed Accounts and other Divisions 14,051
Addition to assets retained in the Account
by Golden American Life Insurance Company 6
____________
Increase (decrease) in net assets derived from principal
transactions 46,972
____________
Total increase (decrease) 50,365
____________
NET ASSETS AT DECEMBER 31, 1998 $102,832
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Hard
Assets
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $43,301
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 8,570
Net realized gain (loss) on investments 3,106
Net unrealized appreciation (depreciation) of investments (9,738)
____________
Net increase (decrease) in net assets resulting from operations 1,938
Changes from principal transactions:
Purchase payments 6,936
Contract distributions and terminations (5,699)
Transfer payments from (to) Fixed Accounts and other Divisions (886)
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company (87)
____________
Increase (decrease) in net assets derived from principal
transactions 264
____________
Total increase (decrease) 2,202
____________
NET ASSETS AT DECEMBER 31, 1997 45,503
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Hard
Assets
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $2,033
Net realized gain (loss) on investments (6,941)
Net unrealized appreciation (depreciation) of investments (8,620)
____________
Net increase (decrease) in net assets resulting from operations (13,528)
Changes from principal transactions:
Purchase payments 7,508
Contract distributions and terminations (4,524)
Transfer payments from (to) Fixed Accounts and other Divisions (5,266)
Addition to assets retained in the Account
by Golden American Life Insurance Company 10
____________
Increase (decrease) in net assets derived from principal
transactions (2,272)
____________
Total increase (decrease) (15,800)
____________
NET ASSETS AT DECEMBER 31, 1998 $29,703
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
All-Growth
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $76,842
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 490
Net realized gain (loss) on investments 556
Net unrealized appreciation (depreciation) of investments 1,550
____________
Net increase (decrease) in net assets resulting from operations 2,596
Changes from principal transactions:
Purchase payments 7,441
Contract distributions and terminations (10,832)
Transfer payments from (to) Fixed Accounts and other Divisions (4,053)
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company (256)
____________
Increase (decrease) in net assets derived from principal
transactions (7,700)
____________
Total increase (decrease) (5,104)
____________
NET ASSETS AT DECEMBER 31, 1997 71,738
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
All-Growth
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($905)
Net realized gain (loss) on investments 330
Net unrealized appreciation (depreciation) of investments 6,240
____________
Net increase (decrease) in net assets resulting from operations 5,665
Changes from principal transactions:
Purchase payments 15,762
Contract distributions and terminations (9,206)
Transfer payments from (to) Fixed Accounts and other Divisions (2,159)
Addition to assets retained in the Account
by Golden American Life Insurance Company 7
____________
Increase (decrease) in net assets derived from principal
transactions 4,404
____________
Total increase (decrease) 10,069
____________
NET ASSETS AT DECEMBER 31, 1998 $81,807
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Real
Estate
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $50,681
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 3,901
Net realized gain (loss) on investments 2,621
Net unrealized appreciation (depreciation) of investments 5,391
____________
Net increase (decrease) in net assets resulting from operations 11,913
Changes from principal transactions:
Purchase payments 14,095
Contract distributions and terminations (5,798)
Transfer payments from (to) Fixed Accounts and other Divisions 3,766
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 43
____________
Increase (decrease) in net assets derived from principal
transactions 12,106
____________
Total increase (decrease) 24,019
____________
NET ASSETS AT DECEMBER 31, 1997 74,700
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Real
Estate
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $8,244
Net realized gain (loss) on investments 3,708
Net unrealized appreciation (depreciation) of investments (24,689)
____________
Net increase (decrease) in net assets resulting from operations (12,737)
Changes from principal transactions:
Purchase payments 24,639
Contract distributions and terminations (6,988)
Transfer payments from (to) Fixed Accounts and other Divisions (10,631)
Addition to assets retained in the Account
by Golden American Life Insurance Company 12
____________
Increase (decrease) in net assets derived from principal
transactions 7,032
____________
Total increase (decrease) (5,705)
____________
NET ASSETS AT DECEMBER 31, 1998 $68,995
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Fully
Managed
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $134,431
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 9,632
Net realized gain (loss) on investments 2,407
Net unrealized appreciation (depreciation) of investments 5,898
____________
Net increase (decrease) in net assets resulting from operations 17,937
Changes from principal transactions:
Purchase payments 19,633
Contract distributions and terminations (17,687)
Transfer payments from (to) Fixed Accounts and other Divisions 4,389
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company (53)
____________
Increase (decrease) in net assets derived from principal
transactions 6,282
____________
Total increase (decrease) 24,219
____________
NET ASSETS AT DECEMBER 31, 1997 158,650
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Fully
Managed
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $15,626
Net realized gain (loss) on investments 1,704
Net unrealized appreciation (depreciation) of investments (10,501)
____________
Net increase (decrease) in net assets resulting from operations 6,829
Changes from principal transactions:
Purchase payments 74,467
Contract distributions and terminations (19,367)
Transfer payments from (to) Fixed Accounts and other Divisions 5,756
Addition to assets retained in the Account
by Golden American Life Insurance Company 31
____________
Increase (decrease) in net assets derived from principal
transactions 60,887
____________
Total increase (decrease) 67,716
____________
NET ASSETS AT DECEMBER 31, 1998 $226,366
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Multiple
Allocation
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $270,427
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 21,419
Net realized gain (loss) on investments 5,773
Net unrealized appreciation (depreciation) of investments 9,866
____________
Net increase (decrease) in net assets resulting from operations 37,058
Changes from principal transactions:
Purchase payments 9,404
Contract distributions and terminations (45,162)
Transfer payments from (to) Fixed Accounts and other Divisions (9,649)
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company (209)
____________
Increase (decrease) in net assets derived from principal
transactions (45,616)
____________
Total increase (decrease) (8,558)
____________
NET ASSETS AT DECEMBER 31, 1997 261,869
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Multiple
Allocation
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $23,815
Net realized gain (loss) on investments 2,288
Net unrealized appreciation (depreciation) of investments (10,125)
____________
Net increase (decrease) in net assets resulting from operations 15,978
Changes from principal transactions:
Purchase payments 34,793
Contract distributions and terminations (39,339)
Transfer payments from (to) Fixed Accounts and other Divisions 581
Addition to assets retained in the Account
by Golden American Life Insurance Company 28
____________
Increase (decrease) in net assets derived from principal
transactions (3,937)
____________
Total increase (decrease) 12,041
____________
NET ASSETS AT DECEMBER 31, 1998 $273,910
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Capital
Appreciation
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $145,989
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 13,819
Net realized gain (loss) on investments 8,242
Net unrealized appreciation (depreciation) of investments 16,323
____________
Net increase (decrease) in net assets resulting from operations 38,384
Changes from principal transactions:
Purchase payments 17,440
Contract distributions and terminations (20,143)
Transfer payments from (to) Fixed Accounts and other Divisions 5,915
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 232
____________
Increase (decrease) in net assets derived from principal
transactions 3,444
____________
Total increase (decrease) 41,828
____________
NET ASSETS AT DECEMBER 31, 1997 187,817
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Capital
Appreciation
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $18,956
Net realized gain (loss) on investments 6,551
Net unrealized appreciation (depreciation) of investments (3,987)
____________
Net increase (decrease) in net assets resulting from operations 21,520
Changes from principal transactions:
Purchase payments 63,892
Contract distributions and terminations (26,711)
Transfer payments from (to) Fixed Accounts and other Divisions 10,035
Addition to assets retained in the Account
by Golden American Life Insurance Company 25
____________
Increase (decrease) in net assets derived from principal
transactions 47,241
____________
Total increase (decrease) 68,761
____________
NET ASSETS AT DECEMBER 31, 1998 $256,578
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Rising
Dividends
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $123,573
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 1,726
Net realized gain (loss) on investments 3,602
Net unrealized appreciation (depreciation) of investments 33,738
____________
Net increase (decrease) in net assets resulting from operations 39,066
Changes from principal transactions:
Purchase payments 45,995
Contract distributions and terminations (18,620)
Transfer payments from (to) Fixed Accounts and other Divisions 25,458
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 471
____________
Increase (decrease) in net assets derived from principal
transactions 53,304
____________
Total increase (decrease) 92,370
____________
NET ASSETS AT DECEMBER 31, 1997 215,943
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Rising
Dividends
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $12,920
Net realized gain (loss) on investments 3,842
Net unrealized appreciation (depreciation) of investments 17,344
____________
Net increase (decrease) in net assets resulting from operations 34,106
Changes from principal transactions:
Purchase payments 216,682
Contract distributions and terminations (26,449)
Transfer payments from (to) Fixed Accounts and other Divisions 60,274
Addition to assets retained in the Account
by Golden American Life Insurance Company 60
____________
Increase (decrease) in net assets derived from principal
transactions 250,567
____________
Total increase (decrease) 284,673
____________
NET ASSETS AT DECEMBER 31, 1998 $500,616
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Emerging
Markets
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $37,153
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) (826)
Net realized gain (loss) on investments (1,134)
Net unrealized appreciation (depreciation) of investments (2,698)
____________
Net increase (decrease) in net assets resulting from operations (4,658)
Changes from principal transactions:
Purchase payments 5,427
Contract distributions and terminations (5,304)
Transfer payments from (to) Fixed Accounts and other Divisions 2,002
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company (119)
____________
Increase (decrease) in net assets derived from principal
transactions 2,006
____________
Total increase (decrease) (2,652)
____________
NET ASSETS AT DECEMBER 31, 1997 34,501
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Emerging
Markets
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($524)
Net realized gain (loss) on investments (3,524)
Net unrealized appreciation (depreciation) of investments (4,266)
____________
Net increase (decrease) in net assets resulting from operations (8,314)
Changes from principal transactions:
Purchase payments 2,520
Contract distributions and terminations (2,973)
Transfer payments from (to) Fixed Accounts and other Divisions (3,483)
Addition to assets retained in the Account
by Golden American Life Insurance Company 3
____________
Increase (decrease) in net assets derived from principal
transactions (3,933)
____________
Total increase (decrease) (12,247)
____________
NET ASSETS AT DECEMBER 31, 1998 $22,254
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Market
Manager
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $5,479
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 424
Net realized gain (loss) on investments 238
Net unrealized appreciation (depreciation) of investments 1,127
____________
Net increase (decrease) in net assets resulting from operations 1,789
Changes from principal transactions:
Purchase payments (59)
Contract distributions and terminations (189)
Transfer payments from (to) Fixed Accounts and other Divisions (303)
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company (1)
____________
Increase (decrease) in net assets derived from principal
transactions (552)
____________
Total increase (decrease) 1,237
____________
NET ASSETS AT DECEMBER 31, 1997 6,716
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Market
Manager
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $299
Net realized gain (loss) on investments 135
Net unrealized appreciation (depreciation) of investments 1,090
____________
Net increase (decrease) in net assets resulting from operations 1,524
Changes from principal transactions:
Purchase payments (36)
Contract distributions and terminations (188)
Transfer payments from (to) Fixed Accounts and other Divisions (309)
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions (533)
____________
Total increase (decrease) 991
____________
NET ASSETS AT DECEMBER 31, 1998 $7,707
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Value
Equity
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $42,861
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 5,696
Net realized gain (loss) on investments 898
Net unrealized appreciation (depreciation) of investments 5,129
____________
Net increase (decrease) in net assets resulting from operations 11,723
Changes from principal transactions:
Purchase payments 16,881
Contract distributions and terminations (5,181)
Transfer payments from (to) Fixed Accounts and other Divisions 10,573
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 168
____________
Increase (decrease) in net assets derived from principal
transactions 22,441
____________
Total increase (decrease) 34,164
____________
NET ASSETS AT DECEMBER 31, 1997 77,025
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Value
Equity
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $1,994
Net realized gain (loss) on investments 1,237
Net unrealized appreciation (depreciation) of investments (4,208)
____________
Net increase (decrease) in net assets resulting from operations (977)
Changes from principal transactions:
Purchase payments 51,484
Contract distributions and terminations (7,869)
Transfer payments from (to) Fixed Accounts and other Divisions 6,521
Addition to assets retained in the Account
by Golden American Life Insurance Company 10
____________
Increase (decrease) in net assets derived from principal
transactions 50,146
____________
Total increase (decrease) 49,169
____________
NET ASSETS AT DECEMBER 31, 1998 $126,194
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Strategic
Equity
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $29,858
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 1,752
Net realized gain (loss) on investments 1,180
Net unrealized appreciation (depreciation) of investments 4,847
____________
Net increase (decrease) in net assets resulting from operations 7,779
Changes from principal transactions:
Purchase payments 9,853
Contract distributions and terminations (4,107)
Transfer payments from (to) Fixed Accounts and other Divisions 6,920
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 134
____________
Increase (decrease) in net assets derived from principal
transactions 12,800
____________
Total increase (decrease) 20,579
____________
NET ASSETS AT DECEMBER 31, 1997 50,437
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Strategic
Equity
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $3,586
Net realized gain (loss) on investments 1,365
Net unrealized appreciation (depreciation) of investments (6,078)
____________
Net increase (decrease) in net assets resulting from operations (1,127)
Changes from principal transactions:
Purchase payments 25,972
Contract distributions and terminations (5,201)
Transfer payments from (to) Fixed Accounts and other Divisions 1,265
Addition to assets retained in the Account
by Golden American Life Insurance Company 2
____________
Increase (decrease) in net assets derived from principal
transactions 22,038
____________
Total increase (decrease) 20,911
____________
NET ASSETS AT DECEMBER 31, 1998 $71,348
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Small Cap
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $33,056
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) (754)
Net realized gain (loss) on investments (174)
Net unrealized appreciation (depreciation) of investments 4,543
____________
Net increase (decrease) in net assets resulting from operations 3,615
Changes from principal transactions:
Purchase payments 13,691
Contract distributions and terminations (3,143)
Transfer payments from (to) Fixed Accounts and other Divisions 5,487
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 19
____________
Increase (decrease) in net assets derived from principal
transactions 16,054
____________
Total increase (decrease) 19,669
____________
NET ASSETS AT DECEMBER 31, 1997 52,725
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Small Cap
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($1,343)
Net realized gain (loss) on investments 2,148
Net unrealized appreciation (depreciation) of investments 15,952
____________
Net increase (decrease) in net assets resulting from operations 16,757
Changes from principal transactions:
Purchase payments 44,851
Contract distributions and terminations (6,104)
Transfer payments from (to) Fixed Accounts and other Divisions 16,010
Addition to assets retained in the Account
by Golden American Life Insurance Company 6
____________
Increase (decrease) in net assets derived from principal
transactions 54,763
____________
Total increase (decrease) 71,520
____________
NET ASSETS AT DECEMBER 31, 1998 $124,245
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Managed
Global
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $86,266
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 6,640
Net realized gain (loss) on investments 2,841
Net unrealized appreciation (depreciation) of investments (883)
____________
Net increase (decrease) in net assets resulting from operations 8,598
Changes from principal transactions:
Purchase payments 17,472
Contract distributions and terminations (12,081)
Transfer payments from (to) Fixed Accounts and other Divisions 4,438
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company (12)
____________
Increase (decrease) in net assets derived from principal
transactions 9,817
____________
Total increase (decrease) 18,415
____________
NET ASSETS AT DECEMBER 31, 1997 104,681
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Managed
Global
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $3,296
Net realized gain (loss) on investments 7,634
Net unrealized appreciation (depreciation) of investments 16,611
____________
Net increase (decrease) in net assets resulting from operations 27,541
Changes from principal transactions:
Purchase payments 11,958
Contract distributions and terminations (13,329)
Transfer payments from (to) Fixed Accounts and other Divisions (176)
Addition to assets retained in the Account
by Golden American Life Insurance Company 9
____________
Increase (decrease) in net assets derived from principal
transactions (1,538)
____________
Total increase (decrease) 26,003
____________
NET ASSETS AT DECEMBER 31, 1998 $130,684
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Mid-Cap
Growth
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $4,571
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 612
Net realized gain (loss) on investments 57
Net unrealized appreciation (depreciation) of investments 912
____________
Net increase (decrease) in net assets resulting from operations 1,581
Changes from principal transactions:
Purchase payments 8,980
Contract distributions and terminations (580)
Transfer payments from (to) Fixed Accounts and other Divisions 5,763
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 46
____________
Increase (decrease) in net assets derived from principal
transactions 14,209
____________
Total increase (decrease) 15,790
____________
NET ASSETS AT DECEMBER 31, 1997 20,361
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Mid-Cap
Growth
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $3,991
Net realized gain (loss) on investments 899
Net unrealized appreciation (depreciation) of investments 6,574
____________
Net increase (decrease) in net assets resulting from operations 11,464
Changes from principal transactions:
Purchase payments 66,121
Contract distributions and terminations (3,065)
Transfer payments from (to) Fixed Accounts and other Divisions 21,962
Addition to assets retained in the Account
by Golden American Life Insurance Company 1
____________
Increase (decrease) in net assets derived from principal
transactions 85,019
____________
Total increase (decrease) 96,483
____________
NET ASSETS AT DECEMBER 31, 1998 $116,844
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Growth &
Income
Division
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $8,275
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 3,057
Net realized gain (loss) on investments 177
Net unrealized appreciation (depreciation) of investments 980
____________
Net increase (decrease) in net assets resulting from operations 4,214
Changes from principal transactions:
Purchase payments 22,706
Contract distributions and terminations (1,861)
Transfer payments from (to) Fixed Accounts and other Divisions 11,481
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 107
____________
Increase (decrease) in net assets derived from principal
transactions 32,433
____________
Total increase (decrease) 36,647
____________
NET ASSETS AT DECEMBER 31, 1997 44,922
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Growth &
Income
Division
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $2,904
Net realized gain (loss) on investments 911
Net unrealized appreciation (depreciation) of investments 7,679
____________
Net increase (decrease) in net assets resulting from operations 11,494
Changes from principal transactions:
Purchase payments 105,760
Contract distributions and terminations (7,503)
Transfer payments from (to) Fixed Accounts and other Divisions 24,270
Addition to assets retained in the Account
by Golden American Life Insurance Company 7
____________
Increase (decrease) in net assets derived from principal
transactions 122,534
____________
Total increase (decrease) 134,028
____________
NET ASSETS AT DECEMBER 31, 1998 $178,950
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Research
Division
(b)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $801
Net realized gain (loss) on investments 19
Net unrealized appreciation (depreciation) of investments 388
____________
Net increase (decrease) in net assets resulting from operations 1,208
Changes from principal transactions:
Purchase payments 19,514
Contract distributions and terminations (534)
Transfer payments from (to) Fixed Accounts and other Divisions 14,044
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 170
____________
Increase (decrease) in net assets derived from principal
transactions 33,194
____________
Total increase (decrease) 34,402
____________
NET ASSETS AT DECEMBER 31, 1997 34,402
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Research
Division
(b)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $10,068
Net realized gain (loss) on investments 972
Net unrealized appreciation (depreciation) of investments 16,878
____________
Net increase (decrease) in net assets resulting from operations 27,918
Changes from principal transactions:
Purchase payments 167,295
Contract distributions and terminations (6,740)
Transfer payments from (to) Fixed Accounts and other Divisions 60,643
Addition to assets retained in the Account
by Golden American Life Insurance Company 11
____________
Increase (decrease) in net assets derived from principal
transactions 221,209
____________
Total increase (decrease) 249,127
____________
NET ASSETS AT DECEMBER 31, 1998 $283,529
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Total
Return
Division
(a)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $687
Net realized gain (loss) on investments 18
Net unrealized appreciation (depreciation) of investments 412
____________
Net increase (decrease) in net assets resulting from operations 1,117
Changes from principal transactions:
Purchase payments 15,427
Contract distributions and terminations (602)
Transfer payments from (to) Fixed Accounts and other Divisions 10,193
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 96
____________
Increase (decrease) in net assets derived from principal
transactions 25,114
____________
Total increase (decrease) 26,231
____________
NET ASSETS AT DECEMBER 31, 1997 26,231
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Total
Return
Division
(a)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $9,099
Net realized gain (loss) on investments 185
Net unrealized appreciation (depreciation) of investments 1,028
____________
Net increase (decrease) in net assets resulting from operations 10,312
Changes from principal transactions:
Purchase payments 156,492
Contract distributions and terminations (7,889)
Transfer payments from (to) Fixed Accounts and other Divisions 42,666
Addition to assets retained in the Account
by Golden American Life Insurance Company 23
____________
Increase (decrease) in net assets derived from principal
transactions 191,292
____________
Total increase (decrease) 201,604
____________
NET ASSETS AT DECEMBER 31, 1998 $227,835
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Value +
Growth
Division
(b)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($137)
Net realized gain (loss) on investments 515
Net unrealized appreciation (depreciation) of investments (1,430)
____________
Net increase (decrease) in net assets resulting from operations (1,052)
Changes from principal transactions:
Purchase payments 15,158
Contract distributions and terminations (431)
Transfer payments from (to) Fixed Accounts and other Divisions 9,404
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 99
____________
Increase (decrease) in net assets derived from principal
transactions 24,230
____________
Total increase (decrease) 23,178
____________
NET ASSETS AT DECEMBER 31, 1997 23,178
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Value +
Growth
Division
(b)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $4,697
Net realized gain (loss) on investments (807)
Net unrealized appreciation (depreciation) of investments 15,417
____________
Net increase (decrease) in net assets resulting from operations 19,307
Changes from principal transactions:
Purchase payments 77,977
Contract distributions and terminations (3,834)
Transfer payments from (to) Fixed Accounts and other Divisions 26,430
Addition to assets retained in the Account
by Golden American Life Insurance Company 10
____________
Increase (decrease) in net assets derived from principal
transactions 100,583
____________
Total increase (decrease) 119,890
____________
NET ASSETS AT DECEMBER 31, 1998 $143,068
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Global
Fixed
Income
Division
(g)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $9
Net realized gain (loss) on investments (1)
Net unrealized appreciation (depreciation) of investments (10)
____________
Net increase (decrease) in net assets resulting from operations (2)
Changes from principal transactions:
Purchase payments 190
Contract distributions and terminations --
Transfer payments from (to) Fixed Accounts and other Divisions 18
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 208
____________
Total increase (decrease) 206
____________
NET ASSETS AT DECEMBER 31, 1997 206
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Global
Fixed
Income
Division
(g)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $174
Net realized gain (loss) on investments 216
Net unrealized appreciation (depreciation) of investments --
____________
Net increase (decrease) in net assets resulting from operations 390
Changes from principal transactions:
Purchase payments 5,820
Contract distributions and terminations (219)
Transfer payments from (to) Fixed Accounts and other Divisions 3,331
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 8,932
____________
Total increase (decrease) 9,322
____________
NET ASSETS AT DECEMBER 31, 1998 $9,528
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Develop-
ing
World
Division
(h)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) --
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
____________
Net increase (decrease) in net assets resulting from operations --
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from (to) Fixed Accounts and other Divisions --
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions --
____________
Total increase (decrease) --
____________
NET ASSETS AT DECEMBER 31, 1997 --
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Develop-
ing
World
Division
(h)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($22)
Net realized gain (loss) on investments (266)
Net unrealized appreciation (depreciation) of investments 149
____________
Net increase (decrease) in net assets resulting from operations (139)
Changes from principal transactions:
Purchase payments 2,757
Contract distributions and terminations (34)
Transfer payments from (to) Fixed Accounts and other Divisions 1,928
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 4,651
____________
Total increase (decrease) 4,512
____________
NET ASSETS AT DECEMBER 31, 1998 $4,512
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Growth
Oppor-
tunities
Division
(h)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) --
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
____________
Net increase (decrease) in net assets resulting from operations --
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from (to) Fixed Accounts and other Divisions --
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions --
____________
Total increase (decrease) --
____________
NET ASSETS AT DECEMBER 31, 1997 --
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Growth
Oppor-
tunities
Division
(h)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($8)
Net realized gain (loss) on investments (235)
Net unrealized appreciation (depreciation) of investments 349
____________
Net increase (decrease) in net assets resulting from operations 106
Changes from principal transactions:
Purchase payments 4,097
Contract distributions and terminations (45)
Transfer payments from (to) Fixed Accounts and other Divisions (27)
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 4,025
____________
Total increase (decrease) 4,131
____________
NET ASSETS AT DECEMBER 31, 1998 $4,131
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
High
Yield
Bond
Division
(j)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) --
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
____________
Net increase (decrease) in net assets resulting from operations --
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from (to) Fixed Accounts and other Divisions --
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions --
____________
Total increase (decrease) --
____________
NET ASSETS AT DECEMBER 31, 1997 --
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
High
Yield
Bond
Division
(j)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $817
Net realized gain (loss) on investments (318)
Net unrealized appreciation (depreciation) of investments (18)
____________
Net increase (decrease) in net assets resulting from operations 481
Changes from principal transactions:
Purchase payments 32,399
Contract distributions and terminations (912)
Transfer payments from (to) Fixed Accounts and other Divisions 14,150
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 45,637
____________
Total increase (decrease) 46,118
____________
NET ASSETS AT DECEMBER 31, 1998 $46,118
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
StocksPLUS
Growth
and
Income
Division
(i)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) --
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
____________
Net increase (decrease) in net assets resulting from operations --
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from (to) Fixed Accounts and other Divisions --
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions --
____________
Total increase (decrease) --
____________
NET ASSETS AT DECEMBER 31, 1997 --
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
StocksPLUS
Growth
and
Income
Division
(i)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $814
Net realized gain (loss) on investments (97)
Net unrealized appreciation (depreciation) of investments 4,255
____________
Net increase (decrease) in net assets resulting from operations 4,972
Changes from principal transactions:
Purchase payments 29,368
Contract distributions and terminations (361)
Transfer payments from (to) Fixed Accounts and other Divisions 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 46,830
____________
Total increase (decrease) 51,802
____________
NET ASSETS AT DECEMBER 31, 1998 $51,802
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Appre-
ciation
Division
(c)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $15
Net realized gain (loss) on investments 1
Net unrealized appreciation (depreciation) of investments (9)
____________
Net increase (decrease) in net assets resulting from operations 7
Changes from principal transactions:
Purchase payments 256
Contract distributions and terminations --
Transfer payments from (to) Fixed Accounts and other Divisions --
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 256
____________
Total increase (decrease) 263
____________
NET ASSETS AT DECEMBER 31, 1997 263
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Appre-
ciation
Division
(c)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $30
Net realized gain (loss) on investments 3
Net unrealized appreciation (depreciation) of investments 52
____________
Net increase (decrease) in net assets resulting from operations 85
Changes from principal transactions:
Purchase payments 595
Contract distributions and terminations (21)
Transfer payments from (to) Fixed Accounts and other Divisions 52
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 626
____________
Total increase (decrease) 711
____________
NET ASSETS AT DECEMBER 31, 1998 $974
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
High
Income
Division
(c)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($1)
Net realized gain (loss) on investments 1
Net unrealized appreciation (depreciation) of investments 3
____________
Net increase (decrease) in net assets resulting from operations 3
Changes from principal transactions:
Purchase payments 206
Contract distributions and terminations --
Transfer payments from (to) Fixed Accounts and other Divisions --
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 206
____________
Total increase (decrease) 209
____________
NET ASSETS AT DECEMBER 31, 1997 209
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
High
Income
Division
(c)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $36
Net realized gain (loss) on investments 8
Net unrealized appreciation (depreciation) of investments (66)
____________
Net increase (decrease) in net assets resulting from operations (22)
Changes from principal transactions:
Purchase payments 530
Contract distributions and terminations (15)
Transfer payments from (to) Fixed Accounts and other Divisions 104
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 619
____________
Total increase (decrease) 597
____________
NET ASSETS AT DECEMBER 31, 1998 $806
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Large Cap
Value
Division
(c)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($1)
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments 7
____________
Net increase (decrease) in net assets resulting from operations 6
Changes from principal transactions:
Purchase payments 204
Contract distributions and terminations --
Transfer payments from (to) Fixed Accounts and other Divisions 5
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 209
____________
Total increase (decrease) 215
____________
NET ASSETS AT DECEMBER 31, 1997 215
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Large Cap
Value
Division
(c)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $14
Net realized gain (loss) on investments 2
Net unrealized appreciation (depreciation) of investments 3
____________
Net increase (decrease) in net assets resulting from operations 19
Changes from principal transactions:
Purchase payments 429
Contract distributions and terminations (5)
Transfer payments from (to) Fixed Accounts and other Divisions 43
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 467
____________
Total increase (decrease) 486
____________
NET ASSETS AT DECEMBER 31, 1998 $701
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Inter-
national
Equity
Division
(d)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) --
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments ($5)
____________
Net increase (decrease) in net assets resulting from operations (5)
Changes from principal transactions:
Purchase payments 99
Contract distributions and terminations --
Transfer payments from (to) Fixed Accounts and other Divisions 2
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 101
____________
Total increase (decrease) 96
____________
NET ASSETS AT DECEMBER 31, 1997 96
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Inter-
national
Equity
Division
(d)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($3)
Net realized gain (loss) on investments (1)
Net unrealized appreciation (depreciation) of investments (2)
____________
Net increase (decrease) in net assets resulting from operations (6)
Changes from principal transactions:
Purchase payments 178
Contract distributions and terminations (4)
Transfer payments from (to) Fixed Accounts and other Divisions 62
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 236
____________
Total increase (decrease) 230
____________
NET ASSETS AT DECEMBER 31, 1998 $326
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Money
Market
Division
(e)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) --
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
____________
Net increase (decrease) in net assets resulting from operations --
Changes from principal transactions:
Purchase payments $183
Contract distributions and terminations (1)
Transfer payments from (to) Fixed Accounts and other Divisions (1)
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 181
____________
Total increase (decrease) 181
____________
NET ASSETS AT DECEMBER 31, 1997 181
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Smith
Barney
Money
Market
Division
(e)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $14
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
____________
Net increase (decrease) in net assets resulting from operations 14
Changes from principal transactions:
Purchase payments 565
Contract distributions and terminations (25)
Transfer payments from (to) Fixed Accounts and other Divisions (417)
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 123
____________
Total increase (decrease) 137
____________
NET ASSETS AT DECEMBER 31, 1998 $318
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Inter-
national
Equity
Division
(f)
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 --
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $81
Net realized gain (loss) on investments (12)
Net unrealized appreciation (depreciation) of investments (93)
____________
Net increase (decrease) in net assets resulting from operations (24)
Changes from principal transactions:
Purchase payments 1,825
Contract distributions and terminations (2)
Transfer payments from (to) Fixed Accounts and other Divisions 182
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 2,005
____________
Total increase (decrease) 1,981
____________
NET ASSETS AT DECEMBER 31, 1997 1,981
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Inter-
national
Equity
Division
(f)
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ($179)
Net realized gain (loss) on investments (556)
Net unrealized appreciation (depreciation) of investments 1,647
____________
Net increase (decrease) in net assets resulting from operations 912
Changes from principal transactions:
Purchase payments 41,775
Contract distributions and terminations (940)
Transfer payments from (to) Fixed Accounts and other Divisions 6,037
Addition to assets retained in the Account
by Golden American Life Insurance Company --
____________
Increase (decrease) in net assets derived from principal
transactions 46,872
____________
Total increase (decrease) 47,784
____________
NET ASSETS AT DECEMBER 31, 1998 $49,765
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Combined
____________
<S> <C>
NET ASSETS AT JANUARY 1, 1997 $1,184,573
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) 81,285
Net realized gain (loss) on investments 31,070
Net unrealized appreciation (depreciation) of investments 75,558
____________
Net increase (decrease) in net assets resulting from operations 187,913
Changes from principal transactions:
Purchase payments 304,259
Contract distributions and terminations (184,701)
Transfer payments from (to) Fixed Accounts and other Divisions 111,251
Addition to (reallocation from) assets retained in the Account
by Golden American Life Insurance Company 976
____________
Increase (decrease) in net assets derived from principal
transactions 231,785
____________
Total increase (decrease) 419,698
____________
NET ASSETS AT DECEMBER 31, 1997 1,604,271
</TABLE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Combined
____________
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $125,356
Net realized gain (loss) on investments 22,265
Net unrealized appreciation (depreciation) of investments 39,447
____________
Net increase (decrease) in net assets resulting from operations 187,068
Changes from principal transactions:
Purchase payments 1,536,754
Contract distributions and terminations (247,928)
Transfer payments from (to) Fixed Accounts and other Divisions 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 1,526,866
____________
Total increase (decrease) 1,713,934
____________
NET ASSETS AT DECEMBER 31, 1998 $3,318,205
============
<FN>
(a) Commencement of operations, February 3, 1997
(b) Commencement of operations, February 4, 1997
(c) Commencement of operations, August 26, 1997
(d) Commencement of operations, September 18, 1997
(e) Commencement of operations, September 24, 1997
(f) Commencement of operations, October 9, 1997
(g) Commencement of operations, October 24, 1997
(h) Commencement of operations, March 2, 1998
(i) Commencement of operations, May 8, 1998
(j) Commencement of operations, May 11, 1998
</TABLE>
See accompanying notes.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT B
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
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 1998, the Account had GoldenSelect Contracts and Granite PrimElite
Contracts. GoldenSelect Contracts sold by Golden American during 1998
include DVA 100, DVA Series 100, DVA PLUS, ACCESS, PREMIUM PLUS and ESII.
During 1998, the Account had GoldenSelect Contracts (DVA 80) which were no
longer being sold.
At December 31, 1998, the Account had, under GoldenSelect Contracts, twenty-
six investment divisions: Liquid Asset, Limited Maturity Bond, Hard Assets,
All-Growth, Real Estate, Fully Managed, Multiple Allocation, Capital
Appreciation, Rising Dividends, Emerging Markets, Market Manager, Value
Equity, Strategic Equity, Small Cap, Managed Global, Mid-Cap Growth (formerly
OTC), Growth & Income, Research, Total Return, Value + Growth, Global Fixed
Income, Developing World, Growth Opportunities, PIMCO High Yield Bond, PIMCO
StocksPLUS Growth and Income and International Equity Divisions
("Divisions"). The Account also had, under Granite PrimElite Contracts,
eight investment divisions: Mid-Cap Growth (formerly OTC), Research, Total
Return, Appreciation, Smith Barney High Income, Smith Barney Large Cap Value
(formerly Smith Barney Income and Growth), 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, the Travelers Series Fund Inc.,
the Greenwich Street Series Fund Inc. (formerly the Smith Barney Series Fund
Inc.), the Warburg Pincus Trust or the PIMCO Variable Insurance Trust (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:
<TABLE>
<CAPTION>
Equi-Select Series Trust The GCG Trust
Investment Division Investment Division
___________________________ ___________________________
<S> <S>
International Fixed Income Global Fixed Income
OTC Mid-Cap Growth
Research Research
Total Return Total Return
Value + Growth Value + Growth
Growth & Income Growth & Income
</TABLE>
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
The 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. In December 1995, Golden American also discontinued
external sales of DVA 100, however, the DVA 100 contracts continue to be
available to Golden American employees and agents. Under the terms of the
Contracts, 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 are as
follows:
<TABLE>
<CAPTION>
Series Annual Rates
__________________________________ __________________
<S> <C>
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
ES II 1.25
Granite PrimElite - Standard 1.10
Granite PrimElite - Annual Ratchet 1.25
</TABLE>
ASSET BASED ADMINISTRATIVE CHARGES: A daily charge at an annual rate of .10%
is deducted from assets attributable to DVA 100 and DVA Series 100 Contracts.
A daily charge at an annual rate of .15% is deducted from the assets
attributable to the DVA PLUS, ACCESS, PREMIUM PLUS, ESII 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
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 has 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 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
_____________________ _______________________________________________________
PREMIUM Granite
DVA PLUS PLUS ES II PrimElite
_____________ _____________ _____________ _____________
<S> <C> <C> <C> <C>
0 7% 8% 8% 7%
1 7 8 7 7
2 6 8 6 6
3 5 8 5 5
4 4 7 4 4
5 3 6 3 3
6 1 5 2 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 by Golden
American. 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.
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
___________________________________
1998 1997
_______________ _________________
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Balance at beginning of year $17,009 $26,612
Sales load advanced 274 616
Premium tax advanced -- 7
Net transfer from Fixed Account
and other Divisions -- 353
Amortization of deferred sales load
and premium tax (8,280) (10,579)
_______________ _________________
Balance at end of year $9,003 $17,009
=============== =================
</TABLE>
NOTE 4 - PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments were
as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
_________________________
1998
_________________________
PURCHASES SALES
_________________________
(DOLLARS IN THOUSANDS)
<S> <C> <C>
The GCG Trust:
Liquid Asset Series $570,537 $452,115
Limited Maturity Bond Series 71,742 22,970
Hard Assets Series 17,730 17,975
All-Growth Series 16,647 13,146
Real Estate Series 29,007 13,733
Fully Managed Series 83,688 7,148
Multiple Allocation Series 52,037 32,159
Capital Appreciation Series 83,259 17,034
Rising Dividends Series 270,955 7,361
Emerging Markets Series 2,644 7,107
Market Manager Series 342 292
Value Equity Series 58,297 6,136
Strategic Equity Series 31,008 5,375
Small Cap Series 63,182 9,735
Managed Global Series 41,119 39,355
Mid-Cap Growth Series 97,494 8,444
Growth & Income Series 132,350 6,850
Research Series 237,915 6,540
Total Return Series 202,032 1,560
Value + Growth Series 119,241 13,912
Global Fixed Income Series 14,270 5,161
Developing World Series 7,293 2,662
Growth Opportunities Series 7,214 3,196
PIMCO Variable Insurance Trust:
PIMCO High Yield Bond Portfolio 52,726 6,256
PIMCO StocksPLUS Growth and Income Portfolio 49,898 2,237
Greenwich Street Series Fund Inc.:
Appreciation Portfolio 739 82
Travelers Series Fund Inc.:
Smith Barney High Income Portfolio 878 222
Smith Barney Large Cap Value Porfolio 513 32
Smith Barney International Equity Portfolio 245 12
Smith Barney Money Market Portfolio 630 494
Warburg Pincus Trust:
International Equity Portfolio 370,938 324,226
_________________________
COMBINED $2,686,570 $1,033,527
=========================
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
_________________________
1997
_________________________
PURCHASES SALES
_________________________
(DOLLARS IN THOUSANDS)
<S> <C> <C>
The GCG Trust:
Liquid Asset Series $94,848 $75,062
Limited Maturity Bond Series 12,572 13,891
Hard Assets Series 21,526 12,693
All-Growth Series 7,468 14,683
Real Estate Series 24,254 8,239
Fully Managed Series 27,691 11,768
Multiple Allocation Series 30,819 55,031
Capital Appreciation Series 41,409 24,135
Rising Dividends Series 63,949 8,887
Emerging Markets Series 8,023 6,846
Market Manager Series 467 623
Value Equity Series 32,557 4,409
Strategic Equity Series 19,475 4,918
Small Cap Series 25,870 10,563
Managed Global Series 37,985 21,524
Mid-Cap Growth Series 18,373 3,328
Growth & Income Series 37,291 1,763
Research Series 34,430 419
Total Return Series 26,167 354
Value + Growth Series 30,053 5,950
Global Fixed Income Series 224 7
Developing World Series -- --
Growth Opportunities Series -- --
PIMCO Variable Insurance Trust:
PIMCO High Yield Bond Portfolio -- --
PIMCO StocksPLUS Growth and Income Portfolio -- --
Greenwich Street Series Fund Inc.:
Appreciation Portfolio 283 12
Travelers Series Fund Inc.:
Smith Barney High Income Portfolio 216 11
Smith Barney Large Cap Value Porfolio 210 1
Smith Barney International Equity Portfolio 103 2
Smith Barney Money Market Portfolio 194 12
Warburg Pincus Trust:
International Equity Portfolio 2,146 59
_________________________
COMBINED $598,603 $285,190
=========================
</TABLE>
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 purchase transactions for the Market Manager
Division resulted from such updates.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
_________________________
1998
_________________________
PURCHASES SALES
_________________________
<S> <C> <C>
Liquid Asset Division 46,713,872 38,496,936
Limited Maturity Bond Division 5,263,273 2,390,944
Hard Assets Division 1,390,271 1,503,254
All-Growth Division 1,876,296 1,557,867
Real Estate Division 1,269,259 1,003,769
Fully Managed Division 4,432,536 1,393,191
Multiple Allocation Division 2,439,316 2,628,892
Capital Appreciation Division 3,704,327 1,712,022
Rising Dividends Division 13,285,423 1,798,264
Emerging Markets Division 737,697 1,279,884
Market Manager Division 16,579 26,443
Value Equity Division 3,639,566 936,377
Strategic Equity Division 2,329,825 828,876
Small Cap Division 5,737,867 1,727,666
Managed Global Division 3,637,963 3,808,355
Mid-Cap Growth Division 5,201,859 1,073,702
Growth & Income Division 8,700,243 1,061,928
Research Division 11,776,149 1,145,700
Total Return Division 11,841,572 542,519
Value + Growth Division 8,862,606 1,834,396
Global Fixed Income Division 1,199,981 486,199
Developing World Division 1,034,819 414,729
Growth Opportunities Division 801,993 373,469
PIMCO High Yield Bond Division 5,575,890 995,489
PIMCO StocksPLUS Growth and Income Division 5,235,676 567,893
Appreciation Division 45,518 5,062
Smith Barney High Income Division 59,777 15,706
Smith Barney Large Cap Value Division 25,818 1,496
Smith Barney International Equity Division 13,627 659
Smith Barney Money Market Division 55,074 43,687
International Equity Division 34,755,360 31,779,305
_________________________
COMBINED 191,660,032 101,434,679
=========================
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
_________________________
1997
_________________________
PURCHASES SALES
_________________________
<S> <C> <C>
Liquid Asset Division 8,859,035 7,508,736
Limited Maturity Bond Division 814,102 1,099,923
Hard Assets Division 955,532 934,748
All-Growth Division 902,597 1,467,510
Real Estate Division 1,165,038 633,059
Fully Managed Division 1,588,523 1,271,492
Multiple Allocation Division 858,882 3,296,283
Capital Appreciation Division 1,899,517 1,801,059
Rising Dividends Division 4,263,972 1,391,248
Emerging Markets Division 1,231,916 1,082,071
Market Manager Division -- 31,196
Value Equity Division 1,792,574 522,420
Strategic Equity Division 1,539,555 551,638
Small Cap Division 3,022,647 1,720,403
Managed Global Division 3,674,935 2,873,007
Mid-Cap Growth Division 1,166,129 357,910
Growth & Income Division 2,623,649 368,883
Research Division 1,962,393 137,427
Total Return Division 1,683,989 52,603
Value + Growth Division 2,598,824 818,375
Global Fixed Income Division 18,902 1,482
Developing World Division -- --
Growth Opportunities Division -- --
PIMCO High Yield Bond Division -- --
PIMCO StocksPLUS Growth and Income Division -- --
Appreciation Division 19,581 822
Smith Barney High Income Division 15,972 739
Smith Barney Large Cap Value Division 12,176 39
Smith Barney International Equity Division 7,216 138
Smith Barney Money Market Division 17,685 1,114
International Equity Division 208,851 9,015
_________________________
COMBINED 42,904,192 27,933,340
=========================
</TABLE>
NOTE 6 - NET ASSETS
Investments at net asset value less the payable to Golden American Life
Insurance Company for charges and fees at December 31, 1998 consisted of the
following:
<TABLE>
<CAPTION>
Limited
Liquid Maturity Hard All-
Asset Bond Assets Growth
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $166,620 $85,663 $27,056 $64,169
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 9,139 17,885 17,001 8,405
Net unrealized appreciation
(depreciation) of
investments -- (716) (14,354) 9,233
_____________________________________________________
$175,759 $102,832 $29,703 $81,807
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Real Fully Multiple Capital
Estate Managed Allocation Appreciation
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $51,262 $167,589 $134,591 $146,874
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 26,016 48,555 134,202 74,724
Net unrealized appreciation
(depreciation) of
investments (8,283) 10,222 5,117 34,980
_____________________________________________________
$68,995 $226,366 $273,910 $256,578
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Rising Emerging Market Value
Dividends Markets Manager Equity
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $394,953 $46,675 $2,242 $109,242
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 26,832 (14,912) 2,060 13,560
Net unrealized appreciation
(depreciation) of
investments 78,831 (9,509) 3,405 3,392
_____________________________________________________
$500,616 $22,254 $7,707 $126,194
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Strategic Small Managed Mid-Cap
Equity Cap Global Growth
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $61,578 $103,543 $90,360 $103,719
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 8,326 (467) 20,177 5,764
Net unrealized appreciation
(depreciation) of
investments 1,444 21,169 20,147 7,361
_____________________________________________________
$71,348 $124,245 $130,684 $116,844
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Growth & Total Value +
Income Research Return Growth
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $162,972 $254,403 $216,406 $124,813
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 7,050 11,860 9,989 4,268
Net unrealized appreciation
(depreciation) of
investments 8,928 17,266 1,440 13,987
_____________________________________________________
$178,950 $283,529 $227,835 $143,068
=====================================================
</TABLE>
<TABLE>
<CAPTION>
PIMCO
Global Growth High
Fixed Developing Oppor- Yield
Income World tunities Bond
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $9,140 $4,651 $4,025 $45,637
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 398 (288) (243) 499
Net unrealized appreciation
(depreciation) of
investments (10) 149 349 (18)
_____________________________________________________
$9,528 $4,512 $4,131 $46,118
=====================================================
</TABLE>
<TABLE>
<CAPTION>
PIMCO Smith Smith
StocksPLUS Barney Barney
Growth and Appre- High Large Cap
Income ciation Income Value
Division Division Division Division
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $46,830 $882 $825 $676
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 717 49 44 15
Net unrealized appreciation
(depreciation) of
investments 4,255 43 (63) 10
_____________________________________________________
$51,802 $974 $806 $701
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Smith
Barney Smith
Inter- Barney Inter-
national Money national
Equity Market Equity
Division Division Division Combined
_____________________________________________________
(Dollars in thousands)
<S> <C> <C> <C> <C>
Unit transactions $337 $304 $48,877 $2,676,914
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments (4) 14 (666) 430,969
Net unrealized appreciation
(depreciation) of
investments (7) -- 1,554 210,322
_____________________________________________________
$326 $318 $49,765 $3,318,205
=====================================================
</TABLE>
NOTE 7 - UNIT VALUES
Accumulation unit value information (which is based on total assets) for
units outstanding by Contract type as of December 31, 1998 were as
follows:
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
LIQUID ASSET
Currently payable annuity products:
DVA 80 2,728 $15.19 $41
DVA 100 2,657 14.89 40
Contracts in accumulation period:
DVA 80 371,896 15.19 5,650
DVA 100 1,765,308 14.89 26,288
DVA Series 100 50,601 14.38 727
DVA PLUS - Standard 489,531 14.54 7,118
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 3,587,645 14.33 51,394
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 2,964,038 14.11 41,830
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 3,069,965 13.88 42,610
____________
175,698
LIMITED MATURITY BOND
Currently payable annuity products:
DVA 80 8,126 17.77 144
DVA 100 17,655 17.42 307
Contracts in accumulation period:
DVA 80 91,829 17.77 1,632
DVA 100 2,069,663 17.42 36,045
DVA Series 100 22,995 16.81 387
DVA PLUS - Standard 263,074 17.02 4,478
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 1,557,946 16.77 26,124
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 1,121,400 16.52 18,525
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 937,378 16.25 15,230
____________
102,872
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
HARD ASSETS
Currently payable annuity products:
DVA 80 365 $15.15 $6
DVA 100 8,649 14.85 128
Contracts in accumulation period:
DVA 80 58,984 15.15 893
DVA 100 744,236 14.85 11,050
DVA Series 100 23,997 14.33 344
DVA PLUS - Standard 146,678 14.50 2,126
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 258,034 14.28 3,685
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 609,087 14.07 8,570
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 210,821 13.84 2,917
____________
29,719
ALL-GROWTH
Currently payable annuity products:
DVA 80 474 16.36 8
DVA 100 11,790 16.03 189
Contracts in accumulation period:
DVA 80 72,780 16.36 1,191
DVA 100 2,382,762 16.03 38,207
DVA Series 100 23,147 15.48 358
DVA PLUS - Standard 208,260 15.66 3,261
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 645,591 15.43 9,958
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 1,471,156 15.20 22,355
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 422,889 14.95 6,320
____________
81,847
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
REAL ESTATE
Currently payable annuity products:
DVA 80 1,101 $23.06 $25
DVA 100 21,684 22.60 490
Contracts in accumulation period:
DVA 80 33,563 23.06 774
DVA 100 1,136,778 22.60 25,692
DVA Series 100 9,562 21.82 209
DVA PLUS - Standard 170,494 22.07 3,763
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 436,867 21.74 9,498
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 914,501 21.42 19,588
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 426,516 21.07 8,985
____________
69,024
FULLY MANAGED
Currently payable annuity products:
DVA 80 2,737 21.78 60
DVA 100 60,779 21.34 1,297
Contracts in accumulation period:
DVA 80 96,116 21.78 2,093
DVA 100 4,072,871 21.34 86,930
DVA Series 100 33,313 20.61 686
DVA PLUS - Standard 544,623 20.84 11,351
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 1,628,157 20.53 33,431
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 2,780,652 20.23 56,246
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 1,727,706 19.90 34,373
____________
226,467
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
MULTIPLE ALLOCATION
Currently payable annuity products:
DVA 80 14,541 $23.26 $338
DVA 100 90,029 22.80 2,053
Contracts in accumulation period:
DVA 80 405,816 23.26 9,440
DVA 100 7,709,073 22.80 175,791
DVA Series 100 64,749 22.01 1,425
DVA PLUS - Standard 395,764 22.27 8,812
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 800,489 21.94 17,560
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 1,980,779 21.61 42,806
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 744,366 21.26 15,822
____________
274,047
CAPITAL APPRECIATION
Currently payable annuity products:
DVA 80 7,669 25.47 195
DVA 100 44,548 25.13 1,119
Contracts in accumulation period:
DVA 80 83,297 25.47 2,122
DVA 100 4,645,391 25.13 116,756
DVA Series 100 49,076 24.55 1,205
DVA PLUS - Standard 413,115 24.75 10,223
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 1,342,757 24.50 32,897
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 2,787,732 24.26 67,619
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 1,023,964 23.98 24,551
____________
256,687
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
RISING DIVIDENDS
Currently payable annuity products:
DVA 80 12,379 $23.31 $289
DVA 100 15,367 23.06 355
Contracts in accumulation period:
DVA 80 127,116 23.31 2,962
DVA 100 4,450,237 23.06 102,628
DVA Series 100 92,161 22.64 2,086
DVA PLUS - Standard 1,199,087 22.79 27,323
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 4,591,470 22.61 103,810
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 7,386,288 22.43 165,696
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 4,305,084 22.22 95,669
____________
500,818
EMERGING MARKETS
Currently payable annuity products:
DVA 80 304 6.71 2
DVA 100 9,591 6.64 64
Contracts in accumulation period:
DVA 80 68,213 6.71 458
DVA 100 1,539,408 6.64 10,224
DVA Series 100 23,813 6.52 155
DVA PLUS - Standard 266,800 6.56 1,751
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 271,025 6.51 1,765
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 1,177,915 6.46 7,610
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 37,134 6.40 238
____________
22,267
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
MARKET MANAGER
Contracts in accumulation period:
DVA 100 332,519 $23.71 $7,884
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 7,958 23.14 184
____________
8,068
VALUE EQUITY
Currently payable annuity products:
DVA 80 409 18.73 8
DVA 100 2,145 18.58 40
Contracts in accumulation period:
DVA 80 29,033 18.73 544
DVA 100 1,049,863 18.58 19,502
DVA Series 100 20,539 18.32 376
DVA PLUS - Standard 454,942 18.41 8,377
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 1,415,540 18.31 25,913
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 2,736,310 18.20 49,797
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 1,201,314 18.06 21,692
____________
126,249
STRATEGIC EQUITY
Currently payable annuity products:
DVA 100 34,850 14.40 502
Contracts in accumulation period:
DVA 80 53,353 14.49 773
DVA 100 737,255 14.40 10,615
DVA Series 100 22,096 14.23 315
DVA PLUS - Standard 508,588 14.30 7,272
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 1,105,850 14.23 15,735
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 1,731,615 14.16 24,521
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 827,477 14.07 11,644
____________
71,377
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
SMALL CAP
Currently payable annuity products:
DVA 100 6,856 $15.55 $107
Contracts in accumulation period:
DVA 80 46,417 15.65 726
DVA 100 694,347 15.55 10,801
DVA Series 100 18,405 15.39 283
DVA PLUS - Standard 446,934 15.44 6,900
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 2,476,498 15.37 38,058
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 3,086,639 15.30 47,219
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 1,326,706 15.23 20,204
____________
124,298
MANAGED GLOBAL
Currently payable annuity products:
DVA 80 295 15.46 5
DVA 100 16,286 15.27 249
Contracts in accumulation period:
DVA 80 31,668 15.46 489
DVA 100 3,928,543 15.27 59,981
DVA Series 100 47,894 14.95 716
DVA PLUS - Standard 649,216 15.02 9,753
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 610,300 14.88 9,084
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 3,354,682 14.75 49,469
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 67,979 14.59 992
____________
130,738
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
MID-CAP GROWTH
Contracts in accumulation period:
DVA 80 31,935 $23.04 $736
DVA 100 315,603 22.84 7,210
DVA Series 100 12,309 22.50 277
DVA PLUS - Standard 173,070 22.60 3,912
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 1,905,008 22.43 42,722
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 1,527,664 22.31 34,087
Granite PrimElite - Standard 981 22.60 22
Granite PrimElite - Annual Ratchet 23,659 22.43 531
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 1,235,724 22.17 27,396
____________
116,893
GROWTH & INCOME
Contracts in accumulation period:
DVA 80 9,045 17.29 156
DVA 100 486,360 17.20 8,365
DVA Series 100 9,399 17.03 160
DVA PLUS - Standard 537,480 17.08 9,180
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 3,297,314 17.01 56,089
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 3,474,459 16.94 58,850
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 2,741,015 16.87 46,233
____________
179,033
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
RESEARCH
Contracts in accumulation period:
DVA 80 14,054 $23.47 $330
DVA 100 488,822 23.27 11,377
DVA Series 100 20,718 22.93 475
DVA PLUS - Standard 437,189 23.03 10,068
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 3,902,974 22.89 89,339
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 3,875,695 22.73 88,107
Granite PrimElite - Standard 3,070 23.03 71
Granite PrimElite - Annual Ratchet 38,692 22.89 886
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 3,674,201 22.59 82,990
____________
283,643
TOTAL RETURN
Contracts in accumulation period:
DVA 80 2,035 18.17 37
DVA 100 431,678 18.02 7,778
DVA Series 100 6,695 17.75 119
DVA PLUS - Standard 616,433 17.83 10,989
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 3,982,960 17.72 70,569
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 3,973,034 17.60 69,922
Granite PrimElite - Standard 10,098 17.83 180
Granite PrimElite - Annual Ratchet 32,769 17.72 581
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 3,874,737 17.49 67,753
____________
227,928
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
VALUE + GROWTH
Contracts in accumulation period:
DVA 80 35,295 $16.57 $585
DVA 100 299,829 16.47 4,940
DVA Series 100 11,112 16.31 181
DVA PLUS - Standard 362,210 16.36 5,926
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 3,293,704 16.29 53,670
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 2,452,149 16.22 39,786
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 2,354,360 16.16 38,039
____________
143,127
GLOBAL FIXED INCOME
Contracts in accumulation period:
DVA 80 1,419 13.42 19
DVA 100 13,446 13.31 179
DVA PLUS - Standard 6,337 13.17 83
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 396,068 13.09 5,184
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 119,924 13.00 1,560
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 194,008 12.92 2,506
____________
9,531
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
DEVELOPING WORLD
Contracts in accumulation period:
DVA 80 3,368 $7.32 $25
DVA 100 4,598 7.31 34
DVA PLUS - Standard 617 7.29 5
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 417,221 7.28 3,039
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 82,414 7.27 599
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 111,872 7.26 812
____________
4,514
GROWTH OPPORTUNITIES
Contracts in accumulation period:
DVA 100 13,050 9.69 126
DVA PLUS - Standard 5,235 9.67 51
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 141,597 9.65 1,367
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 126,683 9.64 1,221
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 141,959 9.63 1,367
____________
4,132
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
PIMCO HIGH YIELD BOND
Contracts in accumulation period:
DVA 80 2,973 $10.12 $30
DVA 100 107,998 10.11 1,092
DVA PLUS - Standard 213,774 10.09 2,157
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 1,630,971 10.08 16,440
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 1,066,219 10.07 10,737
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 1,558,466 10.06 15,678
____________
46,134
PIMCO STOCKSPLUS GROWTH AND INCOME
Contracts in accumulation period:
DVA 80 13,664 11.16 152
DVA 100 160,283 11.14 1,786
DVA PLUS - Standard 112,706 11.12 1,253
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 1,527,697 11.11 16,975
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 942,738 11.10 10,465
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 1,910,695 11.09 21,188
____________
51,819
</TABLE>
<TABLE>
<CAPTION>
UNIT TOTAL UNIT
DIVISION/CONTRACT UNITS VALUE VALUE
______________________________________________________________________________
(IN THOUSANDS)
<S> <C> <C> <C>
APPRECIATION
Contracts in accumulation period:
Granite PrimElite - Standard 1,108 $16.53 $18
Granite PrimElite - Annual Ratchet 58,107 16.47 957
____________
975
SMITH BARNEY HIGH INCOME
Contracts in accumulation period:
Granite PrimElite - Standard 12,711 13.66 174
Granite PrimElite - Annual Ratchet 46,593 13.58 633
____________
807
SMITH BARNEY LARGE CAP VALUE
Contracts in accumulation period:
Granite PrimElite - Standard 1,600 19.35 31
Granite PrimElite - Annual Ratchet 34,859 19.24 671
____________
702
SMITH BARNEY INTERNATIONAL EQUITY
Contracts in accumulation period:
Granite PrimElite - Standard 2,885 14.35 41
Granite PrimElite - Annual Ratchet 19,916 14.28 285
____________
326
SMITH BARNEY MONEY MARKET
Contracts in accumulation period:
Granite PrimElite - Standard 2,017 11.43 23
Granite PrimElite - Annual Ratchet 25,941 11.37 295
____________
318
INTERNATIONAL EQUITY
Contracts in accumulation period:
DVA PLUS - Annual Ratchet & 5.5% Solution,
ACCESS - Standard, PREMIUM PLUS - Standard,
ES II 2,422,075 10.29 24,919
DVA PLUS - 7% Solution,
ACCESS - Annual Ratchet & 5.5% Solution,
PREMIUM PLUS - Annual Ratchet &
5.5% Solution 680,861 10.32 7,025
ACCESS - 7% Solution,
PREMIUM PLUS - 7% Solution 1,736,713 10.27 17,841
____________
49,785
_____________ ____________
COMBINED 183,098,947 $3,319,843
============= ============
</TABLE>
<PAGE>
<PAGE>
PART C -- OTHER INFORMATION
ITEM 24: FINANCIAL STATEMENTS AND EXHIBITS
FINANCIAL STATEMENTS
(a) (1) All financial statements are included in either the Prospectuses
or the Statements of Additional Information, as indicated
therein.
(2) Schedules I, III, 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.
SCHEDULE I
SUMMARY OF INVESTMENTS
OTHER THAN INVESTMENTS IN RELATED PARTIES
(Dollars in thousands)
<TABLE>
<CAPTION>
Balance
Sheet
December 31, 1998 Cost 1 Value Amount
_______________________________________________________________________________
<S> <C> <C> <C>
TYPE OF INVESTMENT
Fixed maturities, available for sale:
Bonds:
United States government and govern-
mental agencies and authorities $13,568 $13,742 $13,742
Foreign governments 2,028 2,036 2,036
Public utilities 67,710 67,809 67,809
Corporate securities 365,569 367,489 367,489
Other asset-backed securities 99,877 99,112 99,112
Mortgage-backed securities 191,020 191,797 191,797
___________ ___________ ___________
Total fixed maturities, available
for sale 739,772 741,985 741,985
Equity securities:
Common stocks: industrial, miscel-
laneous and all other 14,437 11,514 11,514
Mortgage loans on real estate 97,322 97,322
Policy loans 11,772 11,772
Short-term investments 41,152 41,152
___________ ___________
Total investments $904,455 $903,745
=========== ===========
<FN>
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.
</TABLE>
<PAGE>
<PAGE>
SCHEDULE III
SUPPLEMENTARY INSURANCE INFORMATION
(Dollars in thousands)
<TABLE>
<CAPTION>
Column Column Column Column Column Column
A B C D E F
________________________________________________________________________________
Future
Policy Other
De- Benefits, Policy
ferred Losses, Claims Insur-
Policy Claims Un- and ance
Acqui- and earned Bene- Premiums
sition Loss Revenue fits and
Segment Costs Expenses Reserve Payable Charges
________________________________________________________________________________
POST-MERGER
________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
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
Period August 14, 1996
through December 31, 1996:
Life insurance 11,468 285,287 2,063 -- 8,768
PRE-ACQUISITION
________________________________________________________________________________
Period January 1, 1996
through August 13, 1996:
Life insurance N/A N/A N/A N/A 12,259
</TABLE>
<PAGE>
<PAGE>
SCHEDULE III
SUPPLEMENTARY INSURANCE INFORMATION - CONTINUED
(Dollars in thousands)
<TABLE>
<CAPTION>
Column Column Column Column Column Column
A G H I J K
________________________________________________________________________________
Amorti-
Benefits zation
Claims, of
Losses Deferred
Net and Policy Other
Invest- Settle- Acqui- Opera-
ment ment sition ting Premiums
Segment Income Expenses Costs Expenses* Written
________________________________________________________________________________
POST-MERGER
________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
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 --
Period August 14, 1996
through December 31, 1996:
Life insurance 5,795 7,003 244 8,066 --
PRE-ACQUISITION
________________________________________________________________________________
Period January 1, 1996
through August 13, 1996:
Life insurance 4,990 5,270 2,436 8,847 --
<FN>
*This includes policy acquisition costs deferred for first year
commissions and interest bonuses, extra credit bonuses and other
expenses related to the production of new business. The cost
related to first year interest bonuses and the extra credit bonus
are included in benefits claims, losses and settlement expenses.
</TABLE>
SCHEDULE IV
REINSURANCE
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F
_______________________________________________________________________________
Percen-
Assumed tage of
Ceded to from Amount
Gross Other Other Net Assumed
Amount Companies Companies Amount to Net
_______________________________________________________________________________
<S> <C> <C> <C> <C> <C>
At December 31, 1998:
Life insurance in
force $181,456,000 $111,552,000 -- $69,904,000 --
============= ============== ========= ============ ========
At December 31, 1997:
Life insurance in
force $149,842,000 $96,686,000 -- $53,156,000 --
============= ============== ========= ============ ========
At December 31, 1996:
Life insurance in
force $86,192,000 $58,368,000 -- $27,824,000 --
============= ============== ========= ============ ========
</TABLE>
<PAGE>
<PAGE>
EXHIBITS
(b) (1) Resolution of the board of directors of the Depositor
authorizing the establishment of the Registrant. (1)
(2) Not applicable.
(3) (a) Distribution Agreement between the Depositor and
Directed Services, Inc. (1)
(b) Dealers Agreement. (1)
(c) Organizational Agreement. (1)
(d) Assignment Agreement for Organizational Agreement. (1)
(4) (a) Individual Deferred Combination Variable and Fixed Annuity
Contract. (2)
(b) Group Deferred Combination Variable and Fixed
Annuity Contract. (2)
(c) Individual Deferred Variable Annuity Contract.(2)
(d) Individual Retirement Annuity Rider Page. (1)
(e) ROTH Individual Retirement Annuity Rider. (1)
(5) (a) Individual Deferred Combination Variable and Fixed Annuity
Application.
(b) Group Deferred Combination Variable and Fixed Annuity
Enrollment Form.
(c) Individual Deferred Variable Annuity Application.
(6) (a) (i) Restated Certificate of Incorporation of Golden American
Life Insurance Company, as amended. (1)
(ii) Certificate of Amendment of the Restated Articles of
Incorporation of Golden American Life Insurance Company. (2)
(b) By-Laws of Golden American Life Insurance Company. (1)
(c) Resolution of the board of directors for Powers of Attorney. (2)
(7) Not applicable.
(8) (a) Participation Agreement between Golden American and PIMCO
Variable Insurance Trust. (1)
(b) Administrative Services Agreement between Golden American
and Equitable Life Insurance Company of Iowa .(1)
(c) Service Agreement between Golden American and Directed
Services, Inc. (1)
(d) Asset Management Agreement between Golden American and
ING Investment Management LLC. (2)
(e) Reciprocal Loan Agreement between Golden American and
ING America Insurance Holdings, Inc. (2)
(f) Revolving Note Payable between Golden American and
SunTrust Bank. (2)
(g) Participation Agreement between Golden American and Warburg
Pincus Asset Management, Inc. (2)
(h) Surplus Note between Golden American and First Columbine
Life Insurance Company.
(i) Surplus Note between Golden American and Equitable
Life Insurance Company of Iowa.
(9) Opinion and Consent of Myles R. Tashman.
(10) (a) Consent of Sutherland Asbill & Brennan LLP.
(b) Consent of Independent Auditors.
(c) Consent of Myles R. Tashman, incorporated in Item 9 of this
Part C, together with the Opinion of Myles R. Tashman.
(11) Not applicable.
(12) Not applicable.
(13) Schedule of Performance Data. (1)
(14) Not applicable.
(15) Powers of Attorney.
(16) Subsidiaries of ING Groep N.V. (2)
__________________________
(1) Incorporated herein by reference to pre-effective amendment number 1
to a registration statement for Separate Account B on Form N-4 filed
with the Securities and Exchange Commission on or about December 18,
1998 (File Nos. 333-66757, 811-5626).
(2) Incorporated herein by reference to post-effective amendment number 1
to a registration statement for Separate Account B on Form N-4 filed
with the Securities and Exchange Commission on or about April 23, 1999
(File Nos. 333-66757, 811-5626).
<PAGE>
<PAGE>
ITEM 25: DIRECTORS AND OFFICERS OF THE DEPOSITOR
Principal Position(s)
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
Patricia M. Corbett Equitable of Iowa Companies Treasurer & Assistant
909 Locust Street Vice President
Des Moines, IA 50309
Lawrence W. Porter, M.D. Equitable of Iowa Companies Medical Director
909 Locust Street
Des Moines, IA 50309
<PAGE>
<PAGE>
ITEM 26: PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
The Depositor owns 100% of the stock of a newly formed New York company, First
Golden American Life Insurance Company of New York ("First Golden"). The
primary purpose for the formation of First Golden is to offer variable products
in the state of New York.
The following persons control or are under common control with the Depositor:
DIRECTED SERVICES, INC. ("DSI") - This corporation is a general business
corporation organized under the laws of the State of New York, and is
wholly owned by ING Groep N.V. ("ING"). The primary purpose of Directed
Services, Inc. is to act as a broker-dealer in securities. It acts as the
principal underwriter and distributor of variable insurance products including
variable annuities as required by the SEC. The contracts are issued by the
Depositor. DSI also has the power to carry on a general financial, securities,
distribution, advisory or investment advisory business; to act as a general
agent or broker for insurance companies and to render advisory, managerial,
research and consulting services for maintaining and improving managerial
efficiency and operation. DSI is also registered with the SEC as an investment
adviser.
The registrant is a segregated asset account of the Company and is
therefore owned and controlled by the Company. All of the Company's
outstanding stock is owned and controlled by ING. Various companies
and other entities controlled by ING may therefore be considered to be
under common control with the registrant or the Company. Such other
companies and entities, together with the identity of their controlling
persons (where applicable), are set forth on the following organizational
chart.
The subsidiaries of ING are included as Exhibit 16.
Item 27: Number of Contract Owners
As of December 31, 1999, there are 34,298 qualified contract owners and
57,987 non-qualified contract owners in Golden American's Separate
Account B.
ITEM 28: INDEMNIFICATION
Golden American shall indemnify (including therein the prepayment of expenses)
any person who is or was a director, officer or employee, or who is or was
serving at the request of Golden American as a director, officer or employee
of another corporation, partnership, joint venture, trust or other enterprise
for expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him with respect to any
threatened, pending or completed action, suit or proceedings against him by
reason of the fact that he is or was such a director, officer or employee to
the extent and in the manner permitted by law.
Golden American may also, to the extent permitted by law, indemnify any other
person who is or was serving Golden American in any capacity. The Board of
Directors shall have the power and authority to determine who may be
indemnified under this paragraph and to what extent (not to exceed the extent
provided in the above paragraph) any such person may be indemnified.
Golden American or its parents may purchase and maintain insurance on behalf
of any such person or persons to be indemnified under the provision in the
above paragraphs, against any such liability to the extent permitted by law.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended, may be permitted to directors, officers and controlling
persons of the Registrant, as provided above or otherwise, the Registrant has
been advised that in the opinion of the SEC such indemnification by the
Depositor is against public policy, as expressed in the Securities Act of 1933,
and therefore may be unenforceable. In the event that a claim of such
indemnification (except insofar as it provides for the payment by the Depositor
of expenses incurred or paid by a director, officer or controlling person in
the successful defense of any action, suit or proceeding) is asserted against
the Depositor by such director, officer or controlling person and the SEC is
still of the same opinion, the Depositor or Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by the Depositor is against public policy as expressed by the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
<PAGE>
<PAGE>
ITEM 29: PRINCIPAL UNDERWRITER
(a) At present, DSI, the Registrant's Distributor, also serves as principal
underwriter for all contracts issued by Golden American. DSI is the
principal underwriter for Separate Account A of Golden American,
Separate Account B of Golden American, Alger Separate Account A of Golden
American, Separate Account NY-B of First Golden, Separate Account A for
Equitable Life Insurance Company of Iowa and The GCG Trust.
(b) The following information is furnished with respect to the principal
officers and directors of Directed Services, Inc., the Registrant's
Distributor. The principal business address for each officer and director
following is 1475 Dunwoody Drive, West Chester, PA 19380-1478, unless
otherwise noted.
Name and Principal Positions and Offices
Business Address with Underwriter
- ------------------- ---------------------
James R. McInnis President
Barnett Chernow Director and Executive Vice President
Myles R. Tashman Director, Executive Vice President,
Secretary and General Counsel
R. Lawrence Roth Director
VESTAX Capital Corporation
1931 Georgetown Road
Hudson, OH 44236
Stephen J. Preston Senior Vice President
Jodie Schult Treasurer
Equitable of Iowa Companies
909 Locust Street
Des Moines, IA 50309
David L. Jacobson Senior Vice President
(c)
1998 Net
Name of Underwriting Compensation
Principal Discounts and on Brokerage
Underwriter Commissions Redemption Commissions Compensation
----------- ----------- ---------- ----------- ------------
Directed $115,716,000 $0 $0 $0
Services, Inc.
ITEM 30: LOCATION OF ACCOUNTS AND RECORDS
Accounts and records are maintained by Golden American Life Insurance Company
at 1475 Dunwoody Drive, West Chester, PA 19380 and by Equitable
Life Insurance Company of Iowa, an affiliate, at 909 Locust Street,
Des Moines, IA 50309.
ITEM 31: MANAGEMENT SERVICES
None.
ITEM 32: UNDERTAKINGS
(a) Registrant hereby undertakes to file a post-effective amendment to this
registration statement as frequently as it is necessary to ensure that the
audited financial statements in the registration statement are never
more that 16 months old so long as payments under the variable annuity
contracts may be accepted.
(b) Registrant hereby undertakes to include either (1) as part of any
application to purchase a contract offered by the prospectus, a space that an
applicant can check to request a Statement of Additional Information, or (2) a
post card or similar written communication affixed to or included in the
prospectus that the applicant can remove to send for a Statement of Additional
Information; and,
(c) Registrant hereby undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available under
this Form promptly upon written or oral request.
<PAGE>
<PAGE>
REPRESENTATIONS
1. The account meets definition of a "separate account" under federal
securities laws.
2. Golden American Life Insurance Company hereby represents that the fees
and charges deducted under the Contract described in the Prospectus, in
the aggregate, are reasonable in relation to the services rendered, the
expenses to be incurred and the risks assumed by the Company.
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act
of 1940, the Registrant certifies that it meets the requirements of
Securities Act Rule 485(b) for effectiveness of this Registration Statement
and has caused this Registration Statement to be signed on its behalf, in
the City of West Chester, and Commonwealth of Pennsylvania, on this 27th
day of January, 2000.
SEPARATE ACCOUNT B
(Registrant)
By: GOLDEN AMERICAN LIFE
INSURANCE COMPANY
(Depositor)
By:
--------------------
Barnett Chernow*
President
Attest: /s/Marilyn Talman
------------------------
Marilyn Talman
Vice President, Associate General Counsel
and Assistant Secretary of Depositor
As required by the Securities Act of 1933, this Registration Statement has
been signed below by the following person in the capacities indicated on
January 27, 2000.
Signature Title
President and Director
- -------------------- of Depositor
Barnett Chernow*
- -------------------- Senior Vice President
E. Robert Koster* and Chief Financial Officer
DIRECTORS OF DEPOSITOR
- ----------------------
Myles R. Tashman*
- ----------------------
Michael W. Cunningham*
- ----------------------
Phillip R. Lowery*
- ----------------------
Mark A. Tullis*
By: /s/Marilyn Talman Attorney-in-Fact
-----------------------
Marilyn Talman
_______________________
*Executed by Marilyn Talman on behalf of those indicated pursuant
to Power of Attorney.
<PAGE>
<PAGE>
EXHIBIT INDEX
ITEM EXHIBIT PAGE #
5(a) Individual Deferred Combination Variable and Fixed EX-99.B5A
Annuity Application
5(b) Group Deferred Combination Variable and Fixed Annuity EX-99.B5B
Enrollment Form
5(c) Individual Deferred Variable Annuity Application EX-99.B5C
8(h) Surplus Note between Golden American and First EX-99.B8H
Columbine Life Insurance Company
8(i) Surplus Note between Golden American and Equitable EX-99.B8I
Life Insurance Company of Iowa
9 Opinion and Consent of Myles R. Tashman EX-99.B9
10(a) Consent of Sutherland Asbill & Brennan LLP EX-99.B10A
10(b) Consent of Ernst & Young LLP, Independent Auditors EX-99.B10B
15 Powers of Attorney EX-99.B15
<PAGE>
<PAGE>
<PAGE>
<PAGE>
Exhibit 5(a)
|
| [APPLICATIONS appears down the left margin]
|
|
|
|
| A GOLDEN OPPORTUNITY FOR SELECT CLIENTS
|
| GoldenSelect/R/ Application
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| [GOLDENSELECT/R/ appears down left margin]
|
|
|
|
|
|
|
|
|
|
| Issued by Golden American Life Insurance Company
| Distributed by Directed Services, Inc., Member NASD
| GA-AA-1050 ING VARIABLE ANNUITIES
|
|
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY DEFERRED VARIABLE ANNUITY
APPLICATION
P.O. Box 2700, West Chester, PA 19380-2700 Phone:(800) 366-0066
Express Mail: ING Variable Annuities 1475 Dunwoody Drive West Chester, PA 19380
===============================================================================
|1(A)| OWNER
- ------
Name: SSN# or Tax ID:
- -------------------------------------------------------------------------------
Permanent Address: City: State: Zip:
- -------------------------------------------------------------------------------
Date of Birth: Phone: EMail Address: Male / / Female / /
- -------------------------------------------------------------------------------
===============================================================================
|1(B)| JOINT OWNER(S) Relationship to Owner:
- ------ ----------------------
Name: SSN# or Tax ID:
- -------------------------------------------------------------------------------
Permanent Address: City: State: Zip:
- -------------------------------------------------------------------------------
Date of Birth: Phone: EMail Address: Male / / Female / /
- -------------------------------------------------------------------------------
===============================================================================
|2(A)| ANNUITANT (If other than owner)
- ------
Name: SSN# or Tax ID:
- -------------------------------------------------------------------------------
Permanent Address: City: State: Zip:
- -------------------------------------------------------------------------------
Date of Birth: Phone: EMail Address: Male / / Female / /
- -------------------------------------------------------------------------------
===============================================================================
|2(B)| CONTINGENT ANNUITANT (Optional)
- ------
Name: SSN# or Tax ID:
- -------------------------------------------------------------------------------
Permanent Address: City: State: Zip:
- -------------------------------------------------------------------------------
Date of Birth: Phone: EMail Address: Male / / Female / /
- -------------------------------------------------------------------------------
===============================================================================
| 3 | BENEFICIARY(S)
- ----- Percentage
Primary Name: Relationship to Owner: %
--------------- ----------------- ---------
Primary Name: Relationship to Owner: %
--------------- ----------------- ---------
Primary Name: Relationship to Owner: %
--------------- ----------------- ---------
Contingent Name: Relationship to Owner: %
--------------- -------------- ---------
Contingent Name: Relationship to Owner: %
--------------- -------------- ---------
===============================================================================
| 4 |
- -----
PRODUCT(Select one plan) DEATH BENEFIT OPTIONS (Select one) RIDERS (Optional)
MAX 7 7% Solution Ratchet Standard MGIB MGAB MGWB
/ / Premium Plus / / / / / / / / / / / / / /
- -------------------------------------------------------------------------------
/ / Access / / / / / / / / / / / / / /
- -------------------------------------------------------------------------------
/ / ES II ONLY ONE DEATH BENEFIT OFFERED / / / / / /
- -------------------------------------------------------------------------------
/ / Value ONLY ONE DEATH BENEFIT OFFERED / / / / / /
- -------------------------------------------------------------------------------
/ / DVA Plus / / / / / / / / / / / / / /
- -------------------------------------------------------------------------------
/ / Other: / / / / / / / / / / / / / /
- -------------------------------------------------------------------------------
ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR
OTHER PERSON FILES AN APPLICATION FOR INSURANCE CONTAINING ANY MATERIALLY FALSE
INFORMATION, OR CONCEALS FOR THE PUROSE OF MISLEADING INFORMATION CONCERNING
ANY FACT MATERIAL THER TO, COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS A CRIME
GA-AA-1050 INDICIA 11/22/1999
104131
<PAGE>
<PAGE>
===============================================================================
| 5 | INITIAL PREMIUM AND ALLOCATION INFORMATION
- -----
A. INITIAL INVESTMENT
1) Initial Premium Paid: $________ (If initital premium is either an exchange
or transfe, please indicate approximate premium.) Please make check payable
to Golden American Life Insurance Company
2) Fill in percentages for your initial investment allocation(s) in Column (A)
below
B. DOLLAR COST AVERAGING (DCA) OPTIONAL
1) Amount to be transferred monthly $_________ (Max: 1/12of premium allocated
to divisions below: 1/6 for 6 Month DCA)
2) Division or Allocation your transferred from: / /Limited Maturity Bond
Division / /Liquid Asset Division / /1 YR Fixed / / 6 Month DCA
3) Please indicate the divisions you wish to transfer to by filling in
percentage and dollar amounts in Column B below
INVESTMENT ADVISER ACCOUNT DIVISION A)INITIAL INVESTMENT B)DCA
- ------------------ ---------------- ------------------ ---
A I M CAPITAL CAPITAL APPRECIATION $________ ________% ______%
MANAGMENT, INC.
A I M CAPITAL STRATEGIC EQUITY $________ ________% ______%
MANAGMENT, INC.
ALLIANCE CAPITAL CAPITAL GROWTH $________ ________% ______%
MANAGMENT, INC.
BARING INTERNATIONAL GLOBAL FIXED INCOME $________ ________% ______%
INVESTMENT LIMITED
BARING INTERNATIONAL HARD ASSETS $________ ________% ______%
INVESTMENT LIMITED
BARING INTERNATIONAL DEVELOPING WORLD $________ ________% ______%
INVESTMENT LIMITED
CAPITAL GUARDIAN SMALL CAP $________ ________% ______%
TRUST COMPANY
CAPITAL GUARDIAN MANAGED GLOBAL $________ ________% ______%
TRUST COMPANY
CREDIT SUISSE ASSET INTERNATIONAL EQUITY $________ ________% ______%
MANAGEMENT, LLC
EAGLE ASSET VALUE EQUITY $________ ________% ______%
MANAGEMENT, LLC
EII REALTY REAL ESTATE $________ ________% ______%
SECURITIES, INC.
ING INVESTMENT LIMITED MATURITY BOND $________ ________% ______%
MANAGEMENT, LLC
ING INVESTMENT LIQUID ASSET $________ ________% ______%
MANAGEMENT, LLC
JANUS CAPITAL GROWTH $________ ________% ______%
CORPORATION
MFS INVESTMENT MID-CAP GROWTH $________ ________% ______%
MANAGEMENT
MFS INVESTMENT RESEARCH $________ ________% ______%
MANAGEMENT
MFS INVESTMENT TOTAL RETURN $________ ________% ______%
MANAGEMENT
PACIFIC INVESTMENT HIGH YIELD BOND $________ ________% ______%
MANAGEMENT COMPANY (PIMCO)
PACIFIC INVESTMENT STOCKSPLUS GRWOTH $________ ________% ______%
MANAGEMENT COMPANY (PIMCO) & INCOME
PUTNAM INVESTMENT EMERGING MARKETS/1/ $________ ________% ______%
MANAGEMENT, INC.
SALOMON BROTHERS ALL-CAP $________ ________% ______%
ASSET MANAGEMENT, INC.
SALOMON BROTHERS INVESTORS $________ ________% ______%
ASSET MANAGEMENT, INC.
T. ROWE PRICE EQUITY INCOME $________ ________% ______%
ASSOCIATES INC.
T. ROWE PRICE FULLY MANAGED $________ ________% ______%
ASSOCIATES INC.
FIXED ALLOCATIONS: / /1 YR / /3 YR / /5 YR
/ /10 YR (Not Available in all
states) / /6 Month DCA
TOTAL = $________ 100% 100%
/1/ ONLY AVAILABLE WITH DVAPLUS AND ACCESS
GA-AA-1050 INDICIA 11/22/1999
104131
<PAGE>
<PAGE>
===============================================================================
| 8 | TELEPHONE REALLOCATION AUTHORIZATION
- ----- (Owner's initials to validate agent)_______
I authorize Golden American to act upon reallocation instructions given by
electronic means or voice command from the agen that signs below and/or the
following individuals:______________________, _______________________; upon
furnishing his/her social security number or alternative identification.
Neither Golden American nor any person authorized by Golden American will be
responsible for any claim, loss, liability or expenses in connection with
reallocation instructions received by electronic means or voice command from
such person if Golden American or other such person acted on such electronic
means or voice command in good faith in reliance upon this authorization. Golden
American will continue to act upon this authorization until such time as the
person indicated above is no longer affiliated with the broker/dealer under
which my contract was purchased or until such time that I notify Golden American
in writing of a change in instructions.
===============================================================================
| 7 | TAX-QUALIFIED PLANS (If you are funding a qualified plan, please
- ----- specify type):
/ /IRA Indicate contribution amount and appropriate tax year ________________
/ /IRA Rollover
/ /SEP/IRA / /SAR SEP IRA / /401(B) TSA Transfer / /401(a) Plan
/ /CONDUIT IRA
/ /Roth IRA If transfer, provide original conversion date ___________
/ /Simple IRA Transfer Provide establishment date ____________
/ / Other ________________________
===============================================================================
| 8 | REPLACEMENT
- ----
Will the coverage applied for replace any existing annuity or life insurance
coverage? / / Yes (If yes, please fill in below) / / No
Company Name: Policy Number: Cash Value:
--------------------- ---------- ----------
===============================================================================
| 9 | PLEASE READ THE FOLLOWING STATEMENTS CAREFULLY AND SIGN BELOW:
- -----
BY SIGNING BELOW, I ACKNOWLEDGE RECEIPT OF THE PROSPECTUS. I AGREE
THAT, TO THE BEST OF MY KNOWLEDGE AND BELIEF, ALL STATEMENTS AND
ANSWERS IN THIS APPLICATION ARE COMPLETE AND TRUE AND MAY BE RELIED
UPON IN DETERMINING WHETHER TO ISSUE THE CONTRACT. MY ANSWERS WILL FORM
A PART OF ANY CONTRACT TO BE ISSUED, AND ONLY THE OWNER AND GOLDEN
AMERICAN HAVE THE AUTHORITY TO MODIFY THIS APPLICATION.
CONTRACTS AND POLICIES AND UNDERLYING SERIES SHARES OR SECURITIES
WHICH FUND CONTRACTS AND POLICIES ARE NOT INSURED BY THE FDIC OR ANY
OTHER AGENCY. THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK
AND ARE NOT BANK GUARANTEED. ALSO, THEY ARE SUBJECT TO MARKET
FLUCTUATION, INVESTMENT RISK AND POSSIBLE LOSS OF PRINCIPAL INVESTED.
I UNDERSTAND THAT THE CONTRACT'S CASH SURRENDER VALUE, WHEN BASED
ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT DIVISION, MAY
INCREASE OR DECREASE ON ANY DAY AND THAT NO MINIMUM VALUE IS GUARANTEED.
THE CONTRACT'S COVERAGE IS IN ACCORD WITH MY ANTICIPATED FINANCIAL
OBJECTIVES.
I UNDERSTAND THAT ANY AMOUNT ALLOCATED TO THE FIXED ACCOUNT MAY BE SUBJECT
TO A MARKET VALUE ADJUSTMENT, WHICH MAY CAUSE THE VALUES TO INCREASE OR
DECREAS, PRIOR TO A SPECIFIED DATE OR DATES AS SPECIFIED INTHE CONTRACT.
MY SIGNATURE CERTIFIES, UNDER PENALTY OF PERJURY, THAT TEH TAXPAYER
IDENTIFICATION NUMBER PROVIDED IS CORRECT. I AM NOT SUBJECT TO BACKUP
WITHHOLDING BECAUSE: I AM EXEMPT; OR I HAVE NOT BEEN NOTIFIED THAT I AM
SUBJECT TO BACKUP WITHHOLDINGS FROM FAILURE TO REPORT ALL INTEREST
DIVIDENDS; OR I HAVE BEEN NOTIFIED THAT I AM NO LONGER SUBJECT TO BACKUP
WITHHOLDING. (STRIKE OUT THE PRECEDING SENTENCE IF SUBJECT TO BACKUP
WITHHOLDING.) THE IRS DOES NOT REQUIRE MY CONSENT TO ANY PROVISION OF THIS
DOCUMENT OTHER THAN THE CERTIFICATION REQUIRED TO AVOID BACKUP WITHHOLDING.
_______________________________________________________________________________
Signature of Owner Signed at (City, State) Date
_______________________________________________________________________________
Signature of Joint Owner (if applicable) Signed at (City, State) Date
_______________________________________________________________________________
Signature of Annuitant (if other than Signed at (City, State) Date
Owner)
===============================================================================
|10| SPECIAL REMARKS
- ----
===============================================================================
|11| FOR AGENT USE ONLY
- ----
DO YOU HAVE REASON TO BELIEVE THAT THE CONTRACT APPLIED FOR WILL REPLACE ANY
EXISTING ANNUITY OR LIFE INSURANCE COVERAGE?
/ / YES / / NO
Commission Alternative (select one): / / A / / B / / C / / D
Client Account No. (if applicable)_____________________
_______________________________________________________________________________
Agent Signature Print Agent Name Social Security # Broker/Dealer/Branch
GA-AA-1051 INDICIA 11/22/1999
104131
<PAGE>
<PAGE>
<PAGE>
<PAGE>
Exhibit 5(b)
|
| [ENROLLMENT FORM appears down the left margin]
|
|
|
|
| A GOLDEN OPPORTUNITY FOR SELECT CLIENTS
|
| GoldenSelect/R/ Enrollment Form
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| [GOLDENSELECT/R/ appears down left margin]
|
|
|
|
|
|
|
|
|
|
| Issued by Golden American Life Insurance Company
| Distributed by Directed Services, Inc., Member NASD
| GA-EA-1050 ING VARIABLE ANNUITIES
|
|
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY DEFERRED VARIABLE ANNUITY
ENROLLMENT FORM
P.O. Box 2700, West Chester, PA 19380-2700 Phone:(800) 366-0066
Express Mail: ING Variable Annuities 1475 Dunwoody Drive West Chester, PA 19380
===============================================================================
|1(A)| OWNER
- ------
Name: SSN# or Tax ID:
- -------------------------------------------------------------------------------
Permanent Address: City: State: Zip:
- -------------------------------------------------------------------------------
Date of Birth: Phone: EMail Address: Male / / Female / /
- -------------------------------------------------------------------------------
===============================================================================
|1(B)| JOINT OWNER(S) Relationship to Owner:
- ------ ----------------------
Name: SSN# or Tax ID:
- -------------------------------------------------------------------------------
Permanent Address: City: State: Zip:
- -------------------------------------------------------------------------------
Date of Birth: Phone: EMail Address: Male / / Female / /
- -------------------------------------------------------------------------------
===============================================================================
|2(A)| ANNUITANT (If other than owner)
- ------
Name: SSN# or Tax ID:
- -------------------------------------------------------------------------------
Permanent Address: City: State: Zip:
- -------------------------------------------------------------------------------
Date of Birth: Phone: EMail Address: Male / / Female / /
- -------------------------------------------------------------------------------
===============================================================================
|2(B)| CONTINGENT ANNUITANT (Optional)
- ------
Name: SSN# or Tax ID:
- -------------------------------------------------------------------------------
Permanent Address: City: State: Zip:
- -------------------------------------------------------------------------------
Date of Birth: Phone: EMail Address: Male / / Female / /
- -------------------------------------------------------------------------------
===============================================================================
| 3 | BENEFICIARY(S)
- ----- Percentage
Primary Name: Relationship to Owner: %
--------------- ----------------- ---------
Primary Name: Relationship to Owner: %
--------------- ----------------- ---------
Primary Name: Relationship to Owner: %
--------------- ----------------- ---------
Contingent Name: Relationship to Owner: %
--------------- -------------- ---------
Contingent Name: Relationship to Owner: %
--------------- -------------- ---------
===============================================================================
| 4 |
- -----
PRODUCT(Select one plan) DEATH BENEFIT OPTIONS (Select one) RIDERS (Optional)
MAX 7 7% Solution Ratchet Standard MGIB MGAB MGWB
/ / Premium Plus / / / / / / / / / / / / / /
- -------------------------------------------------------------------------------
/ / Access / / / / / / / / / / / / / /
- -------------------------------------------------------------------------------
/ / ES II ONLY ONE DEATH BENEFIT OFFERED / / / / / /
- -------------------------------------------------------------------------------
/ / Value ONLY ONE DEATH BENEFIT OFFERED / / / / / /
- -------------------------------------------------------------------------------
/ / DVA Plus / / / / / / / / / / / / / /
- -------------------------------------------------------------------------------
/ / Other: / / / / / / / / / / / / / /
- -------------------------------------------------------------------------------
ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR
OTHER PERSON FILES AN APPLICATION FOR INSURANCE CONTAINING ANY MATERIALLY FALSE
INFORMATION, OR CONCEALS FOR THE PUROSE OF MISLEADING INFORMATION CONCERNING
ANY FACT MATERIAL THER TO, COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS A CRIME
GA-EA-1050 INDICIA 11/22/1999
104141
<PAGE>
<PAGE>
===============================================================================
| 5 | INITIAL PREMIUM AND ALLOCATION INFORMATION
- -----
A. INITIAL INVESTMENT
1) Initial Premium Paid: $________ (If initital premium is either an exchange
or transfe, please indicate approximate premium.) Please make check payable
to Golden American Life Insurance Company
2) Fill in percentages for your initial investment allocation(s) in Column (A)
below
B. DOLLAR COST AVERAGING (DCA) OPTIONAL
1) Amount to be transferred monthly $_________ (Max: 1/12of premium allocated
to divisions below: 1/6 for 6 Month DCA)
2) Division or Allocation your transferred from: / /Limited Maturity Bond
Division / /Liquid Asset Division / /1 YR Fixed / / 6 Month DCA
3) Please indicate the divisions you wish to transfer to by filling in
percentage and dollar amounts in Column B below
INVESTMENT ADVISER ACCOUNT DIVISION A)INITIAL INVESTMENT B)DCA
- ------------------ ---------------- ------------------ ---
A I M CAPITAL CAPITAL APPRECIATION $________ ________% ______%
MANAGMENT, INC.
A I M CAPITAL STRATEGIC EQUITY $________ ________% ______%
MANAGMENT, INC.
ALLIANCE CAPITAL CAPITAL GROWTH $________ ________% ______%
MANAGMENT, INC.
BARING INTERNATIONAL GLOBAL FIXED INCOME $________ ________% ______%
INVESTMENT LIMITED
BARING INTERNATIONAL HARD ASSETS $________ ________% ______%
INVESTMENT LIMITED
BARING INTERNATIONAL DEVELOPING WORLD $________ ________% ______%
INVESTMENT LIMITED
CAPITAL GUARDIAN SMALL CAP $________ ________% ______%
TRUST COMPANY
CAPITAL GUARDIAN MANAGED GLOBAL $________ ________% ______%
TRUST COMPANY
CREDIT SUISSE ASSET INTERNATIONAL EQUITY $________ ________% ______%
MANAGEMENT, LLC
EAGLE ASSET VALUE EQUITY $________ ________% ______%
MANAGEMENT, LLC
EII REALTY REAL ESTATE $________ ________% ______%
SECURITIES, INC.
ING INVESTMENT LIMITED MATURITY BOND $________ ________% ______%
MANAGEMENT, LLC
ING INVESTMENT LIQUID ASSET $________ ________% ______%
MANAGEMENT, LLC
JANUS CAPITAL GROWTH $________ ________% ______%
CORPORATION
MFS INVESTMENT MID-CAP GROWTH $________ ________% ______%
MANAGEMENT
MFS INVESTMENT RESEARCH $________ ________% ______%
MANAGEMENT
MFS INVESTMENT TOTAL RETURN $________ ________% ______%
MANAGEMENT
PACIFIC INVESTMENT HIGH YIELD BOND $________ ________% ______%
MANAGEMENT COMPANY (PIMCO)
PACIFIC INVESTMENT STOCKSPLUS GRWOTH $________ ________% ______%
MANAGEMENT COMPANY (PIMCO) & INCOME
PUTNAM INVESTMENT EMERGING MARKETS/1/ $________ ________% ______%
MANAGEMENT, INC.
SALOMON BROTHERS ALL-CAP $________ ________% ______%
ASSET MANAGEMENT, INC.
SALOMON BROTHERS INVESTORS $________ ________% ______%
ASSET MANAGEMENT, INC.
T. ROWE PRICE EQUITY INCOME $________ ________% ______%
ASSOCIATES INC.
T. ROWE PRICE FULLY MANAGED $________ ________% ______%
ASSOCIATES INC.
FIXED ALLOCATIONS: / /1 YR / /3 YR / /5 YR
/ /10 YR (Not Available in all
states) / /6 Month DCA
TOTAL = $________ 100% 100%
/1/ ONLY AVAILABLE WITH DVAPLUS AND ACCESS
GA-EA-1050 INDICIA 11/22/1999
104141
<PAGE>
<PAGE>
===============================================================================
| 8 | TELEPHONE REALLOCATION AUTHORIZATION
- ----- (Owner's initials to validate agent)_______
I authorize Golden American to act upon reallocation instructions given by
electronic means or voice command from the agen that signs below and/or the
following individuals:______________________, _______________________; upon
furnishing his/her social security number or alternative identification.
Neither Golden American nor any person authorized by Golden American will be
responsible for any claim, loss, liability or expenses in connection with
reallocation instructions received by electronic means or voice command from
such person if Golden American or other such person acted on such electronic
means or voice command in good faith in reliance upon this authorization. Golden
American will continue to act upon this authorization until such time as the
person indicated above is no longer affiliated with the broker/dealer under
which my contract was purchased or until such time that I notify Golden American
in writing of a change in instructions.
===============================================================================
| 7 | TAX-QUALIFIED PLANS (If you are funding a qualified plan, please
- ----- specify type):
/ /IRA Indicate contribution amount and appropriate tax year ________________
/ /IRA Rollover
/ /SEP/IRA / /SAR SEP IRA / /401(B) TSA Transfer / /401(a) Plan
/ /CONDUIT IRA
/ /Roth IRA If transfer, provide original conversion date ___________
/ /Simple IRA Transfer Provide establishment date ____________
/ / Other ________________________
===============================================================================
| 8 | REPLACEMENT
- ----
Will the coverage applied for replace any existing annuity or life insurance
coverage? / / Yes (If yes, please fill in below) / / No
Company Name: Policy Number: Cash Value:
--------------------- ---------- ----------
===============================================================================
| 9 | PLEASE READ THE FOLLOWING STATEMENTS CAREFULLY AND SIGN BELOW:
- -----
BY SIGNING BELOW, I ACKNOWLEDGE RECEIPT OF THE PROSPECTUS. I AGREE
THAT, TO THE BEST OF MY KNOWLEDGE AND BELIEF, ALL STATEMENTS AND
ANSWERS IN THIS APPLICATION ARE COMPLETE AND TRUE AND MAY BE RELIED
UPON IN DETERMINING WHETHER TO ISSUE THE CONTRACT. MY ANSWERS WILL FORM
A PART OF ANY CONTRACT TO BE ISSUED, AND ONLY THE OWNER AND GOLDEN
AMERICAN HAVE THE AUTHORITY TO MODIFY THIS APPLICATION.
CONTRACTS AND POLICIES AND UNDERLYING SERIES SHARES OR SECURITIES
WHICH FUND CONTRACTS AND POLICIES ARE NOT INSURED BY THE FDIC OR ANY
OTHER AGENCY. THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK
AND ARE NOT BANK GUARANTEED. ALSO, THEY ARE SUBJECT TO MARKET
FLUCTUATION, INVESTMENT RISK AND POSSIBLE LOSS OF PRINCIPAL INVESTED.
I UNDERSTAND THAT THE CONTRACT'S CASH SURRENDER VALUE, WHEN BASED
ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT DIVISION, MAY
INCREASE OR DECREASE ON ANY DAY AND THAT NO MINIMUM VALUE IS GUARANTEED.
THE CONTRACT'S COVERAGE IS IN ACCORD WITH MY ANTICIPATED FINANCIAL
OBJECTIVES.
I UNDERSTAND THAT ANY AMOUNT ALLOCATED TO THE FIXED ACCOUNT MAY BE SUBJECT
TO A MARKET VALUE ADJUSTMENT, WHICH MAY CAUSE THE VALUES TO INCREASE OR
DECREAS, PRIOR TO A SPECIFIED DATE OR DATES AS SPECIFIED INTHE CONTRACT.
MY SIGNATURE CERTIFIES, UNDER PENALTY OF PERJURY, THAT TEH TAXPAYER
IDENTIFICATION NUMBER PROVIDED IS CORRECT. I AM NOT SUBJECT TO BACKUP
WITHHOLDING BECAUSE: I AM EXEMPT; OR I HAVE NOT BEEN NOTIFIED THAT I AM
SUBJECT TO BACKUP WITHHOLDINGS FROM FAILURE TO REPORT ALL INTEREST
DIVIDENDS; OR I HAVE BEEN NOTIFIED THAT I AM NO LONGER SUBJECT TO BACKUP
WITHHOLDING. (STRIKE OUT THE PRECEDING SENTENCE IF SUBJECT TO BACKUP
WITHHOLDING.) THE IRS DOES NOT REQUIRE MY CONSENT TO ANY PROVISION OF THIS
DOCUMENT OTHER THAN THE CERTIFICATION REQUIRED TO AVOID BACKUP WITHHOLDING.
_______________________________________________________________________________
Signature of Owner Signed at (City, State) Date
_______________________________________________________________________________
Signature of Joint Owner (if applicable) Signed at (City, State) Date
_______________________________________________________________________________
Signature of Annuitant (if other than Signed at (City, State) Date
Owner)
===============================================================================
|10| SPECIAL REMARKS
- ----
===============================================================================
|11| FOR AGENT USE ONLY
- ----
DO YOU HAVE REASON TO BELIEVE THAT THE CONTRACT APPLIED FOR WILL REPLACE ANY
EXISTING ANNUITY OR LIFE INSURANCE COVERAGE?
/ / YES / / NO
Commission Alternative (select one): / / A / / B / / C / / D
Client Account No. (if applicable)_____________________
_______________________________________________________________________________
Agent Signature Print Agent Name Social Security # Broker/Dealer/Branch
GA-EA-1051 INDICIA 11/22/1999
104141
<PAGE>
<PAGE>
<PAGE>
<PAGE>
Exhibit 5(c)
|
| [APPLICATIONS appears down the left margin]
|
|
|
|
| A GOLDEN OPPORTUNITY FOR SELECT CLIENTS
|
| GoldenSelect/R/ Application
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| [GOLDENSELECT/R/ appears down left margin]
|
|
|
|
|
|
|
|
|
|
| Issued by Golden American Life Insurance Company
| Distributed by Directed Services, Inc., Member NASD
| GA-AA-1051 ING VARIABLE ANNUITIES
|
|
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY DEFERRED VARIABLE ANNUITY
APPLICATION
P.O. Box 2700, West Chester, PA 19380-2700 Phone:(800) 366-0066
Express Mail: ING Variable Annuities 1475 Dunwoody Drive West Chester, PA 19380
===============================================================================
|1(A)| OWNER
- ------
Name: SSN# or Tax ID:
- -------------------------------------------------------------------------------
Permanent Address: City: State: Zip:
- -------------------------------------------------------------------------------
Date of Birth: Phone: EMail Address: Male / / Female / /
- -------------------------------------------------------------------------------
===============================================================================
|1(B)| JOINT OWNER(S) Relationship to Owner:
- ------ ----------------------
Name: SSN# or Tax ID:
- -------------------------------------------------------------------------------
Permanent Address: City: State: Zip:
- -------------------------------------------------------------------------------
Date of Birth: Phone: EMail Address: Male / / Female / /
- -------------------------------------------------------------------------------
===============================================================================
|2(A)| ANNUITANT (If other than owner)
- ------
Name: SSN# or Tax ID:
- -------------------------------------------------------------------------------
Permanent Address: City: State: Zip:
- -------------------------------------------------------------------------------
Date of Birth: Phone: EMail Address: Male / / Female / /
- -------------------------------------------------------------------------------
===============================================================================
|2(B)| CONTINGENT ANNUITANT (Optional)
- ------
Name: SSN# or Tax ID:
- -------------------------------------------------------------------------------
Permanent Address: City: State: Zip:
- -------------------------------------------------------------------------------
Date of Birth: Phone: EMail Address: Male / / Female / /
- -------------------------------------------------------------------------------
===============================================================================
| 3 | BENEFICIARY(S)
- ----- Percentage
Primary Name: Relationship to Owner: %
--------------- ----------------- ---------
Primary Name: Relationship to Owner: %
--------------- ----------------- ---------
Primary Name: Relationship to Owner: %
--------------- ----------------- ---------
Contingent Name: Relationship to Owner: %
--------------- -------------- ---------
Contingent Name: Relationship to Owner: %
--------------- -------------- ---------
===============================================================================
| 4 |
- -----
PRODUCT(Select one plan) DEATH BENEFIT OPTIONS (Select one) RIDERS (Optional)
MAX 7 7% Solution Ratchet Standard MGIB MGAB MGWB
/ / Premium Plus / / / / / / / / / / / / / /
- -------------------------------------------------------------------------------
/ / Access / / / / / / / / / / / / / /
- -------------------------------------------------------------------------------
/ / ES II ONLY ONE DEATH BENEFIT OFFERED / / / / / /
- -------------------------------------------------------------------------------
/ / Value ONLY ONE DEATH BENEFIT OFFERED / / / / / /
- -------------------------------------------------------------------------------
/ / DVA Plus / / / / / / / / / / / / / /
- -------------------------------------------------------------------------------
/ / Other: / / / / / / / / / / / / / /
- -------------------------------------------------------------------------------
ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR
OTHER PERSON FILES AN APPLICATION FOR INSURANCE CONTAINING ANY MATERIALLY FALSE
INFORMATION, OR CONCEALS FOR THE PUROSE OF MISLEADING INFORMATION CONCERNING
ANY FACT MATERIAL THER TO, COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS A CRIME
GA-AA-1051 INDICIA 11/22/1999
104136
<PAGE>
<PAGE>
===============================================================================
| 5 | INITIAL PREMIUM AND ALLOCATION INFORMATION
- -----
A. INITIAL INVESTMENT
1) Initial Premium Paid: $________ (If initital premium is either an exchange
or transfe, please indicate approximate premium.) Please make check payable
to Golden American Life Insurance Company
2) Fill in percentages for your initial investment allocation(s) in Column (A)
below
B. DOLLAR COST AVERAGING (DCA) OPTIONAL
1) Amount to be transferred monthly $_________ (Max: 1/12of premium allocated
to divisions below: 1/6 for 6 Month DCA)
2) Division or Allocation your transferred from: / /Limited Maturity Bond
Division / /Liquid Asset Division / /1 YR Fixed / / 6 Month DCA
3) Please indicate the divisions you wish to transfer to by filling in
percentage and dollar amounts in Column B below
INVESTMENT ADVISER ACCOUNT DIVISION A)INITIAL INVESTMENT B)DCA
- ------------------ ---------------- ------------------ ---
A I M CAPITAL CAPITAL APPRECIATION $________ ________% ______%
MANAGMENT, INC.
A I M CAPITAL STRATEGIC EQUITY $________ ________% ______%
MANAGMENT, INC.
ALLIANCE CAPITAL CAPITAL GROWTH $________ ________% ______%
MANAGMENT, INC.
BARING INTERNATIONAL GLOBAL FIXED INCOME $________ ________% ______%
INVESTMENT LIMITED
BARING INTERNATIONAL HARD ASSETS $________ ________% ______%
INVESTMENT LIMITED
BARING INTERNATIONAL DEVELOPING WORLD $________ ________% ______%
INVESTMENT LIMITED
CAPITAL GUARDIAN SMALL CAP $________ ________% ______%
TRUST COMPANY
CAPITAL GUARDIAN MANAGED GLOBAL $________ ________% ______%
TRUST COMPANY
CREDIT SUISSE ASSET INTERNATIONAL EQUITY $________ ________% ______%
MANAGEMENT, LLC
EAGLE ASSET VALUE EQUITY $________ ________% ______%
MANAGEMENT, LLC
EII REALTY REAL ESTATE $________ ________% ______%
SECURITIES, INC.
ING INVESTMENT LIMITED MATURITY BOND $________ ________% ______%
MANAGEMENT, LLC
ING INVESTMENT LIQUID ASSET $________ ________% ______%
MANAGEMENT, LLC
JANUS CAPITAL GROWTH $________ ________% ______%
CORPORATION
MFS INVESTMENT MID-CAP GROWTH $________ ________% ______%
MANAGEMENT
MFS INVESTMENT RESEARCH $________ ________% ______%
MANAGEMENT
MFS INVESTMENT TOTAL RETURN $________ ________% ______%
MANAGEMENT
PACIFIC INVESTMENT HIGH YIELD BOND $________ ________% ______%
MANAGEMENT COMPANY (PIMCO)
PACIFIC INVESTMENT STOCKSPLUS GRWOTH $________ ________% ______%
MANAGEMENT COMPANY (PIMCO) & INCOME
PUTNAM INVESTMENT EMERGING MARKETS/1/ $________ ________% ______%
MANAGEMENT, INC.
SALOMON BROTHERS ALL-CAP $________ ________% ______%
ASSET MANAGEMENT, INC.
SALOMON BROTHERS INVESTORS $________ ________% ______%
ASSET MANAGEMENT, INC.
T. ROWE PRICE EQUITY INCOME $________ ________% ______%
ASSOCIATES INC.
T. ROWE PRICE FULLY MANAGED $________ ________% ______%
ASSOCIATES INC.
FIXED ALLOCATIONS: / /1 YR / /3 YR / /5 YR
/ /10 YR (Not Available in all
states) / /6 Month DCA
TOTAL = $________ 100% 100%
/1/ ONLY AVAILABLE WITH DVAPLUS AND ACCESS
GA-AA-1051 INDICIA 11/22/1999
104136
<PAGE>
<PAGE>
===============================================================================
| 8 | TELEPHONE REALLOCATION AUTHORIZATION
- ----- (Owner's initials to validate agent)_______
I authorize Golden American to act upon reallocation instructions given by
electronic means or voice command from the agen that signs below and/or the
following individuals:______________________, _______________________; upon
furnishing his/her social security number or alternative identification.
Neither Golden American nor any person authorized by Golden American will be
responsible for any claim, loss, liability or expenses in connection with
reallocation instructions received by electronic means or voice command from
such person if Golden American or other such person acted on such electronic
means or voice command in good faith in reliance upon this authorization. Golden
American will continue to act upon this authorization until such time as the
person indicated above is no longer affiliated with the broker/dealer under
which my contract was purchased or until such time that I notify Golden American
in writing of a change in instructions.
===============================================================================
| 7 | TAX-QUALIFIED PLANS (If you are funding a qualified plan, please
- ----- specify type):
/ /IRA Indicate contribution amount and appropriate tax year ________________
/ /IRA Rollover
/ /SEP/IRA / /SAR SEP IRA / /401(B) TSA Transfer / /401(a) Plan
/ /CONDUIT IRA
/ /Roth IRA If transfer, provide original conversion date ___________
/ /Simple IRA Transfer Provide establishment date ____________
/ / Other ________________________
===============================================================================
| 8 | REPLACEMENT
- ----
Will the coverage applied for replace any existing annuity or life insurance
coverage? / / Yes (If yes, please fill in below) / / No
Company Name: Policy Number: Cash Value:
--------------------- ---------- ----------
===============================================================================
| 9 | PLEASE READ THE FOLLOWING STATEMENTS CAREFULLY AND SIGN BELOW:
- -----
BY SIGNING BELOW, I ACKNOWLEDGE RECEIPT OF THE PROSPECTUS. I AGREE
THAT, TO THE BEST OF MY KNOWLEDGE AND BELIEF, ALL STATEMENTS AND
ANSWERS IN THIS APPLICATION ARE COMPLETE AND TRUE AND MAY BE RELIED
UPON IN DETERMINING WHETHER TO ISSUE THE CONTRACT. MY ANSWERS WILL FORM
A PART OF ANY CONTRACT TO BE ISSUED, AND ONLY THE OWNER AND GOLDEN
AMERICAN HAVE THE AUTHORITY TO MODIFY THIS APPLICATION.
CONTRACTS AND POLICIES AND UNDERLYING SERIES SHARES OR SECURITIES
WHICH FUND CONTRACTS AND POLICIES ARE NOT INSURED BY THE FDIC OR ANY
OTHER AGENCY. THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK
AND ARE NOT BANK GUARANTEED. ALSO, THEY ARE SUBJECT TO MARKET
FLUCTUATION, INVESTMENT RISK AND POSSIBLE LOSS OF PRINCIPAL INVESTED.
I UNDERSTAND THAT THE CONTRACT'S CASH SURRENDER VALUE, WHEN BASED
ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT DIVISION, MAY
INCREASE OR DECREASE ON ANY DAY AND THAT NO MINIMUM VALUE IS GUARANTEED.
THE CONTRACT'S COVERAGE IS IN ACCORD WITH MY ANTICIPATED FINANCIAL
OBJECTIVES.
MY SIGNATURE CERTIFIES, UNDER PENALTY OF PERJURY, THAT TEH TAXPAYER
IDENTIFICATION NUMBER PROVIDED IS CORRECT. I AM NOT SUBJECT TO BACKUP
WITHHOLDING BECAUSE: I AM EXEMPT; OR I HAVE NOT BEEN NOTIFIED THAT I AM
SUBJECT TO BACKUP WITHHOLDINGS FROM FAILURE TO REPORT ALL INTEREST
DIVIDENDS; OR I HAVE BEEN NOTIFIED THAT I AM NO LONGER SUBJECT TO BACKUP
WITHHOLDING. (STRIKE OUT THE PRECEDING SENTENCE IF SUBJECT TO BACKUP
WITHHOLDING.) THE IRS DOES NOT REQUIRE MY CONSENT TO ANY PROVISION OF THIS
DOCUMENT OTHER THAN THE CERTIFICATION REQUIRED TO AVOID BACKUP WITHHOLDING.
_______________________________________________________________________________
Signature of Owner Signed at (City, State) Date
_______________________________________________________________________________
Signature of Joint Owner (if applicable) Signed at (City, State) Date
_______________________________________________________________________________
Signature of Annuitant (if other than Signed at (City, State) Date
Owner)
===============================================================================
|10| SPECIAL REMARKS
- ----
===============================================================================
|11| FOR AGENT USE ONLY
- ----
DO YOU HAVE REASON TO BELIEVE THAT THE CONTRACT APPLIED FOR WILL REPLACE ANY
EXISTING ANNUITY OR LIFE INSURANCE COVERAGE?
/ / YES / / NO
Commission Alternative (select one): / / A / / B / / C / / D
Client Account No. (if applicable)_____________________
_______________________________________________________________________________
Agent Signature Print Agent Name Social Security # Broker/Dealer/Branch
GA-AA-1051 INDICIA 11/22/1999
104136
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Exhibit 8(h)
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SURPLUS NOTE
Golden American Life Insurance Company agrees to pay First Columbine
Life Insurance Company a Colorado corporation, the sum of $35 million
($35,000,000.00) plus interest at the rate of 7.979% per annum from
the date hereof, December 8, 1999 until paid. In any event, this
note will mature on December 7, 2029.
This Surplus Note and accrued interest thereon shall be subordinate
to payments due to policyholders, claimant and beneficiary claims, as
well as debts owed to all other classes of debtors, other than
surplus note holders, of Golden American Life Insurance Company in
the event of (a) the institution of bankruptcy, reorganization,
insolvency or liquidation proceedings by or against Golden American
Life Insurance Company, or (b) the appointment of a Trustee, receiver
or other Conservator for a substantial part of Golden American Life
Insurance Company properties.
Any payments made shall first apply to accrued interest, and the
balance of such payment shall apply to reduce the principal of this
Note.
Any payment of principal and/or interest made shall be subject to the
prior approval of the Delaware Insurance Commissioner. If the
Commissioner has not approved payment of principal to retire the note
prior to its maturity date, the maturity date will be automatically
extended until such time as the Commissioner authorizes payment of
the final balance of principal.
Golden American Life Insurance Company hereby waives presentment and
notice of dishonor.
In witness whereof, Golden American Life Insurance Company has caused
this Note to be executed and delivered.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
By: /s/ David L. Jacobson
--------------------------------
David L. Jacobson, Senior Vice
President and Assistant Secretary
Attest by:
/s/ Myles R. Tashman
- ------------------------
Myles R. Tashman
Executive Vice President and Secretary
<PAGE>
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<PAGE>
<PAGE>
Exhibit 8(i)
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SURPLUS NOTE
Golden American Life Insurance Company agrees to pay Equitable Life
Insurance Company of Iowa, an Iowa corporation, the sum of $50
million ($50,000,000.00) plus interest at the rate of 8.179% per
annum from the date hereof, December 30, 1999 until paid. In any
event, this note will mature on December 29, 2029.
This Surplus Note and accrued interest thereon shall be subordinate
to payments due to policyholders, claimant and beneficiary claims, as
well as debts owed to all other classes of debtors, other than
surplus note holders, of Golden American Life Insurance Company in
the event of (a) the institution of bankruptcy, reorganization,
insolvency or liquidation proceedings by or against Golden American
Life Insurance Company, or (b) the appointment of a Trustee, receiver
or other Conservator for a substantial part of Golden American Life
Insurance Company properties.
Any payments made shall first apply to accrued interest, and the
balance of such payment shall apply to reduce the principal of this
Note.
Any payment of principal and/or interest made shall be subject to the
prior approval of the Delaware Insurance Commissioner. If the
Commissioner has not approved payment of principal to retire the note
prior to its maturity date, the maturity date will be automatically
extended until such time as the Commissioner authorizes payment of
the final balance of principal.
Golden American Life Insurance Company hereby waives presentment and
notice of dishonor.
In witness whereof, Golden American Life Insurance Company has caused
this Note to be executed and delivered.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
By: /s/ David L. Jacobson
---------------------------------
David L. Jacobson, Senior Vice
President and Assistant Secretary
Attest by:
/s/ Marilyn Talman
- -----------------------
Marilyn Talman
Vice President and Assistant Secretary
<PAGE>
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<PAGE>
EXHIBIT 9
ING VARIABLE ANNUITIES
MYLES R. TASHMAN
Executive Vice President,
General Counsel and Secretary
January 24, 2000
Members of the Board of Directors
Golden American Life Insurance Company
1475 Dunwoody Drive
West Chester, PA 19380-1478
Gentlemen:
In my capacity as Executive Vice President and Secretary of Golden
American Life Insurance Company (the "Company"), I have examined the
form of Registration Statement on Form N-4 to be filed by you with the
Securities and Exchange Commission in connection with the registration
under the Securities Act of 1933, as amended, of an indefinite number
of units of interest in Separate Account B of the Company (the
"Account"). I am familiar with the proceedings taken and proposed to
be taken in connection with the authorization, issuance and sale of
units.
Based upon my examination and upon my knowledge of the corporate
activities relating to the Account, it is my opinion that:
(1) The Company was organized in accordance with the laws of the
State of Delaware and is a duly authorized stock life insurance
company under the laws of Delaware and the laws of those states
in which the Company is admitted to do business;
(2) The Account is a validly established separate investment
account of the Company;
(3) The portion of the assets to be held in the Account equals the
reserve and other liabilities for variable benefits under variable
annuity contracts to be issued by the Account. Such assets are
not chargeable with liabilities arising out of any other business
the Company conducts;
(4) The units and the variable annuity contracts will, when issued and
sold in the manner described in the registration statement, be
legal and binding obligations of the Company and will be legally
and validly issued, fully paid, and non-assessable.
I hereby consent to the filing of this opinion as an exhibit to the
registration statement and to the reference to my name under the
heading "Legal Matters" in the prospectus contained in said
registration statement. In giving this consent I do not thereby admit
that I come within the category of persons whose consent is required
under Section 7 of the Securities Act of 1933 or the Rules and
Regulations of the Securities and Exchange Commission thereunder.
Sincerely,
/s/ Myles R. Tashman
- ---------------------
1475 Dunwoody Drive Tel: 610-425-3405 GoldenSelect Series
West Chester, PA 19380-1478 Fax: 610-425-3735 Issued by Golden American
Life Insurance Company
<PAGE>
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 10(a)
SUTHERLAND
ASBILL & 1275 Pennsylvania Avenue, N.W.
BRENNAN LLP Washington, D.C. 20004-2415
Attorneys at Law Tel: (202) 383-0100
Fax: (202) 637-3593
www.sablaw.com
January 24, 2000
STEPHEN E. ROTH
DIRECT LINE: (202) 383-0158
Internet: [email protected]
VIA EDGAR
- ---------
Board of Directors
Golden American Life Insurance Company
1475 Dunwoody Drive
West Chester, PA 19380-1478
Ladies and Gentlemen:
We hereby consent to the reference to our name under the caption
"Legal Matters" in the Prospectus filed as part of Post-Effective Amendment
No. 1 to the Registration Statement on Form N-4 for the Separate Account B
(File Nos. 333-66757, 811-5626). In giving this consent, we do not admit
that we are in the category of persons whose consent is required under
Section 7 of the Securities Act of 1933.
Very truly yours,
SUTHERLAND ASBILL & BRENNAN LLP
By: /s/Stephen E. Roth
------------------
Stephen R. Roth
<PAGE>
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 10(b)
Exhibit 10(b) - Consent of Ernst & Young LLP, Independent Auditors
We consent to the reference to our firm under the captions
"Independent Auditors", "Experts", and "Financial Statements"
and to the use of our reports dated February 12, 1999, with
respect to the financial statements of Golden American Life
Insurance Company, and February 25, 1999, with respect to the
financial statements of Separate Account B, included in
Post-Effective Amendment No. 2 to the Registration Statement
(Form N-4 No. 333-66757) and related Prospectuses of Separate
Account B.
Our audits also included the financial statement schedules of
Golden American Life Insurance Company included in Item 24(a)(2).
These schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion based
on our audits. In our opinion, the financial statement schedules
referred to above, when considered in relation to the basic
financial statements taken as a whole, present fairly in all
material respects the information set forth therein.
/s/Ernst & Young LLP
Des Moines, Iowa
January 21, 2000
<PAGE>
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 15
ING VARIABLE ANNUITIES
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned, being duly
elected Directors and/or Officers of Golden American Life Insurance
Company ("Golden American"), constitute and appoint Myles R. Tashman,
and Marilyn Talman, and each of them, his or her true and lawful
attorneys-in-fact and agents with full power of substitution and
resubstitution for him or her in his or her name, place and stead,
in any and all capacities, to sign the following Golden American
registration statements, and current amendments to registration
statements, and to file the same, with all exhibits thereto, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents full power and authority to do and perform each and every act
and thing requisite and necessary to be done, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
affirming all that said attorneys-in-fact and agents, or any of them,
or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof:
* Post-Effective Amendment No. 5 to Separate Account B of Golden
American's Registration Statement on Form N-4 (Nos. 333-28769;
811-5626)
* Amendment No. 7 to Golden American's Registration Statement on
Form S-1 (No. 333-28765)
* Post-Effective Amendment No. 14 to Separate Account B of Golden
American's Registration Statement on Form N-4 (Nos. 33-59261;
811-5626)
* Amendment No. 5 to Golden American's Registration Statement on
Form S-1 (No. 333-51353)
* Post-Effective Amendment No. 4 to Separate Account B of Golden
American's Registration Statement on Form N-4 (Nos. 333-28679;
811-5626)
* Golden American's Registration Statement on Form S-1 (current
registration No. 333-76941)
* Post-Effective Amendment No. 8 to Separate Account B of Golden
American's Registration Statement on Form N-4 (Nos. 333-28755;
811-5626)
* Golden American's Registration Statement on Form S-1 (current
registration No. 333-76945)
* Post-Effective Amendment No. 2 to Separate Account B of Golden
American's Registration Statement on Form N-4 (Nos. 333-66757;
811-5626)
* Amendment No. 4 to Golden American's Registration Statement on
Form S-1 (No. 333-66745)
SIGNATURE TITLE DATE
- --------- ----- ----
/s/Barnett Chernow
- ----------------------- Director, Chairman of January 18, 2000
Barnett Chernow the Board of
Directors and President
/s/Myles R. Tashman
- ----------------------- Director, Executive January 12, 2000
Myles R. Tashman Vice President,
General Counsel and
Secretary
/s/E. Robert Koster
- ----------------------- Senior Vice President January 17, 2000
E. Robert Koster and Chief Financial
Officer
/s/Cheryl L. Harding
- ----------------------- Chief Accounting January 13, 2000
Cheryl L. Harding Officer
/s/Michael W. Cunningham
- ----------------------- Director January 11, 2000
Michael W. Cunningham
/s/Phillip R. Lowery
- ----------------------- Director January 12, 2000
Phillip R. Lowery
/s/Mark A. Tullis
- ----------------------- Director January 12, 2000
Mark A. Tullis
1475 Dunwoody Drive GoldenSelect Series
West Chester, PA 19380-1478 Issued by Golden American Life Insurance Company
<PAGE>
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